Assisted Housing Fund LP I 10Q 2001 Q3 Quarterly report

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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

/x/	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2001

Commission file number 33-18756

ASSISTED HOUSING FUND L.P. I
(Exact name of registrant as specified in its charter)

Washington
(State of organization)

91-1391150
(IRS Employer
Identification No.)

1191 Second Avenue, Suite 904, Seattle, WA 98101
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (206) 461-4782

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
(Title of class)

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 / /

The Exhibit Index appears at page 13.
There are 13 pages.

Part I. Financial Information

Item 1. Financial Statements

ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES

BALANCE SHEETS

		September 30, 2001			December 31, 2000
		(Unaudited)
ASSETS
Rental property and equipment, at cost:
	Buildings and equipment	$	15,865,074		$	15,836,260
	Less accumulated depreciation		(7,160,332	)		(6,769,459	)

			8,704,742			9,066,801
	Land		723,111			723,111

			9,427,853			9,789,912
Cash and cash equivalents:
	Rental operation		192,496			214,415
	AHF reserves		25,417			13,148

			217,913			227,563
Restricted deposits:
	Tenant trust—security deposits		108,211			114,970
	Reserve accounts		689,799			737,977

			798,010			852,947
Other assets:
	Accounts receivable		100,084			54,039
	Prepaid expenses		23,108			9,124

			123,192			63,163

		$	10,566,968		$	10,933,585

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities:
	Mortgage notes payable	$	12,257,798		$	12,287,154
	Accounts payable		303,705			306,143
	Due to affiliate		692,472			660,464
	Accrued liabilities		158,225			114,238
	Security deposits payable		113,125			111,116

			13,525,325			13,479,115
Minority interests in partnerships			421,707			441,445
Partners' equity (deficit):
	Limited partners		(3,315,056	)		(2,925,898	)
	General partner		(65,008	)		(61,077	)

			(3,380,064	)		(2,986,975	)

		$	10,566,968		$	10,933,585

See notes to financial statements

ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES

STATEMENT OF PARTNERS' EQUITY (DEFICIT)

	Limited Partners			General Partner			Total
Balance—December 31, 1998		(1,964,910	)		(51,370	)		(2,016,280	)
Net Income (loss) for 1999		(508,090	)		(5,132	)		(513,222	)

Balance—December 31, 1999		(2,473,000	)		(56,502	)		(2,529,502	)
Net income (loss) for 2000		(452,898	)		(4,575	)		(457,473	)

Balance December 31, 2000		(2,925,898	)		(61,077	)		(2,986,975	)
Net income (loss) for Sept 30 2001 (Unaudited)		(389,158	)		(3,931	)		(393,089	)

Balance—Sept 30, 2001 (Unaudited)	($	3,315,056	)	($	65,008	)	($	3,380,064	)

See notes to Financial Statements

ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES

STATEMENTS OF OPERATIONS

			Quarter Ended Sept 30, 2001		Nine Months Ended Sept 30, 2001			Quarter Ended Sept 30, 2000			Nine Months Ended Sept 30, 2000
			(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Revenue:
	Rental		410,363		$	1,200,417		$	394,164		$	1,197,041
	Miscellaneous		21,721			57,281			13,622			42,389

			432,084			1,257,698			407,786			1,239,430
Expenses:
	Operating & maintenance		95,177			250,641			75,295			191,130
	Utilities		65,342			222,376			63,303			195,582
	General & administrative		92,918			318,946			99,335			313,617
	Taxes		63,144			197,794			39,511			165,180
	Insurance		11,941			33,411			11,118			23,622
	Interest on mortgage notes		69,461			211,524			78,400			223,504
	Depreciation		137,427			390,873			142,399			427,020
	Miscellaneous		4,468			11,375			222			1,472

			539,878			1,636,940			509,583			1,541,127
			(107,794	)		(379,242	)		(101,797	)		(301,697	)
Other income (expenses):
	Interest earned on escrow accounts & cash reserves		47			259			80			392
	Minority interest		6,371			19,661			6,300			18,875
	General & administrative		(2,875	)		(32,009	)		(2,405	)		(29,655	)
	Partnership management Fees		(895	)		(1,758	)		(724	)		(2,986	)
	Amortization of organization & start-up costs		0			0			0			0

			2,648			(13,847	)		3,251			(13,374	)

		Net income (loss)	(105,146	)		(393,089	)		(98,546	)		(315,071	)

Net income (loss) per unit of limited partnership interest			(148	)		(554	)		(139	)		(444	)

See notes to Financial Statements

ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

				Nine Months Ended Sept 30, 2001			Nine Months Ended Sept 30, 2000
				(Unaudited)			(Unaudited)
Cash flows from operating activities:
	Net Income (loss)				(393,089	)		(315,071	)
	Adjustments to reconcile net (loss) to net cash provided by operating activities:
		Depreciation			390,873			427,020
		Minority interest in operations			(19,661	)		(18,875	)
		Decrease (increase) in:
			Accounts receivable		(46,045	)		(29,662	)
			Prepaid expenses		(13,984	)		276
		Increase (decrease) in:
			Accounts payable		(2,438	)		(7,683	)
			Accrued liabilities		43,987			18,793
			Due to affiliates		32,008			6,156

	Net cash provided by operating activities				(8,349	)		80,954
Cash flows from investing activities:
	Acquisition and construction of rental property				(28,814	)		0
	Decrease (increase) in restricted deposits				48,178			(58,297	)
	Security deposits payable				8,768			1,665

	Net cash provided (used) in investing activities				28,132			(56,632	)
Financing activities:
	Minority partners' capital contributions				(77	)		(96	)
	Mortgage principal payments				(29,356	)		(24,895	)

	Net cash provided by financing activities				(29,433	)		(24,991	)

Net increase (decrease) in cash and cash equivalents					(9,650	)		(669	)
Cash and cash equivalents—beginning of year					227,563			215,400

Cash and cash equivalents—end of period				$	217,913		$	214,731

Supplemental disclosure of cash flow information:
	Cash paid during the period for interest (net of amounts capitalized)			$	211,524		$	223,504

See notes to Financial Statements

(Unaudited)

ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Quarter Ended September 30, 2001

1. General

The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with financial statements and notes thereto included with the Partnership's Form 10-K for the year ended December 31, 2000. In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Partnership's financial position and results of operations. The results of operations for the periods may not be indicative of the results to be expected for the year.

Assisted Housing Fund L.P. I (the Partnership) is a limited partnership which was organized November 2, 1987 under the laws of the state of Washington to acquire limited partnership interests in other partnerships (the Property Partnerships), each of which has been organized to develop or purchase a low- or moderate-income apartment complex. The Partnership's general partner is Murphey Favre Properties, Inc. (MFP), a wholly-owned subsidiary of WM Financial, Inc., which is a wholly-owned subsidiary of Washington Mutual Bank (WMB).

The Partnership completed its public offering of limited partnership interests and commenced operations on April 14, 1989. Prior to that date, the Partnership's activities consisted solely of purchasing limited partnership interests in Property Partnerships which were in the development process. As of December 31, 2000, 334 limited partners held the 703 units of limited partnership interests outstanding.

The Partnership has invested as a limited partner in eleven Property Partnerships. The developer of each apartment complex serves as the general partner (DGP) of the respective Property Partnership. Additionally, a wholly-owned subsidiary of MFP, Murphey Favre Housing Managers (MFHM), is a special limited partner in each Property Partnership. MFHM has the right to oversee the management of each Property Partnership and has certain approval rights over the actions of each DGP.

The Partnership Agreement for each Property Partnership sets forth the allocations of profits, losses and distributions of net cash flow from operations or from sale or refinancing of the rental property.

The properties owned by the Property Partnerships were financed and constructed under Section 515 of the National Housing Act, as amended (administered by Farmer's Home Administration, now known as Rural Housing Services (RHS)). Under this program, the Property Partnerships provide housing to low- and moderate-income families. Lower rental charges to tenants are recovered by the Property Partnerships through an interest reduction program which reduces the effective interest rate over the lives of the mortgages to 1 percent and a rental assistance program whereby RHS pays the Property Partnerships for a portion of qualified tenant rents.

Construction of the rental properties began in June, 1988 and all were completed by January 31, 1991. Rental operations began in April, 1989.

2. Summary of Significant Accounting Policies

a.: The Partnership's financial statements are reported on a consolidated basis with the Property Partnerships in which it has invested because the Partnership (as a limited partner) holds approximately 99% profit and loss interests and approximately 55% of the equity interests in each Property Partnership and because of the aforementioned rights of MFHM to restrict the authority of each DGP.

The consolidated financial statements, include the financial statements of the Partnership and eleven Property Partnerships: Fairview Apartments Company Limited Partnership (Fairview); Ionia Limited Dividend Housing Association Limited Partnership (Ionia); Logan Apartments Company Limited Partnership (Logan); Rolling Brook II Limited Dividend Housing Association Limited Partnership (Rolling Brook); Wexford Manor Limited Dividend Housing Association Limited Partnership (Wexford); Blue Heron Apartment Associates Limited Partnership (Blue Heron); Glenwood Apartment Associates Limited Partnership (Glenwood); Pacific Place Apartment Associates Limited Partnership (Pacific Place); Cove Limited Dividend Housing Association Limited Partnership (Cove); Washington Street Limited Dividend Housing Association Limited Partnership (Washington); and, Fayette Hills Limited Partnership (Fayette).

All material interpartnership transactions and balances have been eliminated. The minority partners' interests in the losses of the Property Partnerships, which aggregate $56,339 and $52,753 as of September 30, 2001 and December 31, 2000, respectively, are included in other income.

b.: The accrual method of accounting is used for both financial statement and income tax purposes.
c.: Rental property and equipment is stated at cost including interest of $387,000, capitalized during construction.

The partnership agreements for the Property Partnerships require the DGP's to fund cost overruns on the development of the rental properties. As of September 30, 2001 and December 31, 2000, $589,462 of such cost overruns have been recorded as capital contributions from DGP's and have been included in the cost basis of the rental property. All depreciation related thereto has been specially allocated to the respective DGP's.

d.: Depreciation is computed for financial statement purposes using the straight-line method over the estimated useful lives of the related assets as follows:

Building shell and components		27.5 years
Land improvements		15 years
Appliances		10 years
Carpets and draperies		10 years

Depreciation is computed for income tax purposes using the modified-accelerated-cost-recovery-system (MACRS).

e.: No income tax provision has been included in the financial statements since income or loss of a Partnership is required to be reported by the respective partners on their income tax returns.

f.: For purposes of the statement of cash flows, all investment instruments purchased with a maturity of three months or less are considered to be cash equivalents.
g.: The unaudited interim financial statements include all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. These adjustments are all of a normal recurring nature.

3. Transactions with Affiliates

In connection with the offering of units of limited partnership interest, the acquisition and development of rental property and the management of both the rental property and the Partnership, the Partnership and Property Partnerships have paid or accrued the following amounts to certain affiliates:

		Quarter Ended Sept 30, 2001		Year Ended Dec 31, 2000
Murphey Favre Properties, Inc.
	Partnership service fee	$	1,875	$	7,500
Developer general partners and affiliates
	Property management fees		31,841		137,289

The Partnership maintains deposits in certain of WMB's interest-bearing accounts which aggregated $25,417 and $13,148 at September 30, 2001 and December 31, 2000, respectively. Interest earned on such deposits totaled $47 and $504 during the quarter ended September 30, 2001 and year ended December 31, 2000, respectively. Terms of the RHS Loan Agreements require each DGP to provide interest-free advances of stipulated amounts as initial operating capital to the Property Partnerships. Due to affiliates includes $152,107 of such advances at September 30, 2001 and December 31, 2000, respectively which will be repaid or from the proceeds of future sales of the respective Properties. The balance includes DGP advances of $35,468 for land improvements and $14,209 to fund operating deficits. The remaining balance due to affiliates includes program management fees and reimbursements payable to MFP.

Under the terms of management services agreements, seven of the eleven Property Partnerships have affiliates of the DGP's which provide management services for the rental properties and receive compensation for such services in amounts approximating 8.4% of rental receipts. Three of the eleven Property Partnerships are co-managed by affiliates of the DGP's which provide management services for the rental properties and receive compensation for such services in amounts approximating 2.8% of rental receipts.

4. Cash in Reserve Accounts

The Loan Agreements between the Property Partnerships and RHS require the Property Partnerships to deposit into separate reserve accounts (savings accounts) $126,889 annually until the reserve accounts reach $1,268,211. With the prior approval of RHS, these funds can be used for: (1) loan debt service, if operating funds cannot meet these obligations: (2) repairs and replacements

caused by catastrophe or long-range depreciation; (3) improvements or extensions to the buildings; and, (4) any other reason RHS determines will promote or be beneficial to the purpose of the loans.

5. Mortgage Notes Payable

The mortgage notes are payable to RHS in monthly installments stated in the table below. In accordance with provisions of Interest Credit Agreements, RHS provides monthly interest credits which reduce the interest rates stated in the mortgage notes to effective rates of 1 percent over the lives of the mortgages. Amortization of principal is based on the stated rates of 8.75% to 10.75% under RHS's Predetermined Amortization Schedule System (PASS). Substantially all of the rental property and equipment is pledged as collateral on the mortgages. No partner is personally liable on the mortgage notes.

Amendments enacted in 1979 and 1987 to Section 515 of the National Housing Act contain restrictive provisions for prepayment of Section 515 loans. In summary, RHS may refuse offers to prepay the mortgage notes and require that the projects be used for the purpose of housing those eligible, as provided in Section 515, for a period of 20 years.

The loan balances, net monthly payments, and due dates for each Property Partnership are as follows:

	Net Monthly Payment		Loan Balance Sept 30, 2001		Due Date
Fairview	$	2,744	$	1,268,006	April, 2040
Ionia		1,532		706,988	October, 2040
Logan		2,142		991,082	March, 2041
Rolling Brook		1,614		744,012	June, 2040
Wexford		1,567		722,266	April, 2040
Blue Heron		3,173		1,462,604	June, 2040
Glenwood		3,111		1,432,114	May, 2039
Pacific Place		1,632		754,309	June, 2039
Cove		3,092		1,424,729	April, 2040
Washington		1,545		710,091	May, 2040
Fayette		4,398		2,041,597	December, 2039

Total	$	26,550	$	12,257,798

Principal Payments on the mortgage notes for the next 5 years are as follows:

Year	Amounts
2001		5,772
2002		38,422
2003		42,029
2004		46,303
2005		50,294
2006 and later years		12,074,978

	$	12,257,798

6. Limited Distributions to Partner

Limited distributions payable from funds provided by rental operations of the Property Partnerships are limited by the Loan Agreements to eight percent per year of the Property Partnerships' initial equity, as determined by the RHS. Current RHS regulations limit the distribution payments in any year to a maximum of the annual distribution for the current year and the prior year. Distribution payments are also subject to approval by RHS. Prerequisites to limited distributions being paid by each Property Partnership are: (a) funding of the reserve account must be current and (b) the mortgage note must be current.

7. Contingency

The Partnership has ceased accrual of the annual partnership administration fee, payable in part to the general partner. Management has determined that the source of payment, a future sale or refinance of one or more of the Property Partnerships, may not be sufficient to pay fees accrued in excess of the $544,540 payable at December 31, 1996. Management has elected to treat fees for years subsequent to 1996 as a contingent liability. At September 30, 2001 and December 31, 2000 the contingent liability for partnership administration fees totaled $353,956 and $298,068, respectively.

The DGP of Logan did not comply with RHS regulations regarding the handling of project cash during 2000. These instances of non-compliance were reported to the appropriate authorities during the first quarter of 2001. In addition, during the first quarter of 2001, the DGP made unauthorized withdrawals of project cash totaling $20,511. Also, project bank accounts have been pledged in violation of RHS regulations. During the third quarter 2001, MFP and the other general partners asked RHS to approve a substitute general partner. As of September 30, 2001 no decision had been made.

8. Guarantees

Each of the DGP's has made certain guarantees to the respective Property Partnership that they will compensate the Partnership in the event the actual low-income housing tax credit is less than 85% to 90% of the available credit. Through September 30, 2001, no payments have been made under the guarantee agreements.

Item 2. Management's Discussion and Analysis

Assisted Housing Fund L.P. I (the Partnership) is a limited partnership organized under the laws of the state of Washington.

The Partnership has invested as a limited partner in eleven other limited partnerships (Property Partnerships) which develop, own, and operate residential apartment complexes which benefit from some form of federal assistance programs and which qualify for low-income housing credits (Tax Credits) pursuant to the Internal Revenue Code by the Tax Reform Act of 1986.

The Partnership's general partner is Murphey Favre Properties, Inc., (MFP), a wholly-owned subsidiary of WM Financial, Inc. which is a wholly-owned subsidiary of Washington Mutual Bank (WMB).

The Partnership completed its public offering of units of limited partnership on April 14, 1989 with proceeds totaling $3,511,000 through the sale of 703 units. There are 334 limited partners and one General Partner in the Partnership.

Each Property Partnership has, as its general partner, one or more individuals or an entity not affiliated with the Partnership or MFP. In accordance with the Partnership Agreements under which such entities are organized, the Partnership depends on the DGP's for the management of each Property Partnership, with the exception of Logan Apartments Company Limited Partnership.

During the quarter, management's emphasis was on the continued operation of eleven properties placed in service. At September 30, 2001, four properties were 100% occupied, four properties were between 90% and 98% occupied, and three properties were between 83% and 88% occupied.

Results of Operations

On a consolidated basis, net income before depreciation and amortization for the third quarter 2001 was $29,633 compared with net income before depreciation and amortization in the third quarter of 2000 of $40,602. Rental revenues for the third quarter of 2001 were up 4.11% from the third quarter 2000 while the third quarter 2001 expenses including depreciation were up 5.9% from the third quarter 2000.

Liquidity and Capital Resources

The Partnership completed its public offering of units of limited partnership on April 14, 1989, with proceeds totaling $3,511,000 from 339 limited partners. The Partnership invested $2,542,000 of offering proceeds in eleven Property Partnerships.

Offering proceeds equal to $175,750 were reserved by the Partnership to fund its operating expenses. As of September 30, 2001, the cash reserves of the Partnership totaled $25,417. It is expected that the Partnership will draw on the reserves in future quarters to fund accounting and other operating expenses of the Partnership. Nominal cash distributions from the Property Partnerships will supplement the cash reserves. It is expected that all cash distributions received from the Property Partnerships will be used to defray the operating expenses of the Partnership and thus it is not likely any distribution will be made to the limited partners.

The Partnership is not required to fund additional amounts to the Property Partnerships based on each Property Partnership agreement. Additionally, each Property Partnership is operated as an individual project, and without any contractual arrangements of any kind between the Property Partnerships. In the third quarter 2001, four properties generated deficit cash flow and seven generated positive cash flow. The deficits were funded by cash reserves of the Property Partnerships.

Included in cash deposits on the consolidated balance sheets were $25,417 and $13,148, held as deposits by the Partnership in Washington Mutual Bank accounts as of September 30, 2001 and December 31, 2000, respectively. Washington Mutual Bank is affiliated with MFP, the general partner of the Partnership.

There are no additional acquisitions nor any dispositions planned.

PART II. OTHER INFORMATION

Except for the disclosures set forth below, all items under Part II are inapplicable or have a negative response and are therefore omitted.

Item 6. Exhibits and Reports on Form 10-Q

a.) Listing of Exhibits.

Exhibit No.		Incorporated by Reference From
3	Certificate of Limited Partnership	Exhibit C to Form S-11 Registration Statement No. 91.1391150
10	Material Contracts	Exhibit 10 to Form 10-K filed for year ended December 31, 1989
13	Annual Report to Security Holders	Exhibit 13 to Form 10-K filed for year ended December 31, 2000

Pursuant to the requirements 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.

Dated this 15th day of November, 2001.

		Assisted Housing Fund L.P. I By: Murphey Favre Properties, Inc. Its Managing General Partner
		HERBERT F. FOX /s/ Herbert F. Fox,Vice President and Principal Financial Officer

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Part I. Financial Information
Item 1. Financial Statements
ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES BALANCE SHEETS
ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES STATEMENT OF PARTNERS' EQUITY (DEFICIT)
ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES STATEMENTS OF OPERATIONS
ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES STATEMENTS OF CASH FLOWS
(Unaudited) ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Quarter Ended September 30, 2001
Item 2. Management's Discussion and Analysis
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 10-Q

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Assisted Housing Fund LP I Inactive 10-Q2001 Q3 Quarterly report

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