AMENDMENT NO. 1 TO 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: 0-21895
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
California 33-6163848
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 NONE
Securities registered pursuant to section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
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
<PAGE>
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
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Item 1. Business
PART I.
Organization
- ------------
WNC Housing Tax Credit Fund V, L.P., Series 3 ("the Partnership" or "Series 3")
is a California Limited Partnership formed under the laws of the State of
California on March 28, 1995, and commenced operations on October 24, 1995 to
acquire limited partnership interests in 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 & Associates, Inc. (the "General
Partner"). The business of the Partnership is conducted primarily through the
General Partner as Series 3 has no employees of its own.
On July 18, 1994, the Partnership commenced a public offering of 20,000 units of
limited partnership interests ("Units"). As of the close of the public offering,
January 21, 1996 a total of 18,000 Limited Partnership Interests representing
$17,558,985, net of discounts of $441,015, had been sold. Holders of Units are
referred to herein as "Limited Partners."
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 Apartment Complex is
subject to a 15-year compliance period (the "Compliance Period").
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 Compliance 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.
As of December 31, 1997, the Partnership had invested in 18 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.
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<PAGE>
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 interests 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.
As of December 31, 1997, 17 of the 18 Apartment Complexes acquired by the
Partnership were completed and in operation and one was under construction. The
Apartment Complexes owned by the Local Limited Partnerships in which the
Partnership has invested were or are being developed by the Local General
Partners who acquired the sites and applied for applicable mortgages and
subsidies. The Partnership became 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 each Local Limited Partnership is limited to its investment. The
Local General Partner of the Local Limited Partnership retain responsibility for
developing, constructing, maintaining, operating and managing the Apartment
Complex.
Following is recap of the status of the 18 Apartment Complexes owned by the 18
Limited Partnerships invested in by the Partnership:
<TABLE>
<CAPTION>
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH THE PARTNERSHIP HAS AN INVESTMENT
AS OF DECEMBER 31, 1996
No. of Units Units Percentage
Name & Location Units Completed Occupied Occupancy
- --------------- ----- --------- -------- ---------
<S> <C> <C> <C> <C>
Alliance Apartments I 19 19 10 54%
Alliance, Nebraska
Blessed Rock of El Monte 137 137 136 99%
El Monte, California
Broadway Apartments 78 0 0 0%
Hobbs, New Mexico
Cascade Pines, L.P., II 375 375 360 96%
Atlanta, Georgia
Curtis Associates I 12 12 11 92%
Curtis, Nebraska
Escatawpa Village Associates 31 31 29 94%
Escatawpa, Mississippi
Evergreen Apartments I 76 76 22 29%
Tulsa, Oklahoma
Hastings Apartments I 18 18 16 89%
Hastings, Nebraska
Heritage Apartments I 30 30 30 100%
Berkeley, Montana
4
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<CAPTION>
No. of Units Units Percentage
Name & Location Units Completed Occupied Occupancy
- --------------- ----- --------- -------- ---------
<S> <C> <C> <C> <C>
Hillcrest Associates 28 28 26 93%
Ontario, Oregon
Patten Towers, L.P. II 221 221 221 100%
Chattanooga, Tennessee
Prairieland Prop of Syracuse II 8 8 8 100%
Syracuse, Kansas
Raymond S. King Apts. 22 22 22 100%
Greensboro, North Carolina
Rosedale Limited Partnership 31 31 29 94%
Silver City, New Mexico
Shepherd South Apts. I 24 24 22 92%
Shepherd, Texas
Solomon Associates I, L.P. 16 16 13 81%
Solomon, Kansas
Talladega Co. Housing Ltd. 30 30 30 100%
Talladega, Alabama
The Willows Apartments 36 36 32 89%
Morganton, North Carolina ______ ______ ______ _____________
------ ------ ------ -------------
1,192 1,114 1,017 91%
===== ===== ===== ===
</TABLE>
Series 3 has become a limited partner in Evergreen Apartments I Limited
Partnership, an Oklahoma limited partnership ("EVERGREEN"); Hillcrest
Associates, a Limited Partnership, an Oregon limited partnership ("HILLCREST");
Shepherd South Apartments I, Ltd., a Texas limited partnership ("SHEPHERD I");
Talladega County Housing, Ltd., an Alabama limited partnership ("TALLADEGA");
and The Willows Apartments Limited Partnership, a North Carolina limited
partnership ("WILLOWS"). Patten Towers, L.P. II, a Tennessee limited partnership
("PATTEN"). Series 3 expects to become a limited partner in Alliance Apartments
I, Limited Partnership, a Nebraska limited partnership ("ALLIANCE"); Hastings
Apartments I, L.P., a Nebraska limited partnership ("HASTINGS"); and Raymond S.
King Apartments, a North Carolina limited partnership ("KING"); Prairieland
Properties of Syracuse II, L.P., a Kansas limited partnership ("PRAIRIELAND");
Heritage Apartments I, L.P., a Missouri limited partnership ("HERITAGE"); and
Solomon Associates I, L.P., a Missouri limited partnership ("SOLOMON"); Cascade
Pines, L.P. II, a Georgia limited partnership ("CASCADE"); and Rosedale Limited
Partnership, a New Mexico limited partnership ("ROSEDALE"); Curtis Associates I,
L.P., a Nebraska limited partnership ("CURTIS").
Series 3 and WNC Housing Tax Credit Fund V, L.P., Series 4 ("SERIES 4")
have each acquired one-half of the Local Limited Partnership Interest in Blessed
Rock of El Monte, a California limited partnership ("BLESSED ROCK").
Series 3 expects to become a limited partner in Broadway Apartments,
Limited Partnership, a New Mexico limited partnership ("BROADWAY"); and
Escatawpa Village Associates, L.P., a Mississippi limited partnership
("ESCATAWPA").
5
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EVERGREEN owns the Evergreen Apartments in Tulsa Oklahoma; HILLCREST owns the
Hillcrest Apartments in Ontario, Oregon; SHEPHERD I owns the Shepherd South
Apartments I in Shepherd, Texas; TALLADEGA owns Indian Hills Estates in
Talladega, Alabama; and WILLOWS owns The Willows Apartments in Morganton, North
Carolina; ALLIANCE owns the Alliance Apartments in Alliance, Nebraska; HASTINGS
owns the Hastings Apartments in Hastings, Nebraska; KING owns the Raymond S.
King Apartments in Greensboro, North Carolina; and PATTEN owns the Patten Towers
Apartments in Chattanooga, Tennessee; BROADWAY owns the Broadway Apartments in
Hobbs, New Mexico; HERITAGE owns the Heritage Apartments in Berkeley, Missouri;
PRAIRIELAND owns the North Ridge Apartments in Syracuse, Kansas; and SOLOMON
owns the North Pine Village Apartments in Solomon, Kansas; BLESSED ROCK owns the
Blessed Rock of El Monte Apartments in El Monte, California; CASCADE owns the
Cascade Pines Apartments in Atlanta, Georgia; CURTIS owns the Bergwood
Apartments in Curtis, Nebraska; ESCATAWPA owns the Escatawpa Village Apartments
in Escatawpa, Mississippi; and ROSEDALE owns the Valley View Apartments in
Silver City, New Mexico.
Included herein is a discussion of a Local Limited Partnership Interest
acquired by SERIES 3.
Series 3's currently required capital contribution to the Local Limited
Partnerships identified herein will represent investment in 18 Local Limited
Partnerships and all of the Partnership's offering proceeds available for
investment. The Apartment Complexes owned by all such Local Limited Partnerships
are located in 13 states and are being developed and constructed by 13 different
development teams. Seven of the Apartment Complexes are financed by RECDS, nine
are financed by other government assistance programs or a combination of other
government assistance programs and "conventional" financing, and two are
financed solely by "conventional" financing. Five of the Apartment Complexes are
designed for senior citizens.
The following tables contain information concerning the Apartment
Complexes owned by the Local Limited Partnerships identified herein
6
<PAGE>
<TABLE>
<CAPTION>
LOCAL LIMITED
ESTIMATED PERMANENT PARTNERSHIP'S
CONSTRUC- MORTGAGE ANTICIPATED
LOCAL PROJECT TION NUMBER OF BASIC LOAN AGGREGATE
LIMITED NAME/NUMBER COMPLETION APARTMENT MONTHLY PRINCIPAL TAX CREDITS
PARTNERSHIP OF BUILDINGS DATE UNITS RENTS AMOUNT (1)
- ----------- ------------ ---- ----- ----- ------ ---
<S> <C> <C> <C> <C> <C> <C>
EVERGREEN Evergreen November 25 1BR $280 $650,000 $990,850
Apartments 1995 units $320 CFB (3)
(2) 43 2BR $450
units $324,425
3 buildings 8 3BR MWPHGL
units (4)
HILLCREST Hillcrest Completed 26 1BR $350 $1,311,000 $683,400
Apartments units $370 RECDS (6)
(5) 2 2BR
units
8 buildings
SHEPHERD Shepherd November 8 1BR $232 $583,900 $277,640
I South 1995 units $300 RECDS (6)
Apartments 16 2BR
I units
(2)
6 buildings
TALLADEGA Indian August 8 1BR $198 $576,000 $1,265,000
Hills 1996 units $237 AHFA(7)
Estates 12 2BR $374
units $246,513
6 3BR Colonial
5 units Bank (8)
buildings
WILLOWS The Willows December 34 1BR $269-312 $254,500 $1,426,280
Apartments 1996 units $375 CICNC (9)
(5) 2 2BR
units $900,000
1 building NCHFA (10)
$40,000
City of
Morganton(11)
ALLIANCE Alliance Completed 6 2BR $336 $500,000 $1,089,660
Apartment July 1995 units $468 CFB (12)
13 3BR
9 buildings units $147,779
City of
Alliance
(13)
HASTINGS Hastings February 6 2BR $359 $450,000 $993,600
Apartments 1996 units $419 FNBO (14)
12 3BR
9 buildings units
KING Raymond S. November 22 2BR $250 $719,000 $974,798
King 1996 units City of
Apartments Greensboro
(5) (15)
2 buildings
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
LOCAL LIMITED
ESTIMATED PERMANENT PARTNERSHIP'S
CONSTRUC- MORTGAGE ANTICIPATED
LOCAL PROJECT TION NUMBER OF BASIC LOAN AGGREGATE
LIMITED NAME/NUMBER COMPLETION APARTMENT MONTHLY PRINCIPAL TAX CREDITS
PARTNERSHIP OF BUILDINGS DATE UNITS RENTS AMOUNT (1)
- ----------- ------------ ---- ----- ----- ------ ---
<S> <C> <C> <C> <C> <C> <C>
PATTEN Patten June 1996 32 studio $508 (8) $7,000,000 $3,911,130
Towers units Hamilton
Apartments 188 1BR $563 (8) County IDB
(5) (2) units (16)
1 2BR unit $644 (8) $875,000
1 building Hamilton
County IDB
(17)
BROADWAY Broadway December 30 1BR $272-335 $1,215,000 $3,613,990
Apartments 1996 units $324-399 BA (2)
16 2BR $372-458
9 buildings units $150,538
32 3BR HOME (3)
units
HERITAGE Heritage June 30 1BR $250-300 $577,350 $1,370,670
Apartments 1997 units MHDC (5)
1 building $135,957
(5) St. Louis
County (6)
PRAIRIE- North Ridge September 2 1BR units $270 $295,171 $152,460
LAND Apartments 1996 4 2BR units $315 RECDS (6)
2 3BR units $340
4 buildings
SOLOMON North Pine January 4 1BR units $269 $561,366 $253,678
Village 1997 12 BR units $352 RECDS (6
Apartments
4 buildings
BLESSED Blessed August 136 1BR $402 $2,600,000 $9,147,920
ROCK Rock of El 1997 units $0 (mgr FENB (22)
Monte 1 2BR unit unit)
Apartments $275,000
EMCRA (23)
14
buildings $650,000
(5) DCF (24)
CASCADE Cascade October 94 1BR $329-$365 $2,465,000 $2,681,950
Pines 1996 units $399-$470 URFA (25)
Apartments 187 2BR $499-$530
units $4,990,000
38 94 3BR URFA (25)0
buildings units
(5) $1,100,000
URFA (25)
- ------- ------------ ----------- ------------ ----------- ------------ -----------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
LOCAL LIMITED
ESTIMATED PERMANENT PARTNERSHIP'S
CONSTRUC- MORTGAGE ANTICIPATED
LOCAL PROJECT TION NUMBER OF BASIC LOAN AGGREGATE
LIMITED NAME/NUMBER COMPLETION APARTMENT MONTHLY PRINCIPAL TAX CREDITS
PARTNERSHIP OF BUILDINGS DATE UNITS RENTS AMOUNT (1)
<S> <C> <C> <C> <C> <C> <C>
CURTIS Bergwood July 1996 4 1BR units $265 $430,000 $181,120
Apartments 8 2BR units $320 RECDS (6)
3 buildings
(2)
ESCATAWPA Escatawpa September 8 1BR units $317 $900,500 $493,720
Village 1996 23 2BR units $369 RECDS (6)
Apartments
12
buildings
(2)
ROSEDALE Valley View January 6 1BR units $295 $1,330.000 $547,280
Apartment 1996 19 2BR units $358 RECDS (6)
6 3BR units $418
4 buildings
- ------ ------------ ----------- ------------- ----------- ----------- ------------
</TABLE>
(1) Low Income Housing Credits are available over a 10-year period. For the year
in which the credit first becomes available, Series 3 will receive only that
percentage of the annual credit which corresponds to the number of months during
which Series 3 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) Commercial Federal Bank ("CFB") will provide the first mortgage loan for a
term of 15 years at an annual interest rate of 8.5%. Principal and interest will
be payable monthly based on a 22-year amortization schedule with the balance of
the loan due and payable in the 15th year.
(4) Most Worshipful Prince Hall Grand Lodge ("MWPHGL") will provide the second
mortgage loan for a term of 15 years at an annual interest rate of 5%. Principal
and interest will be payable monthly based on a 15- year amortization schedule.
(5) Property designed for senior citizens.
(6) RECDS provides mortgage loans under the RECDS Section 515 Mortgage Loan
Program. Each of these mortgage loans will be a 50-year loan and 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.
(7) Alabama Housing Finance Agency ("AHFA") will provide the first mortgage loan
under the HOME program for a term of 20 years at an annual interest rate of .5%
with principal payable monthly based on a 20-year amortization schedule and
interest payable at maturity.
(8) Colonial Bank will provide the second mortgage loan for a term of 20 years
at an annual interest rate of 10.5% with principal and interest payable monthly
based on a 20-year amortization schedule.
(9) Community Investment Corporation of North Carolina ("CICNC") will provide
the first mortgage loan for a term of 30 years at an annual interest rate of
9.25%. Principal and interest will be payable monthly, based on a 30-year
amortization schedule.
(10) North Carolina Housing Financial Agency ("NCHFA") will provide the second
mortgage loan interest-free for a term of 30 years based on a 30-year
amortization schedule, payable monthly.
9
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(11) The City of Morganton will provide the third mortgage loan interest-free
for a term of 20 years, with principal payments due upon maturity of the loan.
(12) Commercial Federal Bank ("CFB") will provide the first mortgage loan for a
term of 15 years at an annual interest rate of 8.5%. Principal and interest will
be payable monthly based on a 22-year amortization schedule. (13) The City of
Alliance will provide the second mortgage loan for a term of 20 years at an
annual interest rate of 0.1%.
Principal and interest will be payable monthly based on a 20-year amortization
schedule.
(14) First National Bank of Omaha ("FNBO") will provide the mortgage loan for a
term of 15 years at a variable interest rate. The note rate will be fixed for 36
months, and every 36 months thereafter, at the adjusted rate which is 225 basis
points over the Three-year Treasury Constant Maturities. The note will have a
floor rate of 8.5% and a ceiling rate of 12.5%. Principal and interest will be
payable monthly based on a 15-year amortization schedule.
(15) The City of Greensboro has approved funding for the rehabilitation of the
Apartment Complex in the aggregate amount of $719,000. The funding sources will
be $355,240 of HOME fundings and $363,750 from the City's Community Development
Block Grant Loan Guarantee Program. The mortgage loan is interest-free for a
term of 30 years with a balloon payment at the end of the term. The HOME Program
was created under the National Affordable Housing Act of 1990. States,
metropolitan cities, urban counties and consortia (contiguous units of local
government) are eligible to become participating jurisdictions in the HOME
Program. The HOME funds are allocated by formula, with 60% of these funds
available for metropolitan cities, urban counties and consortia and 40% for
states. HOME funds may be used for tenant-based rental assistance, assistance to
home-buyers and homeowners, property acquisition, new construction, moderate or
substantial rehabilitation, site improvements, demolition, relocation expenses
and other reasonable and necessary expenses related to development of non-luxury
housing.
(16) The Local Limited Partnership has received tax-exempt bond financing in the
aggregate principal amount of $7,000,000 (the "Tax-Exempt Bond"). The issuer of
the bonds is the Industrial Development Board of the County of Hamilton,
Tennessee ("IDB"). The Tax-Exempt Bond was issued in five separate bonds, fully
amortized by their respective maturity dates, as follows: $2,465,000 at 5.5%
interest per year maturing on August 1, 2005; $1,080,000 at 5.9% interest per
year maturing on February 1, 2008; $830,000 at 7% interest per year maturing on
February 1, 2009; $670,000 at 6.1% interest per year maturing on August 1, 2015;
and $1,955,000 at 6.175% interest per year maturing on August 1, 2026. Upon
funding of the bonds approximately $390,000 will be held by the Trustee in a
separate debt service reserve fund to be used by the Trustee for payment of the
bonds, if required. Principal and interest on the bonds will be due
semi-annually on February 1 and August 1 of each year.
(17) The Local Limited Partnership will receive taxable bond financing in the
principal amount of $875,000 at 6.45% interest per year and maturing on February
1, 2002 ("Taxable Bond"). The Taxable Bond, which is fully amortized by its
maturity date with principal and interest due semi-annually on February 1 and
August 1 of each year, was issued by IDB.
(18) Bank of America ("BA") will provide the first mortgage loan for 15 years at
an annual interest rate of 11.5%. Principal and interest will be payable monthly
based on a 30-year amortization schedule, and all unpaid principal will be due
upon maturity of the loan.
(19) HOME funds will be provided for the second mortgage loan for a term of 50
years at an annual interest rate of 7%. Payments are based upon the availability
of cash flow. Principal and interest will accrue if not paid and will be due
upon maturity of the loan.
10
<PAGE>
(20) Missouri Housing Development Commission ("MHDC") will provide the first
mortgage loan for a term of 35 years at an annual interest rate of 1%. Principal
and interest will be payable monthly based on a 35-year amortization schedule.
(21) St. Louis County will provide the second mortgage loan for a term of 35
years at no interest. Principal payments will be made from surplus cash flow and
will accrue if not paid. Accrued principal will be due upon maturity of the
loan.
(22) Far East National Bank ("FENB") will provide the first mortgage loan for a
term of 30 years at an annual interest rate of 8.5%. Principal and interest will
be payable monthly, based on a 20-year amortization schedule.
(23) El Monte Community Redevelopment Agency ("EMCDA") will provide the second
mortgage loan for a term of 15 years at an annual interest rate of 4%. The loan
will be repaid based on residual receipts.
(24) Deferred City Fees ("DCF") will provide the third mortgage loan for a term
of 30 years at an annual interest rate of 1%. The loan will be repaid based on
residual receipts
(25) Urban Residential Finance Authority (URFA) will provide the first mortgage
loan for a term of 15 years at an annual interest rate of 6.25%. Principal and
interest will be payable annually based on a 15-year amortization schedule. URFA
will provide the second mortgage loan for a term of 30 years at an annual
interest rate of 6.6%. Principal and interest will be payable annually based on
a 30-year amortization schedule. URFA will provide the third mortgage loan for a
term of 30 years at an annual interest rate of 7%. Principal and interest will
be payable annually based on a 30-year amortization schedule.
Tulsa (EVERGREEN): Tulsa (population 367,000) is the county seat of Tulsa
County, and is in northeast Oklahoma at the intersection of Interstate Highway
44 and U.S. Highway 75. The major employers for Tulsa residents are American
Airlines, Tulsa Public Schools, and St. Francis Hospital.
Ontario (HILLCREST): Ontario (population 9,700) is in Malheur County in
east-central Oregon on U.S. Highway 20-26, near Interstate Highway 84. Ontario
is the trade center for this area, known as the Western Treasure Valley. Major
employers for the Ontario area include Ore-Ida Foods, Woodgrain Moulding, and
American Fine Foods.
Shepherd (SHEPHERD I): Shepherd (population 1,800) is in San Jacinto County at
the intersection of U.S. Highway 59 and State Highway 156, in east-central Texas
approximately 50 miles northeast of Houston. The major employers for Shepherd
residents are the Shepherd Independent School District and EGC Plastics.
Talladega (TALLADEGA): Talladega (population 74,000) is in central Alabama
approximately 55 miles east of Birmingham and is the county seat of Talladega
County. Interstate Highway 20 is ten miles north of the city. The major
employers in the area are Kimberly Clark Corporation (paper/pulp), Russell
Corporation (apparel), Sullivan Graphics (commercial printing) and
Georgia-Pacific (plywood lumber pulp).
Morganton (WILLOWS): Morganton (population 15,200) is the county seat of Burke
County in the western section of North Carolina, 70 miles northwest of Charlotte
and 55 miles east of Asheville, at the intersection of Interstate Highway 40 and
U.S. Highway 64. The city's major industries are furniture manufacturing and
textiles. Two of the area's largest employers are Alba Waldensian (hosiery) and
Masco/Drexel Heritage (furniture).
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Alliance (ALLIANCE): Alliance (population 9,800) is the county seat of Box Butte
County, Nebraska, and is near the intersection of U.S. Highway 385 and State
Highway 2, in the western part of the state. Major employers for Alliance
residents are Burlington Northern, Dayco, and Woolrich.
Hastings (HASTINGS): Hastings (population 23,000) is the county seat of Adams
County, Nebraska, in the south-central part of the state, 150 miles southwest of
Omaha, at the intersection of U.S. Highways 6, 34 and 281. The major employers
are Mary Lanning Memorial Hospital, Hastings Regional Hospital, and Hastings
Public School District.
Greensboro (KING): Greensboro (population 187,000) is the county seat of
Guilford County, North Carolina, and is located at the intersection of
Interstate Highways 40 and 85, approximately 25 miles east of Winston-Salem and
85 miles northwest of Raleigh. The largest employers for Greensboro residents
are local and county governments, Sears, Roebuck and Company, and American
Telephone and Telegraph.
Chattanooga (PATTEN): Chattanooga (population 150,000) is located in Hamilton
County, Tennessee, in the south-central part of the state near the Georgia and
Alabama borders, at the intersection of Interstate Highways 24, 59 and 75. The
major employers are the Tennessee Valley Authority, Erlanger Medical Center and
Provident Life and Accident (insurance company).
Hobbs (BROADWAY): Hobbs (population 30,000) is located in Lea County in
southeast New Mexico on U.S. Highway 62/180. The economy of Hobbs is based on
the petroleum industry, with four of the ten largest employers conducting
petroleum related businesses. However, the three largest employers for Hobbs
residents are the Hobbs Municipal Schools, Lea Regional Hospital and city
government.
Berkeley (HERITAGE): Berkeley (population 11,000) is located in St. Louis County
in eastern Missouri, near Interstate Highways 70, 170 and 270, and is a suburb
of the city of St. Louis. The major employers for Berkeley residents are
McDonnell Douglas, Ferguson-Florissant Schools, and Lambert-St. Louis Airport.
Syracuse (PRAIRIELAND): Syracuse (population 1,600) is the county seat of
Hamilton County, Kansas, and is located in the western part of the state at the
intersection of U.S. Highway 50 and State Highway 27. The economy of Hamilton
County is based largely on agriculture. The Syracuse Unified School District,
Hamilton County Hospital and county government are the largest employers in
Syracuse.
Solomon (SOLOMON): Solomon (population 1,000) is located in Dickinson County,
Kansas, in the central part of the state along Interstate Highway 70,
approximately 90 miles west of Topeka. Agriculture plays a major role in the
economy of Dickinson County. Many of Solomon's residents commute to Abilene and
Salina for employment. The largest employers within Solomon are Solomon
Corporation (transformer manufacturing), Mid Kansas Auto Truck Center, and the
Solomon Unified School District.
El Monte (BLESSED ROCK): El Monte (population 106,000) is in Los Angeles County,
California, in the San Gabriel Valley, approximately 12 miles east of downtown
Los Angeles. The major employers for El Monte residents are Wells Fargo Bank,
Von's Co., Inc. (distribution warehouse), and Sargent-Fletcher (air frames).
Atlanta (CASCADE): Atlanta (population 394,000) is the state capital of Georgia,
and is located in Fulton County at the intersection of Interstate Highways 85,
75 and 20. Atlanta is considered the commercial, transportation and financial
capital of the Southeast. It is the national headquarters for Coca-Cola, CNN,
Delta Air Lines, United Parcel Service, Home Depot, and Holiday Inn-Worldwide.
Curtis (CURTIS): Curtis (population 800) is in Frontier County in the
south-central part of Nebraska, near the intersection of U.S. Highway 83 and
State Highways 18 and 23. Major employers for Curtis residents are Maywood Corp.
(agricultural products), Sunset Haven Nursing Community, and NCTA Technical
School.
Escatawpa (ESCATAWPA): Escatawpa (population 3,900) is in Jackson County in
southern Mississippi on Interstate Highway 10. Mobile, Alabama is located
approximately 20 miles east of Escatawpa. Major employers in Jackson County
include Ingalls (shipbuilding), Chevron Refinery, and International Paper.
Silver City (ROSEDALE): Silver City (population 10,600) is the county seat of
Grant County in southwest New Mexico near the intersection of U.S. Highway 180
and State Highway 90. Major employers for Rosedale residents are Silver City
Daily Press and Southwest Transit Mix.
12
<PAGE>
<TABLE>
<CAPTION>
ALLOCATIONS (3) SERIES 3's
LOCAL LOCAL SHARING RATIOS: AND SALE OR CAPITAL
LIMITED GENERAL PROPERTY CASH FLOW REFINANCING CONTRIBUTION
PARTNERSHIP PARTNERS MANAGER (1) (2) PROCEEDS (4) (5)
<S> <C> <C> <C> <C> <C>
EVERGREEN Most Retro WNC: 1st $5,000 99/1 $549,305
Worshipful Management LGP: 2nd $5,000 50/50
Prince Hall Group, Inc. Balance:
Grand Lodge (8) WNC: 25%
(6) LGP: 75%
Retro
Development
of Oklahoma,
Inc. (7)
HILLCREST Riley J. Hill Riley J. Hill WNC: 1st 99/1 $353,505
(9) (9) $1,000 50/50
LGP: the
balance
SHEPHERD Donald W. Wilmic WNC: 1/3 99/1 $121,369
I Sowell (10) Ventures, LGP: 2/3 50/50
Inc.
(11)
TALLADEGA Thomas H. Apartment WNC: 1/3 99/1 $653,237
Cooksey (12) Services and LGP: 2/3 50/50
Management
Apartment Co.
Developers, (13)
Inc. (12)
WILLOWS Gordon GEM WNC: 1/3 99/1 $841,433
Douglas Management, LGP: 2/3 50/50
Brown, Jr. Inc. (17)
(14)
John C.
Loving (15)
Western N.C.
Housing
Partnership,
Inc. (16)
ALLIANCE Retro Retro WNC: 1st $2,500 99/1 $604,108
Development, Management LGP: 2nd $2,500 50/50
Inc. (18) Group, Inc. Balance:
(8) WNC: 25%
LGP: 75%
13
<PAGE>
<CAPTION>
SHARING RATIOS:
ALLOCATIONS (3) SERIES 3's
LOCAL LOCAL SHARING RATIOS: AND SALE OR CAPITAL
LIMITED GENERAL PROPERTY CASH FLOW REFINANCING CONTRIBUTION
PARTNERSHIP PARTNERS MANAGER (1) (2) PROCEEDS (4) (5)
- ----------- -------- ----------- --- ------------ ---
<S> <C> <C> <C> <C> <C>
HASTINGS Retro Retro WNC: 1st $2,500 99/1 $542,107
Development, Management LGP: 2nd $2,500 25/75
Inc. (18) Group, Inc. Balance:
(8) WNC: 25%
Most LGP: 75%
Worshipful
Prince Hall
Grand Lodge
(19)
KING Project Wynnefield WNC: 1/3 99/1 $473,100
Homestead, Properties, LGP: 2/3 50/50
Inc. (20) Inc.
(21)
PATTEN Patten Lawler-Wood, WNC: Greater of 99/1 $2,154,201
Towers, LLC Inc. (23) $5,000 or 15% 50/50
(22) LGP: 40%
Balance:
WNC: 50%
LGP: 50%
BROADWAY Trianon Trianon WNC: Greater of 99/1 $2,003,595
Development Development 15% or $5,000 50/50
Corporation Corporation LGP: 40%
(24) (24) Balance: 50/50
Foundation
for
Social
Resources,
Inc.
(25)
HERITAGE Kenneth M. Lockwood WNC: 1/3 99/1 $753,295
Vitor (26) Realty, LGP: 2/3 50/50
Inc. (28)
Joseph A.
Shepard (27)
- -------- -------------- -------------- ----------------- ------------- ----------------
PRAIRIE- Kenneth M. Lockwood WNC: 1/3 99/1 $84,524
LAND Vitor (26) Realty, Inc. LGP: 2/3 50/50
(28)
Joseph A.
Shepard (27)
- -------- -------------- -------------- ----------------- ------------- ----------------
SOLOMON Kenneth M. Lockwood WNC: 1/3 99/1 $142,061
Vitor (26) Realty, LGP: 2/3 50/50
Inc. (28)
Joseph A.
Shepard (27)
BLESSED Everland, Professional WNC: Greater 98.99/.01/1 $2,603,955
ROCK Inc. Apartment of 30% or 50/50
(28) Management, $12,000
Inc. (29) LGP: 40% of
the balance
The balance:
50/50
CASCADE Urban Brencor Asset WNC: greater 98/2 $1,346,961
Residential Management, of 10% or 50/50
Management, Inc. (31) $5,000
Inc. (30) LGP: 45%
Balance:
WNC:10.9%;
LGP: 89.1%
- -------- -------------- -------------- ---------------- -------------- ----------------
14
<PAGE>
<CAPTION>
SHARING RATIOS:
ALLOCATIONS (3) SERIES 3's
LOCAL LOCAL SHARING RATIOS: AND SALE OR CAPITAL
LIMITED GENERAL PROPERTY CASH FLOW REFINANCING CONTRIBUTION
PARTNERSHIP PARTNERS MANAGER (1) (2) PROCEEDS (4) (5)
- ------- -------------- -------------- --------------------------- -------- -----------
<S> <C> <C> <C> <C> <C>
CURTIS Joseph A. Lockwood WNC: 1/3 99/1 $88,366
Shepard (27) Realty, LGP: 2/3 50/50
Inc. (28)
Kenneth M.
Vitor (26)
- ------- -------------- -------------- --------------------------- -------- -----------
ESCATAWPA Olsen Olsen WNC: 1/3 99/1 $248,646
Securities Securities LGP: 2/3 91/9
Corporation Corporation
(32) (32)
- ------- -------------- -------------- --------------------------- -------- -----------
- ------- -------------- -------------- --------------------------- -------- -----------
ROSEDALE Deke Noftsker M-DC Group, WNC: greater of 33% or 99/1 $308,762
(33) Inc. dba $1,400 50/50
Alpha LGP: 67%
Management
Co, Inc. (34)
- ------- -------------- -------------- --------------------------- -------- -----------
</TABLE>
(1) The maximum annual management fee payable to the property manager generally
is determined pursuant to lender regulations. Each Local General Partner is
authorized to employ either itself or one of its Affiliates, or a third party,
as property manager for leasing and management of the Apartment Complex so long
as the fee therefor 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 Series 3 ("WNC") and the Local General Partner(s) ("LGP") of the
Local Limited Partnership for each year of operations. Generally, to the extent
that the specific dollar amounts which are to be paid to Series 3 are not paid
annually, they will accrue and be paid from sale or refinancing proceeds as an
obligation of the Local Limited Partnership.
(3) Subject to certain special allocations, reflects the respective percentage
interests of Series 3 and the Local General Partner(s) in profits, losses and
Low Income Housing Credits commencing with entry of Series 3 as a limited
partner.
(4) Reflects the percentage interests of Series 3 and the Local General
Partner(s) 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: The
capital contribution of Series 3; and the capital contribution of the Local
General Partner.
(5) Series 3 will make its capital contributions to each Local Limited
Partnership in stages, with each contribution due when certain conditions
regarding construction or operations of the Apartment Complex have been
fulfilled.
(6) Most Worshipful Prince Hall Grand Lodge ("MWPHGL") was formed 103 years ago,
and was incorporated in 1982. One of its goals is to foster the development of
safe, decent and affordable housing to individuals and families earning less
than 60% of the median income of the area. The corporation has represented to
Series 3 that, as of December 10, 1994, it had a net worth in excess of
$3,000,000. (7) Retro Development of Oklahoma, Inc. was formed in 1994 by
Douglas E. Hiner. The company has represented to the Partnership that, as of
December 31, 1994, its net worth was minimal Construction and operating deficit
guarantees will be provided by Douglas E. Hiner. Mr. Hiner, age 55, has
represented to the Series 3 that, as of August 2, 1995, he had a net worth in
excess of $6,500,000.
(8) Retro Management Group, Inc. was formed in 1994. The company currently
manages more than 2,200 units in conventional and government financed apartment
projects in Oklahoma, Nebraska and Iowa. The company's principal, Douglas E.
Hiner, has been involved in property management since 1974.
15
<PAGE>
(9) Riley J. Hill has been involved in the construction industry since 1969. He
owns and manages in excess of 200 tax credit apartment units. Mr. Hill graduated
from Yakima Valley College. Mr. Hill, age 48, has represented to Series 3 that,
as of December 31, 1994, he had a net worth in excess of $3,000,000.
(10) Donald W. Sowell has been a principal and chief executive officer of D.W. &
S. Construction, Inc. since 1985. The corporation was formed for the purpose of
providing construction and construction-related services to the multi-family,
single-family and commercial-use markets. D.W. & S. Construction, Inc. has
completed more than $12,000,000 in multi-family, light commercial and
residential construction. Since 1979 Mr. Sowell has been a principal and chief
executive officer of Don Sowell Development, Inc., a property development
company which has developed $19,000,000 of real estate in Texas and Mississippi.
Mr. Sowell, age 56, has represented to Series 3 that, as of September 30, 1994,
he had a net worth in excess of $3,000,000.
(11) Wilmic Ventures, Inc. is a Texas corporation which was incorporated in
1984. The corporation is comprised of Wilmic Property Management and Wilmic
Laundries, two separate divisions. Donald W. Sowell is a principal and chief
executive officer of Wilmic Ventures, Inc. Wilmic Property Management began
operating in 1979 and manages more than 1,200 apartment units, 386 of which are
tax credit units.
(12) Thomas H. Cooksey has been involved in real estate development and
apartment management since 1980 and, currently, is the general partner of
partnerships that own apartment complexes located in 65 towns, principally in
Alabama. Mr. Cooksey, age 54, has represented to Series 3 that, as of June 22,
1995, he had a net worth in excess of $8,900,000. Apartment Developers, Inc. was
formed in 1993 by Mr. Cooksey, Charles Farrow, Jr. and Kay Wallace to act as a
corporate general partner of the Local Limited Partnership which owns the
Apartment Complex. Mr. Cooksey is the president and owner of the corporation.
Apartment Developers, Inc.
has a nominal shareholders' equity.
(13) Apartment Services and Management Co. was formed in 1986. Thomas H. Cooksey
is president and owner of 50% of the corporation. Apartment Services and
Management Co. manages in excess of 1,200 apartment units, more than 800 of
which are tax credit units.
(14) Gordon Douglas Brown, Jr. has been involved in real estate development,
finance, and analysis since 1964. His development experience includes
apartments, office buildings, condominiums, and shopping centers. Together with
John C. Loving, Mr. Brown has developed 20 apartment projects in North Carolina.
Mr. Brown, age 55, has represented to Series 3 that, as of September 1, 1995, he
had a net worth in excess of $1,700,000.
(15) John C. Loving is the owner and general manager of John Loving and
Associates. Since 1971, Mr. Loving has been involved in real estate finance,
management, sales and development. He earned a Masters of Commerce degree in
finance from the University of Richmond, and is a member of the Raleigh Chamber
of Commerce and the Wake County Homebuilders Association. Mr. Loving has served
as director of Raleigh Academy, and is a director of the North Carolina Council
for Rural Rental Housing. Mr. Loving, age 50, has represented to Series 3 that,
as of August 31, 1995, he had a net worth in excess of $1,600,000.
(16) Western N. C. Housing Partnership, Inc. was formed in 1987, and
incorporated in 1993 as a not-for-profit organization in North Carolina. The
corporation provides technical assistance to the private and public sectors in
preparing grant and loan applications for affordable housing, and has a nominal
fund surplus.
(17) GEM Management, Inc. was formed in North Carolina in 1991. Its president,
Gary D. Ellis, has been involved in low and moderate income housing programs
since 1981. The corporation currently manages 72 apartment complexes consisting
of more than 2,000 affordable rental units located in Alabama, Georgia,
Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia.
16
<PAGE>
(18) Retro Development, Inc. was formed in 1994 by Douglas E. Hiner. The company
has represented to the Partnership that, as of December 31, 1994, its net worth
was minimal. However, construction and operating deficit guarantees will be
provided by Douglas E. Hiner. Mr. Hiner, age 55, has represented to Series 3
that, as of August 2, 1995, he had a net worth in excess of $6,500,000.
(19) Most Worshipful Prince Hall Grand Lodge ("MWPHGL") was formed 103 years ago
and was incorporated in 1982. One of its goals is to foster the development of
safe, decent and affordable housing to individuals and families earning less
than 60% of the median income of the area. The corporation has represented to
Series 3 that, as of September 1, 1995, it had a net worth in excess of
$3,500,000.
(20) Project Homestead, Inc. is a North Carolina non-profit corporation which
was formed in 1991 for the purpose of building and providing housing for low
income families. The corporation has represented to Series 3 that, as of October
31, 1995, it had a fund balance in excess of $890,000.
(21) Wynnefield Properties, Inc. was founded in 1987 by Norwood Stone. The
corporation specializes in property acquisition, construction, rehabilitation
and real estate management. Mr. Stone, who is the sole shareholder, has more
than 30 years' experience in construction, management and development of low and
moderate income housing and commercial properties. The corporation currently
manages 12 properties consisting of 656 units.
(22) Patten Towers Partners, LLC is a limited liability company which was formed
in Tennessee in November 1995. Its members are Patten Housing, LLC and Flagship
Housing, LLC. Robert A. Crowder is the chief manager of Patten Housing, LLC, and
Chris A. Hodges is the chief manager of Flagship Housing, LLC. The company has
represented to Series 3 that, as of December 1, 1995, its net worth was nominal.
Brencor, Inc. will serve as a guarantor for the construction completion
guarantee and the operating deficit guarantee which the Local Limited
Partnership grants to Series 3. Robert A. Crowder is the principal of Brencor,
Inc. The corporation has represented to Series 3 that, as of December 31, 1995,
it had a net worth in excess of $1,000,000.
(23) Lawler-Wood, Inc. is located in Knoxville, Tennessee, and has been in the
management business for 18 years. The corporation currently manages 17
affordable housing properties comprised of 3,250 units of family and elderly
housing in four southeast states.
(24) Trianon Development Corporation is a California corporation which was
formed in 1986 by Lester G. Day. Mr. Day, who is currently the corporation's
chairman, has 40 years' experience in property development and management.
Trianon Development Corporation currently manages 72 affordable housing projects
consisting of approximately 6,500 units. The company has represented to Series 3
that, as of December 31, 1995, it had retained earnings in excess of $130,000.
Construction and operating deficit guarantees will be provided by Lester Day.
Mr. Day has represented to Series 3 that, as of December 31, 1995, he had a net
worth in excess of $3,000,000.
(25) Foundation for Social Resources, Inc., a non-profit corporation, will be a
special general partner. The corporation was founded in 1988 for the purpose of
fostering the development, preservation and rehabilitation of low and moderate
income housing. It currently owns more than 600 units in seven housing
communities. The president of Foundation for Social Resources, Inc. is William
W. Hirsch. Mr. Hirsch has developed apartment communities in Southern California
totaling more than 7,500 units. The corporation has represented to Series 3 that
it has a nominal net worth. As noted above, operating deficit guarantees will be
provided by Lester Day.
(26) Kenneth M. Vitor is a partner of The Lockwood Group, vice president of
Lockwood Housing Development Corporation, president of Lockwood Equities, Inc.,
and president of Mid-America Securities, Inc. Before joining The Lockwood Group
in June 1984, he was president and chief executive officer of Texstar Automotive
17
<PAGE>
Group and its subsidiaries. Mr. Vitor currently serves as president of the
Missouri Council for Rural Housing and Development, a non-profit organization
dedicated to improving multi-family housing in rural areas. He is an NASD
licensed principal. Mr. Vitor, age 53, has represented to Series 3 that, as of
September 1, 1995, he had a net worth in excess of $4,000,000.
(27) Joseph A. Shepard is president of Lockwood Housing Development Corporation,
chairman of the board of Lockwood Equities, Inc., and a partner of The Lockwood
Group. Since entering the real estate field in the mid-1970s, he has directed
the development, construction, rehabilitation, ownership and management of over
8,000 multifamily rental units. Mr. Shepard served two terms as president of the
National Council for Rural Housing and Development and is vice president of the
National Leased Housing Association. He is a member of the Multifamily Committee
and Rural Committee of the National Association of Home Builders. Mr. Shepard,
age 49, has represented to Series 3 that, as of October 1, 1995, he had a net
worth in excess of $7,000,000.
(28) Lockwood Realty, Inc. is owned by Joseph A. Shepard and Kenneth M. Vitor.
It was formed as a Missouri corporation in 1979 as SMR Realty, Inc. Lockwood
Realty, Inc. is in charge of the day-to-day operations of over 200 apartment
projects with more than 8,000 units in five states. The company manages a
variety of rental housing complexes which include conventional apartments,
moderate housing rehabilitation projects, HUD Section 8 apartment units, and
RECDS apartment units. Lockwood Realty, Inc. employs over 150 personnel
including project managers and support staff at each site.
(28) Everland, Inc. is a California corporation which was formed in 1986. It has
acted as developer of projects in El Monte and Rosemead, California. The
corporation's president, Tom Y. Lee, is a Certified Public Accountant and one of
the founding organizers and directors of First Continental Bank in Rosemead.
Everland, Inc. has represented that, as of June 30, 1996, its total equity was
($382,185); however, construction and operating deficit guarantees will be
provided by Tom Y. Lee. Mr. Lee, age 47, as represented that, as of December 31,
1995, he had a net worth in excess of $3,500,000.
(29) Professional Apartment Management, Inc. is a California licensed real
estate broker which provides full property management services for more than 100
facilities, consisting of more than 5,000 units, and having a combined value of
more than $200 million. The company has been managing affordable housing for 26
years, and currently manages approximately 500 tax credit units.
(30) Urban Residential Management, Inc. is a Georgia corporation which was
formed for the purpose of serving as the general partner of CASCADE. The
president of Urban Residential Management Inc. is Herbert Kohn. Brencor, Inc.,
an Affiliate of the property manager, will serve as guarantor for the
construction completion guarantee and the operating deficit guarantee. Brencor,
Inc. has represented to Series 3 that, as of September 30, 1995, it had a
shareholder's equity in excess of $400,000.
(31) Brencor Asset Management, Inc. was formed in Tennessee in 1993. The company
currently manages more than 580 properties, including two tax credit properties
consisting of 317 units.
(32) Olsen Securities Corporation is the parent company of Delta International
Construction Corporation, Delta Wholesale Distributors, Inc., Delta Management &
Systems Corporation, and Delta International Investor Corporation. These
entities have been engaged in real estate construction, development, investment,
and management since 1975 and have organized and administered several private
18
<PAGE>
real estate syndications since that time. The management division of Olsen
Securities Corporation currently manages 50 properties (21 of which are
receiving Tax Credits) with an aggregate value in excess of $50,000,000. The
various projects under management include family, handicapped, congregate and
elderly care developments. Clifford E. Olsen, an attorney, is President and
Chairman of the Board of Directors of Olsen Securities Corporation. Olsen
Securities Corporation has represented to Series 3 that, as of July 31, 1995, it
had a stockholder's equity in excess of $1,200,000.
(33) Deke Noftsker, age 50, is the president of ABO Corp., and has been a
builder of commercial and residential (single and multi-family) properties for
the past 13 years. Mr. Noftsker has represented to Series 3 that, as of May 31,
1995, he had a net worth in excess of $4,000,000.
(34) M-DC Group, Inc., dba Alpha Management Co., Inc. is a Dallas-based
property management firm that was established by Elmer Allgeier in 1979. In
1990, the firm was acquired by Michael Clark, through the M-DC Group, Inc.
Presently the firm manages 78 properties consisting of more than 3,800 units
in Texas, New Mexico and Colorado. Thirty-eight of the properties are
receiving Low Income Housing
Item 2. Properties
Through its investment in Local Limited Partnerships the Partnership holds an
interest in eighteen Apartment Complexes. See Item 1 for information pertaining
to these 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
PART II.
The Units are not traded on a public exchange but are being 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 Partnership Agreement are satisfied.
At December 31, 1997, there were 857 Limited Partners in the Partnership. The
Partnership was not designed to provide cash distributions to Limited Partners
in circumstances other than refinancing or disposition of its investments in
Local Partnerships. The Limited Partners invested in the Partnership received
Low Income Housing Credits per Unit as follows:
1995 $2
1996 $91
1997 $83
19
<PAGE>
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
October 24, 1995
(Date operations
Years Ended December 31, commenced) through
1997 1996 December 31,1995
---- ---- ----------------
<S> <C> <C> <C>
Revenue $ 121,703 $ 209,940 $ 3,487
Partnership operating expenses
(101,489) (92,566) (12,833)
Equity in loss of
Local Partnerships (789,697) (185,071) (343)
--------- --------- -----
Net loss $ (769,483) $ (67,697) $ (9,689)
============ ========= =====
Net loss per Limited
Partnership Interest $ (42.32) $ (4.94) $(14.58)
=========== ====== ======
Total assets $ 15,874,760 $ 18,173,156 $4,726,172
============ ============ =========
Net investment in
Local Partnerships $ 13,836,734 $ 12,782,751 $1,046,532
============ ============ =========
Capital contributions payable
to
Local Partnerships $ 1,290,351 $ 2,822,885 $309,852
=========== =========== =======
Accrued fees and expenses due
to affiliates $ 4,640 $ 43,807 $570,137
======= ======== =======
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Liquidity and Capital Resources
- -------------------------------
Since inception the Partnership has received $17,558,985 in cash from the sale
of Units. Substantially all of the $17,558,985 has been committed to the
purchase price and acquisition fees and cost of investments in Local Limited
Partnerships, reserves and expenses of the offering. Although not presently the
case, the Partnership previously had identified its investments in advance of
receipt of sufficient cash capital to fund the investments. As of December 31,
1997, the Partnership had made capital contribution to Limited Partnerships in
the amount of approximately $12,546,000 and had further obligations of
approximately $1,290,000.
As of December 31, 1997, the Partnership was indebted to Associates in the
amount of approximately $4,600. The component of such indebtedness were as
follows: advances to pay front-end fees of approximately $3,300 and assets
management fees of approximately, $1,300.
20
<PAGE>
Overall, as reflected in its Statement of Cash Flows, the Partnership had a net
decrease in cash and cash equivalents of approximately $548,600. for the period
ended December 31, 1997. This decrease in cash consisted of cash used in
investing activities offset by cash provided by financing and operating
activities for the Partnership of approximately $(2,888,600), $2,237,800 and
$102,200, respectively. Cash used in investing activities consisted of capital
contributions made to Local Limited Partnerships of approximately $3,432,700,
acquisitions fees paid to Associates of approximately $29,000, offset by the
collection of loans receivable totaling approximately $522,200, the return of
acquisition fees of approximately $42,600 and distributions received of
approximately $8,300. Cash flows provided by financing activities consisted of
capital contributions from partners offset by offering expenses of approximately
$2,250,000 and $(12,200), respectively. Cash provided by operating activities
consisted of interest income. Cash used in operating activities consisted
primarily of payments for operating fees and expenses. The major components of
all these activities are discussed in greater detail below.
Overall, as reflected in its Statement of Cash Flows, the Partnership had a net
increase in cash and cash equivalents of approximately $1,906,200. for the
period ended December 31, 1996. This increase in cash consisted of cash provided
by financing, offset by cash used in investing and operating activities of the
Partnership of approximately $9,817,000, $(7,704,800) and $(206,000),
respectively. Cash flows from financing activities consisted of capital
contributions from partners, offset by offering expenses of approximately
$11,334,000 and $(1,517,000), respectively. Cash used in investing activities
consisted of capital contributions to Local Limited Partnerships of
approximately $8,693,200, acquisitions fees paid to Associates of approximately
$1,024,000, offset by escrow cash applied of approximately $1,873,300 and loans
collected of approximately $139,100. Cash provided by operating activities
consisted of primarily of interest income. Cash used in operating activities
consisted primarily of payments for operating fees and expenses. The major
components of all these activities are discussed in greater detail below.
Prior to sale of the Apartment Complexes, it is not expected that any of the
Local Limited Partnerships in which the Partnership has invested or will invest
will generate cash sufficient to provide distributions to The Partnership of any
material amount. Distributions to the Partnership would first by used to meet
operating expenses of the Partnership, including the payment of the Asset
Management Fee to the General Partner. See Item 11 hereof. As a result, it is
not anticipated that the Partnership will provide distributions to the Limited
Partners prior to the same of the Apartment Complexes.
The Partnership's investments are not readily marketable and may be affected by
adverse general economic conditions which, in turn, could substantially increase
the risk of operating losses for the Apartment Complexes, the Local Limited
Partnerships and the Partnership. These problems may result from a number of
factors, many of which cannot be controlled by the General Partner.
Nevertheless, the General Partner anticipates that capital raised from the sale
of the Limited Partnership Interests is sufficient to fund the Partnership's
operations.
The Partnership's investments will not be readily marketable and may be affected
by adverse general economic conditions which, in turn, could substantially
increase the risk of operating losses for the Apartment Complexes, the Local
Limited Partnerships and the Partnership. These problems may result from a
number of factors, many of which cannot be controlled by the General Partner.
Nevertheless, the General Partner anticipates that capital raised from the sale
of the Limited Partnership Interests will be sufficient to fund the
Partnership's investment commitments and proposed operations.
Subsequent to the close of its public offering the Partnership established
working capital reserves of at least 3% of capital contributions, an amount
which is anticipated to be sufficient to satisfy general working capital and
administrative expense requirements of the Partnership including payment of the
asset management fee as well as expenses attendant to the preparation of tax
returns and reports to the Limited Partners and other investor servicing
obligations of the Partnership. Liquidity would, however, be adversely affected
by unanticipated or greater than anticipated operating costs. The Partnership'
liquidity could also be affected by defaults or delays in payment of the Limited
Partners' promissory notes, from which a portion of the working capital reserves
is expected to be funded. To the extent that working capital reserves are
insufficient to satisfy the cash requirements of the Partnership, it is
anticipated that additional funds would be sought through bank loans or other
institutional financing. The General Partner may also apply any cash
distributions received from the Local Limited Partnership for such purposes or
to replenish or increase working capital reserves.
21
<PAGE>
Under the Partnership Agreement, the Partnership does not have the ability to
assess their respective partners for additional capital contributions to provide
capital if needed by the Partnership or their Local Limited Partnership.
Accordingly, if circumstances arise that cause the Local Limited Partnerships to
require capital in addition to that contributed by the respective Partnership
and any equity of the Local General Partners, the only sources from which such
capital needs will be able to be satisfied (other than the limited reserves
available at the Partnership level) will be (i) third-party debt financing
(which may not be available because the Apartment Complexes owned by the Local
Limited Partnerships are already substantially leveraged), (ii) additional
equity contributions or advances of the Local General Partners, (iii) other
equity sources (which could adversely affect the Partnership's interest in Low
Income Housing Credits, cash flow and/or proceeds of sale or refinancing of the
Apartment Complexes and result in adverse tax consequences to the Limited
Partners), or (iv) the sale or disposition of the Apartment Complexes (which
could have the same adverse effects as discussed in (iii) above). There can be
no assurance that funds from any of such sources would be readily available in
sufficient amounts to fund the capital requirement of the Local Limited
Partnerships in question. If such funds are not available, the Local Limited
Partnerships would risk foreclosure on their Apartment Complexes if they were
unable to renegotiate the terms of their first mortgages and any other debt
secured by the Apartment Complexes to the extent the capital requirements of the
Local Limited Partnerships relate to such debt.
The Partnership' capital needs and resources are expected to undergo major
changes during the first several years of operations as a result of the
completion of their respective offerings of Units and acquisition of
investments. Thereafter, the Partnership' capital needs and resources are
expected to be relatively stable over the holding periods of the investments.
Results of Operations
- ---------------------
As discussed in Item 1 above, as of December 31, 1997, the Partnership had
acquired eighteen Local Limited Partnership Interests. Each of the Apartment
Complexes owned by such Local Limited Partnerships has received a reservation or
an allocation for Low Income Low Income Housing Credits. Seventeen of the
eighteen Apartment Complexes are completed and in operation.
Consistent with The Partnership's investment objectives, each Local Limited
Partnership is generating or is expected to generate Low Income Housing Credits
for a period of approximately ten years, commencing with completion of
construction or rehabilitation of its Apartment Complex and is generating or is
expected to generate losses until sale of the Apartment Complex.
As reflected on its Statements of Operations, the Partnership had losses of
approximately $769,500 and $67,700 for the years ended December 31, 1997 and
1996, respectively. The component items of revenue and expense are discussed
below.
Revenue. Revenues consisted entirely of interest earned on Limited Partner
Promissory Notes and cash deposits held in financial institutions (i) as
reserves, or (ii) pending investment in Local Limited Partnerships. Interest
revenue in future years will be a function of prevailing interest rates and the
amount of cash balances. It is anticipated that The Partnership will maintain
cash reserves in an amount not materially in excess of the minimum amount
required by its Partnership Agreement, which is 3% of investor capital.
Expenses. The most significant component of operating expenses is expected to be
the Asset Management Fee. The asset management fee is equal to the greater of
$2,000 for each Apartment Complex or 0.275 % of investor capital, and will be
increased based on changes in the Consumer Price Index. The asset management fee
of $49,500 was incurred in each of the years ended December 31, 1997 and 1996.
The Partnership paid the General Partner or its affiliates $110,000 of those
fees in 1997. No asset management fees were paid in 1996.
22
<PAGE>
Amortization expense consists of the amortization over a period of 30 years of
the Acquisition Fee and other expenses attributable to the acquisition of Local
Limited Partnership Interests.
Office expense consists of The Partnership's administrative expenses, such as
accounting and legal fees, bank charges and investor reporting expenses.
Equity in Income from Local Limited Partnerships. The Partnership's equity in
income from Local Limited Partnerships is equal to approximately 99% of the
aggregate net income of the Local Limited Partnerships incurred after admission
of The Partnership as a limited partner thereof.
After rent-up, the Local Limited Partnerships are expected to generate losses
during each year of operations; this is so because, although rental income is
expected to exceed cash operating expenses, depreciation and amortization
deductions claimed by the Local Limited Partnerships are expected to exceed net
rental income.
23
<PAGE>
Item 8.
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
FINANCIAL STATEMENTS
For The Years Ended December 31, 1997 and 1996
And For The Period October 24, 1995 (Date Operations
Commenced) To December 31, 1995
with
INDEPENDENT AUDITORS' REPORT THEREON
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3
We have audited the accompanying balance sheets of WNC Housing Tax Credit Fund
V, L.P., Series 3 (a California Limited Partnership) (the "Partnership") as of
December 31, 1997 and 1996, and the related statements of operations, partners'
equity (deficit) and cash flows for the years ended December 31, 1997 and 1996
and for the period October 24, 1995 (date operations commenced) to December 31,
1995. 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 did not audit the financial statements of the
limited partnerships in which WNC Housing Tax Credit Fund V, L.P., Series 3 is a
limited partner. These investments, as discussed in Note 3 to the financial
statements, are accounted for by the equity method. The investments in these
limited partnerships represented 87% and 70% of the total assets of WNC Housing
Tax Credit Fund V, L.P., Series 3 at December 31, 1997 and 1996, respectively. A
substantial portion of the financial statements of the limited partnerships were
audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to the amounts included for those limited
partnerships, is based solely on the reports of the other auditors.
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 and the reports of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of WNC Housing Tax Credit Fund V, L.P., Series 3 (a
California Limited Partnership) as of December 31, 1997 and 1996, and the
results of its operations and its cash flows for the years ended December 31,
1997 and 1996 and for the period October 24, 1995 (date operations commenced) to
December 31, 1995 in conformity with generally accepted accounting principles.
/s/Corbin & Wertz
CORBIN & WERTZ
Irvine, California
April 21, 1998
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
BALANCE SHEETS
December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---------------- -----------------
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 2,018,591 $ 2,567,217
Subscriptions receivable (Note 7) - 2,195,000
Loans receivable (Note 2) - 522,190
Investments in limited partnerships (Note 3) 13,836,734 12,782,751
Interest receivable 19,435 105,998
--------------- ----------------
$ 15,874,760 $ 18,173,156
=============== ================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
Payables to limited partnerships (Note 5) $ 1,290,351 $ 2,822,885
Accrued fees and advances due to General Partner
and affiliates (Note 4) 4,640 43,807
--------------- ----------------
Total liabilities 1,294,991 2,866,692
--------------- ----------------
Commitments and contingencies (Note 5)
Partners' equity (deficit):
General partner (29,693) (21,876)
Limited partners (25,000 units authorized; 18,000 units
outstanding at December 31, 1997 and 1996) 14,609,462 15,328,340
--------------- ----------------
Total partners equity 14,579,769 15,306,464
--------------- ----------------
$ 15,874,760 $ 18,173,156
=============== ================
</TABLE>
See accompanying notes to financial statements
FS-2
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For The Years Ended December 31, 1997 and 1996
And For The Period From October 25, 1995 (Date Operations
Commenced) To December 31, 1995
<TABLE>
<CAPTION>
1997 1996 1995
--------------- ---------------- ----------------
<S> <C> <C> <C>
Interest income $ 121,703 $ 209,940 $ 3,487
------------- ------------- -------------
Operating expenses:
Amortization 34,605 23,436 454
Asset management fees (Note 4) 49,500 49,500 12,367
Other 17,384 19,630 12
------------- ------------- -------------
Total operating expenses 101,489 92,566 12,833
------------- ------------- -------------
Income (loss) from operations 20,214 117,374 (9,346)
Equity in losses from limited partnerships (Note 3) (789,697) (185,071) (343)
------------- ------------- -------------
Net loss $ (769,483) $ (67,697) $ (9,689)
============= ============= =============
Net loss allocated to:
General partner $ (7,695) $ (677) $ (97)
============= ============= =============
Limited partners $ (761,788) $ (67,020) $ (9,592)
============= ============= =============
Net loss per weighted limited partner units $ (42.32) $ (4.94) $ (14.58)
============= ============ =============
Outstanding weighted limited partner units 18,000 13,564 658
============= ============= =============
</TABLE>
See accompanying notes to financial statements
FS-3
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For The Years Ended December 31, 1997 and 1996
And For The Period From October 25, 1995 (Date Operations
Commenced) To December 31, 1995
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
--------------- ---------------- ----------------
<S> <C> <C> <C>
Capital contributions, net of discount of $3,000 $ 100 $ 4,494,000 $ 4,494,100
Offering expenses (6,032) (597,196) (603,228)
Capital issued for notes receivable (Note 7) - (35,000) (35,000)
Net loss (97) (9,592) (9,689)
------------- ------------- -------------
Equity (deficit) December 31, 1995 (6,029) 3,852,212 3,846,183
Capital contributions, net of discount of $438,015 - 13,064,985 13,064,985
Cash collected on notes receivable (Note 7) - 35,000 35,000
Capital issued for notes receivable (Note 7) - (55,000) (55,000)
Offering expenses (15,170) (1,501,837) (1,517,007)
Net loss (677) (67,020) (67,697)
------------- ------------- -------------
Equity (deficit) December 31, 1996 (21,876) 15,328,340 15,306,464
Offering expenses (122) (12,090) (12,212)
Cash collected on notes receivable (Note 7) - 55,000 55,000
Net loss (7,695) (761,788) (769,483)
------------- ------------- -------------
Equity (deficit) December 31, 1997 $ (29,693) $ 14,609,462 $ 14,579,769
============= ============= =============
</TABLE>
See accompanying notes to financial statements
FS-4
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For The Years Ended December 31, 1997 and 1996
And For The Period From October 25, 1995 (Date Operations
Commenced) To December 31, 1995
<TABLE>
<CAPTION>
Continued
1997 1996 1995
--------------- ---------------- ----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (769,483) $ (67,697) $ (9,689)
Adjustments to reconcile net loss to net
cash (used in ) provided by operating
activities:
Amortization 34,605 23,436 454
Equity in loss of limited partnerships 789,697 185,071 343
Management fees incurred - 49,500 12,367
Change in interest receivable 86,563 (105,925) (73)
Change in accrued fees and expenses due
to general partner and affiliates (39,167) (290,384) -
------------- ------------- -------------
Net cash (used in) provided by operating
activities 102,215 (205,999) 3,402
------------- ------------- -------------
Cash flows from investing activities:
Investments in limited partnerships (3,432,735) (8,693,189) (397,395)
Cash in escrow - 1,873,262 (1,873,262)
Loans receivable 522,190 139,116 (661,306)
Acquisition fees and costs (28,975) (1,023,950) (12,085)
Returns of acquisition fees (Note 4) 42,551 - -
Distributions received 8,340 - -
------------- ------------- -------------
Net cash used in investing activities (2,888,629) (7,704,761) (2,944,048)
------------- ------------- -------------
Cash flows from financing activities:
Capital contributions from partners 2,250,000 11,333,985 3,975,100
Offering expenses (12,212) (1,517,007) (373,455)
------------- ------------- -------------
Net cash provided by financing activities 2,237,788 9,816,978 3,601,645
------------- ------------- -------------
Net change in cash and cash equivalents (548,626) 1,906,218 660,999
Cash and cash equivalents, beginning of period 2,567,217 660,999 -
------------- ------------- -------------
Cash and cash equivalents, end of period $ 2,018,591 $ 2,567,217 $ 660,999
============= ============= =============
</TABLE>
See accompanying notes to financial statements
FS-5
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS - CONTINUED
For The Years Ended December 31, 1997 and 1996
And For The Period From October 25, 1995 (Date Operations
Commenced) To December 31, 1995
<TABLE>
<CAPTION>
1997 1996 1995
--------------- ---------------- ----------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION Cash paid during the year for:
<S> <C> <C> <C>
Interest $ - $ - $ -
============= ============= =============
Income taxes $ 800 $ 800 $ -
============= ============= =============
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
During 1997 and 1996, the Partnership incurred, but did not pay, $526,643 and
$2,513,033, respectively, of payables to limited partnerships (in connection
with its investments in limited partnerships) (see Note 5).
During 1996, the Partnership incurred, but did not pay, $42,551 of payables
to an affiliate for offering and acquisitions expenses (see Note 4).
As of December 31, 1996, $2,195,000 of capital contributions were recorded as
subscriptions receivable.
See accompanying notes to financial statements
FS-6
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Years Ended December 31, 1997 and 1996
And For The Period From October 25, 1995 (Date Operations
Commenced) To December 31, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Organization
- ------------
WNC Housing Tax Credit Fund V, L.P., Series 3 (the "Partnership") was formed
under the California Revised Limited Partnership Act on March 28, 1995, and
commenced operations on October 24, 1995. Prior to October 24, 1995, the
Partnership was considered a development-stage enterprise. The Partnership was
formed to invest primarily in other limited partnerships which will own and
operate multi-family housing complexes that will qualify for low income housing
credits.
The general partner is WNC Tax Credit Partners, V, L.P. (the "General Partner"),
a California limited partnership. WNC & Associates, Inc. is the general partner
of the WNC Tax Credit Partners V, L.P. Wilfred N. Cooper, Sr., through the
Cooper Revocable Trust, owns 70% of the outstanding stock of WNC & Associates,
Inc. John B. Lester, Jr. is the original limited partner of the Partnership and
owns, through the Lester Family Trust, 30% of the outstanding stock of WNC &
Associates, Inc.
Pursuant to the Partnership Agreement, the Partnership is authorized to sell
25,000 Units at $1,000 per Unit (the "Units") of which 18,000 Units in the
amount of $17,558,985, net of $441,015 of discounts for volume purchases, had
been sold through January 1996. The General Partner has a 1% interest in
operating profits and losses, taxable income and loss and in cash available for
distribution from the Partnership. The limited partners will be allocated the
remaining 99% of these items in proportion to their respective investments.
After the limited partners have received proceeds from a sale or refinancing
equal to their capital contributions and their return on investment (as defined
in the Partnership Agreement) and the General Partner has received a
subordinated disposition fee (as described in Note 4), any additional sale or
refinancing proceeds will be distributed 90% to the limited partners (in
proportion to their respective investments) and 10% to the General Partner.
The Partnership's investments in limited partnerships are subject to the risks
incident to the management and ownership of multifamily residential real estate,
and include the risks that neither the Partnership's investments nor the
apartment complexes owned by the limited partnerships will be readily
marketable. Additionally, there can be no assurance that the Partnership will be
able to dispose of its interests in the limited partnerships. The value of the
Partnership's investments will 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 could be
subject to loss through foreclosure. In addition, each 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 general
partners of the limited partnerships, there can be no assurance that Partnership
operations will be profitable or that the anticipated housing tax credits will
be available to limited partners.
FS-7
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended December 31, 1997 and 1996
And For The Period From October 25, 1995 (Date Operations
Commenced) To December 31, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
Method of Accounting For Investments in Limited Partnerships
- ------------------------------------------------------------
The Partnership accounts for its investments in limited partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the limited partnership's results of operations and for
any distributions received. The accounting policies of the limited partnerships
are consistent with the Partnership. Costs incurred by the Partnership in
acquiring the investments in limited partnerships are capitalized as part of the
investment and amortized over 30 years (see Notes 3 and 4).
Losses from limited partnerships allocated to the Partnership will not be
recognized to the extent that the investment balance would be adjusted below
zero.
Cash and Cash Equivalents
- -------------------------
The Partnership considers highly liquid investments with remaining maturities of
three months or less when purchased to be cash equivalents. At December 31,
1997, the Partnership had cash equivalents of $978,453 representing U.S.
Treasury Bills.
Concentration of Credit Risk
- ----------------------------
At December 31, 1997, the Partnership maintained cash balances at certain
financial institutions in excess of the federally insured maximum.
Offering Expenses
- -----------------
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred in connection with the
selling of limited partnership interests in the Partnership. The General Partner
is obligated to pay all offering and organization costs in excess of 15%
(including sales commissions) of the total offering proceeds. Offering expenses
are reflected as a reduction of limited partners' capital. As of December 31,
1997 and 1996, the Partnership had recorded offering expenses of $1,073,742 and
$1,061,530 and selling expenses of $1,058,705 and $1,058,705, respectively.
FS-8
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended December 31, 1997 and 1996
And For The Period From October 25, 1995 (Date Operations
Commenced) To December 31, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
- --------------------------------------------------------------
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure 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 materially differ from those estimates.
Net Loss Per Limited Partner Unit
- ---------------------------------
Net loss per limited partner unit is computed by dividing the limited partners'
share of net loss by the weighted number of limited partner units outstanding
during the period.
NOTE 2 - LOANS RECEIVABLE
- -------------------------
Loans receivable represent amounts loaned by the Partnership to certain limited
partnerships in which the Partnership may invest. Loans receivable with a
balance of $522,190 as of December 31, 1996 were collectible from two additional
limited partnerships which were acquired in 1997 (see Note 3).
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS
- --------------------------------------------
As of December 31, 1997, the Partnership had acquired limited partnership
interests in eighteen limited partnerships, each of which owns one apartment
complex. As of December 31, 1997, construction had not been completed on one
complex. The respective general partners of the limited partnerships manage the
day to day operations of the limited partnerships. Significant limited
partnership business decisions require the approval of the Partnership. The
Partnership, as a limited partner, is entitled to 99%, as specified in the
partnership agreements, of the operating profits and losses of the limited
partnerships upon its acquisition of its limited partnership interests.
The Partnership investments in the limited partnerships as shown in the
accompanying balance sheet as of December 31, 1997 and 1996 are approximately
$2,206,000 and $3,454,000 greater than the Partnership's equity as shown in the
limited partnerships' financial statements. This difference is primarily due to
acquisition costs related to the acquisition of the investments that have been
capitalized in the Partnership's investment account and are being amortized over
30 years (see Note 4) and capital contributions accrued but not paid.
FS-9
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended December 31, 1997 and 1996
And For The Period From October 25, 1995 (Date Operations
Commenced) To December 31, 1995
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
Following is a summary of the equity method activity of the investments in
limited partnerships for the period ended December 31:
<TABLE>
<CAPTION>
1997 1996
---------------- -----------------
<S> <C> <C>
Investments, beginning of year $ 12,782,751 $ 1,046,532
Capital contributed to limited partnerships, net 1,373,557 8,693,189
Capital contributions payable to limited partnerships 526,644 2,513,033
Capitalized acquisition fees and costs 28,975 738,504
Return of acquisition fees (Note 4) (42,551) -
Amortization of acquisition fees and costs (34,605) (23,436)
Distributions (8,340) -
Equity in losses of limited partnerships (789,697) (185,071)
--------------- ----------------
Investments, end of year $ 13,836,734 $ 12,782,751
=============== ================
</TABLE>
The financial information from the individual financial statements of the
limited partnerships include rental and interest subsidies. Rental subsidies are
included in total revenues and interest subsidies are generally netted in
interest expense. Approximate combined condensed financial information from the
individual financial statements of the limited partnerships as of December 31
and for the years then ended is as follows:
COMBINED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
1997 1996
---------------- -----------------
ASSETS
<S> <C> <C>
Land $ 2,939,000 $ 2,907,000
Construction in progress 95,000 3,488,000
Buildings, net of accumulated depreciation of $2,187,000
and $941,000 44,490,000 28,565,000
Due from affiliates 235,000 433,000
Other assets 4,373,000 5,570,000
--------------- ----------------
$ 52,132,000 $ 40,963,000
=============== ================
</TABLE>
FS-11
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended December 31, 1997 and 1996
And For The Period From October 25, 1995 (Date Operations
Commenced) To December 31, 1995
NOTE 3 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
- -------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED CONDENSED BALANCE SHEETS - CONTINUED
1997 1996
---------------- -----------------
<S> <C> <C>
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Construction and mortgage loans payable $ 32,582,000 $ 26,043,000
Other liabilities (including due to related parties
of $3,667,000 and $2,919,000) 5,143,000 3,599,000
--------------- ----------------
Total liabilities 37,725,000 29,642,000
--------------- ----------------
Partners' equity:
WNC Housing Tax Credit Fund V, L.P., Series 3 11,631,000 9,329,000
Other partners 2,776,000 1,992,000
--------------- ----------------
Total partners' equity 14,407,000 11,321,000
--------------- ----------------
$ 52,132,000 $ 40,963,000
=============== ================
</TABLE>
<TABLE>
<CAPTION>
COMBINED CONDENSED STATEMENTS OF OPERATIONS
1997 1996 1995
--------------- --------------- -----------------
<S> <C> <C> <C>
Total revenue $ 5,339,000 $ 3,981,000 $ 43,000
--------------- --------------- ----------------
Expenses:
Operating expenses 3,331,000 2,053,000 37,000
Interest expense 1,625,000 1,282,000 4,000
Depreciation 1,246,000 864,000 2,000
--------------- --------------- ----------------
Total expenses 6,202,000 4,199,000 43,000
--------------- --------------- ----------------
Net loss $ (863,000) $ (218,000) $ -
=============== =============== ================
Net loss allocable to Partnership $ (790,000) $ (185,000) $ -
=============== =============== ================
</TABLE>
FS-11
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended December 31, 1997 and 1996
And For The Period From October 25, 1995 (Date Operations
Commenced) To December 31, 1995
NOTE 4 - RELATED PARTY TRANSACTIONS
- -----------------------------------
Under the terms of the Partnership Agreement, the Partnership is obligated to
the General Partner or its affiliates for the following items:
Acquisition fees of up to 7.5% of the gross proceeds from the sale of
Partnership units as compensation for services rendered in connection
with the acquisition of limited partnerships. As of December 31, 1996,
the Partnership incurred acquisition fees of $1,008,550 which have been
included in investments in limited partnerships. During 1997,
acquisition fees of $42,551 were returned to the Partnership by an
affiliate, as allowed by the terms of the Partnership Agreement,
resulting in acquisition fees of $965,999 as of December 31, 1997.
Accumulated amortization was $54,714 and $22,514 for 1997 and 1996.
Amortization was insignificant for 1995.
Reimbursement of costs incurred by an affiliate of the General Partner
in connection with the acquisition of limited partnerships. These
reimbursements will not exceed 1% of the gross proceeds. As of December
31, 1997 and 1996, the Partnership incurred acquisition costs of
$99,011 and $70,036, respectively, which have been included in
investments in limited partnerships. Accumulated amortization was
insignificant for 1997, 1996 and 1995.
An annual asset management fee equal to the greater amount of (i)
$2,000 for each apartment complex, or (ii) 0.275% of gross proceeds. In
either case, the fee will be decreased or increased annually based on
changes to the Consumer Price Index. However, in no event will the
maximum amount exceed 0.2% of the invested assets (defined as the
Partnership's capital contributions plus its allocable percentage of
the mortgage debt encumbering the apartment complexes) of the limited
partnerships. The Partnership incurred asset management fees of $49,500
for the years ended December 31, 1997 and 1996, respectively, and
$12,367 for the period ended December 31, 1995. Asset management fees
of $110,000 were paid during 1997. No asset management fees were paid
during 1996 and 1995.
A subordinated disposition fee in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee is subordinated to the
limited partners receiving a return on investment (as defined in the
Partnership Agreement) and is payable only if services are rendered in
the sales effort.
FS-12
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
For The Years Ended December 31, 1997 and 1996
And For The Period From October 25, 1995 (Date Operations
Commenced) To December 31, 1995
NOTE 4 - RELATED PARTY TRANSACTIONS, continued
- ----------------------------------------------
Accrued fees and advances due to (from) General Partner and affiliates consist
of the following at December 31:
<TABLE>
<CAPTION>
1997 1996
---------------- -----------------
<S> <C> <C>
Acquisition fees $ - $ 42,551
Advance for acquisition of property - (68,510)
Advances made for acquisition costs, organizational,
offering and selling expenses 3,273 7,899
Asset management fees 1,367 61,867
--------------- ----------------
$ 4,640 $ 43,807
=============== ================
</TABLE>
NOTE 5 - PAYABLES TO LIMITED PARTNERSHIPS
- -----------------------------------------
Payables to limited partnerships represent amounts which are due at various
times based on conditions specified in the limited partnership agreements. These
contributions are non-interest bearing, are payable in installments and are due
upon the limited partnerships achieving certain operating and development
benchmarks (generally within two years of the Partnership's initial investment).
NOTE 6 - INCOME TAXES
- ---------------------
No provision for income taxes has been recorded in the accompanying financial
statements as any liability for income taxes is the obligation of the partners
of the Partnership.
NOTE 7 - SUBSCRIPTIONS AND NOTES RECEIVABLE
- -------------------------------------------
As of December 31, 1996, the Partnership had received subscriptions for 2,250
Units consisting of receivables of $2,195,000 and promissory notes of $55,000,
all of which were collected in 1997. As of December 31, 1995, the Partnership
had received subscriptions for 519 Units consisting of receivables of $484,000
and promissory notes of $35,000, all of which were collected in 1996. Limited
partners who subscribed for ten or more Units of limited partnership interest
($10,000) could elect to pay 50% of the purchase price in cash upon subscription
and the remaining 50% by the delivery of a promissory note payable, together
with interest at the rate of 10.25% per annum, due no later than 13 months after
the subscription date. Since subscription receivables were collected subsequent
to year-end, the Company has reflected such amounts as a capital contributions
and an asset in the accompanying financial statements as of December 31, 1996
and 1995. Since the promissory notes had not been collected prior to issuance of
the 1996 and 1995 financial statements, respectively, the unpaid balance has
been reflected as a reduction of partners' equity in the accompanying financial
statements.
FS-13
<PAGE>
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
NONE.
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.
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
24
<PAGE>
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.
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.
25
<PAGE>
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.
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.
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 of up to 7.5% of the gross proceeds of the
Partnership's Offering ("Gross Proceeds"). Through December 31, 1997,
approximately, $966,000 of selection fees had been incurred by the Partnership.
26
<PAGE>
(b) A nonaccountable expense reimbursement in an amount not to exceed 1% of
Gross Proceeds. Through December 31, 1997, approximately $99,000 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 $49,500, $49,500 and $12,367 were incurred during the years
ended December 31, 1997, 1996 and December 31, 1995, respectively. Asset
management fees of $110,000 were paid during 1997. No asset management fees were
paid during 1996 and 1995.
(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
Local Limited Partnership Interest. Subordinated disposition fees will be
subordinated to the prior return of the Limited Partners' capital contributions
and payment of the Return on Investment to the Limited Partners. "Return on
Investment" means an annual, cumulative but not compounded, "return" to the
Limited Partners (including Low Income Housing Credits) as a class on their
adjusted capital contributions commencing for each Limited Partner on the last
day of the calendar quarter during which the Limited Partner's capital
contribution is received by the Partnership, calculated at the following rates:
(i) 14% through December 31, 2006 and (ii) 6% for the balance of the
Partnerships term. No disposition fees have been paid.
(e) The General Partner was allocated Low Income Housing Credits of $15,146 and
$8,067 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 4,560 units 25.3%
Interests P.O. Box 126943
San Diego, CA 92113-6943
Units of Limited Partnership Western Financial Savings Bank 1,068 units 5.9%
23 Pasteur
Irvine, CA 92718
</TABLE>
The above are the only persons known to own beneficially in excess of 5% of the
outstanding units.
(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.
27
<PAGE>
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
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.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Financial Statements
Report of independent public accountants.
Balance sheet as of December 31, 1997 and 1996.
Statements of Operations for the years ended December 31, 1997 and 1996 and for
the period from October 24, 1995 (date operations commenced) to December 31,
1995.
Statements of Partners' Equity (deficit) for the years ended December 31, 1997
and 1996 and for the period from October 24, 1995 (date operations commenced) to
December 31, 1995.
Statements of Cash Flows for the years ended December 31, 1997 and 1996 and for
the period from October 24, 1995 (date operations commenced) to December 31,
1995.
Notes to Financial Statements.
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, filed as
Exhibit 28.1 to Form 10-K dated December 31, 1995 is hereby incorporated herein
by reference as exhibit 3.
28
<PAGE>
10.1 Amended and Restated Agreement of Limited Partnership of Evergreen
Apartments I Limited Partnership filed as exhibit 10.1 to Form 8-K dated
November 14, 1995 is hereby incorporated herein by reference as exhibit
10.1.
10.2 Amended and Restated Agreement of Limited Partnership of Shepherd South
Apartments I, Ltd. filed as exhibit 10.1 to Form 8-K dated December 14,
1995 is hereby incorporated herein by reference as exhibit 10.2.
10.3 Amended and Restated Agreement of Limited Partnership of Patten Towers,
L.P. II filed as exhibit 10.1 to Form 8-K dated December 21, 1995 is
hereby incorporated herein by reference as exhibit 10.3.
10.4 Second Amended and Restated Agreement of Limited Partnership of Alliance
Apartments I Limited Partnership filed as exhibit 10.7 to Post-Effective
Amendment No.2 to Registration Statement on Form S-11 of the Partnership
is hereby incorporated herein by reference as exhibit 10.4.
10.5 Amended and Restated Agreement of Limited Partnership of Hastings
Apartments I Limited Partnership filed as exhibit 10.8 to Post-Effective
Amendment No.2 to Registration Statement on Form S-11 of the Partnership
is hereby incorporated herein by reference as exhibit 10.5.
10.6 Agreement of Limited Partnership of Raymond S. King Apartments I Limited
Partnership filed as exhibit 10.9 to Post-Effective Amendment No. 2 to
Registration Statement on Form S-11 of the Partnership is hereby
incorporated herein by reference as exhibit 10.6
10.7 Amended and Restated Agreement of Limited Partnership of Talladega County
Housing, Ltd. filed as exhibit 10.10 to Post-Effective Amendment No. to
Registration Statement on Form S-11 of the Partnership is hereby
incorporated herein by reference as exhibit 10.7
10.8 Amended and Restated Agreement of Limited Partnership of The Willows
Limited Partnership filed as exhibit 10.11 to Post-Effective Amendment
No. to Registration Statement on Form S-11 of the Partnership is hereby
incorporated herein by reference as exhibit 10.8
10.9 Amended and Restated Agreement of Limited Partnership of Cascade Pines
L.P. II filed as exhibit 10.1 to Form 8-K dated April 26, 1996 is hereby
incorporated herein by reference as exhibit 10.9
10.10 Amended and Restated Agreement of Limited Partnership of Rosedale Limited
Partnership filed as exhibit 10.2 to Form 8-K dated April 26, 1996 is
hereby incorporated herein by reference as exhibit 10.10
29
<PAGE>
10.11 Amended and Restated Agreement of Limited Partnership of Blessed Rock of
El Monte filed as exhibit 10.1 to Form 8-K dated September 17, 1996 is
hereby incorporated herein by reference as exhibit 10.11
10.12 Amended and Restated Agreement of Limited Partnership of Broadway
Apartments, Limited Partnership filed as exhibit 10.1 to Form 8-K dated
April 10, 1997 is hereby incorporated herein by reference as exhibit
10.12
REPORTS ON 8-K.
No reports on Form 8-K were filed during the fourth quarter ended December 31,
1997.
30
<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 V, L.P., SERIES 3
By: WNC & Associates, Inc. General Partner
By: /s/ John B. Lester, Jr.
-----------------------------------------------------
John B. Lester, Jr. President of WNC & Associates, Inc.
Date: May 12, 1998
By: /s/ Theodore M. Paul
-----------------------------------------------------
Theodore M. Paul Vice-President, Finance of WNC & Associates, Inc.
Date: May 12, 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. Chairman of the Board of WNC & Associates, Inc.
Date: May 12, 1998
By: /s/ John B. Lester, Jr.
-----------------------------------------------------
John B. Lester, Jr. Secretary of the Board of WNC & Associates, Inc.
Date: May 12, 1998
By: /s/ David N. Shafer
-----------------------------------------------------
David N. Shafer Director of WNC & Associates, Inc.
Date: May 12, 1998
31
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000943904
<NAME> WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 2,018,591
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,018,591
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 15,874,760
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 14,579,769
<TOTAL-LIABILITY-AND-EQUITY> 15,874,760
<SALES> 0
<TOTAL-REVENUES> 121,703
<CGS> 0
<TOTAL-COSTS> 101,489
<OTHER-EXPENSES> 789,697
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (769,483)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (769,483)
<EPS-PRIMARY> (42.32)
<EPS-DILUTED> 0
</TABLE>
