FORM 10-K/A
AMENDMENT NO. 1
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, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 0-21895
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
California 33-6163848
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3158 Redhill Avenue, Suite 120, Costa Mesa, CA 92626
(714) 662-5565
Securities registered pursuant to Section 12(b) of the Act:
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
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State the aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant.
INAPPLICABLE
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
NONE
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PART I.
Item 1. Business
Organization
WNC Housing Tax Credit Fund V, L.P., Series 3 ("the Partnership") 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. The Partnership
was formed to acquire limited partnership interests in other limited
partnerships or limited liability companies ("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" or "Associates"). Wilfred N. Cooper, Sr., through the Cooper Revocable
Trust, owns 66.8% of the outstanding stock of Associates. John B. Lester, Jr.
was the original limited partner of the Partnership and owns, through the Lester
Family Trust, 28.6% of the outstanding stock of Associates. The business of the
Partnership is conducted primarily through the General Partner as the
Partnership has no employees of its own.
Pursuant to a registration statement filed with the Securities and Exchange
Commission on July 26, 1995, the Partnership commenced a public offering of
25,000 Units of Limited Partnership Interest ("Units") at a price of $1,000 per
Unit. As of the close of the public offering, January 21, 1996 a total of 18,000
Limited Partnership Interests representing $17,558,985 had been sold.
Sempra Energy Financial, a California corporation, which is not an affiliate of
the Partnership or General Partner, has purchased 4,560 Units, which represents
25.3% of the Units outstanding for the Partnership. Sempra Energy Financial
invested $4,282,600. A discount of $277,400 was allowed due to a volume
discount. Western Financial Savings Bank, which is not an affiliate of the
Partnership or General Partner, has purchased 1,068 units, which represent 5.9%
of the Units outstanding for the Partnership. Western Financial Savings Bank
invested $1,000,000. A discount of $68,000 was allowed due to a volume discount.
See Item 12(a) in this 10-K.
Description of Business
The Partnership's principal business objective is to provide its Limited
Partners with Low Income Housing Credits. The Partnership's principal business
therefore consists of investing as a limited partner or non-managing member in
Local Limited Partnerships each of which will own and operate a multi-family
housing complex (the "Housing Complex") which will qualify for the Low Income
Housing Credit. In general, under Section 42 of the Internal Revenue Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
to reduce Federal taxes otherwise due in each year of a ten-year period. In
general, under Section 17058 of the California Revenue and Taxation Code, an
owner of low-income housing can receive the Low Income Housing Credit to be used
against California taxes otherwise due in each year of a four-year period. The
Housing Complex is subject to a fifteen-year compliance period (the "Compliance
Period"), and under state law may have to be maintained as low income housing
for 30 or more years.
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 any Local Limited Partnership of its Housing Complex prior to the end of the
applicable Compliance Period. Because of (i) the nature of the Housing
Complexes, (ii) the difficulty of predicting the resale market for low-income
housing 15 or more years in the future, and (iii) the ability of government
lenders to disapprove of transfer, it is not possible at this time to predict
whether the liquidation of the Partnership's assets and the disposition of the
proceeds, if any, in accordance with the Partnership's Agreement of Limited
Partnership, as amended "by Supplements thereto" (the "Partnership Agreement"),
will be able to be accomplished promptly at the end of the 15-year period. If a
Local Limited Partnership is unable to sell its Housing Complex, it is
anticipated that the local general partner ("Local General Partner") will either
continue to operate such Housing Complex or take such other actions as the Local
General Partner believes to be in the best interest of the Local Limited
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Partnership. Notwithstanding the preceding, circumstances beyond the control of
the General Partner or the Local General Partners may occur during the
Compliance Period, which would require the Partnership to approve the
disposition of an Housing Complex prior to the end thereof, possibly resulting
in recapture of Low Income Housing Credits.
As of December 31, 1998, the Partnership had invested in eighteen Local Limited
Partnerships. Each of these Local Limited Partnerships owns a Housing Complex
that is eligible for the federal Low Income Housing Credit. Certain Local
Limited Partnerships may also benefit from government programs promoting low- or
moderate-income housing.
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 of multi-unit residential real estate. Some of these
risks are that the Low Income Housing Credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes; difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests; limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are subject to mortgage
indebtedness. If a Local Limited Partnership does not makes its mortgage
payments, the lender could foreclose resulting in a loss of the Housing Complex
and Low Income Housing Credits. As a limited partner or non-managing member of
the Local Limited Partnerships, the Partnership will have very limited rights
with respect to management of the Local Limited Partnerships, and will rely
totally on the general partners or managing members of the Local Limited
Partnerships for management of the Local 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 Housing
Complexes and the Partnership. In addition, each Local Limited Partnership is
subject to risks relating to environmental hazards and natural disasters, which
might be uninsurable. Because the Partnership's 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 the anticipated Low Income
Housing Credits will be available to Limited Partners.
In addition, Limited Partners are subject to risks in that the rules governing
the Low Income Housing Credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the Low
Income Housing Credits. There are limits on the transferability of Units, and it
is unlikely that a market for Units will develop. All Partnership management
decisions are made by the General Partner.
As a limited partner or non-managing member, the Partnership's liability for
obligations of each Local Limited Partnership is limited to its investment. The
Local General Partners of each Local Limited Partnership retain responsibility
for developing, constructing, maintaining, operating and managing the Housing
Complexes.
Item 2. Properties
Through its investments in Local Limited Partnerships, the Partnership holds
limited partnership interests in the Housing Complexes. The following table
reflects the status of the eighteen Housing Complexes as of December 31, 1998
and for the periods indicated:
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<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
As of December 31, 1998
--------------------------------------------------------------------------------
Partnership's Encumbrances
Number Total Investment Amount of Estimated Low of Local
Partnership General Partner of Occu- in Local Limited Investment Income Housing Limited
Name Location Name Units pancy Partnerships Paid to Date Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Alliance, Retro Development,
Apartments I Nebraska Inc. 19 84% $ 604,000 $ 604,000 $ 363,000 $ 615,000
Limited
Partnership
Blessed Rock of El Monte, Everland, Inc. 137 99% 2,511,000 2,511,000 8,899,000 3,841,000
El Monte California
Broadway Hobbs, New Trianon - Broadway,
Apartments, Mexico LLC, a New Mexico
Limited Limited Liability
Partnership Company 78 83% 2,004,000 1,931,000 2,335,000 1,402,000
Cascade Pines, Atlanta, Urban Residential
L.P. II Georgia Management, Inc.,
a Georgia Corporation 376 83% 1,347,000 1,347,000 2,533,000 8,023,000
Curtis Curtis, Joseph A. Shepard
Associates I, Nebraska and Kenneth M. Vitor 12 58% 88,000 66,000 156,000 427,000
L.P.
Escatawpa Escatawpa, Clifford E. Olsen 32 100% 249,000 249,000 458,000 898,000
Village Mississippi
Associates,
Limited
Partnership
Evergreen Tulsa, Retro Development,
Apartments I Oklahoma Inc. of Oklahoma and
Limited Most Worshipful Prince
Partnership Hall Grand Lodge 76 68% 549,000 549,000 991,000 652,000
Hastings Hastings, Retro Development,
Apartments I, Nebraska Inc. of Oklahoma and
Limited Most Worshipful Prince
Partnership Hall Grand Lodge 18 83% 542,000 542,000 1,005,000 611,000
Heritage Berkeley, Joseph A. Shepard
Apartments I, Missouri and Kenneth M. Vitor 30 100% 752,000 752,000 1,333,000 694,000
L.P.
Hillcrest Ontario, Riley J. Hill 28 96% 354,000 354,000 683,000 1,301,000
Associates, A Oregon
Limited
Partnership
</TABLE>
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<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
As of December 31, 1998
--------------------------------------------------------------------------------
Partnership's Encumbrances
Number Total Investment Amount of Estimated Low of Local
Partnership General Partner of Occu- in Local Limited Investment Income Housing Limited
Name Location Name Units pancy Partnerships Paid to Date Credits Partnerships
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Patten Towers, Chattanooga, Patten Towers Partners,
L.P. II Tennessee LLC 221 98% 2,154,000 2,154,000 3,938,000 7,275,000
Prairieland Syracuse, Kenneth M. Vitor 8 100% 85,000 85,000 152,000 294,000
Properties of Kansas
Syracuse II,
L.P.
Raymond S. King Greensboro, Project Homestead, Inc. 23 100% 437,000 437,000 883,000 782,000
Apartments North
Limited Carolina
Partnership
Rosedale Silver City, Deke Noftsker and ABO
Limited New Mexico Corporation 32 94% 309,000 309,000 547,000 1,324,000
Partnership
Shepherd South Shepherd, Donald W. Sowell 24 100% 121,000 121,000 223,000 577,000
Apartments I, Texas
Ltd.
Solomon Solomon, Joseph A. Shepard
Associates I, Kansas and Kenneth M. Vitor 16 100% 138,000 138,000 250,000 569,000
L.P.
Talladega Talladega, Apartment Developers,
County Housing Alabama Inc. and Thomas H.
Ltd. Cooksey 30 97% 653,000 653,000 1,200,000 811,000
The Willows Morganton, John C. Loving, Gordon
Apartments North D. Brown, Jr. and
Limited Carolina Western N.C. Housing
Partnership Partnership 36 100% 841,000 841,000 1,545,000 1,122,000
------ ---- ---------- ---------- ---------- ----------
1,196 91% $ 13,738,000 $ 13,643,000 $ 27,494,000 $ 31,218,000
====== ==== ========== ========== ========== ==========
</TABLE>
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<TABLE>
<CAPTION>
------------------------
For the year ended
December 31, 1998
------------------------
Low Income Housing
Rental Net Credits Allocated
Partnership Name Income Loss to Partnership
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Apartments
I Limited Partnership $ 65,000 $ (64,000) 99%
Blessed Rock of
El Monte 656,000 (111,000) 49.49%
Broadway Apartments, Limited
Partnership 152,000 (285,000) 99%
Cascade Pines, L.P. II 1,821,000 (152,000) 98%
Curtis Associates I, L.P. 30,000 (24,000) 99%
Escatawpa Village Associates,
Limited Partnership 119,000 (25,000) 99%
Evergreen Apartments I Limited
Partnership 174,000 (224,000) 99%
Hastings Apartments I, Limited
Partnership 83,000 (59,000) 99%
Heritage Apartments I, L.P. 102,000 (45,000) 98.9%
Hillcrest Associates, A Limited
Partnership 188,000 (37,000) 99%
Patten Towers, L.P. II 1,483,000 (38,000) 99%
Prairieland Properties of Syracuse
II, L.P. 51,000 (9,000) 99%
Raymond S. King Apartments Limited
Partnership 65,000 (32,000) 99%
Rosedale Limited Partnership 135,000 (47,000) 99%
Shepherd South Apartments I, Ltd. 87,000 (4,000) 99%
Solomon Associates I, L.P. 92,000 (27,000) 99%
Talladega County Housing Ltd. 86,000 (41,000) 99%
The Willows Apartments Limited
Partnership 112,000 (19,000) 99%
---------- ----------
$ 5,501,000 $ (1,243,000)
========== ==========
</TABLE>
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Item 3. Legal Proceedings
NONE.
Item 4. Submission of Matters to a Vote of Security Holders
NONE.
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Item 5a.
(a) The Units are not traded on a public exchange but were sold through a
public offering. It is not anticipated that any public market will develop
for the purchase and sale of any Unit and none exists. Units can be
assigned only if certain requirements in the Partnership Agreement are
satisfied.
(b) At December 31, 1998, there were 856 Limited Partners.
(c) The Partnership was not designed to provide cash distributions to Limited
Partners in circumstances other than refinancing or disposition of its
investments in Local Limited Partnerships.
(d No unregistered securities were sold by the Partnership during 1998.
Item 5b.
NOT APPLICABLE
Item 6. Selected Financial Data
Selected balance sheet information for the Partnership is as follows as of
December 31:
<TABLE>
<CAPTION>
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 950,372 $ 2,018,591 $ 2,567,217 $ 660,999
Cash in escrow - - - 1,873,262
Subscriptions receivable - - 2,195,000 484,000
Investments in limited partnerships, net 12,559,525 13,836,734 12,782,751 1,046,532
Interest receivable - 19,435 - -
Loan receivable - - 522,190 661,306
Other assets - - 105,998 73
---------- ---------- ---------- ---------
$ 13,509,897 $ 15,874,760 $ 18,173,156 $ 4,726,172
========== ========== ========== =========
LIABILITIES
Due to limited partnerships $ 95,030 $ 1,290,351 $ 2,822,885 $ 309,852
Accrued fees and expenses due to general
partner and affiliates 62,496 4,640 43,807 570,137
PARTNERS' EQUITY 13,352,371 14,579,769 15,306,464 3,846,183
---------- ---------- ---------- ---------
$ 13,509,897 $ 15,874,760 $ 18,173,156 $ 4,726,172
========== ========== ========== =========
</TABLE>
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Selected results of operations, cash flows, and other information for the
Partnership is as follows for the years ended December 31 and for the period
from October 24, 1995 (Date Operations Commenced) to December 31, 1995:
<TABLE>
<CAPTION>
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income (loss) from operations $ (52,065) $ 20,214 $ 117,374 $ (9,346)
Equity in losses from limited partnerships (1,175,333) (789,697) (185,071) (343)
--------- --------- --------- ---------
Net loss $ (1,227,398) $ (769,483) $ (67,697) $ (9,689)
========= ========= ========= =========
Net loss allocated to:
General partner $ (12,274) $ (7,695) $ (677) $ (97)
========= ========= ========= =========
Limited partners $ (1,215,124) $ (761,788) $ (67,020) $ (9,592)
========= ========= ========= =========
Net loss per limited partner unit $ (67.51) $ (42.32) $ (4.94) $ (14.58)
========= ========= ========= =========
Outstanding weighted limited partner units 18,000 18,000 13,564 658
========= ========= ========= =========
1998 1997 1996 1995
---- ---- ---- ----
Net cash provided by (used in):
Operating activities $ 60,991 $ 102,215 $ (205,999) $ 3,402
Investing activities (1,129,210) (2,888,629) (7,704,761) (2,944,048)
Financing activities - 2,237,788 9,816,978 3,601,645
--------- --------- --------- ---------
Net change in cash and cash equivalents (1,068,219) (548,626) 1,906,218 660,999
Cash and cash equivalents, beginning of
period 2,018,591 2,567,217 660,999 -
--------- --------- --------- ---------
Cash and cash equivalents, end of period $ 950,372 $ 2,018,591 $ 2,567,217 $ 660,999
========= ========= ========= =========
Low Income Housing Credit per Unit was as follows for the years ended December 31:
1998 1997 1996 1995
---- ---- ---- ----
Federal $ 131 $ 83 $ 59 $ 14
State - - - -
--------- --------- --------- ---------
Total $ 131 $ 83 $ 59 $ 14
========= ========= ========= =========
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Financial Condition
The Partnership's assets at December 31, 1998 consisted primarily of $950,000 in
cash and aggregate investments in the eighteen Local Limited Partnerships of
$12,560,000. Liabilities at December 31, 1998 primarily consisted of $95,000 due
to limited partnerships and $51,000 of accrued annual management fees due to the
General Partner.
Results of Operations
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997. The
Partnership's net loss for 1998 was $(1,227,000), reflecting an increase of
$458,000 from the net loss experienced in 1997. The increase in net loss is
primarily due to equity in losses from limited partnerships which increased to
$(1,175,000) in 1998 from $(790,000) in 1997, in addition to a decrease in
interest income of $67,000 and an increase in operating expenses of $6,000.
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Year Ended December 31, 1997 Compared to Year Ended December 31, 1996. The
Partnership's net loss for 1997 was $(769,000), reflecting an increase of
$701,000 from the net loss experienced in 1996. The increase in net loss is
primarily due to equity in losses from limited partnerships which increased to
$(790,000) in 1997 from $(185,000) in 1996, in addition to a decrease in
interest income of $88,000 and an increase in operating expenses of $9,000.
Cash Flows
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997. Net
decrease in cash in 1998 was $(1,068,000), compared to a net decrease in cash in
1997 of $(549,000). The decrease in cash was higher in 1998 as compared to 1997
due primarily to a decrease in capital contributions from partners of $2,250,000
and a decrease in cash provided by operating activities of $41,000, offset by a
decrease in offering expenses of $12,000, a decrease in investments in Limited
Partnerships of $1,745,000 and an increase in distributions from Limited
Partnerships of $15,000.
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996. Net
decrease in cash in 1997 was $(549,000), compared to a net increase in cash in
1997 of $1,906,000. The change was due primarily to a decrease in capital
contributions from partners of $9,084,000, offset by a decrease in offering
expenses of $1,505,000, a decrease in investing activities of $4,816,000,
primarily from a decrease in investments in Limited Partnerships, a decrease in
cash in escrow, an increase in loans receivable, and a decrease in capitalized
acquisition costs. In addition, net cash from operating activities increased by
$308,000.
During 1998 accrued payables, which consist primarily of related party
management fees due to the General Partner, increased by $58,000. The General
Partner does not anticipate that these accrued fees will be paid in full until
such time as capital reserves are in excess of future forseeable working capital
requirements of the Partnership.
The Partnership expects its future cash flows, together with its net available
assets at December 31, 1998, to be sufficient to meet all currently forseeable
future cash requirements.
Impact of Year 2000
WNC & Associates, Inc.
Status of Readiness
Information Technology (IT) Systems. The Partnership relies on the IT systems of
WNC, its general partner. IT systems include computer hardware and software used
to produce financial reports and tax return information. This information is
then used to generate reports to investors and regulatory agencies, including
the Internal Revenue Service and the Securities and Exchange Commission. The IT
systems of WNC are year 2000 compliant.
Non-IT Systems. The Partnership also relies on the non-IT systems of WNC. Non-IT
systems include machinery and equipment such as telephones, voice mail and
electronic postage equipment. Except for one telephone system, the non-IT
systems of WNC are year 2000 compliant. The one telephone system will require
the replacement of one computer and one software application, both of which will
be completed on or before October 1, 1999.
Service Providers. WNC also relies on the IT and non-IT systems of service
providers. Service providers include utility companies, financial institutions,
telecommunications carriers, municipalities, and other outside vendors. WNC has
obtained verbal assurances from its material service providers (electrical power
provider, financial institutions and telecommunications carriers) that their IT
and non-IT systems are year 2000 compliant. There can be no assurance that this
compliance information is correct. There also can be no assurance that the
systems of other, less-important service providers and outside vendors will be
year 2000 compliant.
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Costs to Address Year 2000 Issues
The cost to address year 2000 issues for WNC has been less than $20,000. The
cost to replace the telephone system noted above will be less than $5,000. The
cost to deal with potential year 2000 issues of other outside vendors cannot be
estimated at this time.
Risk of Year 2000 Issues
The most reasonable and likely result from non-year 2000 compliance of systems
of the service providers noted above will be the disruption of normal business
operations for WNC. This disruption would, in turn, lead to delays in performing
reporting and fiduciary responsibilities on behalf of the Partnership. The worst
case scenario would be the replacement of a service provider. These delays would
likely be temporary and would likely not have a material effect on the
Partnership or WNC.
Local Limited Partnerships
Status of Readiness
WNC is in the process of obtaining year 2000 certifications from each Local
General Partner of each Local Limited Partnership. Those certifications will
represent to the Partnership that the IT and non-IT systems critical to the
operation of the Housing Complexes and investor reporting to the Partnership are
year 2000 compliant. These certifications will also represent to the Partnership
that the IT and non-IT systems of property management companies, independent
accountants, electrical power providers, financial institutions and
telecommunications carriers used by the Local Limited Partnership are year 2000
compliant.
There can be no assurance that the representations in the certifications will be
correct. There also can be no assurance that the systems of other,
less-important service providers and outside vendors, upon which the Local
Limited Partnerships rely, will be year 2000 compliant.
Costs to Address Year 2000 Issues
There will be no cost to the Partnership as a result of assessing year 2000
issues for the Local Limited Partnerships. The cost to deal with potential year
2000 issues of the Local Limited Partnerships cannot be estimated at this time.
Risk of Year 2000 Issues
There may be Local General Partners who indicate that they or their property
management company are not year 2000 compliant and do not have plans to become
year 2000 compliant before the end of 1999. There may be other Local General
Partners who are unwilling to respond to the certification request. The most
likely result of either non-compliance or failure to respond will be the removal
and replacement of the property management company and/or the Local General
Partner with year 2000 compliant operators.
Despite the efforts to obtain certifications, there can be no assurance that the
Partnership will be unaffected by year 2000 issues. The most reasonable and
likely result from non-year 2000 compliance will be the disruption of normal
business operations for the Local Limited Partnerships, including but not
limited to the possible failure to properly collect rents and meet their
obligations in a timely manner. This disruption would, in turn, lead to delays
by the Local Limited Partnerships in performing reporting and fiduciary
responsibilities on behalf of the Partnership. The worst-case scenario would
include the initiation of foreclosure proceedings on the property by mortgage
debt holders. Under these circumstances, WNC or its affiliates will take actions
necessary to minimize the risk of foreclosure, including the removal and
replacement of a Local General Partner by the Partnership. These delays would
likely be temporary and would likely not have a material effect on the
Partnership or WNC.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
NOT APPLICABLE
Item 8. Financial Statements and Supplementary Data
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WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
FINANCIAL STATEMENTS
For The Years Ended December 31, 1998, 1997 and 1996
with
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3
We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund V,
L.P., Series 3 (a California Limited Partnership) (the "Partnership") as of
December 31, 1998, and the related statements of operations, partners' equity
(deficit) and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit. A
significant portion of the financial statements of the limited partnerships in
which the Partnership is a limited partner were audited by other auditors whose
reports have been furnished to us. As discussed in Note 2 to the financial
statements, the Partnership accounts for its investments in limited partnerships
using the equity method. The portion of the Partnership's investment in limited
partnerships audited by other auditors represented 83% of the total assets of
the Partnership at December 31, 1998. Our opinion, insofar as it relates to the
amounts included in the financial statements for the limited partnerships which
were audited by others, is based solely on the reports of the other auditors.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit and the reports of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audit 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, 1998, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
BDO SEIDMAN, LLP
Orange County, California
June 14, 1999
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INDEPENDENT AUDITORS' REPORT
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3
We have audited the accompanying balance sheet of WNC Housing Tax Credit Fund V,
L.P., Series 3 (a California Limited Partnership) (the "Partnership") as of
December 31, 1997, and the related statements of operations, partners' equity
(deficit) and cash flows for each of the years in the two-year period ended
December 31, 1997. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit. We 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
investment in these limited partnerships represented 87% of the total assets of
WNC Housing Tax Credit Fund V, L.P., Series 3 at December 31, 1997. 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 these 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 the results of its
operations and its cash flows for each of the years in the two-year period ended
December 31, 1997, in conformity with generally accepted accounting principles.
CORBIN & WERTZ
Irvine, California
April 21, 1998
14
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
BALANCE SHEETS
December 31, 1998 and 1997
1998 1997
---- ----
ASSETS
Cash and cash equivalents $ 950,372 $ 2,018,591
Investments in limited partnerships
(Note 2) 12,559,525 13,836,734
Interest receivable - 19,435
---------- ----------
$ 13,509,897 $ 15,874,760
========== ==========
LIABILITIES AND PARTNERS' EQUITY
(DEFICIT)
Liabilities:
Payables to limited partnerships
(Note 4) $ 95,030 $ 1,290,351
Accrued fees and advances due to
General Partner and affiliates
(Note 3) 62,496 4,640
---------- ----------
Total liabilities 157,526 1,294,991
---------- ----------
Partners' equity (deficit):
General partner (41,967) (29,693)
Limited partners (25,000 units
authorized; 18,000 units
outstanding at December 31,
1998 and 1997) 13,394,338 14,609,462
---------- ----------
Total partners' equity 13,352,371 14,579,769
---------- ----------
$ 13,509,897 $ 15,874,760
========== ==========
See accompanying notes to financial statements
15
<PAGE>
WNC HOUSING TAX CREDIT FUND V, L.P., SERIES 3
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For The Years Ended December 31, 1998, 1997 and 1996
1998 1997 1996
---- ---- ----
Interest income $ 55,326 $ 121,703 $ 209,940
---------- ---------- ----------
Operating expenses:
Amortization (Note 2) 35,765 34,605 23,436
Asset management fees (Note 3) 49,500 49,500 49,500
Other 22,126 17,384 19,630
---------- ---------- ----------
Total operating expenses 107,391 101,489 92,566
---------- ---------- ----------
Income (loss) from operations (52,065) 20,214 117,374
Equity in losses from limited
partnerships (Note 2) (1,175,333) (789,697) (185,071)
---------- ---------- ----------
Net loss $ (1,227,398) $ (769,483) $ (67,697)
========== ========== ==========
Net loss allocable to:
General partner $ (12,274) $ (7,695) $ (677)
========== ========== ==========
Limited partners $ (1,215,124) $ (761,788) $ (67,020)
========== ========== ==========
Net loss per limited partner unit $ (67.51) $ (42.32) $ (4.94)
========== ========== ==========
Outstanding weighted limited
partner units 18,000 18,000 13,564
========== ========== ==========
See accompanying notes to financial statements
16
<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, 1998, 1997 and 1996
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
------- -------- -----
<S> <C> <C> <C>
Partners' equity (deficit)at January 1, 1996 $ (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 6) - 35,000 35,000
Capital issued for notes receivable (Note 6) - (55,000) (55,000)
Offering expenses (15,170) (1,501,837) (1,517,007)
Net loss (677) (67,020) (67,697)
---------- ---------- ----------
Partners' equity (deficit) at December 31, 1996 (21,876) 15,328,340 15,306,464
Offering expenses (122) (12,090) (12,212)
Cash collected on notes receivable (Note 6) - 55,000 55,000
Net loss (7,695) (761,788) (769,483)
---------- ---------- ----------
Partners' equity (deficit) at December 31, 1997 (29,693) 14,609,462 14,579,769
Net loss (12,274) (1,215,124) (1,227,398)
---------- ---------- ----------
Partners' equity (deficit) at December 31, 1998 $ (41,967) $ 13,394,338 $ 13,352,371
========== ========== ==========
</TABLE>
See accompanying notes to financial statements
17
<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, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (1,227,398) $ (769,483) $ (67,697)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Amortization 35,765 34,605 23,436
Equity in losses from limited partnerships 1,175,333 789,697 185,071
Change in interest receivable 19,435 86,563 (105,925)
Increase in accrued fees and advances
due to general partner and affiliates 57,856 (39,167) (240,884)
---------- ---------- ----------
Net cash provided by (used in) operating
activities 60,991 102,215 (205,999)
---------- ---------- ----------
Cash flows from investing activities:
Investments in limited partnerships, net (1,120,181) (3,432,735) (8,693,189)
Cash in escrow - - 1,873,262
Loans receivable - 522,190 139,116
Capitalized acquisition fees and costs (32,076) (28,975) (1,023,950)
Return of acquisition fees (Note 3) - 42,551 -
Distributions from limited partnerships 23,047 8,340 -
---------- ---------- ----------
Net cash used in investing activities (1,129,210) (2,888,629) (7,704,761)
---------- ---------- ----------
Cash flows from financing activities:
Capital contributions from partners - 2,250,000 11,333,985
Offering expenses - (12,212) (1,517,007)
---------- ---------- ----------
Net cash provided by financing activities - 2,237,788 9,816,978
---------- ---------- ----------
Net increase (decrease) in cash and cash equivalents (1,068,219) (548,626) 1,906,218
Cash and cash equivalents, beginning of year 2,018,591 2,567,217 660,999
---------- ---------- ----------
Cash and cash equivalents, end of year $ 950,372 $ 2,018,591 $ 2,567,217
========== ========== ==========
</TABLE>
See accompanying notes to financial statements
18
<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, 1998, 1997 and 1996
1998 1997 1996
---- ---- ----
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Taxes paid $ 800 $ 800 $ 800
===== ===== =====
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
During 1998 and 1997, the Partnership incurred, but did not pay, $0 and
$526,643, respectively, of payables to limited partnerships (in connection
with its investments in limited partnerships) (see Note 4).
See accompanying notes to financial statements
19
<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, 1998, 1997 and 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
WNC Housing Tax Credit Fund V, L.P., Series 3, a California Limited Partnership
(the "Partnership"), was formed on March 28, 1995, under the laws of the state
of California. The Partnership was formed to invest primarily in other limited
partnerships (the "Local Limited Partnerships") which own and operate
multi-family housing complexes (the "Housing Complex") that are eligible for low
income housing credits. The local general partners (the "Local General
Partners") of each Local Limited Partnership retain responsibility for
maintaining, operating and managing the Housing Complex.
The general partner is WNC & Associates, Inc. ("WNC"). Wilfred N. Cooper, Sr.,
through the Cooper Revocable Trust owns 66.8% of the outstanding stock of WNC.
John B. Lester is the original limited partner of the Partnership and owns 28.6%
of the outstanding stock of WNC.
The Partnership shall continue in full force and effect until December 31, 2050
unless terminated prior to that date pursuant to the partnership agreement or
law.
The financial statements include only activity relating to the business of the
Partnership, and do not give effect to any assets that the partners may have
outside of their interests in the Partnership, or to any obligations, including
income taxes, of the partners.
The partnership agreement authorized the sale of up to 25,000 units at $1,000
per Unit ("Units"). The offering of Units concluded in January 1996, at which
time 18,000 Units representing subscriptions in the amount of $17,558,985, net
of $441,015 of discounts for volume purchases, had been accepted. 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% interest 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 proceeds
equal to its capital contribution and a subordinated disposition fee (as
described in Note 3) from the remainder, 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.
20
<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, 1998, 1997 and 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Risks and Uncertainties
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 of multi-unit residential real estate. Some of these
risks are that the low income housing credit could be recaptured and that
neither the Partnership's investments nor the Housing Complexes owned by the
Local Limited Partnerships will be readily marketable. To the extent the Housing
Complexes receive government financing or operating subsidies, they may be
subject to one or more of the following risks: difficulties in obtaining tenants
for the Housing Complexes: difficulties in obtaining rent increases; limitations
on cash distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of Local Limited Partnership Interests: limitations on
removal of Local General Partners; limitations on subsidy programs; and possible
changes in applicable regulations. The Housing Complexes are or will be subject
to mortgage indebtedness. If a Local Limited Partnership does not make its
mortgage payments, the lender could foreclose resulting in a loss of the Housing
Complex and low income housing credits. As a limited partner of the Local
Limited Partnerships, the Partnership will have very limited rights with respect
to management of the Local Limited Partnerships, and will rely totally on the
Local General Partners of the Local Limited Partnerships for management of the
Local 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 Housing Complexes and the
Partnership. In addition, each Local Limited Partnership is subject to risks
relating to environmental hazards and natural disasters which might be
uninsurable. Because the Partnership's 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 the anticipated low income housing
credits will be available to Limited Partners.
In addition Limited Partners are subject to risks in that the rules governing
the low income housing credit are complicated, and the use of credits can be
limited. The only material benefit from an investment in Units may be the low
income housing credits. There are limits in the transferability of Units, and it
is unlikely that a market for Units will develop. All management decisions will
be made by the General Partner.
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 Local Limited Partnership's results of operations
and for any distributions received. The accounting policies of the Local Limited
Partnerships are consistent with those of the Partnership. Costs incurred by the
Partnership in acquiring the investments are capitalized as part of the
investment account and are being amortized over 30 years (see Note 2).
21
<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, 1998, 1997 and 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Losses from Local Limited Partnerships allocated to the Partnership will not be
recognized to the extent that the investment balance would be adjusted below
zero.
Offering Expenses
Offering expenses consist of underwriting commissions, legal fees, printing,
filing and recordation fees, and other costs incurred in connection with selling
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 and amounted to $2,132,000
as of December 31, 1998 and 1997.
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.
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. At December 31, 1998, the Partnership had no cash equivalents.
Concentration of Credit Risk
At December 31, 1998, the Partnership maintained cash balances at certain
financial institutions in excess of the federally insured maximum.
Net Loss Per Limited Partner Unit
Net loss per limited partnership unit is calculated pursuant to Statement of
Financial Accounting Standards No. 128, Earnings Per Share. Net loss per unit
includes no dilution and is computed by dividing loss available to limited
partners by the weighted average number of units outstanding during the period.
Calculation of diluted net income per unit is not required.
22
<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, 1998, 1997 and 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Reporting Comprehensive Income
In June 1997, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 130, Reporting Comprehensive Income. This statement establishes
standards for reporting the components of comprehensive income and requires that
all items that are required to be recognized under accounting standards as
components of comprehensive income be included in a financial statement that is
displayed with the same prominence as other financial statements. Comprehensive
income includes net income as well as certain items that are reported directly
within a separate component of partners' equity and bypass net income. The
Partnership adopted the provisions of this statement in 1998. For the years
presented, the Partnership has no elements of other comprehensive income, as
defined by SFAS No. 130.
Reclassifications
Certain prior year balances have been reclassified to conform to the 1998
presentation.
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
As of December 31, 1998, the Partnership has acquired limited partnership
interests in 18 Local Limited Partnerships, each of which owns one Housing
Complex consisting of an aggregate of 1,196 apartment units. The respective
general partners of the Local Limited Partnerships manage the day to day
operations of the entities. Significant Local Limited Partnership business
decisions require approval from the Partnership. The Partnership, as a limited
partner, is generally entitled to 99%, as specified in the Local Limited
Partnership agreements, of the operating profits and losses of the Local Limited
Partnerships.
The Partnership's investments in Local Limited Partnerships as reflected in the
balance sheet at December 31, 1998 and 1997, are approximately $1,187,000 and
$2,206,000 greater than the Partnership's equity as shown in the Local 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 to capital contributions
payable to the limited partnerships which were netted against partner capital in
the Local Limited Partnerships' financial statements (see Note 3).
Equity in losses of Local Limited Partnerships is recognized in the financial
statements until the related investment account is reduced to a zero balance.
Losses incurred after the investment account is reduced to zero are not
recognized. If the Local Limited Partnerships report net income in future years,
the Partnership will resume applying the equity method only after its share of
such net income equals the share of net losses not recognized during the
period(s) the equity method was suspended.
Distributions received by limited partners are accounted for as a reduction of
the investment balance. Distributions received after the investment has reached
zero are recognized as income. During 1998, no investment accounts in Local
Limited Partnerships reached a zero balance.
23
<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, 1998, 1997 and 1996
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
The following is a summary of the equity method activity of the investments in
Local Limited Partnerships for the years ended December 31:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Investments per balance sheet, beginning of year $ 13,836,734 $ 12,782,751
Capital contributions paid, net - 1,373,557
Capital contributions payable to limited partnerships - 526,644
Capitalized acquisition fees and costs 32,076 28,975
Tax credit adjustments (75,140) -
Return of acquisition fees (Note 4) - (42,551)
Distributions paid (23,047) (8,340)
Equity in losses of limited partnerships (1,175,333) (789,697)
Amortization of acquisition fees and costs (35,765) (34,605)
------------- --------------
Investments per balance sheet, end of year $ 12,559,525 $ 13,836,734
============= ==============
</TABLE>
The financial information from the individual financial statements of the Local
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 Local Limited Partnerships as of December
31 and for the years then ended is as follows:
COMBINED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
ASSETS
Buildings and improvements, net of accumulated
depreciation for 1998 and 1997 of $3,757,000
and $2,187,000, respectively $ 43,183,000 $ 44,490,000
Construction in progress - 95,000
Land 2,943,000 2,939,000
Other assets (including due from affiliates of $44,000
and $235,000 as of December 31, 1998 and 1997,
respectively) 4,293,000 4,608,000
---------- ----------
$ 50,419,000 $ 52,132,000
========== ==========
</TABLE>
24
<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, 1998, 1997 and 1996
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
COMBINED CONDENSED BALANCE SHEETS, continued
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
LIABILITIES
Mortgage and construction loans payable $ 31,218,000 $ 32,582,000
Other liabilities (including due to related parties of
$3,459,000 and $3,667,000, as of December 31,
1998 and 1997, respectively) 4,714,000 5,143,000
---------- ----------
35,932,000 37,725,000
---------- ----------
PARTNERS' CAPITAL
WNC Housing Tax Credit Fund V, L.P., Series 3 11,373,000 11,631,000
Other partners 3,114,000 2,776,000
---------- ----------
14,487,000 14,407,000
---------- ----------
$ 50,419,000 $ 52,132,000
========== ==========
COMBINED CONDENSED STATEMENTS OF OPERATIONS
1998 1997 1996
---- ---- ----
Revenues $ 5,705,000 $ 5,339,000 $ 3,981,000
---------- ---------- ----------
Expenses:
Operating expenses 3,580,000 3,331,000 2,053,000
Interest expense 1,739,000 1,625,000 1,282,000
Depreciation and amortization 1,629,000 1,246,000 864,000
---------- ---------- ----------
Total expenses 6,948,000 6,202,000 4,199,000
---------- ---------- ----------
Net loss $ (1,243,000) $ (863,000) $ (218,000)
========== ========== ==========
Net loss allocable to the Partnership $ (1,175,000) $ (790,000) $ (185,000)
========== ========== ==========
Net loss recorded by the Partnership $ (1,175,000) $ (790,000) $ (185,000)
========== ========== ==========
</TABLE>
25
<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, 1998, 1997 and 1996
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS, continued
Certain Local Limited Partnerships have incurred significant operating losses
and have working capital deficiencies. In the event these Local Limited
Partnerships continue to incur significant operating losses, additional capital
contributions by the Partnership and/or the Local General Partner may be
required to sustain the operations of such Local Limited Partnerships. If
additional capital contributions are not made when they are required, the
Partnership's investment in certain of such Local Limited Partnerships could be
impaired.
NOTE 3 - RELATED PARTY TRANSACTIONS
Under the terms of the Partnership Agreement, the Partnership has paid or 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
Units as compensation, for services rendered in connection with the
acquisition of Local Limited Partnerships. As of December 31, 1996, the
Partnership incurred acquisition fees of $1,008,550 which were 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 and 1998. Accumulated
amortization of these capitalized costs was $86,912 and $54,714 for
1998 and 1997, respectively.
Reimbursement of costs incurred by an affiliate of the General Partner
in connection with the acquisition of Local Limited Partnerships. These
reimbursements have not exceeded 1% of the gross proceeds. As of
December 31, 1998 and 1997, the Partnership incurred acquisition costs
of $131,087 and $99,011, respectively, which have been included in
investments in limited partnerships. Accumulated amortization was
insignificant for 1998, 1997 and 1996.
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. Management fees of $49,500 were incurred for 1998, 1997
and 1996, of which $0, $110,000 and $0 were paid during 1998, 1997 and
1996, respectively.
A subordinated disposition fee in an amount equal to 1% of the sales
price of real estate sold. Payment of this fee to the General Partner
is subordinated to the limited partners receiving a return on
investment (as defined in the Partnership Agreement) and is payable
only if the General Partner or its affiliates render services in the
sales effort.
26
<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, 1998, 1997 and 1996
NOTE 3 - RELATED PARTY TRANSACTIONS, continued
The accrued fees and expenses due to the General Partner and affiliates as of
December 31, 1998 and 1997 consist of the following:
1998 1997
---- ----
Advances from WNC $ 11,629 $ 3,273
Asset management fee payable 50,867 1,367
------------ -------------
$ 62,496 $ 4,640
============ =============
NOTE 4 - PAYABLES TO LIMITED PARTNERSHIPS
Payables to Local Limited Partnerships represent amounts which are due at
various times based on conditions specified in the respective limited
partnership agreements. These contributions are payable in installments and are
generally due upon the Local Limited Partnerships achieving certain development
and operating benchmarks (generally within two years of the Partnership's
initial investment).
NOTE 5 - 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 6 - SUBSCRIPTIONS AND NOTES RECEIVABLE
During 1996, the Partnership 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. During 1995, the Partnership 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 but before the
issuance of the respective financial statements, the Partnership reflected such
amounts as capital contributions and an asset in the financial statements. Since
the promissory notes had not been collected prior to issuance of the respective
financial statements, the unpaid balance was reflected as a reduction of
partners' equity in the financial statements. Upon collection of the promissory
notes, such amounts were reflected as capital contributions in the year
collected.
27
<PAGE>
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
(a)(1)
(i) On December 16, 1998, Corbin & Wertz, Irvine, California was dismissed
as the Partnership's principal independent accountant.
(ii) During the last two fiscal years of the Partnership, the reports of
Corbin & Wertz respecting the financial statements of the Partnership
did not contain an adverse opinion or a disclaimer of opinion, nor were
any such reports qualified or modified as to uncertainty, audit scope
or accounting principles.
(iii) The decision to change accountants was approved by the board of
directors of WNC & Associates, Inc., the general partner of the
Partnership.
(iv) During the last two fiscal years and subsequent interim period of the
Partnership there were no disagreements between Corbin & Wertz and the
Partnership on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure of the
nature described in Item 304(a)(1)(iv) of Securities and Exchange
Commission Regulation S-K.
(v) During the last two fiscal years and subsequent interim period of the
Partnership there were no reportable events of the nature described in
Item 304(a)(1)(v) of Securities and Exchange Commission Regulation S-K.
(a)(2)
On December 16, 1998, BDO Seidman, LLP, Costa Mesa, California was engaged as
the Partnership's principal independent accountant. During the last two fiscal
years and subsequent interim period of the Partnership, the Partnership did not
consult BDO Seidman, LLP regarding (i) either, the application of accounting
principles to a specified transaction; or the type of audit opinion that might
be rendered on the Partnership's financial statements, or (ii) any matter that
was the subject of a disagreement (as defined in Item 304(a)(1)(iv) of
Securities and Exchange Commission Regulation S-K) or was a reportable event (as
defined in Item 304(a)(1)(v) of Securities and Exchange Commission Regulation
S-K).
ITEM III.
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 WNC & Associates, Inc. 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. The principal shareholders of WNC & Associates,
Inc. are trusts established by Wilfred N. Cooper, Sr. and John B. Lester, Jr.
Wilfred N. Cooper, Sr., age 68, is the founder, Chief Executive Officer and a
Director of WNC & Associates, Inc., a Director of WNC Capital Corporation, and a
general partner in some of the programs previously sponsored by the Sponsor. Mr.
Cooper has been involved in real estate investment and acquisition activities
28
<PAGE>
since 1968. Previously, during 1970 and 1971, he was founder and 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 where
he had responsibility for factory-built housing evaluation and project
management in urban planning and development. Mr. Cooper is a Director of the
National Association of Home Builders (NAHB) and a National Trustee for NAHB's
Political Action Committee, a Director of the National Housing Conference (NHC)
and a member of NHC's Executive Committee and a Director of the National
Multi-Housing Council (NMHC). Mr. Cooper graduated from Pomona College in 1956
with a Bachelor of Arts degree.
John B. Lester, Jr., age 65, is President, a Director, Secretary and a member of
the Acquisition Committee of WNC & Associates, Inc., and a Director of WNC
Capital Corporation. Mr. Lester has 27 years of experience in engineering and
construction and has been involved in real estate investment and acquisition
activities since 1986 when he joined the Sponsor. Previously, 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 graduated from the
University of Southern California in 1956 with a Bachelor of Science degree in
Mechanical Engineering.
Wilfred N. Cooper, Jr., age 36, is Executive Vice President, a Director and a
member of the Acquisition Committee of WNC & Associates, Inc. He is President
of, and a registered principal with, WNC Capital Corporation, a member firm of
the NASD, and is a Director of WNC Management, Inc. He has been involved in
investment and acquisition activities with respect to real estate since he
joined the Sponsor in 1988. Prior to this, he served as Government Affairs
Assistant with Honda North America in Washington, D.C. Mr. Cooper is a member of
the Advisory Board for LIHC Monthly Report, a Director of NMHC and an Alternate
Director of NAHB. He graduated from The American University in 1985 with a
Bachelor of Arts degree.
David N. Shafer, age 46, is Senior Vice President, a Director, General Counsel,
and a member of the Acquisition Committee of WNC & Associates, Inc., and a
Director and Secretary of WNC Management, Inc. Mr. Shafer has been involved in
real estate investment and acquisition activities since 1984. Prior to joining
the Sponsor in 1990, he was practicing law with a specialty in real estate and
taxation. Mr. Shafer is a Director and President of the California Council of
Affordable Housing 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 (cum laude) and from the University of San Diego in 1986 with a
Master of Law degree in Taxation.
Michael L. Dickenson, age 42, is Vice President and Chief Financial Officer, and
a member of the Acquisition Committee of WNC & Associates, Inc., and Chief
Financial Officer of WNC Management, Inc. He has been involved with acquisition
and investment activities with respect to real estate since 1985. Prior to
joining the Sponsor in March 1999, he was the Director of Financial Services at
TrizecHahn Centers Inc., a developer and operator of commercial real estate,
from 1995 to 1999, a Senior Manager with E&Y Kenneth Leventhal Real Estate
Group, Ernst & Young, LLP, from 1988 to 1995, and Vice President of Finance with
Great Southwest Companies, a commercial and residential real estate developer,
from 1985 to 1988. Mr. Dickenson is a member of the Financial Accounting
Standards Committee for the National Association of Real Estate Companies and
the American Institute of Certified Public Accountants, and a Director of
HomeAid Southern California, a charitable organization affiliated with the
building industry. He graduated from Texas Tech University in 1978 with a
Bachelor of Business Administration - Accounting degree, and is a Certified
Public Accountant in California and Texas.
Thomas J. Riha, age 44, is Vice President - Asset Management and a member of the
Acquisition Committee of WNC & Associates, Inc. and a Director and Chief
Executive Officer of WNC Management, Inc. Mr. Riha has been involved in
acquisition and investment activities with respect to real estate since 1979.
Prior to joining the Sponsor in 1994, Mr. Riha was employed by Trust Realty
Advisor, a real estate acquisition and management company, last serving as Vice
President - Operations. 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 and a member of the American Institute of Certified Public
Accountants.
29
<PAGE>
Sy P. Garban, age 53, is Vice President - National Sales of WNC & Associates,
Inc. and has been employed by the Sponsor since 1989. Mr. Garban has been
involved in real estate investment activities since 1978. Prior to joining the
Sponsor he served as Executive Vice President of MRW, Inc., 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.
N. Paul Buckland, age 36, is Vice President - Acquisitions of WNC & Associates,
Inc. He has been involved in real estate acquisitions and investments since 1986
and has been employed with WNC & Associates, Inc. since 1994. Prior to that, he
served on the development team of the Bixby Ranch that constructed apartment
units and Class A office space in California and neighboring states, and 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.
David Turek, age 44, is Vice President - Originations of WNC & Associates, Inc.
He has been involved with real estate investment and finance activities since
1976 and has been employed by WNC & Associates, Inc. since 1996. From 1995 to
1996, Mr. Turek served as a consultant for a national Tax Credit sponsor where
he was responsible for on-site feasibility studies and due diligence analyses of
Tax Credit properties. From 1990 to 1995, he was involved in the development of
conventional and tax credit multi-family housing. He is a Director with the
Texas Council for Affordable Rural Housing and graduated from Southern Methodist
University in 1976 with a Bachelor of Business Administration degree.
Kay L. Cooper, age 62, is a Director of WNC & Associates, Inc. Mrs. Cooper was
the founder and sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products, from 1975 until 1998. She is the wife of Wilfred N.
Cooper, Sr., the mother of Wilfred N. Cooper, Jr. and the sister of John B.
Lester, Jr. Ms. 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) Annual Asset Management Fee. An annual asset management fee of the greater
of (i) $2,000 per multi-family housing complex or (ii) 0.275% of Gross
Proceeds. The base fee amount will be adjusted annually based on changes
in the Consumer Price Index, however in no event will the annual asset
management fee exceed 0.2% of Invested Assets. "Invested Assets" means the
sum of the Partnership's Investment in Local Limited Partnerships and the
Partnership's allocable share of the amount of indebtedness related to the
Housing Complexes. Fees of $49,500 were incurred for the year ended
December 31, 1998. The Partnership paid the General Partner or its
affiliates $0 of these fees in 1998.
(b) Subordinated Disposition Fee. A subordinated disposition fee in an amount
equal to 1% of the sale price received in connection with the sale or
disposition of a Housing 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.
(c) Interest in Partnership. The General Partner receives 1% of the
Partnership's allocated Low Income Housing Credits, which approximated
$24,000 for the General Partner for the year ended December 31, 1998. The
General Partners are also entitled to receive 1% of cash distributions.
There were no distributions of cash to the General Partners during the
year ended December 31, 1998.
30
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
The following are the only limited partners known to the General
Partner to own beneficially in excess of 5% of the outstanding Units.
Name and Address Amount of Units Percent
Title of Class of Beneficial Owner Controlled of Class
- --------------------- ------------------------------ --------------- ---------
Units of Limited Sempra Energy Financial 4,560 units 25.3%
Partnership Interests P.O. Box 126943
San Diego, CA 92113-6943
Units of Limited Western Financial Savings Bank 1,068 units 5.9%
Partnership Interests 23 Pasteur
Irvine, CA 92718
(b) Security Ownership of Management
Neither the General Partner, its affiliates, nor any of the officers or
directors of the General Partner or its affiliates own directly or
beneficially any Units in the Partnership.
(c) Changes in Control
The management and control of the General Partner may be changed at any
time in accordance with its organizational documents, without the
consent or approval of the Limited Partners. In addition, the
Partnership Agreement provides for the admission of one or more
additional and successor General Partners in certain circumstances.
First, with the consent of any other General Partners and a
majority-in-interest of the Limited Partners, any General Partner may
designate one or more persons to be successor or additional General
Partners. In addition, any General Partner may, without the consent of
any other General Partner or the Limited Partners, (i) substitute in
its stead as General Partner any entity which has, by merger,
consolidation or otherwise, acquired substantially all of its assets,
stock or other evidence of equity interest and continued its business,
or (ii) cause to be admitted to the Partnership an additional General
Partner or Partners if it deems such admission to be necessary or
desirable so that the Partnership will be classified a partnership for
Federal income tax purposes. Finally, a majority-in-interest of the
Limited Partners may at any time remove the General Partner of the
Partnership and elect a successor General Partner.
Item 13. Certain Relationships and Related Transactions
The General Partner manages all of the Partnership's affairs. The transactions
with the General Partner are primarily in the form of fees paid by the
Partnership for services rendered to the Partnership and the General Partner's
interest in the Partnership, as discussed in Item 11 and in the notes to the
Partnership's financial statements.
31
<PAGE>
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
Financial Statements
(a)(1) Financial statements included in Part II hereof:
Report of Independent Certified Public Accountants
Independent Auditors' Report
Balance Sheets, December 31, 1998 and 1997
Statements of Operations for the years ended December 31, 1998, 1997
and 1996
Statements of Partners' Equity (Deficit) for the years ended December
31, 1998, 1997 and 1996
Statements of Cash Flows for the years ended December 31, 1998, 1997
and 1996
Notes to Financial Statements
(a)(2) Financial statement schedules included in Part IV hereof:
Report of Independent Certified Public Accountants on Financial State-
ment Schedule
Schedule III - Real Estate Owned by Local Limited Partnerships
(b) Reports on Form 8-K
1. A Form 8-K dated December 16, 1998 was filed on December 22, 1998
reporting the dismissal of the Partnership's former auditors and the
engagement of new auditors. No financial statements were included.
(c) Exhibits
3.1 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 3.1.
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.
32
<PAGE>
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 Amend
ment 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
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.
(d) Financial statement schedule follows, as set forth in subsection
(a)(2) hereof.
33
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Partners
WNC Housing Tax Credit Fund V, L.P., Series 3
The audit referred to in our report dated June 14, 1999, relating to the 1998
financial statements of WNC Housing Tax Credit Fund V, L.P., Series 3 (the
"Partnership"), which is contained in Item 8 of this Form 10-K, included the
audit of the accompanying financial statement schedule. The financial statement
schedule is the responsibility of the Partnership's management. Our
responsibility is to express an opinion on this financial statement schedule
based upon our audit.
In our opinion, such financial statement schedule presents fairly, in all
material respects, the financial information set forth therein.
BDO SEIDMAN, LLP
Orange County, California
June 14, 1999
34
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
As of December 31, 1998
---------------------------------------------------------------------------------------
Partnership's Total Amount of Encumbrances of Net
Investment in Local Investment Local Limited Property and Accumulated Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Apartments I Alliance,
Limited Partnership Nebraska $ 604,000 $ 604,000 $ 615,000 $ 1,549,000 $ 141,000 $ 1,408,000
Blessed Rock of El El Monte,
Monte California 2,511,000 2,511,000 3,841,000 9,289,000 279,000 9,010,000
Broadway Apartments, Hobbs, New
Limited Partnership Mexico 2,004,000 1,931,000 1,402,000 3,334,000 156,000 3,178,000
Cascade Pines, L.P. II Atlanta,
Georgia 1,347,000 1,347,000 8,023,000 8,392,000 706,000 7,686,000
Curtis Associates I, Curtis,
L.P. Nebraska 88,000 66,000 427,000 497,000 44,000 453,000
Escatawpa Village Escatawpa,
Associates, Limited Mississippi 249,000 249,000 898,000 1,417,000 100,000 1,317,000
Partnership
Evergreen Apartments Tulsa,
I Limited Partnership Oklahoma 549,000 549,000 652,000 1,886,000 199,000 1,687,000
Hastings Apartments Hastings,
I, Limited Partnership Nebraska 542,000 542,000 611,000 1,335,000 106,000 1,229,000
Heritage Apartments Berkeley,
I, L.P. Missouri 752,000 752,000 694,000 1,679,000 80,000 1,599,000
</TABLE>
35
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
As of December 31, 1998
---------------------------------------------------------------------------------------
Partnership's Total Amount of Encumbrances of Net
Investment in Local Investment Local Limited Property and Accumulated Book
Partnership Name Location Limited Partnerships Paid to Date Partnerships Equipment Depreciation Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Hillcrest Associates, Ontario,
A Limited Partnership Oregon 354,000 354,000 1,301,000 1,697,000 198,000 1,499,000
Patten Towers, L.P. II Chattanooga,
Tennessee 2,154,000 2,154,000 7,275,000 10,715,000 1,095,000 9,620,000
Prairieland Syracuse,
Properties of Kansas 85,000 85,000 294,000 511,000 37,000 474,000
Syracuse II, L.P.
Raymond S. King Greensboro,
Apartments Limited North Carolina 437,000 437,000 782,000 1,096,000 84,000 1,012,000
Partnership
Rosedale Limited Silver City,
Partnership New Mexico 309,000 309,000 1,324,000 1,679,000 193,000 1,486,000
Shepherd South Shepherd,
Apartments I, Ltd. Texas 121,000 121,000 577,000 720,000 57,000 663,000
Solomon Associates I, Solomon,
L.P. Kansas 138,000 138,000 569,000 716,000 68,000 648,000
Talladega County Talladega,
Housing Ltd. Alabama 653,000 653,000 811,000 1,466,000 112,000 1,354,000
The Willows Morganton,
Apartments Limited North Carolina 841,000 841,000 1,122,000 1,905,000 102,000 1,803,000
Partnership ---------- ---------- ---------- ---------- ---------- ----------
$ 13,738,000 $ 13,643,000 $ 31,218,000 $ 49,883,000 $ 3,757,000 $ 46,126,000
========== ========== ========== ========== ========== ==========
</TABLE>
36
<PAGE>
WNC Housing Tax Credit Fund V, L.P., Series 3
Schedule III
Real Estate Owned by Local Limited Partnerships
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
For the year ended December 31, 1998
--------------------------------------------------------------------------
Year Estimated
Rental Investment Useful Life
Partnership Name Income Net Loss Status Acquired (Years)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Apartments I Limited
Partnership $ 65,000 $ (64,000) Completed 1997 40
Blessed Rock of El Monte 656,000 (111,000) Completed 1997 40
Broadway Apartments, Limited
Partnership 152,000 (285,000) Completed 1997 40
Cascade Pines, L.P. II 1,821,000 (152,000) Completed 1997 40
Curtis Associates I, L.P. 30,000 (24,000) Completed 1997 27.5
Escatawpa Village Associates,
Limited Partnership 119,000 (25,000) Completed 1997 27.5
Evergreen Apartments I Limited
Partnership 174,000 (224,000) Completed 1996 40
Hastings Apartments I, Limited
Partnership 83,000 (59,000) Completed 1996 40
Heritage Apartments I, L.P. 102,000 (45,000) Completed 1997 27.5
Hillcrest Associates, A Limited
Partnership 188,000 (37,000) Completed 1997 27.5
Patten Towers, L.P. II 1,483,000 (38,000) Completed 1996 27.5
Prairieland Properties of
Syracuse II, L.P. 51,000 (9,000) Completed 1997 27.5
Raymond S. King Apartments
Limited Partnership 65,000 (32,000) Completed 1997 30
Rosedale Limited Partnership 135,000 (47,000) Completed 1997 30
Shepherd South Apartments I, Ltd. 87,000 (4,000) Completed 1996 40
Solomon Associates I, L.P. 92,000 (27,000) Completed 1997 27.5
Talladega County Housing Ltd. 86,000 (41,000) Completed 1996 40
The Willows Apartments Limited
Partnership 112,000 (19,000) Completed 1997 40
--------- ---------
$ 5,501,000 $ (1,243,000)
========= =========
</TABLE>
37
<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: July 27, 1999
By: /s/ Michael L. Dickenson
Michael L. Dickenson,
Vice-President - Chief Financial Officer of WNC & Associates, Inc.
Date: July 27, 1999
By: /s/ Wilfred N. Cooper, Sr.
Wilfred N. Cooper, Sr., General Partner
Date: July 27, 1999
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: July 27, 1999
By: /s/ John B. Lester, Jr.
John B. Lester, Jr., Director of WNC & Associates, Inc.
Date: July 27, 1999
By: /s/ David N. Shafer
David N Shafer, Director of WNC & Associates, Inc.
Date: July 27, 1999
38
<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-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 950,372
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 950,372
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,509,897
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 13,352,371
<TOTAL-LIABILITY-AND-EQUITY> 13,509,897
<SALES> 0
<TOTAL-REVENUES> 55,326
<CGS> 0
<TOTAL-COSTS> 107,391
<OTHER-EXPENSES> 1,175,333
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,227,398)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,227,398)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,227,398)
<EPS-BASIC> (67.51)
<EPS-DILUTED> 0
</TABLE>
