UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-13808
HOUSING PROGRAMS LIMITED
(A California Limited Partnership)
California 95-3906167
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
9090 Wilshire Blvd., Suite 201,
Beverly Hills, California 90211
(Address of former principal executive offices)
HOUSING PROGRAMS LIMITED
(a California limited partnership)
INDEX TO FORM 10-QSB
FOR THE QUARTER ENDED JUNE 30, 2002
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheet
June 30, 2002 1
Statements of Operations
Three and Six Months Ended June 30, 2002 and 2001 2
Statement of Partners' Deficiency
Six Months Ended June 30, 2002 3
Statements of Cash Flows
Six Months Ended June 30, 2002 and 2001 4
Notes to Financial Statements 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION 10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
EXHIBIT 14
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HOUSING PROGRAMS LIMITED
(a California limited partnership)
BALANCE SHEET
JUNE 30, 2002
(Unaudited)
ASSETS
Investments in limited partnerships (Note 2) $ --
Cash and cash equivalents 11,344
Total assets $ 11,344
LIABILITIES AND PARTNERS' DEFICIENCY
Liabilities:
Notes payable (Note 3) $ 4,600,000
Accrued fees due to affiliates (Note 4) 1,157,591
Accrued interest payable (Note 3) 7,105,664
Accounts payable 164,064
Advances due to affiliates 45,936
13,073,255
Commitments and Contingencies (Notes 4 and 5)
Partners' deficiency:
General partners (381,368)
Limited partners (12,680,543)
(13,061,911)
Total liabilities and partners' deficiency $ 11,344
The accompanying notes are an integral part of these financial statements.
HOUSING PROGRAMS LIMITED
(a California limited partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
INTEREST INCOME $ -- $ 1,736 $ 101 $ 6,027
OPERATING EXPENSES:
Management fees - partners (Note 4) 49,797 49,797 99,594 100,599
General and administrative (Note 4) 9,951 14,884 20,529 29,458
Legal and accounting 14,585 27,639 35,942 45,289
Interest 107,553 109,250 216,803 218,500
Total operating expenses 181,886 201,570 372,868 393,846
Loss from Partnership operations (181,886) (199,834) (372,767) (387,819)
Equity in loss of limited partnerships
(Note 2) -- (96,589) (30,462) (96,589)
Gain on sale of limited partnership
interest (Note 2) -- -- -- 65,000
Distributions from limited partnerships
recognized as income (Note 2) 11,343 11,201 11,343 11,201
Net loss $(170,543) $(285,222) $(391,886) $(408,207)
Net loss to general partners (1%) $ (1,705) $ (2,852) $ (3,919) $ (4,082)
Net loss to limited partners (99%) (168,838) (282,370) (387,967) (404,125)
$(170,543) $(285,222) $(391,886) $(408,207)
Net loss per limited partnership
interest (Note 1) $ (14) $ (23) $ (31) $ (33)
The accompanying notes are an integral part of these financial statements.
HOUSING PROGRAMS LIMITED
(a California limited partnership)
STATEMENT OF PARTNERS' DEFICIENCY
FOR THE SIX MONTHS ENDED JUNE 30, 2002
(Unaudited)
General Limited
Partners Partners Total
Partnership interests 12,368
Partners' deficiency,
January 1, 2002 $ (377,449) $(12,292,576) $(12,670,025)
Net loss for the six months
ended June 30, 2002 (3,919) (387,967) (391,886)
Partners' deficiency,
June 30, 2002 $ (381,368) $(12,680,543) $(13,061,911)
The accompanying notes are an integral part of these financial statements.
HOUSING PROGRAMS LIMITED
(a California limited partnership)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(Unaudited)
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(391,886) $(408,207)
Adjustments to reconcile net loss to net cash used in
operating activities:
Gain on sale of limited partnership interest -- (65,000)
Equity in loss of limited partnerships 30,462 96,589
Decrease in due from escrow -- 15,000
Increase (decrease) in:
Accrued interest payable 216,803 218,500
Accounts payable and accrued expenses 22,861 8,987
Accrued fees due to partners 109,020 (76,800)
Net cash used in operating activities (12,740) (210,931)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of partnership interests -- 65,000
Advances to properties -- (96,589)
Capital contributions (30,462) --
Net cash used in investing activities (30,462) (31,589)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Operating advances from affiliates 45,936 --
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,734 (242,520)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 8,610 372,546
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 11,344 $ 130,026
The accompanying notes are an integral part of these financial statements.
HOUSING PROGRAMS LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
The information contained in the following notes to the financial statements is
condensed from that which would appear in the annual audited financial
statements; accordingly, the financial statements included herein should be
reviewed in conjunction with the financial statements and related notes thereto
contained in the Housing Programs Limited (the "Partnership") annual report for
the year ended December 31, 2001. Accounting measurements at interim dates
inherently involve greater reliance on estimates than at year end. The results
of operations for the interim period presented are not necessarily indicative of
the results for the entire year.
In the opinion of the Partnership, the accompanying unaudited financial
statements contain all adjustments (consisting primarily of normal recurring
accruals) necessary to present fairly the financial position of the Partnership
at June 30, 2002 and the results of operations and changes in cash flows for the
three and six months then ended.
Organization
Housing Programs Limited (the "Partnership"), formed under the California
Uniform Limited Partnership Act, was organized on May 15, 1984. The Partnership
was formed to invest primarily in other limited partnerships which own or lease
and operate federal, state or local government-assisted housing projects. The
general partners of the Partnership are National Partnership Investments Corp.
("NAPICO" or the "Managing General Partner"), Coast Housing Investment
Associates (CHIA), a limited partnership, and Housing Programs Corporation II.
The general partners have a one percent interest in profits and losses of the
Partnership. The limited partners have the remaining 99 percent interest which
is allocated in proportion to their respective individual investments. NAPICO is
the managing general partner of the Partnership. Prior to March 11, 2002, Casden
Properties Inc. owned a 95.25% economic interest in NAPICO, with the balance
owned by Casden Investment Corporation ("CIC"). CIC, which is wholly owned by
Alan I. Casden, owned 95% of the voting common stock of NAPICO prior to March
11, 2002.
On December 3, 2001, Casden Properties Inc., entered into a merger agreement and
certain other transaction documents with Apartment Investment and Management
Company, a Maryland corporation ("AIMCO") and certain of its subsidiaries,
pursuant to which, on March 11, 2002, AIMCO acquired Casden Properties Inc. and
its subsidiaries, including 100% of the stock of NAPICO.
Basis of Presentation
The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America.
Method of Accounting for Investment in Limited Partnerships
The investments in local limited partnerships are accounted for on the equity
method. Acquisition, selection fees and other costs related to the acquisition
of the projects have been capitalized to the investment account and amortized on
a straight line basis over the estimated lives of the underlying assets, which
is generally 30 years.
Net Loss Per Limited Partnership Interest
Net loss per limited partnership interest was computed by dividing the limited
partners' share of net loss by the number of limited partnership interests
outstanding during the period. The number of limited partnership interests was
12,368 for the periods presented.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash money market mutual funds. The
Partnership has its cash and cash equivalents on deposit primarily with one
money market mutual fund. Such cash and cash equivalents are uninsured.
Impairment of Long-Lived Assets
The Partnership reviews long-lived assets to determine if there has been any
permanent impairment whenever events or changes in circumstances indicate that
the carrying amount of the asset may not be recoverable. If the sum of the
expected future cash flows is less than the carrying amount of the assets, the
Partnership recognizes an impairment loss.
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
As of June 30, 2002, the Partnership holds limited partnership interests in
seven limited partnerships, after selling its interest in one limited
partnership in January 2001. As of June 30, 2002, the seven limited partnerships
owned residential low income rental projects consisting of 1,153 apartment
units. The mortgage loans of these projects are payable to or insured by various
governmental agencies.
The Partnership, as a limited partner, is entitled to 99 percent of the profits
and losses of the local limited partnerships.
Equity in losses of local limited partnerships are recognized in the financial
statements until the limited partnership investment account is reduced to a zero
balance. Losses incurred after the limited partnership investment account is
reduced to zero are not recognized.
Distributions from the limited partnerships are recognized as a reduction of
capital until the investment balance has been reduced to zero or to a negative
amount equal to further capital contributions required. Subsequent distributions
are recognized as income.
The Partnership has no carrying value in investment in limited partnerships as
of June 30, 2002.
The following are unaudited combined estimated statements of operations for the
three and six months ended June 30, 2002 and 2001 for the limited partnerships
in which the Partnership has investments:
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Revenues
Rental and other $ 1,885,000 $ 1,892,000 $ 3,770,000 $ 3,784,000
Expenses
Depreciation 374,000 362,000 748,000 724,000
Interest 242,000 242,000 484,000 484,000
Operating 1,402,000 1,339,000 2,804,000 2,678,000
2,018,000 1,943,000 4,036,000 3,886,000
Net loss $ (133,000) $ (51,000) $ (266,000) $ (102,000)
NAPICO, or one of its affiliates, is the general partner and property management
agent for certain of the limited partnerships included above.
Under recent adopted law and policy, the United States Department of Housing and
Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment ("HAP") Contracts on a long term basis on the existing terms. In
connection with renewals of the HAP Contracts under such new law and policy, the
amount of rental assistance payments under renewed HAP Contracts will be based
on market rentals instead of above market rentals, which may be the case under
existing HAP Contracts. The payments under the renewed HAP Contracts may not be
in an amount that would provide sufficient cash flow to permit owners of
properties subject to HAP Contracts to meet the debt service requirements of
existing loans insured by the Federal Housing Administration of HUD ("FHA")
unless such mortgage loans are restructured. In order to address the reduction
in payments under HAP Contracts as a result of this new policy, the Multi-family
Assisted Housing Reform and Affordability Act of 1997 ("MAHRAA") provides for
the restructuring of mortgage loans insured by the FHA with respect to
properties subject to the Section 8 program. Under MAHRAA, an FHA-insured
mortgage loan can be restructured into a first mortgage loan which will be
amortized on a current basis and a low interest second mortgage loan payable to
FHA which will only be payable on maturity of the first mortgage loan. This
restructuring results in a reduction in annual debt service payable by the owner
of the FHA-insured mortgage loan and is expected to result in an insurance
payment from FHA to the holder of the FHA-insured loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties serving families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.
When the HAP Contracts are subject to renewal, there can be no assurance that
the local limited partnerships in which the Partnership has an investment will
be permitted to restructure its mortgage indebtedness under MAHRAA. In addition,
the economic impact on the Partnership of the combination of the reduced
payments under the HAP Contracts and the restructuring of the existing
FHA-insured mortgage loans under MAHRAA is uncertain.
During the six months ended June 30, 2001, the Partnership sold its interest in
one limited partnership for net proceeds of $65,000. The Partnership recognized
a gain from the sale equal to the net proceeds received because it had no
investment balance related to this partnership.
NOTE 3 - NOTES PAYABLE
Two of the Partnership's investments, Evergreen and Plaza Village, involved
purchases of partnership interests from partners who subsequently withdrew from
the operating partnership. The Partnership is obligated for non-recourse notes
payable of $4,600,000 to the sellers of the partnership interests, bearing
interest at 9.5 percent. The notes matured in December 1999. These obligations
and the related interest are collateralized by the Partnership's investment in
the investee limited partnerships and are payable only out of cash distributions
from the investee partnerships, as defined in the notes. Unpaid interest was due
at maturity of the notes.
All notes payable and related accrued interest payable aggregating $11,705,664
as of June 30, 2002 became payable prior to June 30, 2002. The Partnership has
not made any payments and is in default under the terms of the notes. Due to the
Partnership's lack of cash and partners' deficiency, there is substantial doubt
about its ability to make these payments, which would result in the possible
foreclosure of the two investments in the local limited partnerships. As a
result, there is substantial doubt about the Partnership's ability to continue
as a going concern.
Management is attempting to negotiate extensions of the maturity dates on the
notes payable.
NOTE 4 - FEES AND EXPENSES DUE TO GENERAL PARTNERS
Under the terms of the Restated Certificate and Agreement of the Limited
Partnership, the Partnership is obligated to the general partners for an annual
management fee equal to 0.5 percent of the original invested assets of the
limited partnerships. Invested assets is defined as the costs of acquiring
project interests including the proportionate amount of the mortgage loans
related to the Partnership's interests in the capital accounts of the respective
limited partnerships. For the six months ended June 30, 2002 and 2001, $99,594
and $100,599, respectively, has been expensed. The unpaid balance at June 30,
2002 is $1,157,591.
The Partnership reimburses NAPICO for certain expenses. The reimbursement to
NAPICO was $9,426 and $10,997 for the six months ended June 30, 2002 and 2001,
respectively, and is included in general and administrative expenses.
As of June 30, 2002, the fees and expenses due the general partners exceeded the
Partnership's cash. The general partners, during the forthcoming year, are not
expected to demand payment of amounts due in excess of such cash or such that
the Partnership would not have sufficient operating cash; however, the
Partnership will remain liable for all such amounts.
NOTE 5 - CONTINGENCIES
On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership interests in Real Estate Associates Limited III (an affiliated
partnership in which NAPICO is the managing general partner) and two investors
holding an aggregate of five units of limited partnership interest in Real
Estate Associates Limited VI (another affiliated partnership in which NAPICO is
the managing general partner) commenced an action in the United States District
Court for the Central District of California against the Partnership, NAPICO and
certain other affiliated entities. The complaint alleges that the defendants
breached their fiduciary duty to the limited partners of certain NAPICO managed
partnerships and made materially false and misleading statements in the consent
solicitation statements sent to the limited partners of such partnerships
relating to approval of the transfer of partnership interests in limited
partnerships, owning certain of the properties, to affiliates of Casden
Properties Inc., organized by an affiliate of NAPICO. The plaintiffs seek
equitable relief, as well as compensatory damages and litigation related costs.
On August 4, 1999, one investor holding one unit of limited partnership interest
in the Partnership commenced a virtually identical action in the United States
District Court for the Central District of California against the Partnership,
NAPICO and certain other affiliated entities. The second action has been
subsumed in the first action, which has been certified as a class action. On
August 21, 2001, plaintiffs filed a supplemental complaint, which added new
claims, including for a recission of the transfer of partnership interests and
an accounting. Trial is scheduled for October 1, 2002. The managing general
partner of such NAPICO managed partnerships and the other defendants believe
that the plaintiffs' claims are without merit and are vigorously contesting the
actions.
The holder of a purchase money promissory note issued by Cloverleaf limited
partnership, one of the Partnership's investments, in the amount of $845,000
plus accrued interest payable of $1,130,000 as of June 30, 2002, filed a
foreclosure action against the Cloverleaf limited partnership. The Partnership
and other defendants have answered the complaint and intend to vigorously defend
this action. The Partnership has no investment balance related to this Local
Partnership.
The holders of three cash flow notes issued by Oshtemo Limited Dividend Housing
Association, one of the Partnership's investments, with an aggregate principal
balance of $3,825,000 have filed a suit to reduce the notes to judgment and
foreclose on the Partnership's interest in this limited partnership. Settlement
discussions have begun; however, there is no guarantee that a settlement will be
reached. The Partnership has no investment balance related to this limited
partnership.
NAPICO is a plaintiff in various lawsuits and has also been named as defendant
in other lawsuits arising from transactions in the ordinary course of business.
In the opinion of NAPICO, the claims will not result in any material liability
to the Partnership.
NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about Fair
Value of Financial Instruments," requires disclosure of fair value information
about financial instruments, when it is practicable to estimate that value. The
notes payable are collateralized by the Partnership's investments in investee
limited partnerships, which account for the Partnership's primary source of
revenues, are subject to various government rules, regulations and restrictions
which make it impracticable to estimate the fair value of the notes and related
accrued interest payable. It is impracticable to estimate the fair value of the
amounts due to affiliates due to their related party nature. The carrying amount
of other assets and liabilities reported on the balance sheets that require such
disclosure approximates fair value due to their short-term maturity.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Liquidity and Capital Resources
The Partnership's primary sources of funds include interest income on money
market accounts and distributions from limited partnerships in which the
Partnership has invested. It is not expected that any of the local limited
partnerships in which the Partnership has invested will generate cash flow
sufficient to provide for distributions to the Partnership's limited partners in
any material amount.
Results of Operations
Partnership revenues consist primarily of interest income earned on investment
of funds. The Partnership also receives distributions from the lower-tier
limited partnerships in which it has invested.
Distributions received from limited partnerships are recognized as return of
capital until the investment balance has been reduced to zero or to a negative
amount equal to future capital contributions required. Subsequent distributions
received are recognized as income.
Except for investing cash in money market funds, the Partnership's investments
consist entirely of interests in other limited partnerships owning
government-assisted housing projects. Available cash not invested in local
limited partnerships is invested in these money market funds to provide interest
income as reflected in the statements of operations. These funds can be
converted to cash to meet obligations as they arise. The Partnership intends to
continue investing available funds in this manner.
An annual management fee is payable to the general partners of the Partnership
and is calculated at 0.5 percent of the Partnership's invested assets. The
management fee is paid to the general partners for their continuing management
of partnership affairs. The fee is payable beginning with the month following
the Partnership's initial investment in a local limited partnership. Management
fees were $99,594 and $100,599 for the six months ended June 30, 2002 and 2001,
respectively.
Two of the Partnership's investments, Evergreen and Plaza Village, involved
purchases of partnership interests from partners who subsequently withdrew from
the operating partnership. The Partnership is obligated for non-recourse notes
payable of $4,600,000 to the sellers of the partnership interests, bearing
interest at 9.5 percent. The notes matured in December 1999. These obligations
and the related interest are collateralized by the Partnership's investment in
the investee limited partnerships and are payable only out of cash distributions
from the investee partnerships, as defined in the notes. Unpaid interest was due
at maturity of the notes.
All notes payable and related accrued interest payable aggregating $11,705,664
as of June 30, 2002 became payable prior to June 30, 2002. The Partnership has
not made any payments and is in default under the terms of the notes. Due to the
Partnership's lack of cash and partners' deficiency, there is substantial doubt
about its ability to make these payments, which would result in the possible
foreclosure of the two investments in the local limited partnerships. As a
result, there is substantial doubt about the Partnership's ability to continue
as a going concern.
Management is attempting to negotiate extensions of the maturity dates on the
notes payable.
Operating expenses, other than management fees and interest expense, consist of
legal and accounting fees for services rendered to the Partnership and
administrative expenses, which were generally consistent for the periods
presented. Legal and accounting fees were $35,942 and $45,289 for the six months
ended June 30, 2002 and 2001, respectively. General and administrative expenses
were $20,529 and $29,458 for the periods ended June 30, 2002 and 2001,
respectively.
The Partnership accounts for its investments in the local limited partnerships
on the equity method, thereby adjusting its investment balance by its
proportionate share of the income or loss of the local limited partnerships.
Losses incurred after the limited partnership investment account is reduced to
zero are not recognized.
Under recent adopted law and policy, the United States Department of Housing and
Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment ("HAP") Contracts on a long term basis on the existing terms. In
connection with renewals of the HAP Contracts under such new law and policy, the
amount of rental assistance payments under renewed HAP Contracts will be based
on market rentals instead of above market rentals, which may be the case under
existing HAP Contracts. The payments under the renewed HAP Contracts may not be
in an amount that would provide sufficient cash flow to permit owners of
properties subject to HAP Contracts to meet the debt service requirements of
existing loans insured by the Federal Housing Administration of HUD ("FHA")
unless such mortgage loans are restructured. In order to address the reduction
in payments under HAP Contracts as a result of this new policy, the Multi-family
Assisted Housing Reform and Affordability Act of 1997 ("MAHRAA") provides for
the restructuring of mortgage loans insured by the FHA with respect to
properties subject to the Section 8 program. Under MAHRAA, an FHA-insured
mortgage loan can be restructured into a first mortgage loan which will be
amortized on a current basis and a low interest second mortgage loan payable to
FHA which will only be payable on maturity of the first mortgage loan. This
restructuring results in a reduction in annual debt service payable by the owner
of the FHA-insured mortgage loan and is expected to result in an insurance
payment from FHA to the holder of the FHA-insured loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties serving families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.
When the HAP Contracts are subject to renewal, there can be no assurance that
the local limited partnerships in which the Partnership has an investment will
be permitted to restructure its mortgage indebtedness under MAHRAA. In addition,
the economic impact on the Partnership of the combination of the reduced
payments under the HAP Contracts and the restructuring of the existing
FHA-insured mortgage loans under MAHRAA is uncertain.
During the six months ended June 30, 2001, the Partnership sold its interest in
one limited partnership for net proceeds of $65,000. The Partnership recognized
a gain from the sale equal to the net proceeds received because it had no
investment balance related to this partnership.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership interests in Real Estate Associates Limited III (an affiliated
partnership in which NAPICO is the managing general partner) and two investors
holding an aggregate of five units of limited partnership interest in Real
Estate Associates Limited VI (another affiliated partnership in which NAPICO is
the managing general partner) commenced an action in the United States District
Court for the Central District of California against the Partnership, NAPICO and
certain other affiliated entities. The complaint alleges that the defendants
breached their fiduciary duty to the limited partners of certain NAPICO managed
partnerships and made materially false and misleading statements in the consent
solicitation statements sent to the limited partners of such partnerships
relating to approval of the transfer of partnership interests in limited
partnerships, owning certain of the properties, to affiliates of Casden
Properties Inc., organized by an affiliate of NAPICO. The plaintiffs seek
equitable relief, as well as compensatory damages and litigation related costs.
On August 4, 1999, one investor holding one unit of limited partnership interest
in the Partnership commenced a virtually identical action in the United States
District Court for the Central District of California against the Partnership,
NAPICO and certain other affiliated entities. The second action has been
subsumed in the first action, which has been certified as a class action. On
August 21, 2001, plaintiffs filed a supplemental complaint, which added new
claims, including for a recission of the transfer of partnership interests and
an accounting. Trial is scheduled for October 1, 2002. The managing general
partner of such NAPICO managed partnerships and the other defendants believe
that the plaintiffs' claims are without merit and are vigorously contesting the
actions.
The holder of a purchase money promissory note issued by Cloverleaf Limited
Partnership, one of the Partnership's investments, in the amount of $845,000
plus accrued interest payable of $1,130,000 as of June 30, 2002, filed a
foreclosure action against the Cloverleaf limited partnership. The Partnership
and other defendants have answered the complaint and intend to vigorously defend
this action. The Partnership has no investment balance related to this Local
Partnership.
The holders of three cash flow notes issued by Oshtemo Limited Dividend Housing
Association, one of the Partnership's investments, with an aggregate principal
balance of $3,825,000 have filed a suit to reduce the notes to judgment and
foreclose on the Partnership's interest in this limited partnership. Settlement
discussions have begun; however, there is no guarantee that a settlement will be
reached. The Partnership has no investment balance related to this limited
partnership.
As of June 30, 2002, NAPICO was a plaintiff or defendant in various lawsuits.
None of these suits are related to the Partnership. In the opinion of NAPICO,
the claims will not result in any material liability to the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 3, Restated Certificate and Agreement of Limited
Partnership dated May 15, 1984 filed with the Securities and
Exchange Commission Form S-11 No. 2-92352, which is hereby
incorporated by reference.
Exhibit 99, Certification of Chief Executive Officer and
Chief Financial Officer.
b) Reports on Form 8-K:
None filed during the quarter ended June 30, 2002.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
HOUSING PROGRAMS LIMITED
(a California limited partnership)
By: National Partnership Investments Corp.
General Partner
By: /s/Charles H. Boxenbaum
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer
By: /s/Brian H. Shuman
Brian H. Shuman
Chief Financial Officer
Date: August 19, 2002
Exhibit 99
Certification of CEO and CFO
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-QSB of Housing Programs Ltd.
(the "Partnership"), for the quarterly period ended June 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"),
Charles H. Boxenbaum, as the equivalent of the Chief Executive Officer of the
Partnership, and Brian H. Shuman, as the equivalent of the Chief Financial
Officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Partnership.
/s/ Charles H. Boxenbaum
Name: Charles H. Boxenbaum
Date: August 19, 2002
/s/ Brian H. Shuman
Name: Brian H. Shuman
Date: August 19, 2002
This certification accompanies the Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Partnership for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.