June 29, 2000
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Boston Financial Tax Credit Fund VII, A Limited Partnership
Annual Report on Form 10-K for the Year Ended March 31, 2000
File Number 0-24584
Dear Sir/Madam:
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act
of 1934, filed herewith is one copy of subject report.
Very truly yours,
/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller
TC710K-K
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2000
--------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-24584
Boston Financial Tax Credit Fund VII, A Limited Partnership
(Exact name of registrant as specified in its charter)
Massachusetts 04-3166203
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
101 Arch Street, Boston, Massachusetts 02110-1106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-3911
-------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
100,000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]
State the aggregate sales price of partnership units held by non-affiliates of
the registrant. $45,581,000 as of March 31, 2000
<PAGE>
K-5
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS: (2) ANY PROXY OR
INFORMATION STATEMENT: AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b)OR
(c) UNDER THE SECURITIES ACT OF 1933.
Part of Report on
Form 10-K into
Which the Document
Documents incorporated by reference is Incorporated
Report on Form 8-K dated March 18, 1993 Part I, Item 1
Report on Form 8-K dated June 8, 1993 Part I, Item 1
Report on Form 8-K dated September 10, 1993 Part I, Item 1
Report on Form 8-K dated January 14, 1994 Part I, Item 1
Post-Effective Amendment No. 1-3 to the Form S-11
Registration Statement, File # 33-52468 Part I, Item 1
Post-Effective Amendment No. 4 to the Form S-11
Registration Statement, File # 33-52468 Part III, Item 12
Prospectus - Sections Entitled:
"Investment Objectives and Policies -
Principal Investment Objectives" Part I, Item 1
"Investment Risks" Part I, Item 1
"Estimated Use of Proceeds" Part III, Item 13
"Management Compensation and Fees" Part III, Item 13
"Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions" Part III, Item 13
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED MARCH 31, 2000
TABLE OF CONTENTS
Page No.
PART I
Item 1 Business K-3
Item 2 Properties K-5
Item 3 Legal Proceedings K-10
Item 4 Submission of Matters to a Vote of
Security Holders K-10
PART II
Item 5 Market for the Registrant's Units and
Related Security Holder Matters K-10
Item 6 Selected Financial Data K-11
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations K-12
Item 7A Quantitative and Qualitative Disclosures about
Market Risk K-15
Item 8 Financial Statements and Supplementary Data K-15
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure K-15
PART III
Item 10 Directors and Executive Officers
of the Registrant K-15
Item 11 Management Remuneration K-16
Item 12 Security Ownership of Certain Beneficial
Owners and Management K-16
Item 13 Certain Relationships and Related Transactions K-17
PART IV
Item 14 Exhibits, Financial Statement Schedule and
Reports on Form 8-K K-19
SIGNATURES K-20
<PAGE>
PART I
Item 1. Business
Boston Financial Tax Credit Fund VII, A Limited Partnership (the "Fund") is a
Massachusetts limited partnership formed on September 14, 1992 under the laws of
the Commonwealth of Massachusetts. The Fund's partnership agreement
("Partnership Agreement") authorizes the sale of up to 100,000 Units of limited
partnership interest at $1,000 per Unit. On November 30, 1993, the Fund held its
final investor closing. In total, the Fund received $50,930,000 of capital
contributions for 50,930 units. Such amounts exclude five unregistered Units
previously acquired for $5,000 by the Initial Limited Partner, which is also one
of the General Partners. The offering of Units terminated on January 21, 1994.
No further sale of units is expected.
The Fund is engaged solely in the business of real estate investment.
Accordingly, a presentation of information about industry segments is not
applicable and would not be material to an understanding of the Fund's business
taken as a whole.
The Fund has invested as a limited partner in other limited partnerships ("Local
Limited Partnerships") which own and operate residential apartment complexes
("Properties") some of which benefit from some form of federal, state or local
assistance programs and all of which qualify for low-income housing tax credits
("Tax Credits") added to the Internal Revenue Code (the "Code") by the Tax
Reform Act of 1986. The investment objectives of the Fund include the following:
(i) to provide investors with annual tax credits which they may use to reduce
their federal income taxes; (ii) to provide limited cash distributions from the
operations of apartment complexes; and (iii) to preserve and protect the Fund's
capital with the possibility of realizing a profit through the sale or
refinancing of apartment complexes. There cannot be any assurance that the Fund
will attain any or all of these investment objectives. A more detailed
discussion of these investment objectives, along with the risks in achieving
them, is contained in the sections of the Prospectus entitled "Investment
Objectives and Policies Principal Investment Objectives" and "Investment Risks",
which are herein incorporated by this reference.
Table A on the following page lists the properties originally acquired by the
Local Limited Partnerships in which the Fund has invested. Item 7 of this Report
contains other significant information with respect to such Local Limited
Partnerships. The terms of the acquisition of each Local Limited Partnership
interest have been described in a supplement to the Prospectus and collected in
the post-effective amendment to the Registration Statement; such descriptions
are incorporated herein by this reference.
<PAGE>
TABLE A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
Properties owned by Date
Local Limited Interest
Partnerships Location Acquired
---------------------------- ------------------ ---------------
Oak Ridge Macon, GA 12/31/92
Santa Fe Oaks II Gainesville, FL 12/31/92
Andrew's Pointe Burnsville, MN 04/13/92
Palo Verde II Henderson, NV 05/19/93
Woods Lane Rogers, AR 07/30/93
Crafton Place Fayetteville, AR 07/30/93
Guardian Place Richmond, VA 10/07/93
Twin Oaks Meadows Lansing, MI 10/29/93
Sunrise Terrace Madera, CA 11/24/93
Wynmor Brooklyn Park, MN 12/22/93
Citrus Glen Orlando, FL 12/30/93
St. Andrews Pointe Columbia, SC 01/05/94
Des Moines St. Village Des Moines, IA 01/31/94
Fountain Lakes Benton, AR 02/02/94
Fairhaven Manor Burlington, WA 03/08/94
Grand Boulevard Renaissance Chicago, IL 08/03/94
Los Claveles II Trujillio Alto, PR 08/31/94
Springwood Tallahassee, FL 12/15/94
Harford Commons Baltimore, MD 02/28/95
The Fund's interest in profits and losses of each Local Limited Partnership
arising from normal operations is 99%, with the exception of Springwood which is
19.8%. Profits and losses arising from sale or refinancing transactions are
allocated in accordance with the respective Local Limited Partnership
Agreements.
Although the Fund's investments in Local Limited Partnerships are not subject to
seasonal fluctuations, the Fund's equity in losses of Local Limited
Partnerships, to the extent it reflects the operations of individual Properties,
may vary from quarter to quarter based upon changes in occupancy and operating
expenses as a result of seasonal factors.
Each Local Limited Partnership has as its general partners ("Local General
Partners") one or more individuals or entities not affiliated with the Fund or
its General Partners. In accordance with the partnership agreements under which
such entities are organized ("Local Limited Partnership Agreements"), the Fund
depends on the Local General Partners for the management of each Local Limited
Partnership. As of March 31, 2000, the following Local Limited Partnerships have
a common Local General Partner or affiliated group of Local General Partners
accounting for the specified percentage of the total capital contributions to
Local Limited Partnerships: (i) Oak Ridge, Santa Fe Oaks Phase II, Springwood
and St. Andrews Pointe, representing 23.92%, have Flournoy Development Company
and John Flournoy as Local General Partners; (ii) Woods Lane, Crafton Place and
Fountain Lakes, representing 16.92%, have Lindsey Management Company as Local
General Partner. The Local General Partners of the remaining Local Limited
Partnerships are identified in the Acquisition Reports reported on Forms 8-K,
which are herein incorporated by reference.
The Properties owned by Local Limited Partnerships in which the Fund has
invested are, and will continue to be, subject to competition from existing and
future apartment complexes in the same areas. The success of the Fund will
depend on many outside factors, most of which are beyond the control of the Fund
and which cannot be predicted at this time. Such factors include general
economic and real estate market conditions, both on a national basis and in
those areas where the Properties are located, the availability and cost of
borrowed funds, real estate tax rates, operating expenses, energy costs and
governmental regulations. In addition, other risks inherent in real estate
investment may influence the ultimate success of the Fund, including: (i)
possible reduction in rental income due to an inability to maintain high
occupancy levels or adequate rental levels; (ii) possible adverse changes in
general economic conditions and adverse local conditions, such as competitive
over-building or a decrease in employment or adverse changes in real estate
laws, including building codes; and (iii) possible future adoption of rent
control legislation which would not permit increased costs to be passed on to
the tenants in the form of rent increases or which suppress the ability of the
Local Limited Partnerships to generate operating cash flow. Since some of the
Properties benefit from some form of governmental assistance, the Fund is
subject to the risks inherent in that area including decreased subsidies,
difficulties in finding suitable tenants and obtaining permission for rent
increases. In addition, any Tax Credits allocated to investors with respect to a
Property are subject to recapture to the extent that the Property or any portion
thereof ceases to qualify for the Tax Credits. Other future changes in federal
and state income tax laws affecting real estate ownership or limited
partnerships could have a material and adverse affect on the business of the
Fund.
The Fund is managed by Arch Street VII, Inc., the Managing General Partner of
the Fund. The other General Partner of the Fund is Arch Street VII Limited
Partnership. The Fund, which does not have any employees, reimburses Lend Lease
Real Estate Investments, Inc., an affiliate of the General Partners, for certain
expenses and overhead costs. A complete discussion of the management of the Fund
is set forth in Item 10 of this Report.
Item 2. Properties
The Fund owns limited partnership interests in nineteen Local Limited
Partnerships which own and operate Properties, some of which benefit from some
form of federal, state or local assistance programs and all of which qualify for
the Tax Credits added to the Code by the Tax Reform Act of 1986. The Fund's
ownership interest in each Local Limited Partnership is 99%, with the exception
of Springwood, which is 19.8%.
Each of the Local Limited Partnerships has received an allocation of Tax Credits
from the relevant state tax credit agency. In general, the Tax Credits run for
ten years from the date the Property is placed in service. The required holding
period (the "Compliance Period") of the Properties is fifteen years. During
these fifteen years, the Properties must satisfy rent restrictions, tenant
income limitations and other requirements, as promulgated by the Internal
Revenue Service, in order to maintain eligibility for the Tax Credit at all
times during the Compliance Period. Once a Local Limited Partnership has become
eligible for the Tax Credits, it may lose such eligibility and suffer an event
of recapture if its Property fails to remain in compliance with the
requirements. To date, none of the Local Limited Partnerships have suffered an
event of recapture of Tax Credits.
In addition, some of the Local Limited Partnerships have obtained one or a
combination of different types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable terms; or iii) loans that have repayment
terms that are based on a percentage of cash flow.
The schedules on the following pages provide certain key information on the
Local Limited Partnership interests acquired by the Fund.
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions Mtge. loans Occupancy
Local Limited Partnership Number Total Committed Paid Through payable at at
Property Name of at March 31, March 31, December 31, Type of March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
-------------------------------- -------------- ------------------- ----------------- ------------------ ---------- -----------
Oak Ridge Apartments,
a Limited Partnership
Oak Ridge
<S> <C> <C> <C> <C> <C> <C>
Macon, GA 152 $2,870,245 $2,870,245 $4,046,475 None 71 %
Santa Fe Oaks Phase II,
a Limited Partnership
Santa Fe Oaks II
Gainesville, FL 129 2,698,631 2,698,586 3,660,185 None 98%
Andrew's Pointe Limited
Partnership
Andrew's Pointe
Burnsville, MN 57 1,333,800 1,333,800 2,283,645 None 95%
Palo Verde II, a Nevada
Limited Partnership
Palo Verde II
Henderson, NV 60 1,324,801 1,324,801 1,074,298 None 96%
Woods Lane, a Limited
Partnership
Woods Lane
Rogers, AR 156 2,574,180 2,574,180 3,285,471 None 100%
Crafton Place, a Limited
Partnership
Crafton Place
Fayetteville, AR 84 1,365,120 1,365,120 1,642,747 None 100%
<PAGE>
Capital Contributions Mtge. Loans Occupancy
Local Limited Partnership Number Total Committed Paid Through payable at at
Property Name of at March 31, March 31, December 31, Type of March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
-------------------------------- -------------- ------------------------------------------- ---------------- ---------- ---------
Guardian Place
Limited Partnership
Guardian Place
Richmond, VA 120 2,174,390 2,174,390 2,945,065 None 84%
Twin Oaks Meadows Limited
Dividend Housing Association
Limited Partnership
Twin Oaks Meadows
Lansing, MI 63 1,436,400 1,436,400 1,889,103 None 94%
Madera Sunrise Terrace
Limited Partnership
Sunrise Terrace
Madera, CA 52 1,523,196 1,523,196 995,967 None 98%
Eden Park Limited
Partnership
Wynmor
Brooklyn Park, MN 324 5,527,758 5,527,758 5,660,037 None 90%
Affordable Citrus Glen
Limited Partnership
Citrus Glen
Orlando, FL 176 4,581,360 4,581,360 5,377,384 None 98%
St. Andrews Pointe Apartments,
A Limited Partnership
St. Andrews Pointe
Columbia, SC 150 3,414,528 3,414,528 4,587,899 None 88%
<PAGE>
Capital Contributions Mtge. Loans Occupancy
Local Limited Partnership Number Total Committed Paid Through payable at at
Property Name of at March 31, March 31, December 31, Type of March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
-------------------------------- ----------- ---------------------- ----------------- ------------------ ------------ ----------
Des Moines Street Associates
Limited Partnership
Des Moines St. Village
Des Moines, IA 42 1,083,996 1,083,996 1,679,037 Section 8 98%
Fountain Lakes, A Limited
Partnership
Fountain Lakes
Benton, AR 180 2,854,593 2,854,593 4,133,906 None 98%
Fairhaven Manor Limited
Partnership
Fairhaven Manor
Burlington, WA 40 1,232,020 1,232,020 929,733 None 100%
Grand Boulevard Renaissance I
Limited Partnership
Grand Boulevard Renaissance
Chicago, IL 30 1,085,000 868,000 1,936,992 Section 8 97%
Los Claveles, S.E. Limited
Partnership
Los Claveles II
Trujilio Alto, PR 180 1,272,000 923,374 9,000,135 Section 8 49%
BHP/Harford Commons
Limited Partnership
Harford Commons
Baltimore, MD 30 1,187,000 1,128,000 1,726,920 None 90%
Capital Contributions Mtge. loans Occupancy
Local Limited Partnership Number Total Committed Paid Through payable at at
Property Name of at March 31, March 31, December 31, Type of March 31,
Property Location Apt. Units 2000 2000 1999 Subsidy* 2000
---------------------------------------------- ------------------- ----------------- ------------------ ---------------------
Springwood Apartments,
A Limited Partnership
Springwood
Tallahassee, FL 113 624,805 624,805 3,854,331 None 95%
----- ------------ ------------ ------------
2,138 $40,163,823 $39,539,152 $ 60,709,330
===== =========== =========== ============
</TABLE>
* Section 8 This subsidy, which is authorized under Section 8 of
Title II of the Housing and Community Development Act of 1974,
allows qualified low-income tenants to pay 30% of their monthly
income as rent with the balance paid by the federal government.
<PAGE>
Two Local Limited Partnerships invested in by the Fund each represent more than
10% of the total capital contributions to be made to Local Limited Partnerships
by the Fund. The first is Eden Park Limited Partnership which owns Wynmor, an
existing property located in Brooklyn Park, Minnesota. The property contains 324
apartments in eleven three-story buildings and represents 13.76% of the total
capital contributions to be made to the Local Limited Partnerships.
Eden Park Limited Partnership has obtained a $6,000,000 first mortgage loan. The
mortgage is payable in monthly installments of principal and interest in the
amount of $48,922, based on a 25 year amortization period, and accrues interest
at a rate of 8.65%. The unpaid principal and interest is due in one balloon
payment in October of 2020.
The other Local Limited Partnership which represents more than 10% of the total
capital contributions to be made to Local Limited Partnerships is Affordable
Citrus Glen Limited Partnership which owns Citrus Glen Apartments. Citrus Glen
Apartments, which is located in Orlando, Florida, contains 176 apartments and
represents 11.41% of the total capital contributions to be made to the Local
Limited Partnerships.
Affordable Citrus Glen Limited Partnership ("Citrus Glen") has obtained
permanent financing in the amount of $3,848,000 at an interest rate of 9.55%.
The note requires monthly principal and interest payments of $32,497, amortized
over a 30 year period, with the unpaid principal balance due in full on February
1, 2010. Additional financing has been obtained in the amount of $1,670,000,
with stated interest at 9%, from the Florida Housing Finance Agency. Due to
other claims against cash flows, the maximum effective rate will be 4.5%, the
rate at which interest is currently being accrued. Repayment is based on the
cash flow of Citrus Glen, beginning on January 10, 1995, with annual payments
due each January 10 through 2009, at which time all outstanding principal and
interest is due. The loan is non-recourse and is collateralized by a second
mortgage on Citrus Glen's rental property and an assignment of leases, rents and
contract rights.
Duration of leases for occupancy in the Properties described above is six to
twelve months. The Managing General Partner believes the described herein are
adequately covered by insurance.
Additional information required under this item, as it pertains to the Fund, is
contained in Items 1, 7 and 8 of this Report.
Item 3. Legal Proceedings
The Fund is not a party to any pending legal or administrative proceeding, and
to the best of its knowledge, no legal or administrative proceeding is
threatened or contemplated against it.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that a public
market will develop. If a Limited Partner desires to sell Units, the buyer of
those Units will be required to comply with the minimum purchase and retention
requirements and investor suitability standards imposed by applicable federal or
state securities laws and the minimum purchase and retention requirements
imposed by the Fund. The price to be paid for the Units, as well as the
commissions to be received by any participating broker-dealers, will be subject
to negotiation by the Limited Partner seeking to sell his Units. Units will not
be redeemed or repurchased by the Fund.
The Partnership Agreement does not impose on the Fund or its General Partners
any obligation to obtain periodic appraisals of assets or to provide Limited
Partners with any estimates of the current value of Units.
As of June 15, 2000, there were 2,474 record holders of Units of the Fund.
Cash distributions, when made, are paid annually. No cash distributions were
paid during the years ended March 31, 2000, 1999 and 1998.
Item 6. Selected Financial Data
The following table sets forth selected financial information regarding the
Fund's financial position and operating results. This information should be read
in conjunction with Management's Discussion and Analysis of Financial Condition
and Results of Operations and the Financial Statements and Supplementary Data,
which are included in Items 7 and 8 of this Report.
<TABLE>
<CAPTION>
<PAGE>
March 31, March 31, March 31, March 31, March 31,
2000 1999 1998 1997 1996
------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C>
Revenue $ 236,880 $ 256,266 $ 254,185 $ 400,349 $ 257,160
Equity in losses of Local Limited
Partnerships (2,745,266) (2,852,291) (3,325,494) (2,967,826) (2,570,732)
Net Loss (3,048,493) (3,150,253) (3,626,340) (3,131,087) (2,870,229)
Per Limited Partnership Unit (A) (59.26) (61.24) (70.49) (60.86) (55.79)
Cash and cash equivalents 307,807 114,347 375,168 373,729 334,845
Marketable securities 2,491,752 3,020,272 3,106,645 3,240,944 3,855,342
Investments in Local Limited
Partnerships 22,640,861 25,341,905 28,387,876 31,792,098 34,328,400
Long-term debt - - - - -
Total assets (B) 25,752,403 28,779,904 32,158,308 35,694,649 38,795,017
Cash Distribution - - - - -
Other data:
Passive loss (C) (2,916,825) (4,009,001) (4,473,368) (3,697,126) (3,835,484)
Per Limited Partnership Unit (C) (56.70) (77.93) (86.95) (71.87) (74.56)
Portfolio income (C) 279,480 304,325 301,029 359,903 477,042
Per Limited Partnership Unit (C) 5.43 5.92 5.85 7.00 9.27
Other Income (C) 2,444,059 - - - -
Per Limited Partnership Unit (C) 47.51 - - - -
Net short term capital losses (C) - - - - (610)
Per Limited Partnership Unit (C) - - - - (.01)
Low-Income Housing Tax Credit (C) 7,556,310 7,547,206 7,547,206 7,531,209 7,016,512
Per Limited Partnership Unit (C) 146.88 146.71 148.19 146.39 136.39
Local Limited Partnership interests
owned at end of period 19 19 19 19 19
</TABLE>
(A) Per Limited Partnership Unit data is based upon 50,930 Units for all of
the five years ended March 31, 2000.
(B) Total assets include the investments in Local Limited Partnerships.
(C) Income tax information is as of December 31, the year end of the Fund for
income tax purposes.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The Fund
intends such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statement, and is including this statement for
purposes of complying with these safe harbor provisions. Although the Fund
believes the forward-looking statements are based on reasonable assumptions, the
Fund can give no assurance that their expectations will be attained. Actual
results and timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due to a number
of factors, including, without limitation, general economic and real estate
conditions and interest rates.
Liquidity and Capital Resources
At March 31, 2000, the Fund had cash and cash equivalents of $307,807 compared
with $114,347 at March 31, 1999. This increase is due to proceeds from sales and
maturities of marketable securities in excess of purchases of marketable
securities and cash distributions received from Local Limited Partnerships.
These increases are offset by cash used for operations and investments in Local
Limited Partnerships.
As of March 31, 2000, approximately $2,240,000 of marketable securities has been
designated as Reserves by the Managing General Partner. The Reserves were
established to be used for working capital of the Fund and contingencies related
to the ownership of Local Limited Partnership interests. Management believes
that the interest income earned on Reserves, along with cash distributions
received from Local Limited Partnerships, to the extent available, will be
sufficient to fund the Fund's ongoing operations. Reserves may be used to fund
operating deficits, if the Managing General Partner deems funding appropriate.
At March 31, 2000, the Fund has committed to make future capital contributions
and pay future purchase price installments on its investments in Local Limited
Partnerships. These future payments are contingent upon the achievement of
certain criteria as set forth in the Local Limited Partnership Agreements and
total approximately $408,000. In addition, the Fund has set aside $217,000 for
future capital contributions to one Local Limited Partnership.
Since the Fund invests as a limited partner, the Fund has no contractual duty to
provide additional funds to Local Limited Partnerships beyond its specified
investment. Thus, as of March 31, 2000, the Fund had no contractual or other
obligation to any Local Limited Partnership which had not been paid or provided
for, except as described above.
In the event a Local Limited Partnership encounters operating difficulties
requiring additional funds, the Fund might deem it in its best interests to
provide such funds, voluntarily, in order to protect its investment. No such
event has occurred to date.
Cash Distributions
No cash distributions were made in the two years ended March 31, 2000, 1999 or
1998. It is not expected that cash available for distribution, if any, will be
significant during the 2000 calendar year. Based on the results of 1999
operations, the Local Limited Partnerships are not expected to distribute
significant amounts of cash to the Fund because such amounts will be needed to
fund Property operating costs. In addition, many of the Properties benefit from
some type of federal or state subsidy and, as a consequence, are subject to
restrictions on cash distributions.
Results of Operations
2000 versus 1999
The Fund's results of operations for the year ended March 31, 2000 resulted in a
net loss of $3,048,493 as compared to a net loss of $3,150,253 for the same
period in 1999. The decrease in net loss is primarily attributable to a decrease
in equity in losses of Local Limited Partnerships. The decrease in equity in
losses of Local Limited Partnerships is primarily due to an increase in losses
not recognized by the Fund for a Local Limited Partnership where the Fund's
cumulative equity in losses exceeded its total investment. The decrease in
equity in losses of Local Limited Partnership's is expected to continue.
1999 versus 1998
The Fund's results of operations for the year ended March 31, 1999 resulted in a
net loss of $3,150,253 as compared to a net loss of $3,626,340 for the same
period in 1998. The decrease in net loss is primarily attributable to a decrease
in equity in losses of Local Limited Partnerships. The decrease in equity in
losses of Local Limited Partnerships is primarily due to an increase in losses
not recognized by the Fund for a Local Limited Partnership where the Fund's
cumulative equity in losses exceeded its total investment. The decrease in
equity in losses of Local Limited Partnerships is expected to continue.
Low-Income Housing Tax Credits
The 2000, 1999 and 1998 Tax Credits per unit were $146.88, $146.71 and $148.19,
respectively, for investor limited partners. Tax Credits are not available for a
property until the property is placed in service and its apartment units are
occupied by qualified tenants. In the first year the Tax Credits are claimed,
the allowable credit amount is determined using an averaging convention to
reflect the number of months that apartment units comprising the qualified basis
were occupied by qualified tenants during the year. To the extent that the full
amount of the annual credit is not allocated in the first year, an additional
credit equal to the difference is available in the 11th taxable year.
The Tax Credits per Limited Partnership Unit have stabilized at approximately
$147 per unit, as properties have reached completion and have become fully
leased. Since the Tax Credits have stabilized, the annual amount allocated to
investors is expected to remain the same for about seven years. In years eight
through ten, the credits are expected to decrease as Properties reach the end of
the ten year credit period.
Property Discussions
As previously reported, Grand Boulevard Renaissance, located in Chicago,
Illinois, has been experiencing operating difficulties and has difficulties in
achieving debt service coverage. As a result of the operating difficulties, the
Local General Partner has begun negotiations with the lender in an attempt to
reduce the interest rate on the current mortgage. The Managing General Partner
performed a site visit in April and found the property to be in good physical
condition. As of March 31, 2000, occupancy was 97%. The Managing General Partner
will continue to work closely with the Local General Partner and new management
agent to monitor operations.
As previously reported, effective December 30, 1999, the Managing General
Partner and the lender were successful in closing a workout for Los Claveles II,
located in Trujillo Alto, Puerto Rico, which included bringing in a replacement
General Partner and restructuring the existing debt on the property. The loan
restructuring will generate cancellation of debt income. Further, this workout
provides funds for much needed capital improvements and deferred maintenance. In
addition, the incoming Local General Partner and its management affiliate are
well qualified and experienced to deal with the complicated task of turning this
property around. The new property manager started in January 2000 and is
focusing on the extensive capital improvements needs. The property continues to
experience operating difficulties due to the ongoing capital needs. Occupancy as
of March 31, 2000 was 49%. The Managing General Partner continues to work
closely with the replacement Local General Partner and is monitoring progress
under the workout agreement.
Oak Ridge, located in Macon, Georgia, has been experiencing operating
difficulties due to low occupancy and because one of the buildings was damaged
by a fire in late 1999. The building that had the fire has been unoccupied since
late in 1999, however, it is scheduled to be back in service by the second
quarter of 2000. Occupancy as of March 31, 2000 was 71%. In September of 1999, a
new on-site manager was hired to enhance tenant screening and marketing efforts.
The Managing General Partner will be working closely with the management agent
and Local General Partner to monitor property operations and marketing efforts.
Woods Lane, located in Rogers, Arkansas, had been suffering from poor occupancy
due to local competition. However, over the past year operations improved
significantly resulting in occupancy remaining above 90% throughout most of
1999. As of March 31, 2000, occupancy was 100%. The occupancy improvement was
partially due to the growth of a few companies that have national headquarters
in the nearby region. In addition, as previously reported, a new management team
was hired in September 1998 to step-up the marketing efforts, review rent
concessions, install a resident referral plan and monitor competing rent levels.
Additionlly, capital improvements were made which include exterior painting,
carpet replacement and landscaping and grounds improvement. The Managing General
Partner will continue to monitor the new management agent and review property
operations.
The Fund has implemented policies and practices for assessing potential
impairment of its investments in Local Limited Partnerships. The investments are
analyzed by real estate experts to determine if impairment indicators exist. If
so, the carrying value is compared to the undiscounted future cash flows
expected to be derived from the asset. If there is a significant impairment in
carrying value, a provision to write down the asset to fair value will be
recorded in the Fund's financial statements.
Inflation and Other Economic Factors
Inflation had no material impact on the operations or financial condition of the
Fund for the years ended March 31, 2000, 1999 and 1998.
As some Properties benefit from some form of government assistance, the
Partnership is subject to the risks inherent in that area including decreased
subsidies, difficulties in finding suitable tenants and obtaining permission for
rent increases. In addition, the Tax Credits allocated to investors with respect
to a Property are subject to recapture to the extent that a Property or any
portion thereof ceases to qualify for Tax Credits.
Some of the Properties listed in this report are located in areas suffering from
poor economic conditions. Such conditions could have an adverse effect on the
rent or occupancy levels at such Properties. Nevertheless, the Managing General
Partner believes that the generally high demand for below market rate housing
will tend to negate such factors. However, no assurance can be given in this
regard.
Other Development
Lend Lease Real Estate Investments, Inc.("Lend Lease"), the U.S. subsidiary of
Lend Lease Corporation and the leading U.S.institutional real estateadvisor, as
ranked by assets under management, acquired The Boston Financial Group Limited
Partnership ("Boston Financial") on November 3, 1999.
Headquartered in New York and Atlanta, Lend Lease Corporation has regional
offices in 12 cities nationwide. The company ranks as the leading U.S. manager
of tax-exempt assets invested in real estate. Lend Lease is a subsidiary of Lend
Lease Corporation, an international real estate and financial services group
listed on the Australian Stock Exchange. Worldwide, Lend Lease Corporation
operates from more than 30 cities on five continents: North America, Europe,
Asia, Australia and South America. In addition to real estate investments, the
Lend Lease Group operates in the areas of property development, project
management and construction, and capital services (infrastructure).
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The Fund has invested in marketable securities with a fair value of $2,491,752
at March 31, 2000; these securities, with rates ranging from 4.82% to 6.57%, do
not subject the Fund to significant market risk because of their short term
maturities and high liquidity. The Fund has no other exposure to market risk
associated with activities in derivative financial instruments, derivative
commodity instruments or other financial instruments.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Managing General Partner of the Fund is Arch Street VII, Inc., a
Massachusetts corporation (the "Managing General Partner"), an affiliate of Lend
Lease Estate Investment, Inc. ("Lend Lease"). The Managing General Partner was
incorporated in September 1992. Randolph G. Hawthorne is the Chief Operating
Officer of the Managing General Partner and had the primary responsibility for
evaluating, selecting and negotiating investments for the Fund. The Investment
Committee of the Managing General Partner approved all investments. The names
and positions of the principal officers and the directors of the Managing
General Partner are set forth below.
Name Position
Jenny Netzer President, Managing Director
Michael H. Gladstone Vice President, Managing Director
Randolph G. Hawthorne Vice President, Managing Director
Paul F. Coughlan Vice President
William E. Haynsworth Vice President
The other General Partner of the Fund is Arch Street VII Limited Partnership, a
Massachusetts limited partnership ("Arch Street VII L.P.") that was organized in
September 1992. The managing general partner of Arch Street VII L.P. is Arch
Street VII, Inc.
The Managing General Partner provides day-to-day management of the Fund.
Compensation is discussed in Item 11 of this report. Such day-to-day management
does not include the management of the Properties.
The business experience of each of the persons listed above is described below.
There is no family relationship between any of the persons listed in this
section.
Jenny Netzer, age 44, Principal, Head of Housing and Community Investing. -
Responsible for tax credit investment programs to institutional clients. Joined
Lend Lease through its 1999 acquisition of Boston Financial, started with Boston
Financial in 1987. Previously, led Boston Financial's new business initiatives
and managed firm's Asset Management division, responsible for performance of 750
properties and providing service to 35,000 investors. Prior to joining Boston
Financial, served as Deputy Budget Director for Commonwealth of Massachusetts,
responsible for Commonwealth's health care and public pension program's budgets,
served as Assistant Controller at Yale University and former member of Watertown
Zoning Board of Appeals Officer of Affordable Housing Tax Credit Coalition and
frequent speaker on affordable housing and tax credit industry issues, BA
Harvard University; Master's in Public Policy Harvard's Kennedy School of
Government.
Michael H. Gladstone, age 43, Principal, Legal - Responsible for legal work in
the areas of affordable and conventional housing and investment products and
services. Joined Lend Lease through its 1999 acquisition of Boston Financial,
started with Boston Financial in 1985; served as firm's General Counsel. Prior
to joining Boston Financial, associated with law firm of Herrick & Smith, served
on advisory board of Housing and Development Reporter. Lectured at Harvard
University on affordable housing matters, Member, The National Realty Committee,
Cornell Real Estate Council, National Association of Real Estate Investment
Managers and Massachusetts Bar, BA Emory University; JD & MBA Cornell
University.
Randolph G. Hawthorne, age 50, Principal, Housing and Community Investing -
Responsible for structuring and acquiring real estate investments. Joined Lend
Lease through its 1999 acquisition of Boston Financial, started with Boston
Financial in 1973. Previously, served as Boston Financial's Treasurer, Past
Chairman of the Board of the National Multi Housing Council, having served on
the board since 1989, Past President of the National Housing and Rehabilitation
Association, Member, Multifamily Council of the Urban Land Institute, Frequent
speaker at industry conferences. Serves on the Editorial Advisory Boards of the
Tax Credit Advisor and Multi-Housing News, BS Massachusetts Institute of
Technology; MBA Harvard Graduate School of Business.
Paul F. Coughlan, age 56, Principal, Housing and Community Investing -
Responsible for marketing and sales of institutional tax credit investments.
Joined Lend Lease through its 1999 acquisition of Boston Financial, started with
Boston Financial in 1975. Previously, served as sales manager for Boston
Financial's retail tax credit fund, AB Brown University.
William E. Haynsworth, age 60, Principal, Housing and Community Investing -
Responsible for the structuring of real estate investments and the acquisition
of property interests. Joined Lend Lease through its 1999 acquisition of Boston
Financial, started with Boston Financial 1977. Prior to joining Boston
Financial, Acting Executive Director and General Counsel of the Massachusetts
Housing Finance Agency. Served as Director of Non-Residential Development of the
Boston Redevelopment Authority and Associate of Goodwin, Proctor & Hoar, Past
President and current Chairman of the Board of Directors of Affordable Housing
Tax Credit Coalition, BA Dartmouth College; LLB and LLM Harvard Law School.
Item 11. Management Remuneration
Neither the directors nor officers of Arch Street VII, Inc., nor the partners of
Arch Street VII L.P., nor any other individual with significant involvement in
the business of the Fund receives any current or proposed remuneration from the
Fund.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 31, 2000, the following is the only entity known to the Fund to be
the beneficial owner of more than 5% of the Units outstanding:
Amount
Title of Name and Address of Beneficially Percent
Class Beneficial Owner Owned of Class
Limited Partner Oldham Institutional Tax Credits LLC 5,349 units 10.5%
101 Arch Street
Boston, MA
Oldham Institutional Tax Credits LLC is an affiliate of Arch Street VII, Inc.,
the Managing General Partner.
The equity securities registered by the Fund under Section 12(g) of the Act
consist of 100,000 Units, 50,930 of which were sold to the public. The remaining
Units were deregistered in Post-Effective Amendment No. 4 dated January 20,
1995, which is herein incorporated by reference. Holders of Units are permitted
to vote on matters affecting the Fund only in certain unusual circumstances and
do not generally have the right to vote on the operation or management of the
Fund.
Arch Street VII, L.P. owns five (unregistered) Units not included in the Units
sold to the public.
Except as described in the preceding paragraphs, neither Arch Street VII, Inc.,
Arch Street VII L.P., Lend Lease nor any of their executive officers, directors,
partners or affiliates is the beneficial owner of any Units. None of the
foregoing persons possesses a right to acquire beneficial ownership of Units.
The Fund does not know of any existing arrangement that might at a later date
result in a change in control of the Fund.
Item 13. Certain Relationships and Related Transactions
The Fund was required to pay certain fees to and reimburse certain expenses of
the Managing General Partner or its affiliates in connection with the
organization of the Fund and the offering of Units. The Fund is also required to
pay certain fees to and reimburse certain expenses of the Managing General
Partner or its affiliates in connection with the administration of the Fund and
its acquisition and disposition of investments in Local Limited Partnerships. In
addition, the General Partners are entitled to certain Fund distributions under
the terms of the Partnership Agreement. Also, an affiliate of the General
Partners will receive up to $10,000 from the sale or refinancing proceeds of
each Local Limited Partnership, if it is still a limited partner at the time of
such transaction. All such fees, expenses and distributions paid during the
years ended March 31, 2000, 1999 and 1998 are described below and in the
sections of the Prospectus entitled "Estimated Use of Proceeds", "Management
Compensation and Fees" and "Profits and Losses for Tax Purposes, Tax Credits and
Cash Distributions." Such sections are incorporated herein by reference. In
addition, an affiliate of the Managing General Partner serves as property
management agent for Twin Oaks Meadows.
The Fund is permitted to enter into transactions involving affiliates of the
Managing General Partner, subject to certain limitations established in the
Partnership Agreement.
Information regarding the Fees paid and expenses reimbursements made in the
three years ended March 31, 2000 is presented below.
Organizational fees and expenses and selling expenses
In accordance with the Partnership Agreement, the Fund is required to pay
certain fees to and reimburse expenses of the Managing General Partner and
others in connection with the organization of the Fund and the offering of its
Limited Partnership Units. Commissions, fees and accountable expenses related to
the sale of the Units totaling $6,304,898 have been charged directly to Limited
Partners' equity. In connection therewith, $4,329,050 of selling expenses and
$1,975,848 of offering expenses incurred on behalf of the Fund have been paid to
an affiliate of the Managing General Partner. The Fund is required to pay a
non-accountable expense allowance for marketing expense equal to a maximum of 1%
of Gross Proceeds. This allowance has not yet been charged to the Fund. In
addition, the Fund has paid $50,000 in organization costs to an affiliate of the
Managing General Partner. This cost has been included in the balance sheet.
Total organization and offering expenses exclusive of selling commissions and
underwriting advisory fees did not exceed 5.5% of the Gross Proceeds, and
organizational and offering expenses, inclusive of selling commissions and
underwriting advisory fees, did not exceed 15.0% of the Gross Proceeds. No
organizational fees and expenses were paid during the years ended March 31,
2000, 1999 and 1998.
Acquisition fees and expenses
In accordance with the Partnership Agreement, the Fund is required to pay
acquisition fees to and reimburse acquisition expenses of the Managing General
Partner or its affiliates for selecting, evaluating, structuring, negotiating
and closing the Fund's investments in Local Limited Partnerships. Acquisition
fees totaled 6% of the Gross Proceeds. Acquisition expenses, which include legal
fees and expenses, travel and communications expenses, costs of appraisals and
accounting fees and expenses, totaled 1.5% of the Gross Proceeds. Acquisition
fees totaling $3,055,800 for the closing of the Fund's Local Limited Partnership
Investments have been paid to an affiliate of the Managing General Partner. Of
this amount, approximately $2,567,000 is included as capital contributions to
Local Limited Partnerships. Acquisition expenses totaling $763,950 were incurred
and have been reimbursed to an affiliate of the Managing General Partner. No
acquisition fees or expenses were paid during the three years ended March 31,
2000.
Asset Management Fees
In accordance with the Partnership Agreement, an affiliate of the Managing
General Partner is paid an annual fee for services in connection with the
administration of the affairs of the Fund. The affiliate currently receives the
base amount of 0.593% (as adjusted by the CPI factor) of Gross Proceeds annually
as the Asset Management Fee. Fees earned during the years ended March 31, 2000,
1999 and 1998 are as follows:
2000 1999 1998
------------- ------------ -------------
Asset Management Fees $ 297,164 $ 292,147 $ 286,044
Salaries and benefits expense reimbursements
An affiliate of the Managing General Partner is reimbursed for the cost of the
Fund's salaries and benefits expenses. The reimbursements are based upon the
size and complexity of the Fund's operations. Reimbursements paid or payable
during the years ended March 31, 2000, 1999 and 1998 are as follows:
2000 1999 1998
------------- ------------ -------------
Salaries and benefits
expense reimbursements $ 107,844 $ 92,108 $ 108,845
Property Management Fees
An affiliate of the Managing General Partner is the management agent for one
Local Limited Partnership. The management fee charged to the property is equal
to 5% of the property gross revenues. Fees charged for the years ended December
31, 1999, 1998 and 1997 are as follows:
1999 1998 1997
-------------- -------------- ---------
Property Management Fees $ 23,247 $ 23,058 $ 22,680
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partners of the Fund,
Arch Street VII, Inc. and Arch Street VII Limited Partnership, receive 1% of
cash distributions paid to partners. To date, the Fund has not paid any cash
distributions to partners.
Additional information concerning cash distributions and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Lend Lease and its affiliates during the years
ended March 31, 2000, 1999 and 1998 is presented in Note 5 to the Financial
Statements.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) and (a)(2) Documents filed as a part of this Report
In response to this portion of Item 14, the financial statements, financial
statement schedule and the auditors' report relating thereto are submitted as a
separate section of this Report. See Index to the financial statements on page
F-1 hereof.
The reports of auditors of the Local Limited Partnerships relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
28.1 of this Report.
All other financial statement schedules and exhibits for which provision is made
in the applicable accounting regulations of the Securities and Exchange
Commission are not required under related instructions or are inapplicable and
therefore have been omitted.
(a)(3) See Exhibit Index contained herein.
(a)(3)(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the year ended March 31,
2000.
(a)(3)(c) Exhibits
Number and Description in Accordance with
Item 601 of Regulation S-K
27. Financial Data Schedule
28. Additional Exhibits
(a) 28.1 Reports of Other Independent Auditors
(b) Audited financial statements of Local Limited Partnerships.
None
(a)(3)(d) None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
By: Arch Street VII, Inc.
its Managing General Partner
By: /s/Randolph G. Hawthorne Date: June 29, 2000
------------------------------ -------------
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Managing General
Partner of the Fund and in the capacities and on the dates indicated:
By: /s/Randolph G. Hawthorne Date: June 29, 2000
----------------------------- -------------
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
By: /s/Michael H. Gladstone Date: June 29, 2000
------------------------------------ -------------
Michael H. Gladstone,
Managing Director, Vice President
<PAGE>
Item 8. Financial Statements and Supplementary Data
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 2000
INDEX
Page No.
Report of Independent Accountants
For the years ended March 31, 2000, 1999 and 1998 F-2
Financial Statements
Balance Sheets - March 31, 2000 and 1999 F-3
Statements of Operations - Years ended
March 31, 2000, 1999 and 1998 F-4
Statements of Changes in Partners' Equity (Deficiency) -
Years ended March 31, 2000, 1999 and 1998 F-5
Statements of Cash Flows - Years ended
March 31, 2000, 1999 and 1998 F-6
Notes to the Financial Statements F-7
Financial Statement Schedule
Schedule III - Real Estate and Accumulated
Depreciation F-16
Other schedules have been omitted as they are either not required or the
information required to be presented therein is available elsewhere in the
financial statements and the accompanying notes and schedules.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Boston Financial Tax Credit Fund VII, A Limited Partnership:
In our opinion, based on our audits and the reports of other auditors, the
combined financial statements listed in the accompanying index present fairly,
in all material respects, the financial position Boston Financial Tax Credit
Fund VII, A Limited Partnership (the "Fund") at March 31, 2000 and 1999 and the
results of its operations and its cash flows for each of the three years in
the period ended March 31, 2000, in conformity with accounting principles
generally accepted in the United States. In addition, in our opinion, the
financial statement schedule listed in the accompanying index presents fairly,
in all material respects, the information set forth therein when read in
conjunction with the related financial statements. These financial statements
and financial statment schedule are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the financial statements
of certain local limited partnerships for which $17,189,105 and $14,443,839
of cumulative equity in losses are included in the balance sheet as of March
31, 2000 and 1999, respectively, and for which net losses of $2,745,266,
$2,852,291 and $3,325,494 are included in the accompanying financial statements
for the years ended March 31, 2000, 1999, and 1998, respectively. Those
statements were audited by other auditors whose reports thereon have been
furnished to us, and our opinion expressed herein, insofar as it relates to the
amounts included for the Local Limited Partnerships, is based solely on the
reports of the other auditors. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits and the reports of other auditors provide a reasonable basis for the
opinions expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
June 22, 2000
Boston, Massachusetts
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
BALANCE SHEETS - MARCH 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
------------- ---------
Assets
<S> <C> <C>
Cash and cash equivalents $ 307,807 $ 114,347
Marketable securities, at fair value (Note 3) 2,491,752 3,020,272
Restricted cash (Note 4) 280,053 266,031
Investments in Local Limited Partnerships (Note 4) 22,640,861 25,341,905
Other assets 31,930 37,349
------------- --------------
Total Assets $ 25,752,403 $ 28,779,904
============= ==============
Liabilities and Partners' Equity
Accounts payable to affiliates (Notes 4 and 5) $ 170,084 $ 72,014
Accounts payable and accrued expenses 36,491 68,778
------------- --------------
Total Liabilities 206,575 140,792
------------- --------------
Commitments (Note 6)
General, Initial and Investor Limited Partners' Equity 25,580,333 28,628,826
Net unrealized gains (losses) on marketable securities (34,505) 10,286
------------- --------------
Total Partners' Equity 25,545,828 28,639,112
------------- --------------
Total Liabilities and Partners' Equity $ 25,752,403 $ 28,779,904
============= ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
For the Years Ended March 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>
2000 1999 1998
------------ ------------ -----------
Revenue:
<S> <C> <C> <C>
Investment $ 166,318 $ 192,898 $ 202,202
Other 70,562 63,368 51,983
------------ ---------- ------------
Total Revenue 236,880 256,266 254,185
------------ ------------ -------------
Expenses:
General and administrative expenses (includes
reimbursements to an affiliate in the amounts of
$107,844, $92,108 and $108,845, respectively)
(Note 5) 210,759 229,897 227,685
Asset management fees, related party (Note 5) 297,164 292,147 286,044
Amortization 32,184 32,184 41,302
------------ ------------ ------------
Total Expenses 540,107 554,228 555,031
------------ ------------ ------------
Loss before equity in losses of
Local Limited Partnerships (303,227) (297,962) (300,846)
Equity in losses of
Local Limited Partnerships (Note 4) (2,745,266) (2,852,291) (3,325,494)
------------ ------------ ------------
Net Loss $ (3,048,493) $ (3,150,253) $ (3,626,340)
============ ============ ============
Net Loss allocated:
General Partners $ (30,485) $ (31,503) $ (36,263)
Limited Partners (3,018,008) (3,118,750) (3,590,077)
------------ ------------ ------------
$ (3,048,493) $ (3,150,253) $ (3,626,340)
============ ============ ============
Net Loss per Limited Partnership Unit
(50,930 Units) $ (59.26) $ (61.24) $ (70.49)
=========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Years Ended March 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>
Net
Initial Investor Unrealized
General Limited Limited Gains
Partners Partner Partners (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1997 $ (90,267) $ 5,000 $ 35,490,686 $ (50,092) $ 35,355,327
----------- --------- -------------- ----------- -------------
Comprehensive Income (Loss):
Change in net unrealized losses
on marketable securities
available for sale - - - 56,217 56,217
Net Loss (36,263) - (3,590,077) - (3,626,340)
----------- --------- -------------- ----------- -------------
Comprehensive Income (Loss) (36,263) - (3,590,077) 56,217 (3,570,123)
----------- --------- -------------- ----------- -------------
Balance at March 31, 1998 (126,530) 5,000 31,900,609 6,125 31,785,204
----------- --------- -------------- ----------- -------------
Comprehensive Income (Loss):
Change in net unrealized gains
on marketable securities
available for sale - - - 4,161 4,161
Net Loss (31,503) - (3,118,750) - (3,150,253)
----------- --------- -------------- ----------- -------------
Comprehensive Income (Loss) (31,503) - (3,118,750) 4,161 (3,146,092)
----------- --------- -------------- ----------- -------------
Balance at March 31, 1999 (158,033) 5,000 28,781,859 10,286 28,639,112
----------- --------- -------------- ----------- -------------
Comprehensive Loss:
Change in net unrealized gains
on marketable securities
available for sale - - - (44,791) (44,791)
Net Loss (30,485) - (3,018,008) - (3,048,493)
----------- --------- -------------- ----------- -------------
Comprehensive Loss (30,485) - (3,018,008) (44,791) (3,093,284)
----------- --------- -------------- ----------- -------------
Balance at March 31, 2000 $ (188,518) $ 5,000 $ 25,763,851 $ (34,505) $ 25,545,828
=========== ========= ============== =========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Years Ended March 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>
2000 1999 1998
-------------- -------------- --------
Cash flows from operating activities:
<S> <C> <C> <C>
Net Loss $ (3,048,493) $ (3,150,253) $ (3,626,340)
Adjustments to reconcile net loss
to net cash used for operating activities:
Equity in losses of Local Limited Partnerships 2,745,266 2,852,291 3,325,494
Amortization 32,184 32,184 41,302
(Gain) loss on sales and maturities of marketable
securities (1,554) (2,518) 1,778
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Restricted cash (14,022) (13,476) (13,400)
Other assets 5,419 (1,285) 3,492
Accounts payable to affiliates 98,070 (237,158) 4,790
Accounts payable and accrued expenses (32,287) 4,846 28,992
-------------- ------------- -------------
Net cash used for operating activities (215,417) (515,369) (233,892)
-------------- ------------- -------------
Cash flows from investing activities:
Purchases of marketable securities (698,323) (2,071,201) (2,295,469)
Proceeds from sales and maturities
of marketable securities 1,183,606 2,164,253 2,484,207
Investments in Local Limited Partnerships (230,000) (20,000) (99,191)
Cash distributions received from Local
Limited Partnerships 153,594 181,496 145,784
-------------- ------------- -------------
Net cash provided by investing activities 408,877 254,548 235,331
-------------- ------------- -------------
Net increase (decrease) in cash and cash equivalents 193,460 (260,821) 1,439
Cash and cash equivalents, beginning of period 114,347 375,168 373,729
-------------- ------------- -------------
Cash and cash equivalents, end of period $ 307,807 $ 114,347 $ 375,168
============== ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
F-18
NOTES TO THE FINANCIAL STATEMENTS
1. Organization
Boston Financial Tax Credit Fund VII, A Limited Partnership (the "Fund") is a
Massachusetts limited partnership organized to invest in other limited
partnerships ("Local Limited Partnerships") which own and operate apartment
complexes which are eligible for low income housing tax credits which may be
applied against the federal income tax liability of an investor.
Arch Street VII, Inc., a Massachusetts corporation ("Arch Street, Inc.") is the
Managing General Partner of the Fund. Arch Street VII Limited Partnership, a
Massachusetts limited partnership ("Arch Street L.P."), whose general partner
consists of Arch Street, Inc., is also a General Partner. Both the Managing
General Partner and Arch Street L.P. are affiliates of Lend Lease Real Estate
Investments, Inc. ("Lend Lease"). An affiliate of the General Partners ("SLP
Affiliate") is a special limited partner in each Local Limited Partnership in
which the Fund invests, with the right to become a general partner under certain
circumstances. The fiscal year of the Fund ends on March 31.
The Partnership Agreement authorized the sale of up to 100,000 Units of limited
partnership interest ("Units") at $1,000 per Unit. Boston Financial Securities,
Inc., an affiliate of the General Partners, received selling commissions and
underwriting advisory fees, which did not exceed 7.0% and 1.5%, respectively, of
Gross Proceeds for Units, sold by the entity as a soliciting dealer. On November
30, 1993, the Fund held its final investor closing. In total, the Fund received
$50,930,000 of capital contributions from investors admitted as Limited Partners
for 50,930 Units.
The Partnership Agreement provides that all cash available for distribution will
be allocated 99% to the Limited Partners and 1% to the General Partners. Sale or
refinancing proceeds generally will be distributed first to the Limited Partners
in an amount equal to their adjusted capital contributions, second to the
General Partners in an amount equal to their capital contributions, third to the
General Partners (after payment of the 6% return as set forth in Section 4.2.3
of the Partnership Agreement, and of any accrued but unpaid Subordinated
Disposition Fee, a fee equal to 1% of the sales price of a property owned by a
Local Limited Partnership) in such amount as is necessary to cause the General
Partners to have received 5% of all distributions to the Partners, and lastly,
95% to the Limited Partners and 5% to the General Partners.
Profits and losses for tax purposes arising from general operations and tax
credits generally will be allocated 99% to the Limited Partners and 1% to the
General Partners. However, as set forth in the Partnership Agreement, profits
and losses for tax purposes arising from a sale or refinancing generally will be
allocated among the Partners in such manner as is necessary to cause their
respective capital accounts to reflect the amount that would be distributable to
them in accordance with the priorities set forth in the preceding paragraph, if
all of the Fund's assets were sold for their federal adjusted basis and the Fund
were then liquidated.
All distributions of cash available for distribution or distributions of sale or
refinancing proceeds, and all allocations of profits and losses for tax purposes
from normal operations and from a sale or refinancing or of tax credits, which
are distributed or allocated to the General Partners, will be allocated 1% to
Arch Street, Inc. and 99% to Arch Street L.P.
Under the terms of the Partnership Agreement, the Fund initially designated 5%
of the Gross Proceeds from the sale of Units as a reserve for working capital of
the Fund and contingencies related to ownership of Local Limited Partnership
interests. The Managing General Partner may increase or decrease such amounts
from time to time as it deems appropriate. At March 31, 2000, the Managing
General Partner has designated approximately $2,240,000 of marketable securities
as such Reserve.
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. Significant Accounting Policies
Basis of Presentation
The Fund accounts for its investments in Local Limited Partnerships using the
equity method of accounting because the Fund does not have control over the
major operating and financial policies of the Local Limited Partnerships in
which it invests. Under the equity method, the investment is carried at cost,
adjusted for the Fund's share of income or loss of the Local Limited
Partnerships, additional investments in and cash distributions from the Local
Limited Partnerships. Equity in income or loss of the Local Limited Partnerships
is included in the Fund's operations. The Fund has no obligation to fund
liabilities of the Local Limited Partnerships beyond its investment and
therefore a Local Limited Partnership investment will not be carried below zero.
To the extent that equity in losses are incurred when a Local Limited
Partnership's respective investment balance has been reduced to zero, losses
will be suspended to be used against future income.
Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the Fund. These
fees and expenses are included in the Fund's investments in Local Limited
Partnerships and are being amortized on a straight-line basis over 35 years.
The Fund recognizes a decline in the carrying value of its investments in Local
Limited Partnerships when there is evidence of a non-temporary decline in the
recoverable amount of the investment. There is a possibility that the estimates
relating to reserves for non-temporary declines in carrying value of investments
in Local Limited Partnerships may be subject to material near term adjustments.
The Fund, as a limited partner in the Local Limited Partnerships, is subject to
risks inherent in the ownership of property which are beyond its control, such
as fluctuations in occupancy rates and operating expenses, variations in rental
schedules, proper maintenance and continued eligibility of tax credits. If the
cost of operating a property exceeds the rental income earned thereon, the Fund
may deem it in its best interest to voluntarily provide funds in order to
protect its investment.
The General Partners have decided to report results of the Local Limited
Partnerships on a 90 day lag basis because the Local Limited Partnerships report
their results on a calendar year basis. Accordingly, the financial information
about the Local Limited Partnerships that is included in the accompanying
financial statements is as of December 31, 1999, 1998 and 1997.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of short-term money market instruments
with original maturities of 90 days or less at acquisition and approximate
fair value.
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (Continued)
2. Significant Accounting Policies (continued)
Marketable Securities
The Fund's investments in securities are classified as "Available for Sale"
securities and reported at fair value as reported by the brokerage firm at which
the securities are held. Realized gains or losses from the sales of securities
are based on the specific identification method. Unrealized gains and losses are
excluded from earnings and reported as a separate component of partners' equity.
Income Taxes
No provision for income taxes has been made as the liability for such taxes is
an obligation of the partners of the Fund.
Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107 ("SFAS No. 107"),
Disclosures About Fair Value of Financial Instruments, requires disclosure of
the fair value of most on- and off-balance sheet financial instruments for which
it is practicable to estimate that value. The scope of SFAS No. 107 excludes
certain financial instruments, such as trade receivables and payables when the
carrying value approximates the fair value and investments accounted for under
the equity method, and all nonfinancial assets, such as real property. The fair
values of the Fund's assets and liabilities, which qualify as financial
instruments under SFAS No. 107, approximate their carrying amounts in the
accompanying balance sheets.
3. Marketable Securities
<TABLE>
<CAPTION>
A summary of marketable securities is as follows:
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
Debt securities issued by
the US Treasury and other
US government corporations
<S> <C> <C> <C> <C>
and agencies $ 2,071,100 $ 352 $ (29,553) $ 2,041,899
Mortgage backed securities 455,157 - (5,304) 449,853
------------- ----------- ----------- ------------
Marketable securities at
March 31, 2000 $ 2,526,257 $ 352 $ (34,857) $ 2,491,752
============= =========== =========== ============
Debt securities issued by
the US Treasury and other
US government corporations
and agencies $ 2,372,929 $ 9,210 $ (6,263) $ 2,375,876
Mortgage backed securities 637,057 7,339 - 644,396
------------- ----------- ----------- ------------
Marketable securities at
March 31, 1999 $ 3,009,986 $ 16,549 $ (6,263) $ 3,020,272
============= =========== =========== ============
</TABLE>
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (Continued)
3. Marketable Securities (continued)
The contractual maturities at March 31, 2000 are as follows:
<TABLE>
<CAPTION>
Fair
Cost Value
<S> <C> <C>
Due in less than one year $ 899,028 $ 893,250
Due in one to five years 1,172,072 1,148,649
Mortgage backed securities 455,157 449,853
------------ ------------
$ 2,526,257 $ 2,491,752
============ ============
</TABLE>
Actual maturities for asset backed securities may differ from contractual
maturities because some borrowers have the right to call or prepay obligations.
Proceeds from the sales of marketable securities were approximately $402,000,
$501,000 and $1,275,000 during the years ended March 31, 2000, 1999 and 1998,
respectively. Proceeds from the maturities of marketable securities were
approximately $782,000, $1,663,000 and $1,209,000 during the years ended March
31, 2000, 1999 and 1998, respectively. Included in investment income are gross
gains of $1,916, $3,891 and $5,672 and gross losses of $362, $1,373 and $7,450
that were realized on the sales during the years ended March 31, 2000, 1999 and
1998, respectively.
4. Investments in Local Limited Partnerships
The Fund uses the equity method to account for its limited partnership interests
in nineteen Local Limited Partnerships which own and operate multi-family
housing complexes. The Fund, as Investor Limited Partner, pursuant to the
various Local Limited Partnership Agreements, which contain certain operating
and distribution restrictions, has generally acquired a 99% interest, with the
exception of Springwood which is a 19.8% interest, in the profits, losses, tax
credits and cash flows from operations of each of the Local Limited
Partnerships. Upon dissolution, proceeds will be distributed according to each
respective partnership agreement.
The following is a summary of investments in Local Limited Partnerships at March
31:
<TABLE>
<CAPTION>
2000 1999 1998
------------- ------------- ---------
Capital contributions paid to Local Limited
Partnerships and purchase price paid to
withdrawing partners of Local Limited
<S> <C> <C> <C>
Partnerships $ 39,539,152 $ 39,309,152 $ 39,289,152
Cumulative equity in losses of Local Limited Partnerships
(excluding unrecognized losses of $1,460,403, $663,782 and
$138,300 in 2000, 1999 and 1998, respectively) (17,189,105) (14,443,839) (11,591,548)
Cash distributions received from Local Limited
Partnerships (773,877) (620,283) (438,787)
------------- ------------- -------------
Investments in Local Limited Partnerships before
adjustments 21,576,170 24,245,030 27,258,817
Excess of investment costs over the underlying net assets acquired:
Acquisition fees and expenses 1,252,338 1,252,338 1,252,338
Accumulated amortization of acquisition fees and expenses (187,647) (155,463) (123,279)
------------- ------------- -------------
Investments in Local Limited Partnerships $ 22,640,861 $ 25,341,905 $ 28,387,876
============= ============= =============
</TABLE>
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (Continued)
4. Investments in Local Limited Partnerships (continued)
Summarized financial information as of December 31, 1999, 1998 and 1997 (due to
the Fund's policy of reporting the financial information of its Local Limited
Partnership interests on a 90 day lag basis) of all the Local Limited
Partnerships in which the Fund has invested as of that date is as follows:
Summarized Balance Sheets - as of December 31,
<TABLE>
<CAPTION>
1999 1998 1997
---------------- --------------- ----------
Assets:
<S> <C> <C> <C>
Investment property, net $ 87,041,519 $ 91,081,027 $ 94,703,692
Current assets 2,723,938 3,171,778 2,798,228
Other assets 4,824,644 4,168,082 4,068,904
---------------- --------------- ---------------
Total Assets $ 94,590,101 $ 98,420,887 $ 101,570,824
================ =============== ===============
Liabilities and Partners' Equity:
Current liabilities (includes current
portion of long term debt) $ 3,941,263 $ 5,290,635 $ 4,083,692
Long-term debt 59,251,015 57,915,772 58,686,199
Other debt 3,249,378 3,123,544 2,876,908
---------------- --------------- ---------------
Total Liabilities 66,441,656 66,329,951 65,646,799
Fund's Equity 20,112,181 23,639,697 27,000,331
Other Partners' Equity 8,036,264 8,451,239 8,923,694
---------------- --------------- ---------------
Total Liabilities and Partners' Equity $ 94,590,101 $ 98,420,887 $ 101,570,824
================ =============== ===============
Summarized Statements of Operations -
for the years ended December 31,
1999 1998 1997
---------------- --------------- ----------
Rental and other revenue $ 12,522,727 $ 12,162,713 $ 12,245,232
---------------- --------------- ---------------
Expenses:
Operating 7,313,184 6,684,290 6,745,745
Interest 4,956,203 5,034,525 5,030,571
Depreciation and amortization 4,125,199 4,140,576 4,282,140
---------------- --------------- ---------------
Total Expenses 16,394,586 15,859,391 16,058,456
---------------- --------------- ---------------
Net Loss $ (3,871,859) $ (3,696,678) $ (3,813,224)
================ =============== ===============
Fund's share of Net Loss $ (3,541,887) $ (3,377,773) $ (3,463,794)
================ =============== ===============
Other partners' share of Net Loss $ (329,972) $ (318,905) $ (349,430)
================ =============== ===============
</TABLE>
For the years ended March 31, 2000, 1999 and 1998, the Fund has not recognized
$796,621, $525,482 and $138,300, respectively, of equity in losses relating to
one Local Limited Partnership where cumulative equity in losses exceeded its
total investment in this Local Limited Partnership.
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (Continued)
4. Investments in Local Limited Partnerships (continued)
The Fund's equity as reflected by the Local Limited Partnerships of $20,112,181
differs from the Fund's investments in Local Limited Partnerships before
adjustment of $21,576,170 primarily because the Fund has not recognized
$1,460,403 of equity in losses of one Local Limited Partnership whose equity in
losses exceeded its total investment.
The Fund has set aside in an escrow account future capital contributions related
to its investment in one Local Limited Partnership. Interest earned on this
deposit is payable to the local general partner. At March 31, 2000 and 1999,
$54,795 and $40,773, respectively, of interest is included in accounts payable
to an affiliate.
5. Transactions with Affiliates
An affiliate of the Managing General Partner receives a base amount of 0.593%
(as adjusted by the CPI factor) of Gross Proceeds annually as an Asset
Management Fee for administering the affairs of the Fund. Asset Management Fees
of $297,164, $292,147 and $286,044 have been included in expenses for the years
ended March 31, 2000, 1999 and 1998, respectively. Included in accounts payable
to affiliates is $75,499 and $13,332 for Asset Management Fees for March 31,
2000 and 1999, respectively.
An affiliate of the Managing General Partner is reimbursed for the actual cost
of the Fund's operating expenses. Included in general and administrative
expenses for the years ended March 31, 2000, 1999 and 1998 is $107,844, $92,108
and $108,845, respectively, that the Fund has paid or accrued for reimbursement
for salaries and benefits. The amounts payable for salaries and benefits at
March 31, 2000 and 1999 were $39,790 and $17,909, respectively.
An affiliate of the Managing General Partner is the management agent for one
Local Limited Partnership. The management fee charged to the property is equal
to 5% of the property gross revenues. Included in operating expenses in the
summarized income statements in Note 4 to the Financial Statements is $23,247,
$23,058 and $22,680 of property management fees at December 31, 1999, 1998 and
1997, respectively.
6. Commitments
At March 31, 2000, the Fund has committed to make future capital contributions
and pay future purchase price installments on its investments in Local Limited
Partnerships. These future payments are contingent upon the achievement of
certain criteria as set forth in the Local Limited Partnership Agreements and
total approximately $408,000. In addition, the Fund has set aside $217,000 for
future capital contributions to one Local Limited Partnership.
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (Continued)
7. Federal Income Taxes
The following schedule reconciles the reported financial statement loss for the
fiscal years ended March 31, 2000, 1999 and 1998 to the loss reported on the
Form 1065, U.S. Partnership Return of Income for the years ended December 31,
1999, 1998 and 1997:
<TABLE>
<CAPTION>
2000 1999 1998
------------ ------------ --------
<S> <C> <C> <C>
Net Loss per financial statements $ (3,048,493) $ (3,150,253) $ (3,626,340)
Adjustment to reflect March 31 fiscal year end
to December 31 tax year end 44,093 (28,066) 112,520
Adjustment for equity in losses of Local Limited
Partnerships for financial reporting (tax) purposes
in excess of equity in losses for
tax (financial reporting) purposes 3,880,121 (53,105) (1,630,198)
Equity in loss of Local Limited Partnership not
recognized for financial reporting purposes (796,621) (525,482) (138,300)
Amortization of acquisition fees and expenses
for tax purposes in excess of amortization
for financial reporting purposes (13,356) (13,356) (13,405)
Related party expenses not currently deductible
for tax purposes 1 259,031 193,445
Related party expenses paid in current year
but expensed for financial reporting purposes
in prior year (259,031) (193,445) (262,410)
------------ ------------ ------------
Net Loss per tax return $ (193,286) $ (3,704,676) $(5,364,688)
============ ============ ===========
</TABLE>
The differences in the assets and liabilities of the Fund for financial
reporting purposes and tax reporting purposes as of March 31, 2000 are as
follows:
<TABLE>
<CAPTION>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 22,640,861 $ 23,135,393 $ (494,532)
============= ============= =============
Other assets $ 3,111,542 $ 9,394,421 $ (6,282,879)
============= ============= =============
Liabilities $ 206,575 $ 115,197 $ 91,378
============= ============== =============
</TABLE>
The differences in assets and liabilities of the Fund for financial reporting
purposes are primarily attributable to: (i) the cumulative equity in losses from
Local Limited Partnerships for tax reporting purposes is approximately $482,000
less than for financial reporting purposes, including approximately $1,460,000
of losses the Fund has not recognized relating to one Local Limited Partnership
whose cumulative equity in losses exceeded its total investment; (ii) the
cumulative amortization of acquisition fees for tax purposes exceeds financial
reporting purposes by approximately $51,000; (iii) approximately $64,000 of cash
distributions received from Local Limited
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (Continued)
7. Federal Income Taxes (continued)
Partnerships during the year ended March 31, 2000 are not included in the Fund's
investments in Local Limited Partnerships for tax return purposes at December
31, 1999; (iv) organizational and offering costs of approximately $6,305,000
that have been capitalized for tax purposes are charged to Limited Partners'
equity for financial reporting purposes; and (v) related party expenses which
are not deductible for financial reporting purposes of approximately $259,000
are deductible for tax reporting purposes.
The differences in the assets and liabilities of the Fund for financial
reporting purposes and tax purposes as of March 31, 1999 are as follows:
<TABLE>
<CAPTION>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 25,341,905 $ 22,702,050 $ 2,639,855
============= ============= =============
Other assets $ 3,437,999 $ 10,003,934 $ (6,565,935)
============= ============= =============
Liabilities $ 140,792 $ 108,304 $ 32,488
============= ============= =============
</TABLE>
The differences in assets and liabilities of the Fund for financial reporting
purposes are primarily attributable to: (i) the cumulative equity in losses from
Local Limited Partnerships for tax reporting purposes is approximately
$2,613,000 greater than for financial reporting purposes, including
approximately $664,000 of losses the Fund has not recognized relating to one
Local Limited Partnership whose cumulative equity in losses exceeded its total
investment; (ii) the cumulative amortization of acquisition fees for tax
purposes exceeds financial reporting purposes by approximately $37,000; (iii)
approximately $30,000 of cash distributions received from Local Limited
Partnerships during the year ended March 31, 1999 are not included in the Fund's
investments in Local Limited Partnerships for tax return purposes at December
31, 1998; (iv) organizational and offering costs of approximately $6,305,000
that have been capitalized for tax reporting purposes are charged to Limited
Partners' equity for financial reporting purposes; and (v) related party
expenses which are deductible for financial reporting purposes of approximately
$66,000 are not deductible for tax reporting purposes.
<PAGE>
Boston Financial Tax Credit Fund VII, A Limited Partnership Schedule III - Real
Estate and Accumulated Depreciation of Property Owned by Local Limited
Partnerships in Which Registrant has Invested at March 31, 2000
<TABLE>
<CAPTION>
COST OF INTEREST AT ACQUISITION DATE
--------------------------------------------------------------------------------
NET IMPROVEMENTS
NUMBER TOTAL BUILDINGS / CAPITALIZED
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO
DESCRIPTION UNITS BRANCES * LAND & EQUIPMENT ACQUISITION
Low and Moderate
Income Apartment Complexes
<S> <C> <C> <C> <C> <C>
Oak Ridge Apartments 152 $4,046,475 $727,440 $583,725 $5,788,902
Macon, GA
Santa Fe Oaks Phase II 129 3,660,185 382,394 642,179 6,094,200
Gainesville, FL
Andrew's Pointe 57 2,283,645 95,000 3,430,523 66,393
Burnsville, MN
Palo Verde II 60 1,074,298 148,858 2,537,261 11,579
Henderson, NY
Woods Lane 156 3,285,471 312,000 5,817,580 49,848
Rogers, AR
Crafton Place 84 1,642,747 126,001 3,083,929 1,600
Fayetteville, AR
Guardian Place 120 2,945,065 677,786 1,838,034 2,976,878
Richmond, VA
Twin Oaks Meadows 63 1,889,103 0 720,394 2,531,668
Lansing, MI
Sunrise Terrace 52 995,967 149,959 2,719,607 0
Madera,CA
Wynmor 324 5,660,037 324,000 6,553,123 9,298,345
Brooklyn Park, MN
Citrus Glen 176 5,377,384 500,000 759,632 9,226,242
Orlando, FL
St. Andrews Pointe 150 4,587,899 491,634 7,349,439 853,824
Columbia, SC
Des Moines Street 42 1,679,037 300,000 2,223,447 499,047
Village
Des Moines, IA
Fountain Lakes 180 4,133,906 357,800 4,057,935 2,904,917
Benton, AR
Fairhaven Manor 40 929,733 176,182 2,043,351 6,496
Burlington, WA
Grand Boulevard 30 1,936,992 25,580 1,570,044 1,349,102
Chicago, IL
Los Claveles II 180 9,000,135 335,000 6,842,254 (178,670)
Trujilio Alto, PR
Harford Commons 30 1,726,920 28,000 2,680,017 44,356
Baltimore, MD
Springwood (2) 113 3,854,331 296,280 2,937,028 4,271,360
Tallahassee, FL
---------------------------------------------------------------------------
Totals 2,138 $60,709,330 $5,453,914 $58,389,502 $45,796,087
===========================================================================
</TABLE>
(1) Total aggregate cost for Federal Income Tax purposes is approximately
$110,573,000.
(2) Boston Financial Tax Credit Fund VII has a 20% ownership interest
in Springwood Apartments, A Limited
Partnership.
* Mortgage notes payable generally represent non-recourse
financing of low-income housing projects payable with
terms of up to 40 years with interest payable at rates
ranging from 7.25% to 10.2%. The Fund has not guaranteed
any of these mortgage notes payable.
<PAGE>
Boston Financial Tax Credit Fund VII, A Limited Partnership Schedule III - Real
Estate and Accumulated Depreciation of Property Owned by Local Limited
Partnerships in Which Registrant has Invested at March 31, 2000
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1999 LIFE ON
--------------------------------------------------------
WHICH
BUILDINGS DEPRECIATION
AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION LAND IMPROVEMENTS TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
----------- ---- ------------ ----- ------------ ----- ------- --------
Low and Moderate
Income Apartment Complexes
<S> <C> <C> <C> <C> <C> <C> <C>
Oak Ridge Apartments $727,440 $6,372,627 $7,100,067 $1,629,748 8/93 10 & 30 12/31/92
Macon, GA
Santa Fe Oaks Phase II 382,394 6,736,379 7,118,773 1,710,598 5/93 10 & 30 12/31/92
Gainesville, FL
Andrew's Pointe 98,994 3,492,922 3,591,916 811,597 12/93 7 & 27.5 04/13/92
Burnsville, MN
Palo Verde II 148,858 2,548,840 2,697,698 480,456 10/93 5 - 27.5 05/19/93
Henderson, NY
Woods Lane 312,000 5,867,428 6,179,428 1,422,853 7/93 7 & 27.5 07/30/93
Rogers, AR
Crafton Place 126,001 3,085,529 3,211,530 757,836 7/93 7 & 27.5 07/30/93
Fayetteville, AR
Guardian Place 677,786 4,814,912 5,492,698 896,351 8/94 5 - 40 10/07/93
Richmond, VA
Twin Oaks Meadows 307,264 2,944,798 3,252,062 803,864 8/94 useful lives 10/29/93
Lansing, MI
Sunrise Terrace 149,959 2,719,607 2,869,566 566,453 11/93 useful lives 11/24/93
Madera,CA
Wynmor 1,258,132 14,917,336 16,175,468 3,412,875 9/94 7, 15, & 30 12/22/93
Brooklyn Park, MN
Citrus Glen 10 10,485,864 10,485,874 2,232,645 9/94 5 - 27.5 12/30/93
Orlando, FL
St. Andrews Pointe 491,634 8,203,263 8,694,897 1,664,208 8/94 10 & 30 01/05/94
Columbia, SC
Des Moines Street 303,451 2,719,043 3,022,494 364,783 4/95 useful lives 01/31/94
Village
Des Moines, IA
Fountain Lakes 357,800 6,962,852 7,320,652 1,586,567 1/94 7 - 27.5 02/02/94
Benton, AR
Fairhaven Manor 176,192 2,049,837 2,226,029 352,608 2/94 5 - 7 & 40 03/08/94
Burlington, WA
Grand Boulevard 31,580 2,913,146 2,944,726 421,297 7/95 useful lives 08/03/94
Chicago, IL
Los Claveles II 335,000 6,663,584 6,998,584 1,162,005 8/94 8 & 40 08/31/94
Trujilio Alto, PR
Harford Commons 28,000 2,724,373 2,752,373 391,571 12/95 useful lives 2/28/95
Baltimore, MD
Springwood (2) 296,280 7,208,388 7,504,668 1,929,669 8/95 useful lives 12/31/94
Tallahassee, FL
--------------------------------------------------------
Totals $6,208,775 $103,430,728 $109,639,503 $22,597,984
========================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1999 Accumulated Depreciation December
31, 1998
------------------------------------------------------------------------------- -------------------------------------
<S> <C> <C>
Balance at beginning of period $109,767,808 Balance at beginning of $18,686,781
period
===============
Additions during Additions during
period: period:
Depreciation 3,911,203
------------
Acquisitions 10,888 Balance at close of $22,597,984
period
============
Improvements etc. 196,698
-------------
207,586
Deductions during
period:
Basis reduction (335,891)
-------------
(335,891)
---------------
Balance at close of $109,639,503
period
===============
Property Owned December 31, 1998 Accumulated Depreciation December
31, 1998
------------------------------------------------------------------------------- -------------------------------------
Balance at beginning of period $109,472,326 Balance at beginning of $14,768,634
period
===============
Additions during Additions during
period: period:
Depreciation 3,918,147
------------
Acquisitions 287,005 Balance at close of $18,686,781
period
============
Improvements etc. 8,477
-------------
295,482
Deductions during
period:
Disposition of real 0
estate
-------------
0
---------------
Balance at close of $109,767,808
period
===============
Property Owned December 31, 1997 Accumulated Depreciation December
31, 1997
------------------------------------------------------------------------------- -------------------------------------
Balance at beginning of period $109,243,229 Balance at beginning of $10,724,040
period
Additions during Additions during
period: period:
Depreciation 4,044,594
------------
Acquisitions 175,171 Balance at close of $14,768,634
period
============
Improvements etc. 53,926
-------------
229,097
Deductions during
period:
Disposition of real 0
estate
-------------
0
---------------
Balance at close of $109,472,326
period
===============
</TABLE>
For The Year Ended March 31, 2000
Reports of Independent Auditors
<PAGE>
Springwood
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditors' Report
The Partners
Springwood Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Springwood Apartments, A
Limited Partnership as of December 31, 1999 and 1998, and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Springwood Apartments, A
Limited Partnership as of December 31, 1999 and 1998 and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 25, 2000
<PAGE>
Springwood
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditors' Report
The Partners
Springwood Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Springwood Apartments, A
Limited Partnership as of December 31, 1998 and 1997, and the related statements
of loss, partners' capital, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Springwood Apartments, A
Limited Partnership as of December 31, 1998 and 1997 and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 26, 1999
<PAGE>
HARFORD
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
Baltimore, MD
INDEPENDENT AUDITOR'S REPORT
To the Partners
BHP/Harford Commons Limited Partnership
Baltimore, Maryland
We have audited the accompanying balance sheet of Harford Commons Limited
Partnership as of December 31, 1999 and the related statements of profit and
loss(on HUD Form No. 92410), partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller of the United
States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Harford Commons Limited
Partnership as of December 31, 1999, and the results of its operations, changes
in partners' equity (deficit) and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 20 through 29
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has beensubjected to the audit
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects inrelation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Guide for
Audits of HUD Programs, we have also issued reports dated January 29, 2000,
on our consideration of BHP/Harford Commons Limited Partnership's internal
control and on its compliance with specific requirements applicable to
DHCH-assisted programs, fair housing and nondiscrimination, and laws and
regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman
Federal Employer
Identification Number:
52-1088612
Baltimore, Maryland
January 29, 2000
Audit Principal: William T. Riley, Jr.
<PAGE>
BHP/HARFORD
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
Baltimore, MD
INDEPENDENT AUDITOR'S REPORT
To the Partners
BHP/Harford Commons Limited Partnership
Baltimore, Maryland
We have audited the accompanying balance sheet of BHP/Harford Commons Limited
Partnership as of December 31, 1998, and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller of the United
States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BHP/Harford Commons Limited
Partnership as of December 31, 1998, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 20
through 25 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the audit procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Guide for
Audits of HUD Programs, we have also issued reports dated March 11, 1999, on
our consideration of BHP/Harford Commons Limited Partnershi's internal control
and on its compliance with specific requirements applicable to DHCH-assisted
Programs, fair housing and nondiscrimination, and laws and regulations
applicable to the financial statements.
/s/Reznick Fedder & Silverman
Federal Employer
Identification Number:
52-1088612
Baltimore, Maryland
March 11, 1999
Audit Principal: William T. Riley, Jr.
<PAGE>
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
To the Partners
BHP/Harford Commons Limited Partnership
Baltimore, Maryland
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheet of BHP/Harford Commons Limited
Partnership as of December 31, 1997, and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller of the United
States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BHP/Harford Commons Limited
Partnership as of December 31, 1997, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 20
through 32 is presented for purposes of additional analysis and is not a
required part of the basic financial statements Such information, except for
that
portion marked "unaudited", on which we express no opinion, has been subjected
to the audit procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Guide for
Audits of HUD Programs, we have also issued reports dated February 5, 1998,
on our consideration of BHP/Harford Commons Limited Partnership's internal
control structure and on its compliance with specific requirements applicable to
CDA programs, fair housing and nondiscrimination, laws and regulations
applicable to the financial statements.
/s/Reznick Fedder & Silverman
Federal Employer
Identification Number:
52-1088612
Baltimore, Maryland
February 5, 1998
Audit Principal: William T. Riley, Jr.
<PAGE>
LOS CLAVELES
[Letterhead]
[LOGO]
KEVANE, PETERSON SOTO & PASARELL
INDEPENDENT AUDITORS' REPORT
To the Partners of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP HUD Field Office Director
San Juan, Puerto Rico San Juan, Puerto Rico
We have audited the accompanying statements of financial position of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP, FHA Project No. RQ-46-E-005-019
(a Limited
Partnership) as of December 31, 1999 and 1998, and the related statements of
loss, changes in partners' deficit and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
Except as discussed in the following paragraph, we conducted our audits in
accordance with generally accepted auditing standards and Government Auditing
Standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
We were unable to obtain written representations from the management of the
project as required by generally accepted auditing standards.
In our opinion, except for the effects of such adjustments, if any, as might
have been determined to be necessary had the written representations referred to
in the preceding paragraph been furnished to us by management, the financial
statements referred to in the first paragraph present fairly, in all material
respects, the financial position of Los Claveles, S.E., Limited Partnership as
of December 31, 1999 and 1998, and the results of its operations, changes in
its partners' deficit and its cash flows for the years then ended, in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As shown in the financial
statements, the Partnership has incurred operating losses since its inception
(cumulatively totaling $2,646,740), was in default on its mortgage loan and is
experiencing difficulty in generating adequate cash flow to meet its current
obligations. These conditions and other matters described in Note 20 raise
substantial doubts as the Partnership's ability to continue as a going concern.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Kevane, Peterson, Soto & Pasarell
San Juan, Puerto Rico
March 17, 2000
<PAGE>
LOS CLAVELES
[Letterhead]
[LOGO]
KEVANE, PETERSON SOTO & PASARELL
INDEPENDENT AUDITORS' REPORT
To the Partners of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP HUD Field Office Director
San Juan, Puerto Rico San Juan, Puerto Rico
We have audited the accompanying statements of financial position of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP, FHA Project No. RQ-46-E-005-019
(a Limited
Partnership) as of December 31, 1998 and 1997, and the related statements of
loss, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of LOS CLAVELES, S.E.
Limited Partnership as of December 31, 1998 and 1997, and the results of its
operations, changes in partners' equity and its cash flows for the year then
ended, in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in this
report (shown as Exhibits A though H) are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements of HUD Project No. RQ46-E-005-019. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements, and in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated February 10,1999, on our consideration of the projects' internal control
structure and a report dated February 10, 1999, on its compliance with laws and
regulations.
/s/ Kevane, Peterson, Soto & Pasarell
San Juan, Puerto Rico
February 10, 1999
<PAGE>
Grand Blvd
[Letterhead]
[LOGO]
Haran & Associates Ltd
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Partners
GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP
Chicago, Illinois
We have audited the accompanying balance sheet of GRAND BOULEVARD RENAISSANCE I
LIMITED PARTNERSHIP, (a Limited Partnership) as of December 31, 1999 and
1998, and the related statements of profit and loss, changes in partners'
equity and statements of cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provided a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GRAND BOULEVARD RENAISSANCE I
LIMITED PARTNERSHIP as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The accompanying supplementary information shown on Pages 17 and 18 is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Haran & Associates LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692
February 3, 2000
<PAGE>
Grand Blvd
[Letterhead]
[LOGO]
Haran & Associates Ltd
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Partners
GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP
Chicago, Illinois
We have audited the accompanying balance sheet of GRAND BOULEVARD RENAISSANCE I
LIMITED PARTNERSHIP, (a Limited Partnership) as of December 31, 1998 and
1997, and the related statements of profit and loss, changes in partners' equity
and statements of cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provided a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GRAND BOULEVARD RENAISSANCE I
LIMITED PARTNERSHIP as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
The accompanying supplementary information shown on Pages 17 and 18 is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Haran & Associates LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692
February 12, 1999
<PAGE>
FAIRHAVEN
[Letterhead]
[LOGO]
John R. Brown
Certified Public Accountants
To the Partners of
Fairhaven Manor Limited Partnership
I have audited the accompanying balance sheet of Fairhaven Manor Limited
Partnership as of December 31, 1999, and the related statements of income,
changesin partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Organization's management.
My responsibility is to express an opinion on these financial statements based
on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. I believe that our audit provides a reasonable basis for my
opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Fairhaven Manor Limited
Partnership as of December 31, 1999, and the results of its operations for the
year then ended in conformity with generally accepted accounting principles.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of supplementary
information
on is presented for the purposes of additional information and is not a part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/John R. Brown
Mount Vernon, Washington John R. Brown
January 31, 2000 Certified Public Accountants
<PAGE>
FAIRHAVEN
[Letterhead]
[LOGO]
Hoekstra & Hoekstra
Certified Public Accountants
To the Partners of
Fairhaven Manor Limited Partnership
We have audited the accompanying balance sheet of Fairhaven Manor Limited
Partnership as of December 31, 1998, and the related statements of income,
changes in partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Organization's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fairhaven Manor Limited
Partnership as of December 31, 1998, and the results of its operations for the
year then ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of supplementary
information
on page 15 is presented for the purposes of additional information and is not a
part of the basic financial statements. Such information has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation
to the basic financial statements taken as a whole.
/s/ Hoekstra & Hoekstra
Mount Vernon, Washington Hoekstra & Hoekstra
January 27, 1999 Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
Hoekstra & Hoekstra
Certified Public Accountants
To the Partners of
Fairhaven Manor Limited Partnership
We have audited the accompanying balance sheet of Fairhaven Manor Limited
Partnership as of December 31, 1997, and the related statements of income,
changes in partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Organization's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fairhaven Manor Limited
Partnership as of December 31, 1997, and the results of its operations for the
year then ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of supplementary
information on page 14 is presented for the purposes of additional information
and is not a part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financia
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Hoekstra & Hoekstra
Mount Vernon, Washington Hoekstra & Hoekstra
February 6, 1998 Certified Public Accountants
<PAGE>
Fountain Lakes
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Fountain Lakes, A Limited Partnership
We have audited the accompanying balance sheets of Fountain Lakes, A Limited
Partnership, as of December 31, 1999 and 1998, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fountain Lakes, A Limited
Partnership as of December 31, 1999 and 1998 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on
page 11 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 3, 2000
<PAGE>
Fountain Lakes
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Fountain Lakes, A Limited Partnership
We have audited the accompanying balance sheets of Fountain Lakes, A Limited
Partnership, as of December 31, 1998 and 1997, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fountain Lakes, A Limited
Partnership as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on
page 11 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 11, 1999
<PAGE>
Des Monies
[Letterhead]
[LOGO]
VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
Des Moines Street Associates, L.P.
Des Moines, Iowa
We have audited the accompanying balance sheets of Des Moines Street Associates,
L.P., (a limited partnership), as of December 31, 1999 and 1998, and the
related statements of operations, partners' capital and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Des Moines Street Associates,
L.P., as of December 31, 1999 and 1998, and the results of its operations,
changes in its partners' capital and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
/S/McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
February 2, 2000
<PAGE>
Des Monies
[Letterhead]
[LOGO]
VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
Des Moines Street Associates, L.P.
Des Moines, Iowa
We have audited the accompanying balance sheets of Des Moines Street Associates,
L.P., (a limited partnership), as of December 31, 1998 and 1997, and the
related statements of operations, partners' capital and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Des Moines Street Associates,
L.P., as of December 31, 1998 and 1997, and the results of its operations,
changes in its partners' capital and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
/S/ Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
January 30, 1999
<PAGE>
St. Andrews
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditor's Report
The Partners
St. Andrews Pointe Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of St. Andrews Pointe
Apartments, A Limited Partnership, as of December 31, 1999 and 1998, and the
related statements of loss, partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of St. Andrews Pointe Apartments,
A Limited Partnership as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 25, 2000
<PAGE>
St. Andrews
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditor's Report
The Partners
St. Andrews Pointe Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of St. Andrews Pointe
Apartments, A Limited Partnership, as of December 31, 1998 and 1997, and the
related statements of loss, partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of St. Andrews Pointe Apartments,
A Limited Partnership as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 26, 1999
<PAGE>
Affordable
[Letterhead]
[LOGO]
Deloitte & Touche LLP
Orlando, FL
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:
We have audited the accompanying balance sheet of Affordable/Citrus Glen, Ltd
(a Florida Limited Partnership) as of December 31, 1999, and the related
statements of operations, partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Affordable/Citrus Glen, Ltd.
(a Florida Limited Partnership) as of December 31, 1999, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ Deloitte & Touche LLP
January 21, 2000
<PAGE>
Affordable
[Letterhead]
[LOGO]
Deloitte & Touche LLP
Orlando, FL
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:
We have audited the accompanying balance sheet of Affordable/Citrus Glen, Ltd.
(a Florida Limited Partnership) as of December 31, 1998, and the related
statements of operations, partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Affordable/Citrus Glen, Ltd.
(a Florida Limited Partnership) as of December 31, 1998, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ Deloitte & Touche LLP
January 29, 1999
<PAGE>
[Letterhead]
[LOGO]
Deloitte & Touche LLP
Orlando, FL
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:
We have audited the accompanying balance sheet of Affordable/Citrus Glen, Ltd.
(a Florida Limited Partnership) as of December 31, 1997, and the related
statements of operations, partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Affordable/Citrus Glen, Ltd.
(a Florida Limited Partnership) as of December 31, 1997, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ Deloitte & Touche LLP
January 6, 1998
<PAGE>
EDEN PARK
[Letterhead]
[LOGO]
MAHONEY
ULBRICH
CHRISTIANSEN
RUSS P.A.
To the Partners
Eden Park Limited Partnership
Saint Paul, Minnesota
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Eden Park Limited Partnership
as of December 31, 1999 and 1998, and the related statements of operations,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eden Park Limited Partnership
as of December 31, 1999 and 1998, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.
/s/Mahoney Ulbrich
Christiansen Russ P.A.
Saint Paul, Minnesota
February 9, 2000
<PAGE>
EDEN PARK
[Letterhead]
[LOGO]
MAHONEY
ULBRICH
CHRISTIANSEN
RUSS P.A.
To the Partners
Eden Park Limited Partnership
Saint Paul, Minnesota
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Eden Park Limited Partnership
as of December 31, 1998 and 1997, and the related statements of operations,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eden Park Limited Partnership
as of December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.
/s/Mahoney Ulbrich
Christiansen Russ P.A.
Saint Paul, Minnesota
January 25, 1999
<PAGE>
<PAGE>
Madera
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
Boston, MA
To the Partners of
Madera Sunrise Terrace Limited Partnership
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Madera Sunrise Terrace
Limited Partnership as of December 31, 1999 and 1998, and the related statements
of operations, changes in partners' capital and cash flows for the years then
ended. The financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Madera Sunrise Terrace
Limited Partnership as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/Reznick Fedder & Silverman
January 17, 2000
<PAGE>
Madera
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
Boston, MA
To the Partners of
Madera Sunrise Terrace Limited Partnership
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Madera Sunrise Terrace
Limited Partnership as of December 31, 1998 and 1997, and the related statements
of operations, changes in partners' capital and cash flows for the years then
ended. The financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Madera Sunrise Terrace
Limited Partnership as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/Reznick Fedder & Silverman
January 15, 1999
<PAGE>
TWIN OAKS
[Letterhead]
[LOGO]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
Southfield, Michigan
Independent Auditors Report
January 30, 2000
Partners
Twin Oaks Meadows Limited Dividend Housing
Association Limited Partnership
We have audited the accompanying balance sheet of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership, MSHDA Project No. 915, as of
December 31, 1999 and 1998, and the related statements of profit and loss,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership as of December 31, 1999 and
1998, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental data on
(pages 15 to 18) is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 19, 2000, on our consideration of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership's internal control over
financial reporting and our tests of its compliance with certain provisions of
laws, regulations and contracts.
/s/Kirschner Hutton Perlin, P.C.
<PAGE>
TWIN OAKS
[Letterhead]
[LOGO]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
Southfield, Michigan
Independent Auditors Report
January 19, 1999
Partners
Twin Oaks Meadows Limited Dividend Housing
Association Limited Partnership
We have audited the accompanying balance sheet of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership, MSHDA Project No. 915, as of
December 31, 1998 and 1997, and the related statements of profit and loss,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standard
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership as of December 31, 1998 and
1997, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental data on
(pages 15 to 18) is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 19, 1999, on our consideration of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership's internal control over
financial reporting and our tests of its compliance with certain provisions of
laws, regulations and contracts.
/s/Kirschner Hutton Perlin, P.C.
<PAGE>
Guardian
[Letterhead]
[LOGO]
ERNST & YOUNG LLP
Report of Independent Auditors
The Partners
Guardian Place Limited Partnership
We have audited the accompanying balance sheets of Guardian Place Limited
Partnership as of December 31, 1999 and 1998, and the related statements of
operations, changes in partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Guardian Place Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Ernst & Young LLP
Birmingham , Alabama
January 21, 2000
<PAGE>
Guardian
[Letterhead]
[LOGO]
ERNST & YOUNG LLP
Report of Independent Auditors
The Partners
Guardian Place Limited Partnership
We have audited the accompanying balance sheets of Guardian Place Limited
Partnership as of December 31, 1998 and 1997, and the related statements of
operations, changes in partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Guardian Place Limited
Partnership as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Ernst & Young LLP
Birmingham , Alabama
February 16, 1999
<PAGE>
WOODS Lane
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Woods Lane, A Limited Partnership
We have audited the accompanying balance sheets of Woods Lane, A Limited
Partnership, as of December 31, 1999 and 1998, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Woods Lane, A Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on page 11
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 3, 2000
<PAGE>
WOODS Lane
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Woods Lane, A Limited Partnership
We have audited the accompanying balance sheets of Woods Lane, A Limited
Partnership, as of December 31, 1998 and 1997, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Woods Lane, A Limited
Partnership as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on page 11
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 11, 1999
<PAGE>
Crafton
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Crafton Place, A Limited Partnership
We have audited the accompanying balance sheets of Crafton Place, A Limited
Partnership, as of December 31, 1999 and 1998, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Crafton Place, A Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on page 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 3, 2000
<PAGE>
Crafton
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Crafton Place, A Limited Partnership
We have audited the accompanying balance sheets of Crafton Place, A Limited
Partnership, as of December 31, 1998 and 1997, and the related statements of
income, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Crafton Place, A Limited
Partnership as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on page 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 8, 1999
<PAGE>
Palo Verde
[Letterhead]
[LOGO]
Brotemarkle & Sadd
Glendale, CA
January 26, 2000
Palo Verde II
A Nevada Limited Partnership
Bakersfield, California
We have audited the accompanying balance sheet of Palo Verde II, A Nevada
Limited Partnership (Palo Verde II or the Partnership) as of December 31, 1999
and 1998, and the related statements of operations, partners' capital
(deficiency) and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Palo Verde II as of December
31, 1999 and 1998 and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
/s/ Brotemarkle & Sadd
Glendale, CA
<PAGE>
Palo Verde
[Letterhead]
[LOGO]
Brotemarkle & Sadd
Glendale, CA
February 3, 1999
Palo Verde II
A Nevada Limited Partnership
Bakersfield, California
We have audited the accompanying balance sheet of Palo Verde II, A Nevada
Limited Partnership (Palo Verde II or the Partnership) as of December 31, 1998
and 1997, and the related statements of operations, partners' capital
(deficiency) and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Palo Verde II as of December
31, 1998 and 1997 and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
/s/ Brotemarkle & Sadd
Glendale, CA
<PAGE>
Andrew's Pointe
[Letterhead]
[LOGO]
BERC
& FOX LIMITED
Certified Public Accountants
Independent Auditors' Report
To the Partners,
Andrew's Pointe Limited Partnership:
We have audited the accompanying balance sheets of ANDREW'S POINTE LIMITED
PARTNERSHIP (a Minnesota Limited Partnership) as of December 31, 1999 and 1998,
and the related statements of operations, partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Andrew's Pointe Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Berc & Fox Limited
MINNEAPOLIS, MINNESOTA
January 27, 2000
<PAGE>
Andrew's Pointe
[Letterhead]
[LOGO]
BERC
& FOX LIMITED
Certified Public Accountants
Independent Auditors' Report
To the Partners,
Andrew's Pointe Limited Partnership:
We have audited the accompanying balance sheets of ANDREW'S POINTE LIMITED
PARTNERSHIP (a Minnesota Limited Partnership) as of December 31, 1998 and 1997,
and the related statements of operations, partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Andrew's Pointe Limited
Partnership as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Berc & Fox Limited
MINNEAPOLIS, MINNESOTA
January 22, 1999
<PAGE>
Santa Fe
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditors' Report
The Partners
Santa Fe Oaks Phase II, A Limited Partnership:
We have audited the accompanying balance sheets of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1999 and 1998, and the related
statements of loss, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/KPMG PEAT MARWICK LLP
Atlanta, GA
FEBRUARY 25, 2000
<PAGE>
Santa Fe
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditors' Report
The Partners
Santa Fe Oaks Phase II, A Limited Partnership:
We have audited the accompanying balance sheets of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1998 and 1997, and the related statements
of loss, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/KPMG PEAT MARWICK LLP
Atlanta, GA
FEBRUARY 26, 1999
<PAGE>
OAK RIDGE
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditors' Report
The Partners
Oak Ridge Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Oak Ridge Apartments, A
Limited Partnership, as of December 31, 1999 and 1998, and the related
statements of loss, partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oak Ridge Apartments, A
Limited Partnership as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/KPMG PEAT MARWICK LLP
FEBRUARY 25, 2000
<PAGE>
OAK RIDGE
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
Independent Auditors' Report
The Partners
Oak Ridge Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Oak Ridge Apartments, A
Limited Partnership, as of December 31, 1998 and 1997, and the related
statements of loss, partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oak Ridge Apartments, A
Limited Partnership as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/KPMG PEAT MARWICK LLP
FEBRUARY 26, 1999
<PAGE>
