FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1997
OR
o 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: 0-28370
WNC HOUSING TAX CREDIT FUND IV, L.P. - Series 2
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
California 33-0596399
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(714) 662-5565
Securities registered pursuant to Section
12(b) of the Act:
Title of Securities Exchanges on which Registered
NONE NOT APPLICABLE
Securities registered pursuant to section
12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
<PAGE>
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 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 market value of the voting stock held by non-affiliates of
the registrant. Inapplicable.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and
the Part of the Form 10-K (e.g., Part I, Part II, etc.) 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. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
NONE
2
<PAGE>
Item 1. Business
Organization
WNC Housing Tax Credit Fund IV, L.P., Series 2 (the "Partnership") is a
California limited partnership formed under the laws of the State of California
on September 27, 1993 to acquire limited partnership interests in local limited
partnerships ("Local Limited Partnerships") which own multifamily apartment
complexes that are eligible for low-income housing federal income tax credits
(the "Low Income Housing Credit")
The general partner of the Partnership is WNC Tax Credits Partner IV, L.P. ("The
General Partner"). The general partner of the General Partner is WNC &
Associates, Inc. ("Associates"). The business of the Partnerships is conducted
primarily through Associates as neither the General Partner nor the Partnership
have employees of their own.
The Partnership conducted its public offering ("Offering") from July 1994 to
July 1995. 20,000 Units of Limited Partnership Interests ("Units"), at a price
of $1,000 per Unit were offered. Since inception a total of 15,600 Units
representing approximately $15,241,000 were sold throughout the offering. Enova
Financial, Inc. a California corporation, which is not an affiliate of the
Partnership or General Partner, has purchased 4,000 Units, which represents
25.6% of the Units outstanding for the Partnership. Enova Financial, Inc.
invested $3,641,000. A discounts of $359,000 was allowed due to a volume
discount. See Item 12(a) in this 10-K.
Holders of Limited Partnership Interests are referred to herein as "Limited
Partners."
The Partnership has applied and will apply funds raised through its public
offerings, including the installment payments of the Limited Partners'
promissory notes as received, to the purchase price and acquisition fees and
costs of Local Limited Partnership Interests, reserves, and expenses of this
Offering.
Description of Business
- -----------------------
The Partnership's principal business is to provide its Limited Partners with Low
Income Housing Credits. The Partnership's principal business therefore consists
of investing as a limited partner in Local Limited Partnerships each of which
will own and operate an apartment complex ("Apartment Complex") which will
qualify for the federal Low Income Housing Credit. In general, under Section 42,
an owner of a low-income housing project is entitled to receive the Low Income
Housing Credit in each year of a ten-year period (the "Credit Period"). The
Apartment Complex is subject to a fifteen-year compliance period (the
"Compliance Period").
3
<PAGE>
In general, in order to avoid recapture of Low Income Housing Credits, the
Partnership does not expect that it will dispose of its interests in Local
Limited Partnerships ("Local Limited Partnership Interests") or approve the sale
by a Local Limited Partnership of any Apartment Complex prior to the end of the
applicable Compliance Period. Because of (i) the nature of the Apartment
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the inability of the
Partnership to directly cause the sale of Apartment Complexes by the general
partners of the respective Local Limited Partnerships ("Local General
Partners"), but generally only to require such Local General Partners to use
their respective best efforts to find a purchaser for the Apartment Complexes,
it is not possible at this time to predict whether the liquidation of
substantially all of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership's Agreement of Limited
Partnership ("Partnership Agreement") will be able to be accomplished promptly
at the end of the 15-year period. If a Local Limited Partnership is unable to
sell an Apartment Complex, it is anticipated that the Local General Partner will
either continue to operate such Apartment Complex or take such other actions as
the Local General Partner believes to be in the best interest of the Local
Limited Partnership. In addition, circumstances beyond the control of the
General Partner may occur during the Compliance Period which would require the
Partnership to approve the disposition of an Apartment Complex prior to the end
thereof.
The Partnership's investments in Local Limited Partnerships are subject to the
risks incident to the management and ownership of low-income housing and to the
management and ownership multifamily residential real estate. Some of these
risks are that the Low Income Housing Credit could be recaptured and neither the
Partnership's investments nor the Apartment Complexes owned by Local Limited
Partnerships will be readily marketable. Additionally, there can be no assurance
that the Partnership will be able to dispose of its interest in the Local
Limited Partnerships at the end of the Compliance Period. The value of the
Partnership's investments could be subject to changes in national and local
economic conditions, including unemployment conditions, which could adversely
impact vacancy levels, rental payment defaults and operating expenses. This, in
turn, could substantially increase the risk of operating losses for the
Apartment Complexes and the Partnership. The Apartment Complexes will be subject
to loss through foreclosure. In addition, each Local Limited Partnership is
subject to risks relating to environmental hazards which might be uninsurable.
Because the Partnership's ability to control its operations will depend on these
and other factors beyond the control of the General Partner and the Local
General Partners, there can be no assurance that Partnership operations will be
profitable or that the anticipated Low Income Housing Credits will be available
to Limited Partners.
4
<PAGE>
The Apartment Complexes owned by the Local Limited Partnerships in which the
Partnership has invested or is expected to invest were or are being developed by
the Local General Partners who acquired the sites and applied for applicable
mortgages and subsidies. The Partnership became or will become the principal
limited partner in these Local Limited Partnerships pursuant to arm's-length
negotiations with the Local General Partners. As a limited partner, the
Partnership's liability for obligations of the Local Limited Partnership is
limited to its investment. The Local General Partner of the Local Limited
Partnership retains responsibility for developing, constructing, maintaining,
operating and managing the Apartment Complex.
As of December 31, 1997, the Partnership had invested in twenty one Local
Limited Partnerships. Each of these Local Limited Partnerships owns an Apartment
Complex that is or is expected to be eligible for the Low Income Housing Credit.
All of the Local Limited Partnerships also benefit from government programs
promoting low or moderate income housing.
Following is recap of the status of the twenty one Apartment Complexes owned by
the twenty one Limited Partnerships invested in or identified by the
Partnership:
<TABLE>
<CAPTION>
Under
Construction Construction
or Rehabilitation or Rehabilitation Construction
Completed Not Started
<S> <C> <C> <C>
Properties acquired by 12/31/97 20 1 0
</TABLE>
The following is a schedule of the status as of December 31, 1997, of the
Apartment Complexes owned by Local Partnerships in which the Partnership was a
limited partner as of December 31, 1997:
5
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH THE PARTNERSHIP HAS AN INVESTMENT
AS OF DECEMBER 31, 1997
Number Percentage
of Units Units of Total
NAME & Location Apts. Completed Occupied Units Occupied
- --------------- ----- --------- -------- --------------
<S> <C> <C> <C> <C>
AUTUMN TRACE 58 58 50 86%
Silsbee (Hardin Co.) Texas
BROKEN BOW 18 18 6 37%
Broken Bow (Custer Co.), Nebraska
CHADWICK 48 48 47 98%
Eden, (Rockingham Co.) N.C.
COMANCHE 22 22 21 95%
Comanche (Comanche Co.) Texas
CROSSINGS 114 0 0 0%
Portage, Michigan
E.W. 16 16 15 94%
Evansville (Rock Co.) Wisconsin
GARLAND 18 18 18 100%
Malvern (Hot Spring Co.)Arkansas
HEREFORD 28 28 25 89%
Hereford, (Deaf Smith Co.) Texas
HICKORY LANE 23 23 19 83%
Newton (Newton Co.) Texas
HONEYSUCKLE 47 47 46 98%
Vidor (Orange Co.) Texas
KLIMPEL MANOR 59 59 59 100%
Fullerton (Orange Co.) CA
LA MESA 24 24 23 96%
Lamesa (Dawson Co.),
Texas
LAREDO HEIGHTS APTS 48 48 47 98%
Navasto, Texas
MOUNTAINVIEW 24 24 24 100%
North Wilkesboro (Wilkes Co.) N.C.
PALESTINE 42 42 42 100%
Palestine (Anderson Co.) Texas
PECAN 32 32 31 97%
Forrest City (St. Francis Co.) AR
PIONEER 112 112 109 98%
Bakersfield (Kern Co.) California
SIDNEY APARTMENTS I 18 18 15 83%
Omaha, Nebraska
SOUTHCOVE 54 54 50 93%
Orange Cove (Fresno Co.) CA
WALNUT BEND 23 23 21 92%
Buna (Jasper Co.) Texas
WAUKEE II 23 23 23 100%
Waukee (Dallas Co.) Iowa
============= =============== ==============
228 114 98 86%
============= =============== ==============
</TABLE>
6
<PAGE>
Description of Local Partnerships
- ---------------------------------
The Partnership has become a limited partner in AUTUMN TRACE ASSOCIATES, LTD., a
Texas limited partnership ("AUTUMN"); in BROKEN BOW APARTMENTS, L.P. a Nebraska
limited partnership ("BROKEN BOW"), in CHADWICK LIMITED PARTNERSHIP, a North
Carolina limited partnership ("CHADWICK"); COMANCHE RETIREMENT VILLAGE, LTD., a
Texas limited partnership ("COMANCHE"); CROSSINGS II LIMITED DIVIDEND HOUSING
ASSOCIATION LIMITED PARTNERSHIP, a Michigan limited partnership ("CROSSINGS"),
EW, a Wisconsin limited partnership ("EW"); GARLAND STREET LIMITED PARTNERSHIP,
an Arkansas limited partnership ("GARLAND"); HEREFORD SENIORS COMMUNITY, LTD., a
Texas limited partnership ("HEREFORD"); HICKORY LANE ASSOCIATES, LIMITED, a
Texas limited partnership ("HICKORY"); HONEYSUCKLE COURT ASSOCIATES, LIMITED, a
Texas limited partnership ("HONEYSUCKLE"); KLIMPEL MANOR, LTD., a California
limited partnership ("KLIMPEL"), LAMESA SENIORS COMMUNITY, LTD., a Texas limited
partnership ("LAMESA"); LAREDO HEIGHTS APARTMENTS, LTD., a Texas limited
partnership ("LAREDO"), MOUNTAINVIEW APARTMENTS LIMITED PARTNERSHIP, a North
Carolina limited partnership ("MOUNTAINVIEW"); PALESTINE SENIORS COMMUNITY,
LTD., a Texas limited partnership ("PALESTINE"); PECAN GROVE LIMITED
PARTNERSHIP, an Arkansas limited partnership ("PECAN"), PIONEER STREET
ASSOCIATES, L.P., a California limited partnership ("PIONEER"); SIDNEY
APARTMENTS I LIMITED PARTNERSHIP, a Nebraska limited partnership, ("SIDNEY"),
SOUTHCOVE ASSOCIATES, a California limited partnership ("SOUTHCOVE"), WALNUT
TURN ASSOCIATES, LIMITED, a Texas limited partnership ("WALNUT"), and
CANDLERIDGE APARTMENTS OF WAUKEE L.P. II, an Iowa limited partnership
("WAUKEE-II").
AUTUMN owns the Autumn Trace Apartments in Silsbee, Texas; CHADWICK own the
Chadwick Apartments in Eden, North Carolina; COMANCHE owns the Comanche
Retirement Village Apartments in Comanche, Texas; CROSSINGS owns the
- ----------------------in Portage, Michigan. EW owns the Evansville Town Homes in
Evansville, Wisconsin, GARLAND owns the Garland Street Apartments in Malvern,
Arkansas; HEREFORD owns the Hereford Seniors Community in Hereford, Texas;
HICKORY owns the Hickory Lane Apartments in Newton, Texas; HONEYSUCKLE owns the
Honeysuckle Court Apartments in Vidor, Texas; KLIMPEL owns the Klimpel Manor
Apartments in Fullerton, California, LAMESA owns the Lamesa Seniors Community in
Lamesa, Texas; MOUNTAINVIEW owns the Mountainview Apartments in North
Wilkesboro, North Carolina; PALESTINE owns the Palestine Seniors Community in
Palestine, Texas; and PECAN owns the Pecan Grove Apartments in Forrest City,
Arkansas, PIONEER owns the Pioneer Street Apartments in Bakersfield, California;
SOUTHCOVE own the Southcove Apartments in Orange Cove, California, WALNUT owns
the Walnut Turn Apartments in Buna, Texas. WAUKEE-II owns the Candleridge of
Waukee Apartments II in Waukee, Iowa.
7
<PAGE>
The following tables contain information concerning the Local Limited
Partnerships acquired by the Partnership.
<TABLE>
<CAPTION>
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
Local Project Name Estimated Estimated Number of Basic Permanent Local
Limited Construction Development Apartment Units Monthly Mortgage Limited
Partnership Completion Cost With Rents Loan Amount Partnership's
Land Anticipated
Tax
Credits (1)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
AUTUMN Autumn May 1994 $2,030,727 26 1BR units $210 $1,256,680 $768,000
Trace 32 2BR units $265 RECDS (3)
Apartments (2)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
BROKEN BOW Broken Bow December 1996 $1,417,102 6 2BR units $301 $500,000 $1,127,220
Apartments 10 3BR units $352 FNBO (11)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
CHADWICK Chadwick October $2,024,524 8 1BR units $285 $898,311 $735,000
Apartments (2) 1994 36 2BR units $307 RECDS (3)
4 3BR units $333
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
COMANCHE Comanche January $616,000 20 1BR units $235 $597,520 $290,000
Retirement 1995 2 2BR units $275 RECDS (3)
Village
Apartments
(4)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
CROSSINGS The February $7,375,000 32 1BR units $203-501 $6,133,000 $721,000
Crossings II 1998 79 2BR units $327-674 Michigan
3 3BR units $279-786 State
Housing
Development
Authority
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
EW Evansville September $868,552 4 2BR units $493 $660,000 $306,000
Town Homes 1994 12 3BR units $599 WHEDA (5)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
GARLAND Garland September $898,780 18 2BR units $270 $702,332 $319,000
Street 1994 RECDS (3)
Apartments 1 3BR unit Mgr.'s unit
(2)
---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
HEREFORD Hereford December $854,000 28 1BR units $260 $809,750 $355,000
Seniors 1995 RECDS (3)
Community
Apartments
(4)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
---------------- -------------- -------------- ---------------- ------------ -------------- ------------
HICKORY Hickory December $920,000 16 1BR units $185 $598,900 $322,000
Lane 1995 8 2BR units $233 RECDS (3)
Apartments
(2)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
8
<PAGE>
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
HONEY- Honeysuckle December $1,701,691 24 1BR units $283 $1,172,600 $622,000
SUCKLE Court 1995 24 2BR units $333 RECDS (3)
Apartments
(2)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
KLIMPEL Klimpel November $3,618,242 58 1BR units $340-445 $1,320,000 $3,360,000
Manor 1994 1 2BR unit $497 CHFA (6)
Apartments
(5) $625,000
LGP (7)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
LAMESA Lamesa June $826,426 24 1BR units $265 $679,000 $302,000
Seniors 1994 RECDS (3)
Community
Apartments
(4)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
LAREDO Laredo Heights July $1,302,003 8 1BR units $326 $1,009,500 $419,320
Apartments (2) 1996 12 3BR units $349 RECDS (12)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
MOUNTAIN-VIEW Mountain-view December $1,206,604 22 1BR units $292 $1,025,482 $387,000
Apartments 1993 2 2BR units $340 RECDS (3)
(4)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- -------------
PALESTINE Palestine June $1,180,000 40 1BR units $264 $1,144,600 $446,000
Seniors 1995 2 2BR units $318 RECDS (3)
Community
Apartments
(4)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- -------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
PECAN Pecan July $1,454,000 32 2BR units $245 $1,194,732 $464,000
Grove 1994 RECDS (3)
Apartments
(2)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
PIONEER Pioneer October $3,903,000 78 2BR units $341-4222 $1,960,000 $4,156,000
Street 1995 32 3BR units $488 CCRC (8)
Apartments 2 4BR units $437-542
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ------------------ --------------- -------------- -------------- ---------------- ------------ -------------- ------------
SIDNEY Sidney August $1,134,574 6 2BR units $326 $450,000 $993,320
Apartments I 1996 12 3BR units $349 FNBO (13)
- ------------------ --------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ------------------ --------------- -------------- -------------- ---------------- ------------ -------------- ------------
SOUTHCOVE Southcove July $3,750,000 20 2BR units $226-407 $1,051,050 $3,783,000
Apartments 1995 34 3BR units $249-471 RHCP (9)
$525,000
CCRC (8)
- ------------------ --------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
WALNUT Walnut Turn December $981,000 24 2BR units $218 $716,000 $347,000
Apartments 1995 RECDS (3)
(2)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
WAUKEE-II Candleridge December $736,000 23 1BR units $285 $694,148 $230,000
(12) Apartments 1994 RECDS (3)
of Waukee II
(3)
- ----------------- ---------------- -------------- -------------- ---------------- ------------ -------------- ------------
</TABLE>
9
<PAGE>
(1) Low Income Housing Credits are available over a 10-year period. For the
year in which the credit first becomes available with respect to an
Apartment Complex, The Partnership will receive only that percentage of
the annual credit which corresponds to the number of months during
which The Partnership was a limited partner of the Local Limited
Partnership, and during which the Apartment Complex was completed and
in service. See the discussion under "The Low Income Housing Credit" in
the Prospectus.
(2) Rehabilitation property.
(3) The Rural Economic and Community Development Services (formerly the
Farmers Home Administration) of the United States Department of
Agriculture ("RECDS") provides mortgage loans under the RECDS Section
515 Mortgage Loan Program. Each of these mortgage loans is or will be a
50-year loan and bears or will bear annual interest at a market rate
prior to reduction of the interest rate by a mortgage interest subsidy
to an annual rate of 1%, with principal and interest payable monthly
based on a 50-year amortization schedule.
(4) Senior citizen housing.
(5) The Wisconsin Housing & Economic Development Authority ("WHEDA") will
provide the mortgage loan for a term of 30 years at an interest rate of
6.65% per annum, with principal and interest payable monthly based on a
30-year amortization schedule.
(6) The California Housing and Finance Agency ("CHFA") will provide the
mortgage loan for a term of 40 years at an interest rate of 9% per
annum, with principal and interest payable monthly based on a 40-year
amortization schedule.
(7) Margaret N. Chaffee, one of the Local General Partners, will provide a
second loan for a term of 40 years at an interest rate of 9.25% per
annum, with principal and interest payable monthly based on a 40-year
amortization schedule.
(8) The California Community Reinvestment Corporation ("CCRC") is providing
the mortgage loan at an annual interest rate of 8.75%, with principal
and interest payable monthly based on a 30-year amortization schedule.
(9) California has established the Rental Housing Construction Program
("RHCP") to provide low interest loans directly to project sponsors for
the construction of new rental housing for occupancy by very low-income
households, lower-income households and other households. RHCP funding
is provided through a combination of interim construction and permanent
loans or through permanent loans only. The standard interest rate is 3%
per annum, calculated on a simple (non-compounded) basis. The minimum
term to maturity is 40 years, with longer original terms and 10-year
extensions available. The repayment schedule is based on a formula
generally related to the project's ability to pay. During the first 30
years of the loan term, no principal payments are required. Interest is
payable from, and only to the extent of, net cash flow. Accrued
interest for any year which cannot be paid is deferred until such time
as net cash flow is sufficient for payment thereof. Commencing with the
30th year of the loan term, principal and interest are payable out of
net cash flow. The amount of the required payments depends, in part, on
the remaining duration of the loan term. In each project, 30% or more
of all units must be assisted units, and at least 2/3 of all assisted
units must be very low-income units.
10
<PAGE>
(10) California Community Reinvestment Corp. will provide the mortgage loan
at a fixed interest rate of 9% per annum. The loan will be for a
30-year term, with principal and interest payable monthly based on a
30-year amortization schedule.
(11) First National Bank of Omaha ("FNBO)") will provide the mortgage loan
for a term of 22 years at a variable interest rate. The interest rate
will be adjusted every 36 months to an annual rate of 9% per annum and
a maximum rate of 11.5% per annum. Principal and interest will be
payable monthly based on a 22-year amortization schedule.
(12) Rural Economic and Community Development Services (formerly, the
Farmers Home Administration) of the United States Department of
Agriculture ("RECDS") provides mortgage loans under the RECDS Section
515 Mortgage Loan Program. The mortgage loan will bear annual interest
at a market rate prior to reduction of the interest rate by a mortgage
interest subsidy to an annual rate of 1%, with principal and interest
payable monthly. The term and amortization schedule will be 40 years.
(13) First National Bank of Omaha ("FNBO") will provide the mortgage loan
for a term of 15 years at a variable interest rate. The interest rate
will be adjusted every 36 months to an annual rate of 25 basis points
over the three-year Treasury Constant Maturities. The note will have a
minimum rate of 9% and a maximum rate of 11.5%. Principal and interest
will be payable monthly based on a 22-year amortization schedule.
Silsbee (AUTUMN): Silsbee is in Hardin County, Texas near the intersections of
U.S. Highways 69 and 96, and State Highway 92. Houston lies 120 miles southwest.
The population of Silsbee is approximately 6,400. The major employers for
Silsbee residents are Temple-Inland Forest Products Corp., Kirby Forest
Industries/Louisiana Pacific, and the Silsbee Independent School District.
Broken Bow (BROKEN BOW): Broken Bow is the county seat of Custer County, and is
central Nebraska at the intersection of State Highways 2, 21 and 70. The major
employers for Broken Bow residents are Becton Dickinson Vacutainer Systems
(medical equipment), Sargent Pipe Company, and Arrow Seed Company, Inc.
Eden (CHADWICK): Eden is in Rockingham County, North Carolina at the
intersection of State Highways 87 and 770. Greensboro is 30 miles to the south
and Winston-Salem is 60 miles to the southwest. The population of Eden is
approximately 16,000. The city's largest employers are Miller Brewing Company,
Billcrest Canon, and Sara Lee.
Comanche (COMANCHE): Comanche is the county seat of Comanche County, located in
west-central Texas along U.S. Highway 377. Fort Worth is 108 miles to the
northeast. The population of Comanche is approximately 4,000. It's major
employers are Gore Bros., Inc., Western Hills Nursing Home, Comanche
Manufacturing, and the Comanche Independent School District.
Evansville (EW): Evansville is in Rock County, Wisconsin at the intersection of
U.S. Highway 14 and State Highway 213. The state capitol of Madison is 35 miles
northeast of Orange Cove. The population of Evansville is approximately 3,300.
Three of the area's largest employers are Varco-Pruden, a division of AMCA
International, Baker Manufacturing, and the Harvard Corporation.
Malvern (GARLAND): Malvern is the county seat of Hot Spring County, located in
south-central Arkansas near Interstate Highway 30. Little Rock is 45 miles to
the northeast and Hot Springs National Park is 20 miles to the northwest. The
population of Malvern is approximately 9,200. The city's major employers include
Amoco Foam (meat packing trays), Acme Brick (brick manufacturer) and Willamette
(fiberboard).
Hereford (HEREFORD): Hereford is the county seat of Deaf Smith County, located
in northwest Texas at the intersection of U.S. Highways 60 and 385. Amarillo is
50 miles to the northeast and Lubbock is 90 miles to the southeast. The
population of Hereford is approximately 14,700. Major employers in the Hereford
area are Holly Sugar, Hereford Bi-Products, and the Hereford School System.
11
<PAGE>
Newton (HICKORY): Newton (population 1900) is the county seat of Newton County,
and is located in east-central Texas near the Louisiana border at the
intersection of State Highways 63 and 87 approximately 125 miles northeast of
Houston and 225 miles southeast of Dallas. The major employers for Newton
residents are Shady Acre Shelter (nursing home), Brookshier Brothers (grocery
store) and Kirby Lumber Company.
Vidor (HONEYSUCKLE): Vidor (population 11,000) is in Orange County in
east-central Texas near the Louisiana border at the intersection of Interstate
Highway 10 and State Highway 12 approximately 90 miles northeast of Houston and
250 miles southeast of Dallas. The largest employers for the city's residents
are Vidor School District, North Store Steel, Trinity Industry (car repair) and
Wal-Mart.
Fullerton (KLIMPEL): Fullerton is in Orange County, California, near Interstate
Highway 5 and State Highway 57, approximately 25 miles from downtown Los
Angeles. The economy in the area is based primarily in retail sales, and
secondarily in manufacturing. The largest employers for Fullerton residents are
Hughes Aircraft, Beckman Instruments, and Hunt Wesson.
Lamesa (LAMESA): Lamesa is the county seat of Dawson County, located in
west-central Texas at the intersection of U.S. Highways 180 and 87. Lubbock is
60 miles to the north and Odessa is 63 miles to the southwest. The population of
Lamesa is approximately 10,800. The city's major employers are Lamesa
Independent School District, Britt Oil Service Co. (oil drilling), and Lamesa
Apparel, Inc. (clothing manufacturer).
Navasota (LAREDO): Navasota is in Grimes County, in east-central Texas at the
intersection of State Highways 6, 90 and 105, approximately 80 miles north east
of Houston. The major employers for Navasota residents are the Texas Department
of Corrections, Hackney Steel and Tubular (drill pipes).
North Wilkesboro (MOUNTAINVIEW): North Wilkesboro is in Wilkes County in western
North Carolina, at the intersection of U.S. Highway 421 and State Highway 18.
Charlotte is 80 miles to the southeast and Winston-Salem is 45 miles to the
east. The population of North Wilkesboro is approximately 3,400. The city's main
employers are Tyson Foods, Lowes Company (hardware), and Thaca Co.
(textiles).
12
<PAGE>
Palestine (PALESTINE): Palestine is the county seat of Anderson County, located
in east-central Texas at the intersection of U.S. Highways 79 and 287. Dallas is
60 miles to the northwest and Houston is 125 miles to the southeast. The
population of Palestine is approximately 18,000. The city's major employers are
the Texas Department of Criminal Justice (prison system), Wal-Mart Distribution
Center, and Memorial Hospital.
Forrest City (PECAN): Forrest City is the county seat of St. Francis County,
located in eastern Arkansas at the intersection of Interstate Highway 40 and
State Highway 1. Little Rock is 90 miles to the west. The population of Forrest
City is approximately 13,000. The city's major employers are Sanyo Manufacturing
Corp. (color television sets), Yale Hoists (hoisting equipment) and Airtherm
Products (heating/air conditioning equipment).
Bakersfield (PIONEER): Bakersfield (population 202,000) is the county seat of
Kern County, California, and is located at the southern end of the San Joaquin
Valley on State Highway 99, approximately 110 miles north of Los Angeles. In
1993, Kern County was the largest oil producing county and third most productive
agricultural county in the country. The largest employers in Bakersfield are
Giumarra Vineyards, Sun World/Superior Farms, and Grimmway Farms.
Sidney (SIDNEY): Sidney is the county seat of Cheyenne County, and is located at
the south edge of the Nebraska panhandle near the Colorado border at the
intersection of Interstate Highway 80 and U.S. Highways 385 and 30,
approximately 170 miles northeast of Denver. The major employers for Sidney
residents are Cabel's (mail order sporting goods), Memorial Health Center and
Prestolite Wire Corporation (specialty wiring and cable).
Orange Cove (SOUTHCOVE): Orange Cove is in Fresno County, California on State
Highway 63. The county seat of Fresno is 35 miles northeast of Orange Cove. The
population of Orange Cove is approximately 6,500. A majority of the employed
persons in Orange Cove are employed in agriculture, particularly in the citrus
packing business.
Buna (WALNUT): Buna (population 2,100) is in Jasper County , in east-central
Texas near the Louisiana border at the intersection of Interstate Highway 96 and
State Highway 62 approximately 100 miles northeast of Houston and 225 miles
southeast of Dallas. The largest employers for the city's residents are Temple
Inland Sawmill, Buna School District and Buna Nursing Home.
Waukee (WAUKEE-II): Waukee (population 2,500) is in Dallas County, Iowa, on U.S.
Highway 6, approximately 14 miles northwest of Des Moines. The largest category
of employment for Dallas County is wholesale and retail trade (34%). The
services category accounts for 27% of employment. Some of the larger employers
in the Waukee area are Downey Printing (telephone directory printing),
Selectivend (vending machine manufacturing) and Waukee Community School
District.
13
<PAGE>
<TABLE>
<CAPTION>
- ------------------ --------------------------- -------------------- ------------------------------------------ -----------------
Sharing Ratio:
Allocations(4) Approximate
Local Local and Sale or Partnership's
Limited General Property Refinancing Capital
Partnership Partners Manager (1) Cash Flow (2) Proceeds(5) Contributions
(3)
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
<S> <C> <C> <C> <C> <C>
AUTUMN Clifford E. Olsen (5) Management & Partnership: 10% 99/1 $412,000
Systems LGP: 90% 51/49
Corporation (7)
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
BROKEN BOW Retro Development, Inc (7) Retro Management WNC: 1st $2,500 99/./1 $608,000
Group, Inc. LGP: 2nd $2,500 25/75
Most Worshipful Prince The balance:
Hall Grand Lodge WNC: 25%
LGP: 75%
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
CHADWICK MBG Investment MBG Partnership: 1st 99/1 $378,000
Corpora-tion Management, Inc. $2,950 51/49
LGP: 2nd $5,980
Gordon L. Balance: 99/1
Blackwell
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
COMANCHE Max L. M-DC Group, Partnership: 1st $490 99/1 $149,000
Rightmer Inc. dba Alpha LGP: 2nd $985 51/49
Management Balance: 99/1
Co., Inc.
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
CROSSINGS Raymond T. Cato Det. Mgmnt Fee 98.99%/.01%/1% $451,440
Cato , Jr. Management Reporting Fee
Ltd. Development Fee 30%/70%
Operating Loans
Incentive Mgmt Fee 40%
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
EW Philip C. T & C Services 1995-2000: 99/1 $164,000
Wallis Partnership: $1,500 50/50
Balance to
James L. payment of
Poehlman development
fee, LGP, and
Cynthia L. replacement
Solfest- reserve.
Wallis
2001-there-after:
Anita B. Partnership: $5,000
Poehlman Balance to
payment of
development
fee, LGP, and
replacement
reserve.
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
14
<PAGE>
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
GARLAND Conrad L. Sunbelt 99/1 99/1 $191,000
Beggs Property 60/40
Managers
Audrey D. Corp.
Beggs
Russell J.
Altizer
Marjorie L.
Beggs
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
HEREFORD Winston MJS Manage- ment, 50/50 99/1 $179,000
Sullivan Inc. 51/49
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
HICKORY Olsen Olsen Partnership: 10% 99/1 $172,000
Securities Securities LGP: 90% 49/51
Corporation Corporation
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
HONEY- Olsen Olsen Partnership: 10% 99/1 $333,000
SUCKLE Securities Securities LGP: 90% 49/51
Corporation Corporation
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
KLIMPEL Douglas B. National Partnership: 1/3 96/4 $1,774,000
Chaffee Housing LGP: 2/3 50/50
Ministries
Margaret N.
Chaffee
- ------------------
--------------------------- -------------------- ----------------------- ------------------ -----------------
LAMESA Winston MJS 50/50 99/1 $153,000
Sullivan Management, 51/49
Inc.
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
LAREDO Donald W. Sowell Wilmic Venture, WNC: 1st $1,053 99/1 $1,133,000
Inc. LGP: 2nd $2,107 50/50
The balance:
WNC: 99%
LGP: 1%
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
15
<PAGE>
- ------------------
MOUNTAIN-VIEW John C. Loving MBG Partnership: 1st 99/1 $195,000
Management, $850 51/49
Gordon D. Brown, Jr. Inc. LGP: 2nd
1,650
Balance: 99/1
- ------------------
--------------------------- -------------------- ----------------------- ------------------ -----------------
PALESTINE Winston MJS 50/50 99/1 $225,000
Sullivan Management, 51/49
Inc.
--------------------------- -------------------- ----------------------- ------------------ -----------------
- ------------------
PECAN Conrad L. Sunbelt 99/1 99/1 $239,000
Beggs Property 60/40
Managers
Audrey D. Corp.
Beggs
Russell J.
Altizer
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
PIONEER Philip R. The 1st $4,000: 99/1 $2,222,000
Hammond, Jr. Management WNC: $2,000 50/50
Company LGP: $2,000
LGP: the
Walter Dwelle balance
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
SIDNEY Retro Development, Inc Retro Management WNC: 1st $2,500 99/1 536,000
Group, Inc. LGP: 2nd $2,500 25/75
Most Worshipful Prince The balance:
Hall Grand Lodge WNC: 25%
LGP: 75%
--------------------------- -------------------- ----------------------- ------------------ -----------------
- ------------------
SOUTHCOVE Philip R. Buckingham 1996-1998: 99/1 $2,022,000
Hammond, Jr. Property WNC & LGP: 51/49
Management $1,500 each
Diane M. Company with balance
Hammond to LGP
1999-
thereafter:
WNC & LGP:
$2,250 each
with balance
to LGP
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
WALNUT Olsen Olsen WNC: 10% 99/1 $185,000
Securities Securities LGP: 90% 49/51
Corporation Corporation
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
WAUKEE-II Eric A. Sheldahl WNC: 1st $100 99/1 $125,000
Sheldahl Development LGP: the 51/49
Corporation balance
- ------------------ --------------------------- -------------------- ----------------------- ------------------ -----------------
</TABLE>
15
<PAGE>
(1) The maximum annual management fee payable to the property manager generally
is determined pursuant to lender regulations. The Local General Partners are
authorized to employ either themselves or one of their Affiliates, or a third
party, as a property manager for leasing and management of the Apartment Complex
so long as the management fee does not exceed the amount authorized and approved
by the lender for the Apartment Complex.
(2) Reflects the amount of the net cash flow from operations, if any, to be
distributed to the Partnership and the Local General Partners ("LGP") of the
Local Limited Partnership for each year of operations. To the extent that the
specific dollar amounts which are to be paid are not paid annually, they will
accrue and be paid from sale or refinancing proceeds as an obligation of the
Local Limited Partnership.
(3) The Partnership will make its capital contributions to the Local Limited
Partnership in stages, with each contribution due when certain conditions
regarding construction or operations of the Apartment Complex have been
fulfilled.
(4) Subject to certain special allocations, reflects the respective percentage
interests of the Partnership and the Local General Partners in profits, losses
and Low Income Housing Credits commencing with entry of the Partnership as a
limited partner.
(5) Reflects the percentage interests of the Partnership and the Local General
Partners in any net cash proceeds from sale or refinancing of the Apartment
Complex, after payment of the mortgage loan and other Local Limited Partnership
obligations (see, e.g., note 3), and the following, in the order set forth. As
used herein, the term "sales preparation fee" means a fee in the amount of 3%
(5% in the case of Garland and Pecan) of sale or refinancing proceeds.
Austin: The Local General Partners' sales preparation fee, $100,004 to the
Local General Partner as a partial return of its capital contribution; the
Partnership's capital contribution and the capital contribution of the
Local General Partner (less previous distributions).
Chadwick: The capital contribution of the Partnership (less previous
distributions) and the Local General Partners' sales preparation fee.
16
<PAGE>
Comanche: The capital contribution of the Partnership (less previous
distributions) and the Local General Partner's sales preparation fee.
EW: The Partnership's capital contribution and the Local General Partners'
sales preparation fee.
Garland: An amount equal to 5% of remaining proceeds to the Local General
Partners, the Local General Partners' sales preparation fee, and the
capital contribution of the Partnership (less previous distributions).
Hereford: The capital contribution of the Partnership (less previous
distributions) and the Local General Partner's sales preparation fee.
Hickory: The Local General Partner's sales preparation fee; the capital
contribution of the Partnership; and the capital contribution of the Local
General Partner.
Honeysuckle: The Local General Partner's sales preparation fee; the capital
contribution of the Partnership; and the capital contribution of the Local
General Partner.
Klimpel: The Partnership's capital contribution and the capital
contribution of the Local General Partners LAMESA: The capital contribution
of the Partnership (less previous distributions) and the Local General
Partner's sales preparation fee.
Mountainview: The capital contribution of the Partnership (less previous
distributions) and the Local General Partners' sales preparation fee.
Palestine: The capital contribution of the Partnership (less previous
distributions) and the Local General Partner's sales preparation fee.
Pecan: An amount equal to 5% of remaining proceeds to the Local General
Partners, the Local General Partners' sales preparation fee, and the
capital contribution of the Partnership (less previous distributions).
Pioneer: The capital contribution of the Partnership; the capital
contribution of the Local General Partners; and the Local General Partners'
sales preparation fee.
Southcove: The Local General Partners' sales preparation fee, the capital
contribution of the Partnership and the capital contribution of the Local
General Partners
Walnut: The Local General Partner's sales preparation fee; the capital
contribution of the Partnership; and the capital contribution of the Local
General Partner.
Waukee II: The capital contribution of the Partnership; the Local General
Partner's sales preparation fee
17
<PAGE>
Item 2. Properties
ITEM 2. PROPERTIES:
Through its investment in Local Limited Partnerships the Partnership holds
interests in Apartment Complexes. See Item 1 for information pertaining to the
Apartment Complexes.
Item 3. Legal Proceedings
NONE.
Item 4. Submission of Matters to a Vote of Security Holders
NONE.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Item 5a.
(a) The Units are not traded on a public exchange but were sold through a public
offering. It is not anticipated that any public market will develop for the
purchase and sale of any Unit. Units can be assigned only if certain
requirements in the Partnerships Agreement of Limited Partnership ("Partnership
Agreement") are satisfied.
(b) At December 31, 1997, there were 837 Limited Partners.
(c) The Partnership was not designed to provide cash distributions to Limited
Partners in circumstances other than refinancing or disposition of its
investments in Local Limited Partnerships. The Limited Partners received $113
and $105 federal Low Income Housing Credits per Unit for the years 1997 and
1996, respectively.
Item 6. Selected Financial Data
OMITTED
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation
OMITTED
Item 8. Financial Statements and Supplementary Data
OMITTED
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
NONE
18
<PAGE>
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers of its own. The following
biographical information is presented for the directors and executive officers
of Associates which has principal responsibility for the Partnership's affairs.
Directors and Executive Officers of WNC & Associates, Inc.
The directors of Associates are Wilfred N. Cooper, Sr., who serves as Chairman
of the Board, John B. Lester, Jr., David N. Shafer, Wilfred N. Cooper, Jr. and
Kay L. Cooper. Substantially all of the shares of Associates are owned by
Wilfred N. Cooper, Sr., through the Cooper Revocable Trust, and John B. Lester,
Jr., through the Lester Family Trust.
WILFRED N. COOPER, SR., age 67, has been the principal shareholder and a
Director of WNC & ASSOCIATES, INC. since its organization in 1971, of SHELTER
RESOURCE CORPORATION since its organization in 1981 and of WNC RESOURCES, INC.
from its organization in 1988 through its acquisition by WNC & ASSOCIATES, INC.
in 1991, serving as President of those companies until 1992 and as Chief
Executive Officer since 1992, and has been a Director of WNC CAPITAL CORPORATION
since its organization. He is also a general partner with WNC & ASSOCIATES, INC.
in WNC FINANCIAL GROUP, L.P. and WNC TAX CREDIT PARTNERS, L.P. During 1970 and
1971 he was a principal of Creative Equity Development Corporation, a
predecessor of WNC & ASSOCIATES, INC., and of Creative Equity Corporation, a
real estate investment firm. For 12 years prior to that, Mr. Cooper was employed
by Rockwell International Corporation, last serving as its manager of housing
and urban developments. Previously, he had responsibility for new business
development including factory-built housing evaluation and project management in
urban planning and development. Mr. Cooper is a Director of the Executive
Committee of the National Association of Home Builders (NAHB) and a past
Chairman of the NAHB's Rural Housing Council, a Director of the National Housing
Conference, a Director of the Affordable Housing Tax Credit Coalition, a past
President of the California Council of Affordable Housing (CCAH) (formerly Rural
Builders Council of California), and a past President of Southern California
Chapter II of the Real Estate Syndication and Securities Institute (RESSI) of
the National Association of Realtors (NAR). Mr. Cooper graduated from Pomona
College in 1956 with a Bachelor of Arts degree.
JOHN B. LESTER, JR., age 64, has been a shareholder, a Director and Secretary of
WNC & ASSOCIATES, INC. since 1986, Executive Vice President from 1986 to 1992,
and President and Chief Operating Officer since 1992, and has been a Director of
WNC CAPITAL CORPORATION since its organization. He was a shareholder, Executive
Vice President, Secretary and a Director of WNC RESOURCES, INC. from 1988
through its acquisition by WNC & ASSOCIATES, INC. in 1991. From 1973 to 1986 he
was Chairman of the Board and Vice President or President of E & L Associates,
Inc., a provider of engineering and construction services to the oil refinery
and petrochemical industries which he co-founded in 1973. Mr. Lester is a former
Director of the Los Angeles Chapter of the Associated General Contractors of
California. His responsibilities at WNC & ASSOCIATES, INC. include property
acquisitions and company operations. Mr. Lester graduated from the University of
Southern California in 1956 with a Bachelor of Science degree in Mechanical
Engineering.
19
<PAGE>
DAVID N. SHAFER, age 45, has been a Director of WNC & ASSOCIATES, INC. since
1997, a Senior Vice President since 1992, and General Counsel since 1990, and
served as Asset Management Director from 1990 to 1992, and has been a Director
and Secretary of WNC Management, Inc. since its organization. Previously he was
employed as an associate attorney by the law firms of Morinello, Barone, Holden
& Nardulli from 1987 until 1990, Frye, Brandt & Lyster from 1986 to 1987 and
Simon and Sheridan from 1984 to 1986. Mr. Shafer is a Director and President of
CCAH, a member of NAHB's Rural Housing Council, a past President of Southern
California Chapter II of RESSI, a past Director of the Council of Affordable and
Rural Housing and Development and a member of the State Bar of California. Mr.
Shafer graduated from the University of California at Santa Barbara in 1978 with
a Bachelor of Arts degree, from the New England School of Law in 1983 with a
Juris Doctor degree and from the University of San Diego in 1986 with a Master
of Law degree in Taxation.
WILFRED N. COOPER, JR., age 35, has been employed by WNC & ASSOCIATES, INC.
since 1988 and has been a Director since 1997 Executive Vice President since
1998, and a Senior Vice President since 1992. Mr. Cooper heads the Acquisition
Originations department at WNC, has been President of, and a registered
principal with, WNC CAPITAL CORPORATION, a member firm of the NASD, since its
organization, and has been a Director of WNC Management Inc. since its
organization. Previously, he was employed as a government affairs assistant by
Honda North America from 1987 to 1988, and as a legal assistant with respect to
Federal legislative and regulatory matters by the law firm of Schwartz, Woods
and Miller from 1986 to 1987. Mr. Cooper is an alternate director and member of
NAHB's Rural Housing Council and serves as Chairman of its Membership Committee.
Mr. Cooper graduated from The American University in 1985 with a Bachelor of
Arts degree.
THEODORE M. PAUL, age 42, has been Vice President - Finance of WNC & ASSOCIATES,
INC. since 1992 and Chief Financial Officer since 1990, and has been a Director
and Chief Financial Officer of WNC Management Inc. since its organization.
Previously, he was a Vice President and Chief Financial Officer of National
Partnership Investments Corp., a sponsor and general partner of syndicated
partnerships investing in affordable rental housing qualified for tax credits,
from 1986 until 1990, and was employed as an associate by the accounting firms
of Laventhol & Horwath, during 1985, and Mann & Pollack Accountants, from 1979
to 1984. Mr. Paul is a member of the California Society of Certified Public
Accountants and the American Institute of Certified Public Accountants. His
responsibilities at WNC & ASSOCIATES, INC. include supervision of investor
partnership accounting and tax reporting matters and monitoring the financial
condition of the Local Limited Partnerships in which the Partnership will
invest. Mr. Paul graduated from the University of Illinois in 1978 with a
Bachelor of Science degree and is a Certified Public Accountant in the State of
California.
THOMAS J. RIHA, age 43, has been Vice President - Asset Management of WNC &
ASSOCIATES, INC. since 1994, and has been a Director and Chief Executive Officer
of WNC Management Inc. since its organization. He has more than 17 years'
experience in commercial and multi-family real estate investment and management.
Previously, Mr. Riha was employed by Trust Realty Advisor, a real estate
acquisition and management company, from 1988 to 1994, last serving as Vice
President - Operations. His responsibilities at WNC & ASSOCIATES, INC. include
monitoring the operations and financial performance of, and regulatory
compliance by, properties in the WNC portfolio. Mr. Riha graduated from the
California State University, Fullerton in 1977 with a Bachelor of Arts degree
(cum laude) in Business Administration with a concentration in Accounting and is
a Certified Public Accountant in the State of California and a member of the
American Institute of Certified Public Accountants.
20
<PAGE>
SY P. GARBAN, age 52, has 20 years' experience in the real estate securities and
syndication industry. He has been associated with WNC & ASSOCIATES, INC., since
1989, serving as National Sales Director through 1992 and as Vice President -
National Sales since 1992. Previously, he was employed as Executive Vice
President by MRW, Inc., Newport Beach, California from 1980 to 1989, a real
estate development and management firm. Mr. Garban is a member of the
International Association of Financial Planners. He graduated from Michigan
State University in 1967 with a Bachelor of Science degree in Business
Administration.
CARL FARRINGTON, age 55, has been associated with WNC & ASSOCIATES, INC. since
1993, and has served as Director - Originations since 1994. Mr. Farrington has
more than 12 years' experience in finance and real estate acquisitions.
Previously, he served as Acquisitions Director for The Arcand Company from 1991
to 1993, and as Treasurer and Director of Finance and Administrator for Polytron
Corporation from 1988 to 1991. Mr. Farrington is a member and Director of the
Council of Affordable and Rural Housing and Development. Mr. Farrington
graduated from Yale University with a Bachelor of Arts degree in 1966 and from
Dartmouth College with a Master of Business Administration in 1970.
DAVID TUREK, age 43, has been Director - Originations of WNC & ASSOCIATES, INC.
since 1996. He has 23 years' experience in real estate finance and acquisitions.
Previously, from 1995 to 1996 Mr. Turek served as a consultant for a national
Low Income Housing Credit sponsor where he was responsible for on-site
feasibility studies and due diligence analyses of Low Income Housing Credit
properties, from 1992 to 1995 he served as Executive Vice President for Levcor,
Inc., a multi-family development company, and from 1990 to 1992 he served as
Vice President for the Paragon Group where he was responsible for Low Income
Housing Credit development activities. Mr. Turek graduated from Southern
Methodist University in 1976 with a Bachelor of Business Administration degree.
N. PAUL BUCKLAND, age 36, has been employed by WNC & ASSOCIATES, INC. since 1994
and currently serves as Vice President Acquisitions. He has 11 years' experience
in analysis pertaining to the development of multi-family and commercial
properties. Previously, from 1986 to 1994 he served on the development team of
the Bixby Ranch which constructed more than 700 apartment units and more than
one million square feet of "Class A" office space in California and neighboring
states, and from 1984 to 1986 he served as a land acquisition coordinator with
Lincoln Property Company where he identified and analyzed multi-family
developments. Mr. Buckland graduated from California State University, Fullerton
in 1992 with a Bachelor of Science degree in Business Finance.
MICHELE M. TAYLOR, age 43, has been employed by WNC & ASSOCIATES, INC. since
1986, serving as a paralegal and office manager, and currently is the Investor
Services Director. Previously she was self-employed between 1982 and 1985 in
non-financial services activities and from 1978 to 1981 she was employed as a
paralegal by a law firm which specialized in real estate limited partnership
transactions. Ms. Taylor graduated from the University of California, Irvine in
1976 with a Bachelor of Arts degree.
21
<PAGE>
THERESA I. CHAMPANY, age 40, has been employed by WNC & ASSOCIATES, INC. since
1989 and currently is the Marketing Services Director and a registered principal
with WNC CAPITAL CORPORATION. Previously, she was employed as Manager of
Marketing Services by August Financial Corporation from 1986 to 1989 and as
office manager and Assistant to the Vice President of Real Estate Syndications
by McCombs Securities Co., Inc. from 1979 to 1986. Ms. Champany attended
Manchester (Conn.) Community College from 1976 to 1978.
KAY L. COOPER, age 61, has been an officer and Director of WNC & ASSOCIATES,
INC. since 1971 and of WNC RESOURCES, INC. from 1988 through its acquisition by
WNC & ASSOCIATES, INC. in 1991. Mrs. Cooper has also been the sole proprietor of
Agate 108, a manufacturer and retailer of home accessory products, since 1975.
She is the wife of Wilfred N. Cooper, Sr., the mother of Wilfred N. Cooper, Jr.
and the sister of John B. Lester, Jr. Mrs. Cooper graduated from the University
of Southern California in 1958 with a Bachelor of Science degree.
22
<PAGE>
Item 11. Executive Compensation
The Partnership has no officers, employees, or directors. However, under the
terms of the Partnership Agreement the Partnership is obligated to the General
Partner or Associates for the following fees:
(a) Selection fees in an amount equal to 8% of the gross proceeds of the
Partnerships' Offering ("Gross Proceeds"). Through December 31, 1997,
approximately $1,059,000 of selection fees had been incurred by the Partnership,
(b) A nonaccountable expense reimbursement in an amount equal to 2% of Gross
Proceeds. Through December 31, 1996, approximately $312,000 of nonaccountable
expense reimbursement has been incurred the Partnership.
(c) An annual asset management fee in an amount equal to the greater of (i)
$2,000 for each Apartment Complex or (ii) 0.275% of gross proceeds. Asset
management fees of$42,900 $42,900 and $42,900 were incurred during the years
ended December 31, 1997, 1996 and 1995, respectively.
(d) A subordinated disposition fee in an amount equal to 1% of the sale price
received in connection with the sale or disposition of an Apartment Complex or
interest in a Local Limited Partnership. Subordinated disposition fees will be
subordinated to the prior return of the Limited Partners' capital contributions
and payment of the return on investment (as defined in Article I of the
Partnership Agreement), which includes Low Income Housing Credits, to the
Limited Partners. Through December 31, 1997, no disposition fee had been
incurred by the Partnerships.
(e) The General Partner was allocated Low Income Housing Credits of $17,850 and
$16,604 for the years ended December 31, 1997
and 1996.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Security Ownership of Certain Beneficial Owners(1)
<TABLE>
<CAPTION>
Name and Address Amount and
Title of Class of Beneficial Owner Nature of Percent
Beneficial Owner of Class
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Units of Limited Partnership Enova Financial , Inc. 4,000 units 25.6%
Interests P.O. Box 126943
San Diego, CA 92113-6943
</TABLE>
23
<PAGE>
(1) a) Security Ownership of Certain Beneficial Owners
The above is only person known to own beneficially in excess of 5% of the
outstanding Limited Partnership Interests:
23
<PAGE>
(b) Security Ownership of Management
Neither the General Partner, Associates nor any of the officers or
directors of Associates own directly or beneficially any limited partnership
interests in the Partnership.
(c) Changes in Control
The management and control of the General Partners may be changed at
any time in accordance with their respective organizational documents, without
the consent or approval of the Limited Partners. In addition, the Partnership
Agreement provides for the admission of one or more additional and successor
General Partners in certain circumstances.
First, with the consent of any other General Partners and a
majority-in-interest of the Limited Partners, any General Partner may designate
one or more persons to be successor or additional General Partners. In addition,
any General Partner may, without the consent of any other General Partner or the
Limited Partners, (I) substitute in its stead as General Partner any entity
which has, by merger, consolidation or otherwise, acquired substantially all of
its assets, stock or other evidence of equity interest and continued its
business, or (ii) cause to be admitted to the Partnership an additional General
Partner or Partners if it deems such admission to be necessary or desirable so
that the Partnership will be classified a partnership for Federal income tax
purposes. Finally, a majority-in-interest of the Limited Partners may at anytime
remove the General Partner of the Partnership and elect a successor General
Partner
Item 13. Certain Relationships and Related Transactions
WNC & Associates, Inc. All of the Partnership's affairs are managed by
the General Partner, through Associates. The transactions with the General
Partner and Associates are primarily in the form of fees paid by the Partnership
for services rendered to the Partnership, as discussed in Item 11 and in the
notes to the accompanying financial statements.
24
<PAGE>
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Financial Statements: See Item 8 Omitted
Financial Statement Schedules:
N/A
Exhibits
(3): Articles of incorporation and by-laws: The registrant is not incorporated.
The Partnership Agreement is included as Exhibit B to the Prospectus which is
included in Post-Effective No 11 to Registration Statement on Form S-11 dated
May 24, 1995 incorporated herein by reference as Exhibit 3. (10) Material
contracts: 10.1 Amended and Restated Agreement of Limited Partnership of
Chadwick Limited Partnership filed as exhibit 10.1 to Form 8-K dated July 22,
1994 is hereby incorporated herein by reference as exhibit 10.1.
10.2 Second Amended and Restated Agreement of Limited Partnership of Garland
Street Limited Partnership filed as exhibit 10.2 to Form 8-K dated July 22, 1994
is hereby incorporated herein by reference as exhibit 10.2
10.3 Amended and Restated Agreement of Limited Partnership of Lamesa Seniors
Community, Ltd. filed as exhibit 10.3 to Form 8-K dated July 22, 1994 is hereby
incorporated herein by reference as exhibit 10.3.
10.4 Amended and Restated Agreement of Limited Partnership of Palestine Seniors
Community, Ltd. filed as exhibit 10.4 to Form 8-K dated July 22, 1994 is hereby
incorporated herein by reference as exhibit 10.4.
10.5 Second Amended and Restated Agreement of Limited Partnership of Southcove
Associates filed as exhibit 10.1 to Form 8-K dated August 8, 1994 is hereby
incorporated herein by reference as exhibit 10.5.
10.6 Third Amended and Restated Agreement of Limited Partnership of Southcove
Associates d. filed as exhibit 10.2 to Form 8-K dated August 8, 1994 is hereby
incorporated herein by reference as exhibit 10.6.
10.7 Amended and Restated Agreement of Limited Partnership of Comanche
Retirement Village, Ltd. filed as exhibit 10.1 to Form 8-K dated August 31, 1994
is hereby incorporated herein by reference as exhibit 10.7.
10.8 Amended and Restated Agreement of Limited Partnership of Mountainview
Apartments Limited Partnership filed as exhibit 10.1 to Form 8-K dated September
21, 1994 is hereby incorporated herein by reference as exhibit 10.8.
10.9 Second Amendment to Amended and Restated Agreement of Limited Partnership
of Mountainview Apartments Limited Partnership filed as exhibit 10.2 to Form 8-K
dated September 21, 1994 is hereby incorporated herein by reference as exhibit
10.9.
10.10 Amended and Restated Agreement of Limited Partnership of Pecan Grove
Limited Partnership filed as exhibit 10.3 to Form 8-K dated September 21, 1994
is hereby incorporated herein by reference as exhibit 10.10.
25
<PAGE>
10.11 Second Amendment to Amended and Restated Agreement of Limited Partnership
of Pecan Grove Limited Partnership filed as exhibit 10.4 to Form 8-K dated
September 21, 1994 is hereby incorporated herein by reference as exhibit 10.11.
10.12 Second Amendment to and Entire Restatement of the Agreement of Limited
Partnership of Autumn Trace Associates, Ltd. filed as exhibit 10.1 to Form 8-K
dated October 31, 1994 is hereby incorporated herein by reference as exhibit
10.12.
10.13 Amended and Restated Agreement of Limited Partnership of EW , a Wisconsin
Limited Partnership filed as exhibit 10.2 to Form 8-K dated October 31, 1994 is
hereby incorporated herein by reference as exhibit 10.13.
10.14 Agreement of Limited Partnership of Klimpel Manor, Ltd. filed as exhibit
10.3 to Form 8-K dated September 21, 1994 is hereby incorporated herein by
reference as exhibit 10.14.
10.15 Amended and Restated Agreement of Limited Partnership of Hickory Lane
Associates Limited filed as exhibit 10.15 to Form 10-K dated December 31, 1995
is hereby incorporated herein by reference as exhibit 10.15.
10.16 Amended and Restated Agreement of Limited Partnership of Honeysuckle Court
Associates, Ltd. filed as exhibit 10.16 to Form 10-K dated December 31, 1995 is
hereby incorporated herein by reference as exhibit 10.16.
10.17- Amended and Restated Agreement of Limited Partnership of Walnut Turn
Associates, Ltd. filed as exhibit 10.17 to Form 10-K dated December 31, 1995 is
hereby incorporated herein by reference as exhibit 10.17.
Reports on Form 8-K
No reports of Form 8-K were filed during the fourth quarter ended December 31,
1997.
26
<PAGE>
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.
WNC HOUSING TAX CREDIT FUND IV, L.P., Series 2
By: WNC Tax Credit Partners IV, L.P. General Partner of the Registrant
Date: April 15, 1998
By: WNC & Associates, Inc. General Partner of WNC Tax Credit Partners IV, L.P.
Date: April 15, 1998
By:/s/ John B. Lester, Jr
- -----------------------------------------------------
John B. Lester, Jr. President of WNC & Associates, Inc.
Date: April 15, 1998
By: /s/ Theodore M. Paul
- -----------------------------------------------------
Theodore M. Paul Vice-President Finance of WNC & Associates, Inc.
Date: April 15, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: /s/ Wilfred N. Cooper, Sr.
- -----------------------------------------------------
Wilfred N. Cooper, Sr. Director and Chairman of the Board
WNC & Associates, Inc.
Date: April 15, 1998
By: /s/ John B. Lester, Jr.
- -----------------------------------------------------
John B. Lester, Jr. Director and Secretary of the Board
WNC & Associates, Inc.
Date: April 15, 1998
By: /s/ David N. Shafer
- -----------------------------------------------------
David N. Shafer Director WNC & Associates, Inc.
Date: April 15, 1998
27
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