June 29, 2001 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Boston Financial Qualified Housing Tax Credits L.P. V Annual Report on Form 10-K for the Year Ended March 31, 2001 File Number 0-19706 Dear Sir / Madam: Pursuant to the requirements of section 15(d) of the Securities Exchange Act of 1934, filed herewith is one copy of subject report. Very truly yours, /s/Stephen Guilmette Stephen Guilmette Assistant Controller QH510K-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2001 ----------------------------------------------- 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 0-19706 Boston Financial Qualified Housing Tax Credits L.P. V - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Massachusetts 04-3054464 - ----------------------------------------- ------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 101 Arch Street, Boston, MA 02110-1106 - -------------------------------------- ------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 439-3911 -------------------------- Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered ------------------- --------------------------- None None Securities registered pursuant to Section 12(g) of the Act: UNITS OF LIMITED PARTNERSHIP INTEREST (Title of Class) 100,000 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 (Subsection 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] State the aggregate sales price of partnership units held by non-affiliates of the registrant. $60,904,650 as of March 31, 2001 DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K 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. Part of Report on Form 10-K into Which the Document Documents incorporated by reference is Incorporated Post-effective amendments No. 1 - 5 to the Form S-11 Registration Statement, File # 33-29935 Part I, Item 1 Acquisition Reports Part I, Item 1 Post-effective amendment No. 6 to the Registration Statement on Form S-11, File # 33-29935 Part III, Item 12 Prospectus - Sections Entitled: "Investment objectives and Policies - Principal Investment Policies" Part I, Item 1 "Estimated Use of Proceeds" Part III, Item 13 "Management Compensations and Fees" Part III, Item 13 "Profits and Losses for Tax Purposes, Tax Credits and Cash Distributions" Part III, Item 13 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 2001 TABLE OF CONTENTS Page No. PART I Item 1 Business K-3 Item 2 Properties K-6 Item 3 Legal Proceedings K-12 Item 4 Submission of Matters to a Vote of Security Holders K-12 PART II Item 5 Market for the Registrant's Units and Related Security Holder Matters K-13 Item 6 Selected Financial Data K-14 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations K-14 Item 7A. Quantitative and Qualitative Disclosures about Market Risk K-17 Item 8 Financial Statements and Supplementary Data K-17 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure K-17 PART III Item 10 Directors and Executive Officers of the Registrant K-18 Item 11 Management Remuneration K-19 Item 12 Security Ownership of Certain Beneficial Owners and Management K-19 Item 13 Certain Relationships and Related Transactions K-19 Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K K-22 SIGNATURES K-23 - ---------- PART I Item 1. Business Boston Financial Qualified Housing Tax Credits L.P. V (the "Partnership") is a Massachusetts limited partnership formed on June 16, 1989 under the laws of the State of Massachusetts. The Partnership's partnership agreement ("Partnership Agreement") authorized the sale of up to 100,000 units of Limited Partnership Interest ("Units") at $1,000 per Unit, adjusted for certain discounts. The Partnership raised $68,928,650 ("Gross Proceeds"), net of discounts of $350, through the sale of 68,929 Units. Such amounts exclude five unregistered Units previously acquired for $5,000 by the Initial Limited Partner, which is also one of the General Partners. The offering of Units terminated on August 31, 1991. No further sale of Units is expected. The Partnership is engaged solely in the business of real estate investment. Accordingly, a presentation of information about industry segments is not applicable and would not be material to an understanding of the Partnership's business taken as a whole. The Partnership has invested as a limited partner in other limited partnerships ("Local Limited Partnerships") which own and operate residential apartment complexes ("Properties") some of which benefit from some form of federal, state or local assistance programs and all of which qualify for the low-income housing tax credits ("Tax Credits") added to the Internal Revenue Code (the "Code") by the Tax Reform Act of 1986. The investment objectives of the Partnership include the following: (i) to provide current tax benefits in the form of Tax Credits which qualified limited partners may use to offset their federal income tax liability; (ii) to preserve and protect the Partnership's capital; (iii) to provide limited cash distributions from property operations which are not expected to constitute taxable income during the expected duration of the Partnership's operations; and (iv) to provide cash distributions from sale or refinancing transactions. There cannot be any assurance that the Partnership will attain any or all of these investment objectives. A more detailed discussion of these investment objectives, along with the risks in achieving them, is contained in the section of the prospectus entitled "Investment Objectives and Policies - Principal Investment Policies" which is herein incorporated by this reference. Table A on the following page lists the Properties originally acquired by the Local Limited Partnerships in which the Partnership has invested. Item 7 of this Report contains other significant information with respect to the Local Limited Partnerships. As required by applicable rules, the terms of the acquisition of each Local Limited Partnership interest have been described in supplements to the Prospectus and collected in the post-effective amendments to the Registration Statement listed in Part IV of this Report (collectively, the "Acquisition Reports"); such descriptions are incorporated herein by this reference. TABLE A SELECTED LOCAL LIMITED PARTNERSHIP DATA Date Properties Owned by Local Interest Limited Partnerships Location Acquired - --------------------------------- ----------------------- -------------- Strathern Park/Lorne Park (1)* Los Angeles, CA 07/05/90 Park Caton Catonsville, MD 08/17/90 Cedar Lane I London, KY 09/10/90 Silver Creek II Berea, KY 08/15/90 Rosecliff Sanford, FL 09/18/90 Brookwood Ypsilanti, MI 10/01/90 Oaks of Dunlop Colonial Heights, VA 01/01/91 Water Oak Orange City, FL 01/01/91 Yester Oaks Lafayette, GA 01/01/91 Ocean View Fernandina Beach, FL 01/01/91 Wheeler House (2) Nashua, NH 01/01/91 Archer Village Archer, FL 01/01/91 Timothy House Towson, MD 03/05/91 Westover Station Newport News, VA 03/30/91 Carib III St. Croix, VI 03/21/91 Carib II St. Croix, VI 03/01/91 Whispering Trace Woodstock, GA 05/01/91 New Center Detroit, MI 06/27/91 Huguenot Park* New Paltz, NY 06/26/91 Hillwood Pointe Jacksonville, FL 07/19/91 Pinewood Pointe Jacksonville, FL 07/31/91 Westgate Bismark, ND 07/25/91 Woodlake Hills Pontiac, MI 08/01/91 Bixel House Los Angeles, CA 07/31/91 Magnolia Villas North Hollywood, CA 07/31/91 Schumaker Place Salisbury, MD 09/20/91 Circle Terrace Lansdowne, MD 12/06/91 * The Partnership's interest in profits and losses of each Local Limited Partnership arising from normal operations is 99%, except for a 95% interest in Strathern Park/Lorne Park Apartments and an 88.55% interest in Huguenot Park. Profits and losses arising from sale or refinancing transactions are allocated in accordance with the respective Local Limited Partnership Agreements. (1) On January 1, 1994, Lorne Park merged into Strathern Park in a business combination accounted for as a pooling of interests. Lorne Park's total assets, liabilities and partners' equity were combined with Strathern Park at their existing book value, and neither partnership recognized a gain or loss on the merger. (2) The Partnership no longer has an interest in this Local Limited Partnership. Although the Partnership's investments in Local Limited Partnerships are not subject to seasonal fluctuations, the Partnership's equity in losses of Local Limited Partnerships, to the extent it reflects the operations of individual Properties, may vary from quarter to quarter based upon changes in occupancy and operating expenses as a result of seasonal factors. Each Local Limited Partnership has, as its general partners ("Local General Partners"), one or more individuals or entities not affiliated with the Partnership or its General Partners. In accordance with the partnership agreements under which such entities are organized ("Local Limited Partnership Agreements"), the Partnership depends on the Local General Partners for the management of each Local Limited Partnership. As of March 31, 2001, the following Local Limited Partnerships have a common Local General Partner or affiliated group of Local General Partners accounting for the specified percentage of the capital contributions to Local Limited Partnerships: (i) Timothy House Limited Partnership and Maiden Choice Limited Partnership, representing 10.07%, have Shelter Development Corp. as Local General Partner; (ii) Cobblestone Place Townhomes, A Limited Partnership, Kensington Place Townhomes, A Limited Partnership and Whispering Trace Apartments, A Limited Partnership, representing 11.92%, have Flournoy Development Co. as Local General Partner; (iii) Silver Creek II, Ltd. and Cedar Lane I, Ltd., representing 0.87%, have Robinson A. Williams as Local General Partner; (iv) Water Oak Apartment, L.P., Yester Oaks, L.P., Archer Village, Ltd. and Ocean View Apartments, L.P., representing 2.02%, have Seals & Associates, Inc. & E. Lamar Seals as Local General Partners; (v) Bixel House, A California Limited Partnership and Harmony Apartments, A California Limited Partnership, representing 7.07%, have Julian Weinstock Construction Co., Inc. as Local General Partner; and (vi) St. Croix II Limited Partnership and Christiansted Limited Dividend Housing Association, representing 1.21%, have First Centrum Corp. as Local General Partner. The Local General Partners of the remaining Local Limited Partnerships are identified in the Acquisition Reports, which are incorporated herein by this reference. The Properties owned by the Local Limited Partnerships in which the Partnership has invested are, and will continue to be, subject to competition from existing and future apartment complexes in the same areas. The continued success of the Partnership will depend on many outside factors, most of which are beyond the control of the Partnership and cannot be predicted at this time. Such factors include general economic and real estate market conditions, both on a national basis and in those areas where the Properties are located, the availability and cost of borrowed funds, real estate tax rates, operating expenses, energy costs and government regulations. In addition, other risks inherent in real estate investment may influence the ultimate success of the Partnership, including: (i) possible reduction in rental income due to an inability to maintain high occupancy levels or adequate rental levels; (ii) possible adverse changes in general economic conditions and local conditions, such as competitive over-building or a decrease in employment or adverse changes in real estate laws, including building codes; and (iii) the possible future adoption of rent control legislation which would not permit increased costs to be passed on to the tenants in the form of rent increases or which suppress the ability of the Local Limited Partnerships to generate operating cash flow. Since most of the Properties benefit from some form of government assistance, the Partnership is subject to the risks inherent in that area including decreased subsidies, difficulties in finding suitable tenants and obtaining permission for rent increases. In addition, any Tax Credits allocated to investors with respect to a Property are subject to recapture to the extent that the Property or any portion thereof ceases to qualify for the Tax Credits. Other future changes in federal and state income tax laws affecting real estate ownership or limited partnerships could have a material and adverse affect on the business of the Partnership. The Partnership is managed by Arch Street VIII, Inc., the Managing General Partner of the Partnership. The other General Partner of the Partnership is Arch Street V Limited Partnership. The Partnership, which does not have any employees, reimburses Lend Lease Real Estate Investments, Inc., ("Lend Lease"), an affiliate of the General Partner, for certain expenses and overhead costs. A complete discussion of the management of the Partnership is set forth in Item 10 of this Report. Item 2. Properties The Partnership owns limited partnership interests in twenty-six Local Limited Partnerships which own and operate Properties, some of which benefit from some form of federal, state or local assistance programs and all of which qualify for the Tax Credits added to the Code by the Tax Reform Act of 1986. The Partnership's ownership interest in each Local Limited Partnership is generally 99%, except for Strathern Park/Lorne Park, Westgate and Huguenot Park, where the Partnership's ownership interests are 95%, 49.5% and 88.55%, respectively. Each of the Local Limited Partnerships has received an allocation of Tax Credits from its relevant state tax credit agency. In general, the Tax Credit runs for ten years from the date the Property is placed in service. The required holding period (the "Compliance Period") of the properties is fifteen years. During these fifteen years, the properties must satisfy rent restrictions, tenant income limitations and other requirements, as promulgated by the Internal Revenue Service, in order to maintain eligibility for the Tax Credit at all times during the Compliance Period. Once a Local Limited Partnership has become eligible for the Tax Credits, it may lose such eligibility and suffer an event of recapture if its Property fails to remain in compliance with the requirements. To date, none of the Local Limited Partnerships have suffered an event of recapture of Tax Credits. In addition, some of the Local Limited Partnerships have obtained one or a combination of different types of loans such as: i) below market rate interest loans; ii) loans provided by a redevelopment agency of the town or city in which the Property is located at favorable terms; and iii) loans that have repayment terms that are based on a percentage of cash flow. The schedule on the following pages provide certain key information on the Local Limited Partnership interests acquired by the Partnership. Capital Contributions Total Paid Mortgage loans Occupancy Local Limited Partnership Number Committed at through payable at Type At Property Name Of March 31, March 31, December 31, of March 31, Property Location Apt. Units 2001 2001 2000 Subsidy* 2001 - ---------------------------------- ----------- -------------- ----------- ------------- ---------- ---------------- Strathern Park/Lorne Park, a California Limited Partnership (1) Strathern Park/Lorne Park Los Angeles, CA 241 $8,418,667 $8,418,667 $17,278,198 None 100% Maiden Choice Limited Partnership Park Caton Catonsville, MD 101 2,513,300 2,513,300 1,988,644 None 98% Cedar Lane I, Ltd. Cedar Lane I London, KY 36 288,587 288,587 1,090,974 None 100% Silver Creek II, Ltd. Silver Creek II Berea, KY 24 193,278 193,278 764,617 None 100% Tompkins/Rosecliff, Ltd. Rosecliff Sanford, FL 168 3,604,720 3,604,720 5,499,061 None 89% Brookwood L.D.H.A. Brookwood Ypsilanti, MI 81 2,373,295 2,373,295 2,971,874 None 96% Water Oak Apartment, L.P. Water Oak Orange City, FL 40 293,519 293,519 1,249,946 None 100% Capital Contributions Total Paid Mortgage loans Occupancy Local Limited Partnership Number Committed at through payable at Type at Property Name Of March 31, March 31, December 31, of March 31, Property Location Apt. Units 2001 2001 2000 Subsidy* 2001 - ---------------------------------- ----------- ------------ ---------- ------------ ------------- -------------- Yester Oaks, L.P. Yester Oaks Lafayette, GA 44 319,254 319,254 1,279,845 FmHA 100% Ocean View Apartments, L.P. Ocean View Fernandina Beach, FL 42 334,177 334,177 1,360,042 None 98% Burbank Limited Partnership I (2) Wheeler House Nashua, NH Archer Village, Ltd. Archer Village Archer, FL 24 171,380 171,380 704,791 FmHA 92% The Oaks of Dunlop Farms, L.P. Oaks of Dunlop Colonial Heights, VA 144 2,791,280 2,791,280 4,396,866 None 99% Timothy House Limited Partnership Timothy House Towson, MD 112 3,064,250 3,064,250 2,011,764 None 100% Westover Station Associates, L.P. Westover Station Newport News, VA 108 1,972,947 1,972,947 2,644,818 None 99% Capital Contributions Total Paid Mortgage loans Occupancy Local Limited Partnership Number Committed at through payable at Type at Property Name of March 31, March 31, December 31, of March 31, Property Location Apt. Units 2001 2001 2000 Subsidy* 2001 - ---------------------------------- ----------- ------------ ---------- ------------ -------------- ---------------- Christiansted Limited Dividend Housing Association Carib III St. Croix, VI 24 322,260 322,260 1,474,511 FmHA 75% St. Croix II Limited Partnership Carib II St. Croix, VI 20 347,680 347,680 1,395,703 FmHA 75% Whispering Trace Apartments, A Limited Partnership Whispering Trace Woodstock, GA 40 1,093,330 1,093,330 1,339,400 None 85% Historic New Center Apartments Limited Partnership New Center Detroit, MI 104 3,077,187 3,077,187 2,893,812 Section 8 84% Huguenot Park Associates, L.P. Huguenot Park New Paltz, NY 24 982,358 982,358 1,400,000 None 100% Cobblestone Place Townhomes, A Limited Partnership Hillwood Pointe Jacksonville, FL 100 2,356,133 2,356,133 2,847,051 None 98% Kensington Place Townhomes, A Limited Partnership Pinewood Pointe Jacksonville, FL 136 3,153,173 3,153,173 3,854,826 None 96% Capital Contributions Total Paid Mortgage loans Occupancy Local Limited Partnership Number Committed at through payable at Type At Property Name of March 31, March 31, December 31, of March 31, Property Location Apt. Units 2001 2001 2000 Subsidy* 2001 - ---------------------------------- ----------- ----------- ------------- ---------- -------------- ---------------- Westgate Apartments Limited Partnership Westgate Bismark, ND 60 935,893 935,893 1,550,394 None 97% Woodlake Hills Limited Partnership Woodlake Hills Pontiac, MI 144 4,154,667 4,154,667 3,733,699 None 98% Bixel House, a California Limited Partnership Bixel House Los Angeles, CA 76 710,677 710,677 1,042,584 Section 8 96% Harmony Apartments, a California Limited Partnership Magnolia Villas North Hollywood, CA 65 3,203,996 3,203,996 2,171,145 None 100% Schumaker Place Associates, L.P. Schumaker Place Salisbury, MD 96 2,910,453 2,910,453 2,878,608 None 98% Circle Terrace Associates Limited Partnership Circle Terrace Lansdowne, MD 303 5,811,237 5,811,237 6,320,406 Section 8 98% ------- ------------ ------------ ------------- 2,357 $ 55,397,698 $ 55,397,698 $ 76,143,579 ======= ============ ============ ============= * FmHA This subsidy, which is authorized under Section 515 of the Housing Act of 1949, can be one or a combination of different types of financing. For instance, FmHA may provide: 1) direct below-market-rate mortgage loans for rural rental housing; 2) mortgage interest subsidies which effectively lower the interest rate of the loan to 1%; 3) a rental assistance subsidy to tenants which allows them to pay no more than 30% of their monthly income as rent with the balance paid by the federal government; or 4) a combination of any of the above. Section 8 This subsidy, which is authorized under Section 8 of Title II of the Housing and Community Development Act of 1974, allows qualified low-income tenants to pay 30% of their monthly income as rent with the balance paid by the federal government. (1) On January 1, 1994, Lorne Park merged into Strathern Park in a business combination accounted for as a pooling of interests. Lorne Park's total assets, liabilities and partners' equity were combined with Strathern Park at their existing book value, and neither partnership recognized a gain or loss on the merger. The combined Partnerships constructed a 241 Unit apartment project (Lorne Park: 72 Units, Strathern Park: 169 Units) for tenants whose income is very low to moderate. (2) The Partnership no longer has an interest in this Local Limited Partnership. Two Local Limited Partnerships invested in by the Partnership each represent more than 10% of the total capital contributions to be made to Local Limited Partnerships by the Partnership. The first is Strathern Park/Lorne Park, a California Limited Partnership. Strathern Park/Lorne Park, representing 15.20% of the total capital contributions to Local Limited Partnerships, is a 241-unit apartment complex located in Los Angeles, California. Strathern Park/Lorne Park is financed by a combination of private and public sources, including a first mortgage at 9.41% interest and 30 year term with California Community Reinvestment Corporation, a consortium of private lenders. Secondary financing has a term of 40 years and is provided by the Community Redevelopment Agency of the City of Los Angeles and a U.S. Housing and Urban Development Action Grant, with payments made from the residual receipts of the project. The other Local Limited Partnership which represents more than 10% of the total capital contributions made to Local Limited Partnerships is Circle Terrace Associates Limited Partnership. Circle Terrace, representing 10.49% of the total capital contributions to Local Limited Partnerships, is a substantially renovated 303-unit apartment complex located in Lansdowne, Maryland with 23 garden-style buildings and a newly-constructed community building. All of the units at Circle Terrace benefit from Section 8 Loan Management Set Aside Program. Additionally, Circle Terrace assumed a HUD Section 236 mortgage and financing by Crestar of Richmond Virginia, Inc. and by Maryland's Department of Housing and Community Rental Housing Program. The Property also has a loan financed by Baltimore County's Community Development Block Grant program, and it received weatherization funds from the U.S. Department of Energy. Duration of leases for occupancy in the Properties described above is generally six to twelve months. The Managing General Partner believes the Properties described herein are adequately covered by insurance. Additional information required under this Item, as it pertains to the Partnership, is contained in Items 1, 7 and 8 of this Report. Item 3. Legal Proceedings The Partnership is not a party to any pending legal or administrative proceeding. However, Tompkins/Rosecliff, Ltd. which owns a property in Sanford, Florida, had been involved in certain litigation with an entity formerly affiliated with this Partnership and its previous local general partner. A settlement agreement was agreed upon in July 1999 totaling $200,000, of which the Partnership's share was $100,000. In the opinion of Management, this was an appropriate settlement, which it believes will eliminate the risk of foreclosure and recapture posed by this litigation. Item 4. Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ None. PART II Item 5. Market for the Registrant's Units and Related Security Holder Matters There is no public market for the Units, and it is not expected that a public market will develop. If a Limited Partner desires to sell Units, the buyer of those Units will be required to comply with the minimum purchase and retention requirements and investor suitability standards imposed by applicable federal or state securities laws and the minimum purchase and retention requirements imposed by the Partnership. The price to be paid for the Units, as well as the commissions to be received by any participating broker-dealers, will be subject to negotiation by the Limited Partner seeking to sell his Units. Units will not be redeemed or repurchased by the Partnership. The Partnership Agreement does not impose on the Partnership or its General Partners any obligation to obtain periodic appraisals of assets or to provide Limited Partners with any estimates of the current value of Units. As of June 18, 2001, there were 3,243 record holders of Units of the Partnership. Cash distributions, when made, are paid annually. No cash distributions were paid for the years ended March 31, 2001, 2000 and 1999. Item 6. Selected Financial Data The following table sets forth selected financial information regarding the Partnership's financial position and operating results. This information should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the Financial Statements and Notes thereto, which are included in Items 7 and 8 of this Report. March 31, March 31, March 31, March 31, March 31, 2001 2000 1999 1998 1997 ------------- -------------- ------------- ------------- -------------- Revenue $ 571,148 $ 235,508 $ 281,041 $ 222,072 $ 204,683 Equity in losses of Local Limited Partnerships (2,223,252) (2,576,356) (2,932,545) (4,921,903) (4,044,413) Net loss (2,334,459) (3,006,310) (3,371,589) (5,794,498) (4,337,761) Per Limited Partnership Unit (A) (33.53) (43.18) (48.42) (83.22) (62.30) Cash and cash equivalents 573,599 392,154 303,666 100,850 449,567 Marketable securities 2,481,341 2,332,268 2,666,281 3,064,717 2,840,127 Investment in Local Limited Partnerships 16,317,830 18,818,290 21,538,791 24,748,484 30,531,768 Total assets (B) 19,547,782 21,702,984 24,862,400 28,092,950 33,871,495 Total liabilities 398,597 295,987 405,479 286,362 298,276 Other data: Passive loss (C) (4,614,949) (4,835,075) (5,120,476) (5,324,956) (5,154,301) Per Limited Partnership Unit (A,C) (66.28) (69.44) (73.54) (76.48) (74.03) Portfolio income (C) 372,581 325,210 340,850 361,519 281,707 Per Limited Partnership Unit (A,C) 5.35 4.67 4.90 5.19 4.05 Low-Income Housing Tax Credit (C) 10,449,103 10,510,853 10,405,744 10,512,076 10,512,996 Per Limited Partnership Unit (A,C) 150.08 150.96 150.97 150.98 150.99 Local Limited Partnership interests owned at end of period (D) 26 26 27 27 27 (A) Per Limited Partnership Unit data is based upon 68,929 outstanding Units. (B) Total assets include the net investment in Local Limited Partnerships. (C) Income tax information is as of December 31, the year end of the Partnership for income tax purposes. (D) In January 2000, the Partnership wrote off the foreclosed Wheeler House property. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - ------------------------------------------------------------------------------- Certain matters discussed herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Partnership intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statement and are including this statement for purposes of complying with these safe harbor provisions. Although the Partnership believes the forward-looking statements are based on reasonable assumptions, the Partnership can give no assurance that their expectations will be attained. Actual results and timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, without limitation, general economic and real estate conditions and interest rates. Liquidity and capital resources At March 31, 2001, the Partnership had cash and cash equivalents of $573,599, compared with $392,154 at March 31, 2000. The increase is attributable to proceeds from sales and maturities of marketable securities and cash distributions received from Local Limited Partnerships, partially offset by purchases of marketable securities, net cash used for operations and an advance made to one Local Limited Partnership. Approximately $2,254,000 has been designated as Reserves by the Managing General Partner. The Reserves were established to be used for working capital of the Partnership and contingencies related to the ownership of Local Limited Partnership interests. Management believes that the investment income earned on the Reserves, along with cash distributions received from Local Limited Partnerships, to the extent available, will be sufficient to fund the Partnership's ongoing operations and any contingencies that may arise. Reserves may be used to fund Partnership operating deficits, if the Managing General Partner deems funding appropriate. In the event a Local Limited Partnership encounters operating difficulties requiring additional funds, the Partnership might deem it in its best interests to provide such funds, voluntarily, in order to protect its investment. To date, the Partnership has advanced approximately $328,000 to Local Limited Partnerships to fund operating deficits. Since the Partnership invests as a limited partner, the Partnership has no contractual duty to provide additional funds to Local Limited Partnerships beyond its specified investment. Thus, at March 31, 2001, the Partnership had no contractual or other obligation to any Local Limited Partnership which had not been paid or provided for. Cash distributions No cash distributions were made during the years ended March 31, 2001, 2000 or 1999. It is not expected that cash available for distribution, if any, will be significant during the 2001 calendar year. Based on the results of 2000 operations, the Local Limited Partnerships are not expected to distribute significant amounts of cash to the Partnership because such amounts will be needed to fund Property operating costs. In addition, many of the Properties benefit from some type of federal or state subsidy and, as a consequence, are subject to restrictions on cash distributions. Results of operations 2001 versus 2000 The Partnership's results of operations for the year ended March 31, 2001 resulted in a net loss of $2,334,459 as compared to a net loss of $3,006,310 for the same period in 2000. The decrease in net loss is primarily attributable to decreases in equity in losses of Local Limited Partnerships, an increase in other revenue and a decrease in provisions for valuation of investments in Local Limited Partnerships. These effects were partially offset by an increase in general and administrative expenses. The increase in general and administrative expense is primarily due to increased charges from an affiliate of the General Partner for operational and administrative expenses necessary for the operation of the Partnership. The increased charges pertained to higher levels of staffing and salary levels at the affiliate in addition to changes in the affiliate's allocation of operational and administrative expenses to more accurately reflect the actual cost of services provided to the Partnership. Equity in losses of Local Limited Partnerships decreased primarily due to a decrease in interest expense coupled with continued unrecognized losses for Local Limited Partnerships whose carrying values have been reduced to zero. 2000 versus 1999 The Partnership's results of operations for the year ended March 31, 2000 resulted in a net loss of $3,006,310 as compared to a net loss of $3,371,589 for the same period in 1999. The decrease in net loss is primarily attributable to decreases in equity in losses of Local Limited Partnerships and general and administrative expenses. These effects were partially offset by provisions for valuation of investments in Local Limited Partnerships related to advances to two Local Limited Partnerships recorded in 2000, as well as a decrease in other revenue. Equity in losses of Local Limited Partnerships decreased primarily due to an increase in unrecognized losses for Local Limited Partnerships whose carrying values have been reduced to zero. Low-income housing tax credits The 2000, 1999, and 1998 Tax Credits per Unit were $150.08, $150.96 and $150.97, respectively. The Tax Credit per Limited Partnership Unit is stabilized at approximately $150.00 per Unit in 1993. The Tax Credits per Limited Partner stabilized in 1993. The credits were expected to remain stable for the next seven years and then decrease as certain Properties reached the end of the ten year credit period. However, because the compliance periods extend significantly beyond the tax credit periods, the Partnership is expected to retain most of its interests in the Local Limited Partnerships for the foreseeable future. Property discussions The Partnership's investment portfolio consists of limited partnership interests in 26 Local Limited Partnerships, each of which own and operate a multi-family apartment complex. A majority of the Properties have stabilized operations and operate above break-even. A few Properties generate cash flow deficits that the Local General Partners of those Properties fund through project expense loans, subordinated loans or operating escrows. However, some Properties have persistent operating difficulties that could either: i) have an adverse impact on the Partnership's liquidity; ii) result in their foreclosure; or iii) result in the Managing General Partner deeming it appropriate for the Partnership to dispose of its interest in the Local Limited Partnership. Also, the Managing General Partner, in the normal course of the Partnership's business, may desire to dispose of certain Local Limited Partnerships. The following Property discussions focus only on such Properties. Operations at Historic New Center, located in Detroit, Michigan, continue to struggle. The Property suffers from poor location and security issues. Vandalism has caused an increase in maintenance and repair expenses and negatively affected the Property's occupancy levels and tenant profile. A new site management company began operating the Property on January 1, 2001 but subsequently resigned as they believed they were not suited to manage the Property. An affiliate of the Local General Partner will begin managing the Property in May 2001 and is working to increase curb appeal and implement new marketing programs to increase qualified tenant traffic. The Managing General Partner will continue to closely monitor the site manager's efforts to improve Property operations; however, due to the Property's continuing struggles, the Managing General Partner is concerned about its long-term viability. As previously reported regarding Westgate, located in Bismarck, North Dakota, the Managing General Partner consummated the transfer of 50% of the Partnership's capital and profits in the Local Limited Partnership to an affiliate of the Local General Partner in November 1997 in order to address concerns about the long term viability of the Property. The Managing General Partner also had the right to transfer the Partnership's remaining interest to the Local General Partner any time after one year from the initial transfer. However, due to subsequent transfers by the Local General Partner of its interests in the Property, the date when the Managing General Partner has the right to transfer the remaining interest will not occur until September 1, 2001. It is likely that the Managing General Partner will transfer the Partnership's remaining interest at that time. The Partnership will retain its full share of the Property's tax credits, which expire in 2001, until such time as the remaining interest is put to the new Local General Partner. Further, the new Local General Partner has the right to call the remaining interest after the tax credit period has expired. Carib Villas II and Carib Villas III, both of which are located in St. Croix, Virgin Islands, have been unable to maintain occupancy. The Properties have both family and elderly units, and while the family units have a waiting list, the elderly units have proven difficult to lease. Also, due to the Properties' proximity to the ocean, weather conditions erode their physical condition quickly, and therefore, maintenance issues are a concern. The Managing General Partner will continue to closely monitor the operations at both of these Properties. The Partnership has implemented policies and practices for assessing potential impairment of its investments in Local Limited Partnerships. Real estate experts analyze the investments to determine if impairment indicators exist. If so, the carrying value is compared to the undiscounted future cash flows expected to be derived from the asset. If a significant impairment in carrying value exists, a provision to write down the asset to fair value will be recorded in the Partnership's financial statements. Inflation and other economic factors Inflation had no material impact on the operations or financial condition of the Partnership for the years ended March 31, 2001, 2000 and 1999. Since some of the properties benefit from some form of government assistance, the Partnership is subject to the risks inherent in that area including decreased subsidies, difficulties in finding suitable tenants and obtaining permission for rent increases. In addition, any Tax Credits allocated to investors with respect to a Property are subject to recapture to the extent that the Property or any portion thereof ceases to qualify for the Tax Credits. Certain of the Properties in which the Partnership invests may be located in areas suffering from poor economic conditions. Such conditions could have an adverse effect on rent or occupancy levels at such Properties. Nevertheless, management believes that the generally high demand for below market rate housing will tend to negate such factors. However, no assurance can be given in this regard. Item 7A. Quantitative and Qualitative Disclosures about Market Risk The Partnership has invested in marketable securities with a fair value of $2,481,341 at March 31, 2001; these securities, with rates ranging from 4.75% to 8.50%, do not subject the Partnership to significant market risk because of their short term maturities and high liquidity. The Partnership has no other exposure to market risk associated with activities in derivative financial instruments, derivative commodity instruments or other financial instruments. Item 8. Financial Statements and Supplementary Data Information required under this Item is submitted as a separate section of this Report. See Index on page F-1 hereof. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure - ------------------------------------------------------------------------------ None. PART III Item 10. Directors and Executive Officers of the Registrant - ------------------------------------------------------------- The Managing General Partner of the Partnership is Arch Street VIII, Inc., a Massachusetts corporation ("Arch Street, Inc.") (the "Managing General Partner"), an affiliate of Lend Lease. The Managing General Partner was incorporated in June 1989. The Investment Committee of the Managing General Partner approved all investments. The names and positions of the principal officers and the directors of the Managing General Partner are set forth below. Name Position Jenny Netzer Principal, Head of Housing and Community Investment Michael H. Gladstone Principal, Member, Legal Lauren M. Guillette Principal, Member, Legal The other General Partner of the Partnership is Arch Street V Limited Partnership, a Massachusetts limited partnership ("Arch Street L.P.") that was organized in June 1989. Arch Street, Inc. is the managing general partner of Arch Street L.P. The Managing General Partner provides day-to-day management of the Partnership. Compensation is discussed in Item 11 of this report. Such day-to-day management does not include the management of the Properties. The business experience of each of the persons listed above is described below. There is no family relationship between any of the persons listed in this section. Jenny Netzer, age 45, Principal, Head of Housing and Community Investment Group - - Ms. Netzer is responsible for tax credit investment programs to institutional clients. She joined Lend Lease as a result of the Boston Financial acquisition, starting with Boston Financial in 1987 and leading Boston Financial's new business initiatives and managing the firm's Asset Management division. Prior to joining Boston Financial, Ms. Netzer served as Deputy Budget Director for the Commonwealth of Massachusetts where she was responsible for the Commonwealth's health care and public pension program's budgets. Ms. Netzer also served as Assistant Controller at Yale University, was a former member of Watertown Zoning Board of Appeals, the Officer of Affordable Housing Tax Credit Coalition and a frequent speaker on affordable housing and tax credit industry issues. Ms. Netzer is a graduate of Harvard University (BA) and Harvard's Kennedy School of Government (MPP). Michael H. Gladstone, age 44, Principal, Member, Legal - Mr. Gladstone is responsible for legal work in the areas of affordable and conventional housing and investment products and services. He joined Lend Lease as a result of the Boston Financial acquisition, starting with Boston Financial in 1985 as the firm's General Counsel. Prior to joining Boston Financial, Mr. Gladstone was associated with the law firm of Herrick & Smith and served on the advisory board of the Housing and Development Reporter. Mr. Gladstone lectured at Harvard University on affordable housing matters and is a member of the National Realty Committee, Cornell Real Estate Council, National Association of Real Estate Investment Managers and Massachusetts Bar. Mr. Gladstone is a graduate of Emory University (BA) and Cornell University (J.D. & MBA). Lauren M. Guillette, age 36, Principal, Member, Legal - Ms. Guillette is responsible for legal work in the areas of affordable and conventional housing and investment products and services. She joined Lend Lease as a result of the Boston Financial acquisition, starting with Boston Financial in 1996 as the firm's Assistant General Counsel. Prior to joining Boston Financial, Ms. Guillette was associated with the law firm of Peabody & Brown where she practiced real estate syndication and securities law. Ms. Guillette is a graduate of McGill University (BA) and Suffolk University (J.D.). Item 11. Management Remuneration Neither the directors nor officers of Arch Street, Inc., the partners of Arch Street L.P. nor any other individual with significant involvement in the business of the Partnership receives any current or proposed remuneration from the Partnership. Item 12. Security Ownership of Certain Beneficial Owners and Management As of March 31, 2001, the following is the only entity known to the Partnership to be the beneficial owner of more than 5% of the total number of Units outstanding: Amount Title of Name and Address Beneficially Percent of Class of Beneficial Owner Owned Class --------- ------------------- -------------- ----------- Limited Oldham Institutional Partner Tax Credits LLC 8,024 Units 11.64% 101 Arch Street Boston, MA Oldham Institutional Tax Credits LLC is an affiliate of Arch Street VIII, Inc., the Managing General Partner. The equity securities registered by the Partnership under Section 12(g) of the Act consist of 100,000 Units, 68,929 of which had been sold to the public as of March 31, 2001. The remaining Units were deregistered in Post-Effective Amendment No. 6, dated January 21, 1992, herein incorporated by this reference. Holders of Units are permitted to vote on matters affecting the Partnership only in certain unusual circumstances and do not generally have the right to vote on the operation or management of the Partnership. Arch Street L.P. owns five (unregistered) Units not included in the 68,929 Units sold to the public. Additionally, five registered Units were sold to an employee of an affiliate of the Managing General Partner of the Registrant. Such Units were sold at a discount of 7% of the Unit price for a total discount of $350 and a total purchase price of $4,650. Except as described in the preceding paragraphs, neither Arch Street, Inc., Arch Street L.P., Lend Lease nor any of their executive officers, directors, partners or affiliates is the beneficial owner of any Units. None of the foregoing persons possesses a right to acquire beneficial ownership of Units. The Partnership does not know of any existing arrangement that might at a later date result in a change in control of the Partnership. Item 13. Certain Relationships and Related Transactions The Partnership paid certain fees to and reimbursed certain expenses of the Managing General Partner or its affiliates in connection with the organization of the Partnership and the offering of Units. The Partnership was also required to pay certain fees to and reimburse certain expenses of the Managing General Partner or its affiliates in connection with the administration of the Partnership and its acquisition and disposition of investments in Local Limited Partnerships. In addition, the General Partners are entitled to certain Partnership distributions under the terms of the Partnership Agreement. Also, an affiliate of the General Partners will receive up to $10,000 from the sale or refinancing proceeds of each Local Limited Partnership if it is still a limited partner at the time of such a transaction. All such fees, expenses and distributions are more fully described in the sections of the Prospectus entitled "Estimated Use of Proceeds", "Management Compensation and Fees" and "Profits and Losses for Tax Purposes, Tax Credits and Cash Distributions". Such sections are incorporated herein by reference. In addition, in prior years affiliates of the Managing General Partner served as property management agents for New Center, Carib II, Carib III and Woodlake Hills. The Partnership is permitted to enter into transactions involving affiliates of the Managing General Partner, subject to certain limitations established in the Partnership Agreement. Information regarding the fees paid and expense reimbursements made in the three years ended March 31, 2001 is presented as follows: Organizational fees and expenses In accordance with the Partnership Agreement, the Partnership was required to pay certain fees to and reimburse expenses of the General Partners and others in connection with the organization of the Partnership and the offering of its Limited Partnership Units. Selling commissions, fees and accountable expenses related to the sale of the Units totaling $9,499,985 have been charged directly to Limited Partners' equity. In connection therewith, $5,858,935 of selling expenses and $3,641,050 of offering expenses incurred on behalf of the Partnership have been paid to an affiliate of the General Partners. The Partnership was required to pay a non-accountable expense allowance for marketing expenses equal to a maximum of 1% of Gross Proceeds; this is included in total offering expenses. The Partnership has capitalized an additional $50,000 which was reimbursed to an affiliate of the General Partners. Total organization and offering expenses, exclusive of selling commissions, did not exceed 5.5% of the Gross Proceeds and organizational and offering expenses, inclusive of selling commissions did not exceed 14.0% of the Gross Proceeds. No organizational fees and expenses and selling expenses were paid during the three years ended March 31, 2001. Acquisition fees and expenses In accordance with the Partnership Agreement, the Partnership was required to pay acquisition fees to and reimburse acquisition expenses of the Managing General Partner or its affiliates for selecting, evaluating, structuring, negotiating and closing the Partnership's investments in Local Limited Partnerships. Acquisition fees totaled 7% of the gross offering proceeds. Acquisition expenses, which include such expenses as legal fees and expenses, travel and communications expenses, costs of appraisals, accounting fees and expenses, were expected to total 1.5% of the gross offering proceeds. As of March 31, 2001, acquisition fees totaling $4,825,005 for the closing of the Partnership's Local Limited Partnership Investments have been paid to an affiliate of the Managing General Partner. Acquisition expenses totaling $899,430 at March 31, 2001 were incurred and have been reimbursed to an affiliate of the Managing General Partner. No acquisition fees or expenses were paid during the three years ended March 31, 2001. Asset Management Fees In accordance with the Partnership Agreement, an affiliate of the Managing General Partner is paid an Asset Management Fee for services in connection with the administration of the affairs of the Partnership. The affiliate currently receives the base amount of 0.377% (as adjusted by the CPI factor) of Gross Proceeds annually as the Asset Management Fee. Asset Management Fees incurred in each of the three years ended March 31, 2001 are as follows: 2001 2000 1999 ------------ ---------- ---------- Asset Management Fees $ 253,088 $ 247,331 $ 243,169 Salaries and benefits expense reimbursements An affiliate of the Managing General Partner is reimbursed for the cost of the Partnership's salaries and benefits expenses. The reimbursements are based upon the size and complexity of the Partnership's operations. Reimbursements paid or payable in each of the three years ended March 31, 2001 are as follows: 2001 2000 1999 ----------- ----------- ----------- Salaries and benefits expense reimbursements $ 271,057 $ 139,757 $ 109,845 Property Management Fees Affiliates of the Managing General Partner were previously management agents for four Local Limited Partnerships. Fees charged in each of the three years ended December 31, 2000 were as follows: 2000 1999 1998 ----------- ----------- ----------- Property Management Fees $ - $ 84,640 $ 80,455 Cash distributions paid to the General Partners In accordance with the Partnership Agreement, the General Partners of the Partnership, Arch Street, Inc. and Arch Street L.P., receive 1% of cash distributions paid to partners. No cash distributions were paid to the General Partners in the three years ended March 31, 2001. Additional information concerning cash distributions and other fees paid or payable to the Managing General Partner and its affiliates and the reimbursement of expenses paid or payable to Lend Lease and its affiliates for the three years ended March 31, 2001 is presented in Note 5 to the Financial Statements. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K - ------------------------------------------------------------------------- (a)(1) and (a)(2) Documents filed as a part of this Report In response to this portion of Item 14, the financial statements, financial statement schedule and the auditors' report relating thereto are submitted as a separate section of this Report. See Index to the Financial Statements on page F-1 hereof. The reports of auditors of the Local Limited Partnerships relating to the audits of the financial statements of such Local Limited Partnerships appear in Exhibit 28.1 of this Report. All other financial statement schedules and exhibits for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under related instructions or are inapplicable and therefore have been omitted. (a)(3) See Exhibit Index contained herein. (a)(3)(b) Reports on Form 8-K: No reports on Form 8-K were filed during the year ended March 31, 2001. (a)(3)(c) Exhibits Number and Description in Accordance with Item 601 of Regulation S-K 27. Additional Exhibits (a) 28.1 Reports of Other Independent Auditors (b) Audited financial statements of Local Limited Partnership Circle Terrace (a)(3)(d) None. SIGNATURES 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. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V By: Arch Street VIII, Inc. its Managing General Partner By: /s/Jenny Netzer Date: June 29, 2001 ------------------------------- ------------------- Jenny Netzer Principal, Head of Housing and Community Investment Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Managing General Partner of the Partnership and in the capacities and on the dates indicated: By: /s/Jenny Netzer Date: June 29, 2001 ----------------------------- ------------- Jenny Netzer Director By: /s/Michael H. Gladstone Date: June 29, 2001 ----------------------------- ---------------- Michael H. Gladstone Director BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Annual Report on Form 10-K For The Year Ended March 31, 2001 Index Page No. Report of Independent Accountants For the years ended March 31, 2001, 2000 and 1999 F-2 Financial Statements Balance Sheets - March 31, 2001 and 2000 F-3 Statements of Operations - For the years ended March 31, 2001, 2000 and 1999 F-4 Statements of Changes in Partners' Equity (Deficiency) - For the years ended March 31, 2001, 2000 and 1999 F-5 Statements of Cash Flows - For the years ended March 31, 2001, 2000 and 1999 F-6 Notes to the Financial Statements F-7 Financial Statement Schedule Schedule III - Real Estate and Accumulated Depreciation F-16 See also Index to Exhibits on Page K-22 for the financial statements of the Local Limited Partnerships included as a separate exhibit in this Annual Report on Form 10-K. Other schedules have been omitted as they are either not required or the information required to be presented therein is available elsewhere in the financial statements and the accompanying notes and schedules. Report of Independent Accountants To the Partners of Boston Financial Qualified Housing Tax Credits L.P. V: (A Limited Partnership) In our opinion, based upon our audits and the reports of other auditors, the financial statements listed on the accompanying index present fairly, in all material respects, the financial position of Boston Financial Qualified Housing Tax Credits L.P. V (A Limited Partnership) (the "Partnership") as of March 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2001 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related financial statements. These financial statements and financial statement schedule are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. The Partnership accounts for its investment in Local Limited Partnerships, as discussed in Note 2 of the notes to the financial statements, using the equity method of accounting. We did not audit the financial statements of the Local Limited Partnerships, investments in which the Partnership's investment in Local Limited Partnerships is stated at $16,317,830 at March 31, 2001 and $18,818,290 at March 31, 2000, and the Partnership's equity in earnings (losses) of Local Limited Partnerships is stated at $(2,223,252), $(2,576,356), and $(2,932,545) for the years ended March 31, 2001, 2000, and 1999, respectively. The financial statements of these Local Limited Partnerships were audited by other auditors whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to amounts included for Local Limited Partnerships, is based solely upon the reports of other auditors. We conducted our audits of the Partnership's financial statements in accordance with auditing standards generally accepted in the United States of America which 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, assessing the accounting principles used and significant estimates made by management, and 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. /s/PricewaterhouseCoopers LLP June 27, 2001 Boston, Massachusetts BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) BALANCE SHEETS March 31, 2001 and 2000 2001 2000 ------------- ------------- Assets Cash and cash equivalents $ 573,599 $ 392,154 Marketable securities, at fair value (Note 3) 2,481,341 2,332,268 Investments in Local Limited Partnerships, net (Note 4) 16,317,830 18,818,290 Restricted cash (Note 6) 139,295 131,198 Other assets 35,717 29,074 ------------- ------------- Total Assets $ 19,547,782 $ 21,702,984 ============= ============= Liabilities and Partners' Equity Accounts payable to affiliates (Note 5) $ 189,508 $ 121,184 Accrued expenses 69,794 43,605 Deferred revenue (Note 6) 139,295 131,198 ------------- ------------- Total Liabilities 398,597 295,987 ------------- ------------- General, Initial and Investor Limited Partners' Equity 19,108,683 21,443,142 Net unrealized gains (losses) on marketable securities 40,502 (36,145) ------------- ------------- Total Partners' Equity 19,149,185 21,406,997 ------------- ------------- Total Liabilities and Partners' Equity $ 19,547,782 $ 21,702,984 ============= ============= The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) STATEMENTS OF OPERATIONS For the Years Ended March 31, 2001, 2000 and 1999 2001 2000 1999 ------------- ------------- -------------- Revenue: Investment $ 173,776 $ 156,312 $ 158,954 Other 397,372 79,196 122,087 ------------- ------------- -------------- Total Revenue 571,148 235,508 281,041 ------------- ------------- -------------- Expenses: General and administrative (includes reimbursements to an affiliate in the amounts of $271,057, $139,757 and $109,845 in 2001, 2000 and 1999, respectively) (Note 5) 380,670 219,794 453,057 Asset management fees, affiliate (Note 5) 253,088 247,331 243,169 Provision for valuation of investment in Local Limited Partnership 25,000 174,739 - Amortization 23,597 23,598 23,859 ------------- ------------- -------------- Total Expenses 682,355 665,462 720,085 ------------- ------------- -------------- Loss before equity in losses of Local Limited Partnerships (111,207) (429,954) (439,044) Equity in losses of Local Limited Partnerships (Note 4) (2,223,252) (2,576,356) (2,932,545) ------------- ------------- -------------- Net Loss $ (2,334,459) $ (3,006,310) $ (3,371,589) ============= ============= ============== Net Loss allocated: General Partners $ (23,345) $ (30,063) $ (33,716) Limited Partners (2,311,114) (2,976,247) (3,337,873) ------------- ------------- -------------- $ (2,334,459) $ (3,006,310) $ (3,371,589) ============= ============= ============== Net Loss per Limited Partnership Unit (68,929 Units) $ (33.53) $ (43.18) $ (48.42) ============= ============= ============== The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY) For the Years Ended March 31, 2001, 2000 and 1999 Net Initial Investor Unrealized General Limited Limited Gains Partners Partner Partners (Losses) Total ----------- --------- ----------- --------- ------------ Balance at March 31, 1998 $ (313,896) $ 5,000 $ 28,129,937 $ (14,453) $ 27,806,588 ----------- --------- ------------- ----------- -------------- Comprehensive Income (Loss): Change in net unrealized losses on marketable securities available for sale - - - 21,922 21,922 Net Loss (33,716) - (3,337,873) - (3,371,589) ----------- --------- ------------- ----------- -------------- Comprehensive Income (Loss) (33,716) - (3,337,873) 21,922 (3,349,667) ----------- --------- ------------- ----------- -------------- Balance at March 31, 1999 (347,612) 5,000 24,792,064 7,469 24,456,921 ----------- --------- ------------- ----------- -------------- Comprehensive Loss: Change in net unrealized gains on marketable securities available for sale - - - (43,614) (43,614) Net Loss (30,063) - (2,976,247) - (3,006,310) ----------- --------- ------------- ----------- -------------- Comprehensive Loss (30,063) - (2,976,247) (43,614) (3,049,924) ----------- --------- ------------- ----------- -------------- Balance at March 31, 2000 (377,675) 5,000 21,815,817 (36,145) 21,406,997 ----------- --------- ------------- ----------- -------------- Comprehensive Income (Loss): Change in net unrealized losses on marketable securities available for sale - - - 76,647 76,647 Net Loss (23,345) - (2,311,114) - (2,334,459) ----------- --------- ------------- ----------- -------------- Comprehensive Income (Loss) (23,345) - (2,311,114) 76,647 (2,257,812) ----------- --------- ------------- ----------- -------------- Balance at March 31, 2001 $ (401,020) $ 5,000 $ 19,504,703 $ 40,502 $ 19,149,185 =========== ========= ============= =========== ============== The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) STATEMENTS OF CASH FLOWS For the Years Ended March 31, 2001, 2000 and 1999 2001 2000 1999 ------------- ------------- ------------- Cash flows from operating activities: Net loss $ (2,334,459) $ (3,006,310) $ (3,371,589) Adjustments to reconcile net loss to net cash used for operating activities: Equity in losses of Local Limited Partnerships 2,223,252 2,576,356 2,932,545 Provision for valuation of investment in Local Limited Partnership 25,000 174,739 - Amortization 23,597 23,598 23,859 (Gain) loss on sales and maturities of marketable securities, net (3,423) (2,498) 14,790 Cash distributions included in net loss (158,105) (5,132) (65,089) Increase (decrease) in cash arising from changes in operating assets and liabilities: Restricted cash (8,097) 15,067 (7,407) Other assets (6,643) 3,584 6,383 Accounts payable to affiliates 26,189 (22,259) 64,233 Accrued expenses 68,324 (71,613) 47,527 Deferred revenue 8,097 (15,620) 7,357 ------------- ------------- ------------- Net cash used for operating activities (136,268) (330,088) (347,391) ------------- ------------- ------------- Cash flows from investing activities: Investments in Local Limited Partnerships - (127,767) (50,420) Purchases of marketable securities (1,577,046) (1,067,998) (2,523,829) Proceeds from sales and maturities of marketable securities 1,508,043 1,360,895 2,929,397 Cash distributions received from Local Limited Partnerships 411,716 253,446 368,798 Advances to Local Limited Partnerships (25,000) (188,700) (173,739) Repayment of advances to Local Limited Partnerships - 188,700 - ------------- ------------- ------------- Net cash provided by investing activities 317,713 418,576 550,207 ------------- ------------- ------------- Net increase in cash and cash equivalents 181,445 88,488 202,816 Cash and cash equivalents, beginning 392,154 303,666 100,850 ------------- ------------- ------------- Cash and cash equivalents, ending $ 573,599 $ 392,154 $ 303,666 ============= ============= ============= The accompanying notes are an integral part of these financial statements. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Notes to the Financial Statements 1. Organization Boston Financial Qualified Housing Tax Credits L.P. V ("the Partnership") was formed on June 16, 1989 under the laws of the State of Massachusetts for the primary purpose of investing, as a limited partner, in other limited partnerships ("Local Limited Partnerships"), some of which own and operate apartment complexes benefiting from some form of federal, state or local assistance, and each of which qualifies for low-income housing tax credits. The Partnership's objectives are to: (i) provide current tax benefits in the form of tax credits which qualified investors may use to offset their federal income tax liability; (ii) preserve and protect the Partnership's capital; (iii) provide limited cash distributions from property operations which are not expected to constitute taxable income during Partnership operations; and (iv) provide cash distributions from sale or refinancing transactions. The General Partners of the Partnership are Arch Street V, Inc., a Massachusetts corporation, which serves as the Managing General Partner, and Arch Street V Limited Partnership, a Massachusetts Limited Partnership whose general partner consists of Arch Street V, Inc., which also serves as the Initial Limited Partner. Both of the General Partners are affiliates of Lend Lease Real Estate Investments, Inc. ("Lend Lease"). The fiscal year of the Partnership ends on March 31. The Partnership's partnership agreement (the "Partnership Agreement") authorized the sale of up to 100,000 units of limited partnership interest ("Units") at $1,000 per Unit, adjusted for certain discounts. On August 31, 1991, the Partnership held its final investor closing. In total, the Partnership received $68,928,650 of capital contributions, net of discounts, from investors admitted as Limited Partners for 68,929 Units. Generally, profits, losses, tax credits and cash flows from operations are allocated 99% to the Limited Partners and 1% to the General Partners. Net proceeds from a sale or refinancing will be allocated 95% to the Limited Partners and 5% to the General Partners after certain priority payments. Under the terms of the Partnership Agreement, the Partnership originally designated 4% of the Gross Proceeds from the sale of Units as a reserve for working capital of the Partnership and contingencies related to ownership of Local Limited Partnership interests. The Managing General Partner may increase or decrease such Reserves from time to time, as it deems appropriate. At March 31, 2001, the Managing General Partner has designated approximately $2,254,000 as such Reserves. 2. Significant Accounting Policies Cash Equivalents Cash equivalents consist of short-term money market instruments with original maturities of ninety days or less at acquisition and approximate fair value. Marketable Securities Marketable securities consist primarily of U.S. Treasury instruments and various asset-backed investments vehicles. The Partnership's marketable securities are classified as "Available for Sale" securities and are reported at fair value as reported by the brokerage firm at which the securities are held. Realized gains and losses from the sales of securities are based on the specific identification method. Unrealized gains and losses are excluded from earnings and reported as a separate component of partners' equity. Investments in Local Limited Partnerships The Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting because the Partnership does not have control over the major operating and financial policies of the Local Limited Partnerships in which it invests. Under the equity method, the investment is carried at cost, adjusted for the BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Notes to the Financial Statements (continued) 2. Significant Accounting Policies (continued) ------------------------------------------ Investments in Local Limited Partnerships (continued) - ---------------------------------------------------- Partnership's share of income or loss of the Local Limited Partnerships, additional investments in and cash distributions from the Local Limited Partnerships. Equity in income or loss of the Local Limited Partnerships is included in the Partnership's operations. The Partnership has no obligation to fund liabilities of the Local Limited Partnerships beyond its investment and therefore a Local Limited Partnership's investment will not be carried below zero. To the extent that equity losses are incurred or distributions received when a Local Limited Partnership's respective investment balance has been reduced to zero, the losses will be suspended to be used against future income and distributions received will be included in income. Excess investment costs over the underlying net assets acquired have arisen from acquisition fees paid and expenses reimbursed to an affiliate of the Partnership. These fees and expenses are included in the Partnership's investments in Local Limited Partnerships and are being amortized on a straight-line basis over 35 years until a Local Limited Partnership's respective investment balance has been reduced to zero. The General Partners have decided to report the results of the Local Limited Partnerships on a 90-day lag basis because the Local Limited Partnerships report their results on a calendar year basis. Accordingly, the financial information of the Local Limited Partnerships that is included in the accompanying financial statements is as of December 31, 2000, 1999 and 1998. The Partnership recognizes a decline in the carrying value of its investments in Local Limited Partnerships when there is evidence of a non-temporary decline in the recoverable amount of the investment. There is a possibility that the estimates relating to reserves for non-temporary declines in carrying value of investments in Local Limited Partnerships may be subject to material near term adjustments. The Partnership, as a limited partner in the Local Limited Partnerships, is subject to risks inherent in the ownership of property which are beyond its control, such as fluctuations in occupancy rates and operating expenses, variations in rental schedules, proper maintenance and continued eligibility for tax credits. If the cost of operating a property exceeds the rental income earned thereon, the Partnership may deem it in its best interest to voluntarily provide funds in order to protect its investment. The Partnership has implemented policies and practices for assessing potential impairment of its investments in Local Limited Partnerships. Real estate experts analyze the investments to determine if impairment indicators exist. If so, the carrying value is compared to the undiscounted future cash flows expected to be derived from the asset. If a significant impairment in carrying value exists, a provision to write down the asset to fair value will be recorded in the Partnership's financial statements. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures 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 differ from those estimates. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Notes to the Financial Statements (continued) 2. Significant Accounting Policies (continued) ------------------------------------------ Fair Value of Financial Instruments Statements of Financial Accounting Standards No. 107 ("SFAS No. 107"), Disclosures About Fair Value of Financial Instruments, requires disclosure for the fair value of most on- and off-balance sheet financial instruments for which it is practicable to estimate that value. The scope of SFAS No. 107 excludes certain financial instruments, such as trade receivables and payables when the carrying value approximates the fair value, investments accounted for under the equity method and all nonfinancial assets such as real property. Unless otherwise described, the fair values of the Partnership's assets and liabilities which qualify as financial instruments under SFAS No. 107 approximate their carrying amounts in the accompanying balance sheets. Income Taxes No provision for income taxes has been made as the liability for such taxes is an obligation of the partners of the Partnership. Reclassifications Certain reclassifications have been made to prior years financial statements to conform to the current year presentation. 3. Marketable Securities A summary of marketable securities is as follows: Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value ------------ ----------- ------------ ------------ Debt securities issued by the US Treasury and other US government corporations and agencies $ 2,095,361 $ 34,927 $ - $ 2,130,288 Mortgage backed securities 345,478 5,575 - 351,053 ------------ ----------- ------------ ------------ Marketable securities at March 31, 2001 $ 2,440,839 $ 40,502 $ - $ 2,481,341 ============ =========== ============ ============= A summary of marketable securities is as follows: Gross Gross Unrealized Unrealized Fair Cost Gains Losses Value ------------ ----------- ------------ ------------ Debt securities issued by the US Treasury and other US government corporations and agencies $ 2,046,494 $ 1,407 $ (26,680) $ 2,021,221 Mortgage backed securities 321,919 95 (10,967) 311,047 ------------ ----------- ------------ ------------ Marketable securities at March 31, 2000 $ 2,368,413 $ 1,502 $ (37,647) $ 2,332,268 ============ =========== ============ ============= The contractual maturities at March 31, 2001 are as follows: Fair Cost Value ----------- ----------- Due in less than one year $ 698,401 $ 707,852 Due in one year to five years 1,396,960 1,422,436 Mortgage backed securities 345,478 351,053 ----------- ----------- $ 2,440,839 $ 2,481,341 =========== =========== BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Notes to the Financial Statements (continued) 3. Marketable Securities (continued) -------------------------------- Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations. Proceeds from the sales of marketable securities were approximately $508,000, $493,000 and $451,000 during the years ended March 31, 2001, 2000 and 1999, respectively. Proceeds from the maturities of marketable securities were approximately $1,000,000, $868,000 and $2,479,000 during the years ended March 31, 2001, 2000 and 1999, respectively. Included in investment income are gross gains of $3,704, $2,617 and $4,895 and gross losses of $281, $119 and $19,685 that were realized on the sales during the years ended March 31, 2001, 2000 and 1999, respectively. 4. Investments in Local Limited Partnerships The Partnership uses the equity method to account for its limited partner interest in twenty-six Local Limited Partnerships. Each of these Local Limited Partnerships owns and operates multi-family housing complexes, most of which are government-assisted. Upon dissolution of the Local Limited Partnerships, proceeds will be distributed according to each respective partnership agreement. The following is a summary of investments in Local Limited Partnerships at March 31: 2001 2000 ------------- ------------- Capital contributions and advances paid to Local Limited Partnerships and purchase price paid to withdrawing partners of Local Limited Partnerships $ 55,637,228 $ 55,612,228 Cumulative equity in losses of Local Limited Partnerships (excluding cumulative unrecognized losses of $3,976,771, $2,566,642 and $1,290,733 in 2001, 2000 and 1999, respectively) (37,240,376) (35,175,229) Cumulative cash distributions received from Local Limited Partnerships (2,006,039) (1,594,323) ------------- ------------- Investments in Local Limited Partnerships before adjustment 16,390,813 18,842,676 Excess of investment cost over the underlying net assets acquired: Acquisition fees and expenses 1,006,357 1,006,357 Accumulated amortization of acquisition fees and expenses (249,613) (226,016) ------------- ------------- Investments in Local Limited Partnerships prior to reserve for valuation 17,147,557 19,623,017 Reserve for valuation of investments in Local Limited Partnerships (829,727) (804,727) ------------- ------------- Investments in Local Limited Partnerships $ 16,317,830 $ 18,818,290 ============= ============= The Partnership has provided a reserve for valuation for its investments in Local Limited Partnerships because there is evidence of non-temporary declines in the recoverable amounts of the investments. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Notes to the Financial Statements (continued) 4. Investments in Local Limited Partnerships (continued) - ------------------------------------------------------------- The lender for Wheeler House foreclosed on the property in January 2000. The Partnership does not anticipate any further obligations, receipts or operations relative to this property. As no material gain or loss is expected, and the Partnership's net investment is zero, all capital accounts were written off and excluded from the above investment amounts as of March 31, 2000. Summarized financial information as of December 31, 2000, 1999 and 1998 (due to the Partnership's policy of reporting the financial information of its Local Limited Partnership interests on a 90 day lag basis) of all Local Limited Partnerships in which the Partnership has invested as of that date is as follows: Summarized Balance Sheets - as of December 31, 2000 1999 -------------- -------------- Assets: Investment property, net $ 100,286,185 $ 105,177,955 Other assets 9,227,655 9,003,999 -------------- -------------- Total Assets $ 109,513,840 $ 114,181,954 ============== ============= Liabilities and Partners' Equity: Mortgage notes payable $ 76,143,579 $ 80,783,964 Other liabilities 17,215,472 12,905,802 -------------- -------------- Total Liabilities 93,359,051 93,689,766 Partnership's Equity 11,671,895 15,351,058 Other Partners' Equity 4,482,894 5,141,130 -------------- -------------- Total Liabilities and Partners' Equity $ 109,513,840 $ 114,181,954 ============== ============== Summarized Income Statements - for the years ended December 31, 2000 1999 1998 - ------------------ -------------- -------------- -------------- Rental and other income: $ 15,104,014 $ 15,034,859 $ 14,644,117 -------------- -------------- -------------- Expenses: Operating 8,503,818 8,504,043 7,852,719 Interest 5,493,565 5,762,221 5,916,749 Depreciation and amortization 4,759,086 4,760,003 4,940,971 -------------- -------------- -------------- Total Expenses 18,756,469 19,026,267 18,710,439 -------------- -------------- -------------- Net Loss $ (3,652,455) $ (3,991,408) $ (4,066,322) ============== ============== ============== Partnership's share of Net Loss (includes adjustments from prior years) $ (3,475,275) $ (3,927,947) $ (3,980,818) ============== ============== ============== Other partners' share of Net Loss $ (150,459) $ (89,251) $ (97,679) ============== ============== ============== BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Notes to the Financial Statements (continued) 4. Investments in Local Limited Partnerships (continued) ---------------------------------------------------- For the years ended March 31, 2001, 2000 and 1999, the Partnership has not recognized $1,252,023, $1,351,591 and $1,048,273, respectively, of equity in losses of Local Limited Partnerships relating to Local Limited Partnerships where cumulative equity in losses exceeded its total investments in these Local Limited Partnerships. The Partnership's equity as reflected by the Local Limited Partnerships of $11,671,895 differs from the Partnership's investments in Local Limited Partnerships before adjustment of $16,390,813 principally because: a) unrecognized losses as discussed above; b) distributions made by Local Limited Partnerships during the quarter ended March 31, 2001 are not reflected in the December 31, 2000 balance sheets of the Local Limited Partnerships; and c) syndication costs charged to equity by a Local Limited Partnership are not reflected in the Partnership's investment in the Local Limited Partnership. 5. Transactions with Affiliates An affiliate of the Managing General Partner currently receives the base amount of 0.377% (as adjusted by the CPI factor) of Gross Proceeds annually as the Asset Management Fee for administering the affairs of the Partnership. Asset Management Fees for the years ended March 31, 2001, 2000 and 1999 are $253,088, $247,331 and $243,169, respectively. Included in accounts payable to affiliate at March 31, 2001 and 2000 are $64,572 and $62,841, respectively, of Asset Management Fees due to an affiliate of the Managing General Partner. An affiliate of the Managing General Partner is reimbursed for the actual cost of the Partnership's operating expenses. Included in general and administrative expenses for the years ended March 31, 2001, 2000 and 1999 are $271,057, $139,757 and $109,845, respectively, that the Partnership has paid or is payable as reimbursement for salaries and benefits expenses. The amounts payable for salaries and benefits at March 31, 2001 and 2000 are $124,936 and $58,343, respectively. Affiliates of the Managing General Partner were the management agents for four Local Limited Partnerships in which the Partnership had invested during the years ended December 31, 1999 and 1998. Included in operating expenses in the summarized income statements in Note 4 to the financial statements are $84,640 and $80,455 of fees paid or payable to the affiliates for the years ended December 31, 1999 and 1998, respectively. During 2000, management of these four Local Limited Partnerships was transferred to a non-affiliate. 6. Deferred Revenue Under the terms of a Local Limited Partnership Agreement, the Partnership was required to fund a Supplemental Reserve in the amount of $196,000. The original purpose of the contribution was to fund the development expenses of the Local Limited Partnership. In lieu of transferring the Supplemental Reserve to the Local Limited Partnership, the Partnership designated $196,000 as restricted cash for this purpose. Since the funds were not needed, the Local Limited Partnership Agreement allows that the established Supplemental Reserve, along with the interest earned, are available to pay the Partnership its annual priority distribution. As of March 31, 2001, $121,000 has been released to the Partnership. The remaining balance, along with the accrued interest thereon, has also been accounted for as deferred revenue, as it represents the future annual priority distributions to be released to the Partnership from this Reserve. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Notes to the Financial Statements (continued) 7. Federal Income Taxes The following schedule reconciles the reported financial statement net loss for the fiscal years ended March 31, 2001, 2000 and 1999 to the net loss reported on Form 1065, U.S. Partnership Return of Income for the years ended December 31, 2000, 1999 and 1998: 2001 2000 1999 ------------- ------------- ------------- Net Loss per financial statements $ (2,334,459) $ (3,006,310) $ (3,371,589) Adjustment for equity in losses of Local Limited Partnerships for tax purposes in excess of equity in losses for financial reporting purposes (547,215) (81,680) (406,140) Equity in losses of Local Limited Partnerships not recognized for financial reporting purposes (1,252,023) (1,351,591) (1,048,273) Adjustment to reflect March 31 fiscal year end to December 31 tax year end (57,183) (137,842) 31,950 Provision for valuation of investment in Local Limited Partnership not deductible for tax purposes 25,000 174,739 - Write-off of investment in Local Limited Partnership for tax purposes (24,256) - - Amortization for tax purposes in excess of amortization for financial reporting purposes (12,858) (13,964) (13,703) Related party expenses for financial reporting (tax) purposes in excess of related party expenses for tax (financial reporting) purposes 1,731 (60,556) 60,556 Cash distributions included in net loss for financial reporting purposes (41,105) (32,662) (32,427) ------------- ------------- ------------- Net Loss per tax return $ (4,242,368) $ (4,509,866) $ (4,779,626) ============= ============== ============= The differences in the assets and liabilities of the Partnership for financial reporting purposes and tax reporting purposes for the year ended March 31, 2001 are as follows: Financial Tax Reporting Reporting Purposes Purposes Differences Investments in Local Limited Partnerships $ 16,317,830 $ 9,749,823 $ 6,568,007 ============= ============= ============= Other assets $ 3,229,952 $ 12,877,410 $ (9,647,458) ============= ============= ============ = Liabilities $ 398,597 $ 224,225 $ 174,372 ============= ============= ============= BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Notes to the Financial Statements (continued) 7. Federal Income Taxes (continued) ------------------------------- The differences in assets and liabilities of the Partnership for financial reporting and tax purposes are primarily attributable to: (i) the cumulative equity in loss from Local Limited Partnerships for tax reporting purposes is approximately $7,166,000 greater than for financial reporting purposes, including approximately $3,977,000 of losses the Partnership has not recognized relating to Local Limited Partnerships whose cumulative equity in losses exceeded its total investment; (ii) the cumulative amortization of acquisition fees for tax purposes exceeds financial reporting purposes by approximately $88,000; (iii) approximately $96,000 of cash distributions received from Local Limited Partnerships during the quarter ended March 31, 2001 are not included in the Partnership's investments in Local Limited Partnerships for tax purposes at December 31, 2000; and (iv) organizational and offering costs of approximately $9,500,000 that have been capitalized for tax purposes are charged to Limited Partners' equity for financial reporting purposes. The differences in the assets and liabilities of the Partnership for financial reporting purposes and tax reporting purposes for the year ended March 31, 2000 are as follows: Financial Tax Reporting Reporting Purposes Purposes Differences Investments in Local Limited Partnerships $ 18,818,290 $ 14,081,467 $ 4,736,823 ============== ============== ============== Other assets $ 2,884,694 $ 12,765,769 $ (9,881,075) ============== ============== ============== Liabilities $ 295,987 $ 201,859 $ 94,128 ============== ============== ============= The differences in assets and liabilities of the Partnership for financial reporting and tax purposes are primarily attributable to: (i) the cumulative equity in loss from Local Limited Partnerships for tax reporting purposes is approximately $5,508,000 greater than for financial reporting purposes, including approximately $2,567,000 of losses the Partnership has not recognized relating to Local Limited Partnerships whose cumulative equity in losses exceeded its total investment; (ii) the cumulative amortization of acquisition fees for tax purposes exceeds financial reporting purposes by approximately $85,000; (iii) approximately $60,000 of cash distributions received from Local Limited Partnerships during the quarter ended March 31, 2000 are not included in the Partnership's investments in Local Limited Partnerships for tax reporting purposes at December 31, 1999; and (iv) organizational and offering costs of approximately $9,500,000 that have been capitalized for tax purposes are charged to Limited Partners' equity for financial reporting purposes. Boston Financial Qualified Housing Tax Credits L. P. V Schedule III - Real Estate and Accumulated Depreciation of Property Owned by Local Limited Partnerships in which Registrant has invested at March 31, 2001 COST OF INTEREST AT ACQUISITION DATE ---------------------------------- NET IMPROVEMENTS NUMBER TOTAL CAPITALIZED OF ENCUM- BUILDING AND SUBSEQUENT TO DESCRIPTION UNITS BRANCES * LAND IMPROVEMENTS ACQUISITION ----------- ----- --------- ---- ------------ ----------- Low and Moderate Income Apartment Complexes Strathern Park/Lorne 241 $17,278,198 $4,369,500 $10,513,639 $11,026,062 Park Los Angeles, CA Maidens Choice 101 1,988,644 807,791 2,013,769 3,469,059 Baltimore, MD Cedar Lane 36 1,090,974 40,000 1,375,512 11,854 London, KY Silver Creek 24 764,617 20,000 946,812 0 Berea, KY Rosecliff 168 5,499,061 1,200,000 3,304,950 4,619,117 Orlando, FL Brookwood 81 2,971,874 91,470 344,580 4,595,113 Ypsilanti Township, MI Water Oak 40 1,249,946 98,058 1,467,944 5,638 Orange City, FL Yester Oaks 44 1,279,845 47,105 1,574,145 2,489 Lafayette, GA Ocean View 42 1,360,042 112,620 1,600,421 30,603 Ferandina Beach, FL Archer Village 24 704,791 40,000 861,288 38,869 Archer, FL Oaks of Dunlop 144 4,396,866 631,959 6,492,444 166,060 Colonial Heights, VA Timothy House 112 2,011,764 11,638 6,344,664 485,761 Towson, MD Westover Station 108 2,644,818 305,645 4,299,613 6,259 Newport News, VA Carib Villas III 24 1,474,511 107,582 1,802,466 5,614 St. Croix, VI Carib Villas II 20 1,395,703 57,720 1,787,528 5,614 St. Croix, VI Whispering Trace 40 1,339,400 218,000 2,413,145 (433,785) Woodstock, GA New Center 104 2,893,812 79,652 3,534,776 2,934,509 Detroit, MI Huguenot Park 24 1,400,000 83,000 2,088,664 0 New Paltz, NY Hillwood Pointe 100 2,847,051 454,185 5,103,711 182,184 Jacksonville, FL Pinewood Pointe 136 3,854,826 555,093 6,809,808 725,847 Jacksonville, FL Westgate 60 1,550,394 215,168 2,152,519 57,391 Bismark, ND Woodlake Hills 144 3,733,699 233,690 6,481,250 2,403,715 Pontiac, MI Bixel House 76 1,042,584 190,746 2,294,879 51,935 Los Angeles, CA Harmony 65 2,171,145 0 7,020,696 117,826 North Hollywood, CA Schumaker Place 96 2,878,608 531,776 1,627,716 3,649,531 Salisbury, MD Circle Terrace 303 6,320,406 0 7,884,733 8,656,242 Lansdown, MD ------------------------------------------------------------------------ TOTAL 2,357 $76,143,579 $10,502,398 $92,141,672 $42,813,507 ======================================================================== GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 2000 --------------------------------------------------- LIFE ON WHICH DEPRECIATION BUILDING AND ACCUMULATED DATE IS COMPUTED DATE DESCRIPTION LAND IMPROVEMENTS TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED ----------- ---- ------------ ----- ------------ ----- ------- -------- Low and Moderate Income Apartment Complexes Strathern Park/Lorne $5,889,320 $20,019,881 $25,909,201 $7,360,788 1991 various 07/05/90 Park Los Angeles, CA Maidens Choice 807,791 5,482,828 6,290,619 2,042,030 1991 various 08/17/90 Baltimore, MD Cedar Lane 40,000 1,387,366 1,427,366 401,918 1991 various 09/10/90 London, KY Silver Creek 20,000 946,812 966,812 280,309 1990 various 08/15/90 Berea, KY Rosecliff 1,120,000 8,004,067 9,124,067 3,033,338 1991 various 09/18/90 Orlando, FL Brookwood 522,673 4,508,490 5,031,163 1,411,657 1992 various 10/01/90 Ypsilanti Township, M Water Oak 98,058 1,473,582 1,571,640 518,577 1991 various 01/01/91 Orange City, FL Yester Oaks 47,105 1,576,634 1,623,739 568,940 1991 various 01/01/91 Lafayette, GA Ocean View 112,620 1,631,024 1,743,644 598,933 1991 various 01/01/91 Ferandina Beach, FL Archer Village 40,000 900,157 940,157 332,579 1991 various 01/01/91 Archer, FL Oaks of Dunlop 631,958 6,658,505 7,290,463 2,750,251 1991 various 01/01/91 Colonial Heights, VA Timothy House 11,638 6,830,425 6,842,063 1,749,821 1992 various 03/05/91 Towson, MD Westover Station 305,645 4,305,872 4,611,517 1,232,865 1991 various 03/30/91 Newport News, VA Carib Villas III 239,009 1,676,653 1,915,662 679,286 1992 various 03/21/91 St. Croix, VI Carib Villas II 197,195 1,653,667 1,850,862 662,290 1991 various 03/01/91 St. Croix, VI Whispering Trace 218,000 1,979,360 2,197,360 875,366 1990 various 05/01/91 Woodstock, GA New Center 96,116 6,452,821 6,548,937 2,092,331 1992 various 06/27/91 Detroit, MI Huguenot Park 83,000 2,088,664 2,171,664 738,004 1991 various 06/26/91 New Paltz, NY Hillwood Pointe 454,185 5,285,895 5,740,080 1,972,556 1991 various 07/19/91 Jacksonville, FL Pinewood Pointe 555,093 7,535,655 8,090,748 2,789,421 1991 various 07/31/91 Jacksonville, FL Westgate 248,689 2,176,389 2,425,078 744,020 1991 various 07/25/91 Bismark, ND Woodlake Hills 187,588 8,931,067 9,118,655 2,639,761 1992 various 08/01/91 Pontiac, MI Bixel House 190,746 2,346,814 2,537,560 1,135,075 1991 various 07/31/91 Los Angeles, CA Harmony 0 7,138,522 7,138,522 2,528,471 1991 various 07/31/91 North Hollywood, CA Schumaker Place 1,029,027 4,779,996 5,809,023 1,382,623 1992 various 09/20/91 Salisbury, MD Circle Terrace 1,104,269 15,436,706 16,540,975 4,650,182 1993 various 12/06/91 Lansdown, MD --------------------------------------------------- TOTAL $14,249,725 $131,207,852 $145,457,577 $45,171,392 =================================================== (1) The aggregate cost for Federal Income Tax purposes is approximately $ 126,495,000. * Mortgage notes payable generally represent non-recourse financing of low-income housing projects payable with terms of up to 40 years with interest payable at rates ranging from 8.00% to 11%. The Partnership has not guaranteed any of these mortgage notes payable. QH 5 Summary of property owned and accumulated depreciation: Property Owned December 31, 2000 - -------------------------------------------------------------- Balance at beginning of period $146,140,489 Additions during period: Other acquisitions 18,170 Improvements etc. 346,490 --------------- 364,660 Deductions during period: Cost of real estate sold (1,047,572) Impairment of Assets 0 --------------- (1,047,572) --------------- Balance at close of period $145,457,577 =============== Accumulated Depreciation December 31, 2000 -------------------------------------------------- Balance at beginning of period 40,962,534 Additions/Deductions during period: Depreciation 4,531,017 Disposals (322,159) ----------- Balance at close of period $45,171,392 =========== Property Owned December 31, 1999 - -------------------------------------------------------------- Balance at beginning of period $145,851,429 Additions during period: Other acquisitions 46,195 Improvements etc. 242,865 --------------- 289,060 Deductions during period: Cost of real estate sold 0 Impairment of Assets 0 --------------- 0 --------------- Balance at close of period $146,140,489 =============== Accumulated Depreciation December 31, 1999 -------------------------------------------------- Balance at beginning of period 36,683,600 Additions during period: Depreciation 4,278,934 ----------- Balance at close of period $40,962,534 =========== Property Owned December 31, 1998 - -------------------------------------------------------------- Balance at beginning of period $145,480,348 Additions during period: Other acquisitions 95,346 Improvements etc. 275,735 --------------- 371,081 Deductions during period: Cost of real estate sold 0 Impairment of Assets 0 --------------- 0 --------------- Balance at close of period $145,851,429 =============== Accumulated Depreciation December 31, 1998 - -------------------------------------------------- Balance at beginning of period 31,678,791 Additions during period: Depreciation 5,004,809 ----------- Balance at close of period $36,683,600 =========== BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS V (A Limited Partnership) Annual Report on form 10-K For The Year Ended March 31, 2001 Reports of Independent Auditors Woodlake Hills [Letterhead] [LOGO] JOHN J. LEHOTAN, C.P.A. 4385 W. Main Street Brown City, MI 48416 To The Partners of Woodlake Hills Limited Partnership Dearborn, Michigan 48124 Independent Auditor's Report I have audited the accompanying balance sheet of Woodlake Hills Limited Partnership, a Michigan limited partnership as of December 31, 2000 and the related statements of profit and loss, partners' equity and cash flow for the year then ended. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted our audit in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial positions of Woodlake Hills Limited Partnership as of December 31, 2000 and the results of its operations and its cash flow for the year then ended in conformity with generally accepted accounting principles. /s/John J. Lehotan Certified Public Accountant February 10, 2001 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS V (A Limited Partnership) Annual Report on form 10-K For The Year Ended March 31, 2000 Reports of Independent Auditors Woodlake Hills [Letterhead] [LOGO] JOHN J. LEHOTAN, C.P.A. 4385 W. Main Street Brown City, MI 48416 To The Partners of Woodlake Hills Limited Partnership Dearborn, Michigan 48124 Independent Auditor's Report I have audited the accompanying balance sheet of Woodlake Hills Limited Partnership, a Michigan limited partnership as of December 31, 1999 and the related statements of profit and loss, partners' equity and cash flow for the year then ended. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted our audit in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial positions of Woodlake Hills Limited Partnership as of December 31, 1999 and the results of its operations and its cash flow for the year then ended in conformity with generally accepted accounting principles. /s/John J. Lehotan Certified Public Accountant February 1, 2000 Woodlake Hills [Letterhead] [LOGO] JOHN J. LEHOTAN, C.P.A. 4385 W. Main Street Brown City, MI 48416 To The Partners of Woodlake Hills Limited Partnership Dearborn, Michigan 48124 Independent Auditor's Report I have audited the accompanying balance sheet of Woodlake Hills Limited Partnership, a Michigan limited partnership as of December 31, 1998 and the related statements of profit and loss, partners' equity and cash flow for the year then ended. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted our audit in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial positions of Woodlake Hills Limited Partnership as of December 31, 1998 and the results of its operations and its cash flow for the year then ended in conformity with generally accepted accounting principles. /s/John J. Lehotan Certified Public Accountant February 10, 1999 Strathern Park [Letterhead] [LOGO] NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP 9454 Wilshire Boulevard, Suite 405 Beverly Hills, California 90212-2907 Independent Auditors' Report The Partners Strathern Park Los Angeles, California We have audited the accompanying balance sheet of Strathern Park (a California limited partnership), as of December 31, 2000 and the related statements of operations, partners' equity 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. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Strathern Park as of December 31, 2000, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information on Schedules I and II is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Nanas, Stern, Biers, Neinstein and Co., LLP NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP January 30, 2001 Strathern Park [Letterhead] [LOGO] NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP 9454 Wilshire Boulevard, Suite 405 Beverly Hills, California 90212-2907 Independent Auditors' Report The Partners Strathern Park Los Angeles, California We have audited the accompanying balance sheet of Strathern Park (a California limited partnership), as of December 31, 1999 and the related statements of operations, partners' equity 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. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Strathern Park as of December 31, 1999, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information on Schedules I, II and III is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Nanas, Stern, Biers, Neinstein and Co., LLP NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP January 26, 2000 Strathern Park [Letterhead] [LOGO] NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP 9454 Wilshire Boulevard, Suite 405 Beverly Hills, California 90212-2907 Independent Auditors' Report The Partners Strathern Park Los Angeles, California We have audited the accompanying balance sheet of Strathern Park (a California limited partnership), as of December 31, 1998 and the related statements of operations, partners' equity 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. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Strathern Park 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. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information on Schedules I, II and III is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Nanas, Stern, Biers, Neinstein and Co., LLP NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP February 3, 1999 Maiden Choice Limited Partnership [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Maiden Choice Limited Partnership We have audited the accompanying balance sheet of Maiden Choice Limited Partnership as of December 31, 2000, 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. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Maiden Choice Limited Partnership as of December 31, 2000, and the results of its operations, the changes in partners' equity (deficit) and its cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 21 through 30 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits of HUD Programs", we have also issued reports dated January 11, 2001, on our consideration of Maiden Choice Limited Partnership's internal control and on its compliance with specific requirements applicable to DHCD-assisted programs, and laws and regulations applicable to the financial statements. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer Identification Number: 52-1088612 Audit Principal: William T. Riley, Jr. January 11, 2001 Maiden Choice Limited Partnership [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Maiden Choice Limited Partnership We have audited the accompanying balance sheet of Maiden Choice Limited Partnership as of December 31, 1999, 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. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Maiden Choice Limited Partnership as of December 31, 1999, and the results of its operations, the changes in partners' equity (deficit) and its cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 21 through 30 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits of HUD Programs", we have also issued reports dated January 8, 2000, on our consideration of Maiden Choice Limited Partnership's internal control and on its compliance with specific requirements applicable to DHCD-assisted programs, fair housing and non-discrimination, and laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer Identification Number: 52-1088612 Audit Principal: William T. Riley, Jr. January 8, 2000 Maiden Choice Limited Partnership [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Maiden Choice Limited Partnership We have audited the accompanying balance sheet of Maiden Choice Limited Partnership as of December 31, 1998, and the related statements of profit and loss (on HUD Form No. 92410), partners' equity 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. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Maiden Choice Limited Partnership as of December 31, 1998, and the results of its operations, the changes in partners' equity and its cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 22 through 27 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits of HUD Programs", we have also issued reports dated January 6, 1999, on our consideration of Maiden Choice Limited Partnership's internal control and on its compliance with specific requirements applicable to DHCD-assisted programs, fair housing and non-discrimination, and laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer Identification Number: 52-1088612 Audit Principal: William T. Riley, Jr. January 6, 1999 Cedar Lane I, Ltd. [Letterhead] [LOGO] Miller, Mayer, Sullivan & Stevens LLP INDEPENDENT AUDITORS' REPORT To the Partners Rural Development Cedar Lane I, Ltd. London, Kentucky We have audited the accompanying balance sheets of Cedar Lane I, Ltd., (a limited partnership) Case No. 20-063-621358072, as of December 31, 2000 and 1999 and the related statements of operations, changes in partners' equity (deficit), and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards and the standards for financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cedar Lane I, Ltd. as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated February 2, 2001 on our consideration of Cedar Lane I, Lts.'s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental data included in this report is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and in our opinion, is presented fairly, in all material respects, in relation to the basic financial statements taken as a whole. /s/Miller, Mayerm Sullivan & Stevens, LLP Lexington, Kentucky February 2, 2001 Cedar Lane I, Ltd. [Letterhead] [LOGO] Miller, Mayer, Sullivan & Stevens LLP INDEPENDENT AUDITORS' REPORT To the Partners Rural Development Cedar Lane I, Ltd. London, Kentucky We have audited the accompanying balance sheets of Cedar Lane I, Ltd., (a limited partnership) Case No. 20-063-621358072, as of December 31, 1999 and 1998 and the related statements of operations, changes in partners' equity (deficit), and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards and the standards for financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cedar Lane I, Ltd. as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated January 27, 2000 on our consideration of Cedar Lane I, Lts.'s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental data included in this report is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and in our opinion, is presented fairly, in all material respects, in relation to the basic financial statements taken as a whole. /s/Miller, Mayerm Sullivan & Stevens, LLP Lexington, Kentucky January 27, 2000 Cedar Lane I, Ltd. [Letterhead] [LOGO] Miller, Mayer, Sullivan & Stevens LLP INDEPENDENT AUDITORS' REPORT To the Partners Rural Development Cedar Lane I, Ltd. London, Kentucky We have audited the accompanying balance sheets of Cedar Lane I, Ltd., (a limited partnership) Case No. 20-063-621358072, as of December 31, 1998 and 1997 and the related statements of operations, changes in partners' equity (deficit), and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards and the standards for financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cedar Lane I, Ltd. as of December 31, 1998 and 1997, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated February 11, 1999 on our consideration of Cedar Lane I, Lts.'s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental data included in this report is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and in our opinion, is presented fairly, in all material respects, in relation to the basic financial statements taken as a whole. /s/Miller, Mayerm Sullivan & Stevens, LLP Lexington, Kentucky February 11, 1999 Silver Creek II, Ltd. [Letterhead] [LOGO] Miller, Mayer, Sullivan & Stevens LLP INDEPENDENT AUDITORS' REPORT To the Partners Silver Creek II, Ltd. We have audited the accompanying balance sheets of Silver Creek II, Ltd., (a limited partnership), as of December 31, 2000 and 1999, and the related statements of operations, changes in partners' equity (deficit), and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Silver Creek II, Ltd. as of December 31, 2000 and 1999 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Our audits was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental data included in this report is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and in our opinion, is presented fairly in all material respects, in relation to the basic financial statements taken as a whole. /s/Miller, Mayerm Sullivan & Stevens, LLP Lexington, Kentucky January 29, 2001 Silver Creek II, Ltd. [Letterhead] [LOGO] Miller, Mayer, Sullivan & Stevens LLP INDEPENDENT AUDITORS' REPORT To the Partners Silver Creek II, Ltd. We have audited the accompanying balance sheets of Silver Creek II, Ltd., (a limited partnership), as of December 31, 1999 and 1998, and the related statements of operations, changes in partners' equity (deficit), and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Silver Creek II, Ltd. as of December 31, 1999 and 1998 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Our audits was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental data included in this report is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and in our opinion, is presented fairly in all material respects, in relation to the basic financial statements taken as a whole. /s/Miller, Mayerm Sullivan & Stevens, LLP Lexington, Kentucky January 27, 2000 Tomkins/Rosecliff, Ltd.: [Letterhead] [LOGO] Deloitte & Touche LLP Suite 1800 200 South Orange Avenue Orlando, Florida 32801 INDEPENDENT AUDITORS' REPORT To the General Partner and Limited Partners of Tomkins/Rosecliff, Ltd.: We have audited the accompanying balance sheet of Tomkins/Rosecliff, Ltd. (a Florida Limited Partnership) as of December 31, 2000, and the related statements of operations, partners' equity 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. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tomkins/Rosecliff, Ltd. (a Florida Limited Partnership) as of December 31, 2000, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. /s/Deloitte & Touche LLP January 19, 2000 Tomkins/Rosecliff,Ltd.: [Letterhead] [LOGO] Deloitte & Touche LLP Suite 1800 200 South Orange Avenue Orlando, Florida 32801 INDEPENDENT AUDITORS' REPORT To the General Partner and Limited Partners of Tomkins/Rosecliff, Ltd.: We have audited the accompanying balance sheet of Tomkins/Rosecliff, Ltd. (a Florida Limited Partnership) as of December 31, 1999, and the related statements of operations, partners' equity 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. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tomkins/Rosecliff, Ltd. (a Florida Limited Partnership) as of December 31, 1999, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. /s/Deloitte & Touche LLP January 21, 2000 Tomkins/Rosecliff, Ltd.: [Letterhead] [LOGO] Deloitte & Touche LLP Suite 1800 200 South Orange Avenue Orlando, Florida 32801 INDEPENDENT AUDITORS' REPORT To the General Partner and Limited Partners of Tomkins/Rosecliff, Ltd.: We have audited the accompanying balance sheet of Tomkins/Rosecliff, Ltd. (a Florida Limited Partnership) as of December 31, 1998, and the related statements of operations, partners' equity 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. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tomkins/Rosecliff, Ltd. (a Florida 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. /s/Deloitte & Touche LLP January 29, 1999 Brookwood L.D.H.A [Letterhead] [LOGO] Follmer Rudzewicz PLC INDEPENDENT AUDITORS' REPORT To the Partners of: Brookwood L.D.H.A. Limited Partnership 28388 Franklin Road Southfield, Michigan 48034 We have audited the accompanying balance sheet of Brookwood L.D.H.A. Limited Partnership (a Michigan limited partnership), MSHDA Development No. 832 as of December 31, 2000 and the related statement of profit and loss, changes in accumulated earnings 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. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of Brookwood L.D.H.A. Limited Partnership, MSHDA No. 832 as of December 31, 2000, and the results of its operations, the changes in its cumulative income and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information of Brookwood L.D.H.A. Limited Partnership, MSHDA No. 832 on pages 13 to 17 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. This additional information is the responsibility of the partnership's management. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards, we have also issued a report dated January 16, 2001 on our consideration of the partnership's internal control structure and on its compliance with laws and regulations. /s/Follmer Rudzewicz PLC Follmer Rudzewicz PLC Certified Public Accountants Southfield, Michigan EIN: 38-3460430 Brookwood L.D.H.A [Letterhead] [LOGO] Follmer, Rudzewicz & Co., P.C. INDEPENDENT AUDITORS' REPORT To the Partners of: Brookwood L.D.H.A. Limited Partnership 28388 Franklin Road Southfield, Michigan 48034 We have audited the accompanying balance sheet of Brookwood L.D.H.A. Limited Partnership (a Michigan limited partnership), MSHDA Development No. 832 as of December 31, 1999 and the related statement of profit and loss, changes in accumulated earnings 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. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of Brookwood L.D.H.A. Limited Partnership, MSHDA No. 832 as of December 31, 1999, and the results of its operations, the changes in its cumulative income and its cash flows for the year then ended in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information of Brookwood L.D.H.A. Limited Partnership, MSHDA No. 832 on pages 13 through 18 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. This additional information is the responsibility of the partnership's management. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards, we have also issued a report dated January 24, 2000 on our consideration of the partnership's internal control structure and on its compliance with laws and regulations. /s/Follmer, Rudzewicz & Co., P.C. Follmer,Rudzewicz & Co. P.C. Certified Public Accountants Southfield, Michigan 38-1910111 Brookwood L.D.H.A [Letterhead] [LOGO] Follmer, Rudzewicz & Co., P.C. INDEPENDENT AUDITORS' REPORT To the Partners of: Brookwood L.D.H.A. Limited Partnership 28388 Franklin Road Southfield, Michigan 48034 We have audited the accompanying balance sheet of Brookwood L.D.H.A. Limited Partnership (a Michigan limited partnership), MSHDA Development No. 832 as of December 31, 1998 and the related statement of profit and loss, changes in accumulated earnings 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. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of Brookwood L.D.H.A. Limited Partnership, MSHDA No. 832 as of December 31, 1998, and the results of its operations, the changes in its cumulative income and its cash flows for the year then ended in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information of Brookwood L.D.H.A. Limited Partnership, MSHDA No. 832 on pages 11 through 14 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. This additional information is the responsibility of the partnership's management. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards, we have also issued a report dated January 22, 1999 on our consideration of the partnership's internal control structure and on its compliance with laws and regulations. /s/Follmer, Rudzewicz & Co., P.C. Follmer,Rudzewicz & Co. P.C. Certified Public Accountants Southfield, Michigan 38-1910111 Burbank Limited Partnership I [Letterhead] Otis, Atwell & Timberlake Professional Association The Partners Burbank Limited Partnership I We have audited the accompanying balance sheet of Burbank Limited Partnership I as of December 31, 1999 and 1998, and the related statements of income, partners' equity (deficit) and cash flows for the years 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 audits. 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Burbank Limited Partnership I as of December 31, 1999 and 1998, and the results of its operations, changes in partners' equity (deficit) and cash flows for the year then ended, in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note 2 to the financial statements, the Partnership's first mortgage note has matured and has not yet been refinanced, which raises substantial doubt about the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/Otis, Atwell & Timberlake, P.A. Certified Public Accountants January 19, 2000 Portland, Maine Virginia Housing Development Authority [Letterhead] [LOGO] Wall Einhorn & Chernitzer., P.C. Certified Public Accountants First Virginia Bank Tower 555 Main Street Suite 1500 Norfolk, Virginia 23510 Alvin A. Wall, CPA Telephone (757)625-4700 Martin A. Einhorn, CPA, CVA Telephone (757)625-0527 Jeffrey S. Chernitzer, CPA INDEPENDENT AUDITORS' REPORT To the Partners Virginia Housing Development Authority The Oaks of Dunlop Farms, L. P. 601 South Belvidere Street (A Limited Partnership) Richmond, Virginia 23220 Norfolk, Virginia We have audited the accompanying balance sheets of The Oaks of Dunlop Farms, L.P. (A Limited Partnership), VHDA Project Number 90-0300-C, as of December 31, 2000 and 1999, and the related statements of operations , partners' equity, and cash flows for the years then ended. These financial statements are the responsibility of the project's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of VHDA Project Number 90-0300-C as of December 31, 2000 and 1999, and the results of its operations, changes in partners' equity, and cash flows for the years then ended in conformity with generally accepted accounting principles. The accompanying supplementary information (shown on pages 10 to 17) is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Wall, Einhorn & Chernitzer, P.C. Norfolk, Virginia January 22, 2001 Virginia Housing Development Authority [Letterhead] [LOGO] Wall Einhorn & Chernitzer., P.C. Certified Public Accountants First Virginia Bank Tower 555 Main Street Suite 1500 Norfolk, Virginia 23510 Alvin A. Wall, CPA Telephone (757)625-4700 Martin A. Einhorn, CPA, CVA Telephone (757)625-0527 Jeffrey S. Chernitzer, CPA INDEPENDENT AUDITORS' REPORT To the Partners Virginia Housing Development Authority The Oaks of Dunlop Farms, L. P. 601 South Belvidere Street (A Limited Partnership) Richmond, Virginia 23220 Norfolk, Virginia We have audited the accompanying balance sheets of The Oaks of Dunlop Farms, L.P. (A Limited Partnership), VHDA Project Number 90-0300-C, as of December 31, 1999 and 1998, and the related statements of operations , partners' equity, and cash flows for the years then ended. These financial statements are the responsibility of the project's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of VHDA Project Number 90-0300-C as of December 31, 1999 and 1998, and the results of its operations, changes in partners' equity, and cash flows for the years then ended in conformity with generally accepted accounting principles. The accompanying supplementary information (shown on pages 10 to 17) is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Wall, Einhorn & Chernitzer, P.C. Norfolk, Virginia January 26, 2000 Timothy House Limited Partnership [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Timothy House Limited Partnership We have audited the accompanying balance sheet of Timothy House Limited Partnership as of December 31, 2000 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. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Timothy House Limited Partnership as of December 31, 2000, and the results of its operations, the changes in partners' equity (deficit) and its cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 21 through 30 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information, except for that portion marked "unaudited," on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits of HUD Programs", we have also issued reports dated January 9, 2001, on our consideration of Timothy House Limited Partnership's internal control structure and on its compliance with requirements applicable to DHCD-assisted programs, and laws and regulations applicable to the financial statements. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer January 9, 2001 Identification Number: 52-1088612 Lead Auditor: William T. Riley, Jr. Timothy House Limited Partnership [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Timothy House Limited Partnership We have audited the accompanying balance sheet of Timothy House Limited Partnership as of December 31, 1999 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. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Timothy House Limited Partnership as of December 31, 1999, and the results of its operations, the changes in partners' equity (deficit) and its cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 21 through 30 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information, except for that portion marked "unaudited," on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits of HUD Programs", we have also issued reports dated January 18, 2000, on our consideration of Timothy House Limited Partnership's internal control structure and on its compliance with requirements applicable to DHCD-assisted programs, fair housing and non-discrimination, and laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer January 18, 2000 Identification Number: 52-1088612 Audit Principal: William T. Riley, Jr. Timothy House Limited Partnership [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Timothy House Limited Partnership We have audited the accompanying balance sheet of Timothy House Limited Partnership as of December 31, 1998 and the related statements of profit and loss (on HUD Form No. 92410), partners' equity 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. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Timothy House Limited Partnership as of December 31, 1998, and the results of its operations, the changes in partners' equity and its cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 22 through 27 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information, except for that portion marked "unaudited," on which we express no opinion, has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits of HUD Programs", we have also issued reports dated January 13, 1999, on our consideration of Timothy House Limited Partnership's internal control structure and on its compliance with requirements applicable to DHCD-assisted programs, fair housing and non-discrimination, and laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer January 13, 1999 Identification Number: 52-1088612 Audit Principal: William T. Riley, Jr. Westover Station Associates, L.P. [Letterhead] Wilfore & Wynn A Professional Corporation Certified Public Accountants INDEPENDENT AUDITORS' REPORT The Partners Virginia Housing Development Westover Station Associates, L.P. Authority (A Limited Partnership) 601 South Belvidere Street Newport News, Virginia Richmond, Virginia 23220 We have audited the accompanying balance sheets of Westover Station Associates, L.P., VHDA Project Number 90-0303-C, as of December 31, 2000 and 1999 and the related statements of operations, partners' capital 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 audits. We conducted our audits in accordance with generally accepted auditing standards and the Virginia Housing Development Authority's Mortgagor/Grantee's Audit Guide. 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Westover Station Associates, L.P. at December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules included in the report are presented for purposes of additional analysis and are not a required part of the basic financial statements of Westover Station Associates, L.P. Such information has been subjected to the auditing procedures applied in the audit of the basis financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/Wilfore & Wynn Wilfore & Wynn Virginia Beach, Virginia February 6, 2001 4530 Professional Circle Virginia Beach, Virginia 23455-6498 Telephone (757)456-0111 Fax (757)473-1095 Westover Station Associates, L.P. [Letterhead] Wilfore & Wynn A Professional Corporation Certified Public Accountants INDEPENDENT AUDITORS' REPORT The Partners Virginia Housing Development Westover Station Associates, L.P. Authority (A Limited Partnership) 601 South Belvidere Street Newport News, Virginia Richmond, Virginia 23220 We have audited the accompanying balance sheets of Westover Station Associates, L.P., VHDA Project Number 90-0303-C, as of December 31, 1999 and 1998 and the related statements of operations, partners' capital 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 audits. We conducted our audits in accordance with generally accepted auditing standards and the Virginia Housing Development Authority's Mortgagor/Grantee's Audit Guide. 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Westover Station Associates, L.P. at December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules included in the report are presented for purposes of additional analysis and are not a required part of the basic financial statements of Westover Station Associates, L.P. Such information has been subjected to the auditing procedures applied in the audit of the basis financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/Wilfore & Wynn Wilfore & Wynn Virginia Beach, Virginia February 9, 2000 4530 Professional Circle Virginia Beach, Virginia 23455-6498 Telephone (757)456-0111 Fax (757)473-1095 Christiansted Limited Dividend Housing [Letterhead] Kirschner Hutton Perlin, P.C. Certified Public Accountants 26913 Northwestern Hwy. Suite 510 Southfield, Michigan 48034-8444 Telephone: (248) 356-3880 Facsimile: (248) 356-3885 Independent Auditors' Report February 5, 2001 Partners Christiansted Limited Dividend Housing Association Limited Partnership We have audited the accompanying balance sheet of Christiansted Limited Dividend Housing Association Limited Partnership as of December 31, 2000 and 1999, and the related statements of operations, partners' deficit and cash flows for the years 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 audits. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Christiansted Limited Dividend Housing Association Limited Partnership as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/Kirshner Huton Perlin, P.C. Christiansted Limited Dividend Housing [Letterhead] Kirschner Hutton Perlin, P.C. Certified Public Accountants 26913 Northwestern Hwy. Suite 510 Southfield, Michigan 48034-8444 Telephone: (248) 356-3880 Facsimile: (248) 356-3885 Independent Auditors' Report January 18, 2000 Partners Christiansted Limited Dividend Housing Association Limited Partnership We have audited the accompanying balance sheet of Christiansted Limited Dividend Housing Association Limited Partnership as of December 31, 1999 and 1998, and the related statements of operations, partners' deficit and cash flows for the years 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 audits. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Christiansted Limited Dividend Housing Association Limited Partnership as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/Kirshner Huton Perlin, P.C. St. Croix II. Limited Partnership [Letterhead] Kirschner Hutton Perlin, P.C. Certified Public Accountants 26913 Northwestern Hwy. Suite 510 Southfield, Michigan 48034-8444 Telephone: (248) 356-3880 Facsimile: (248) 356-3885 Independent Auditors' Report February 5, 2001 Partners St. Croix II. Limited Partnership We have audited the accompanying balance sheet of St. Croix II, Limited Partnership as of December 31, 2000 and 1999, and the related statements of operations, partners' deficit and cash flows for the years 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 audits. 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of St. Croix II, Limited Partnership as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/Kirshner Huton Perlin, P.C. St. Croix II. Limited Partnership [Letterhead] Kirschner Hutton Perlin, P.C. Certified Public Accountants 26913 Northwestern Hwy. Suite 510 Southfield, Michigan 48034-8444 Telephone: (248) 356-3880 Facsimile: (248) 356-3885 Independent Auditors' Report January 17, 2000 Partners St. Croix II. Limited Partnership We have audited the accompanying balance sheet of St. Croix II, Limited Partnership as of December 31, 1999 and 1998, and the related statements of operations, partners' deficit and cash flows for the years 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 audits. 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of St. Croix II, Limited Partnership as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/Kirshner Huton Perlin, P.C. Kensington Place Townhomes, Letterhead] [LOGO] KPMG LLP 303 Peachtree Street, N.E. Suite 2000 Atlanta, GA 30308 Independent Auditors' Report The Partners Kensington Place Townhomes, A Limited Partnership: We have audited the accompanying balance sheets of Kensington Place Townhomes, A Limited Partnership as of December 31, 2000 and 1999, and the related statements of loss, partners' capital, and cash flows for the years 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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kensington Place Townhomes, A Limited Partnership as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. /s/ KPMG LLP February 23, 2001 Kensington Place Townhomes, Letterhead] [LOGO] KPMG Peat Marwick LLP 303 Peachtree Street, N.E. Suite 2000 Atlanta, GA 30308 Independent Auditors' Report The Partners Kensington Place Townhomes, A Limited Partnership: We have audited the accompanying balance sheets of Kensington Place Townhomes, A Limited Partnership as of December 31, 1999 and 1998, and the related statements of loss, partners' capital, and cash flows for the years 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 audits. 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kensington Place Townhomes, A Limited Partnership as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/ KPMG Peat Marwick LLP February 25, 2000 Cobblestone Place Townhomes, [Letterhead] [LOGO] KPMG LLP 303 Peachtree Street, N.E. Suite 2000 Atlanta, GA 30308 Independent Auditors' Report The Partners Cobblestone Place Townhomes, A Limited Partnership: We have audited the accompanying balance sheets of Cobblestone Place Townhomes, A Limited Partnership as of December 31, 2000 and 1999, and the related statements of loss, partners' capital, and cash flows for the years 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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cobblestone Place Townhomes, A Limited Partnership as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. /s/ KPMG LLP February 23, 2000 Cobblestone Place Townhomes, [Letterhead] [LOGO] KPMG Peat Marwick LLP 303 Peachtree Street, N.E. Suite 2000 Atlanta, GA 30308 Independent Auditors' Report The Partners Cobblestone Place Townhomes, A Limited Partnership: We have audited the accompanying balance sheets of Cobblestone Place Townhomes, A Limited Partnership as of December 31, 1999 and 1998, and the related statements of loss, partners' capital, and cash flows for the years 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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cobblestone Place Townhomes, A Limited Partnership as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with auditing standards generally accepted in the United States of America. /s/ KPMG Peat Marwick LLP February 23, 2000 Whispering Trace Apartments [Letterhead] [LOGO] KPMG LLP 303 Peachtree Street, N.E. Suite 2000 Atlanta, GA 30308 Independent Auditors' Report The Partners Whispering Trace Apartments, A Limited Partnership: We have audited the accompanying balance sheets of Whispering Trace Apartments, A Limited Partnership as of December 31, 2000 and 1999, and the related statements of loss, partners' capital (deficit), and cash flows for the years 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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 statements presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Whispering Trace Apartments, A Limited Partnership as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. /s/ KPMG LLP February 23, 2001 Whispering Trace Apartments [Letterhead] [LOGO] KPMG Peat Marwick LLP 303 Peachtree Street, N.E. Suite 2000 Atlanta, GA 30308 Independent Auditors' Report The Partners Whispering Trace Apartments, A Limited Partnership: We have audited the accompanying balance sheets of Whispering Trace Apartments, A Limited Partnership as of December 31, 1999 and 1998, and the related statements of loss, partners' capital (deficit), and cash flows for the years 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 audits. 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 statements presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Whispering Trace Apartments, A Limited Partnership as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/ KPMG Peat Marwick LLP February 17, 2000 Huguenot Park Associates, L.P. [letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS REPORT To the Partners Huguenot Park Associates, L.P. We have audited the accompanying balance sheet of Huguenot Park Associates, L.P. as of December 31, 2000 and 1999, and the related statements of operations, partners' capital and cash flows for the years 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. 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 audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Huguenot Park Associates, L.P. as of December 31, 2000 and 1999, and the results of its operations, the changes in partners' capital and cash flows for the year then ended, in conformity with generally accepted accounting principles. /s/Reznick Fedder & Silverman Bethesda, Maryland February 17, 2001 Huguenot Park Associates, L.P. [letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS REPORT To the Partners Huguenot Park Associates, L.P. We have audited the accompanying balance sheet of Huguenot Park Associates, L.P. as of December 31, 1999 and 1998, and the related statements of operations, partners' capital and cash flows for the years 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. 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 audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Huguenot Park Associates, L.P. as of December 31, 1999 and 1998, and the results of its operations, the changes in partners' capital and cash flows for the year then ended, in conformity with generally accepted accounting principles. /s/Reznick Fedder & Silverman Bethesda, Maryland February 7, 2000 Westgate Apartments Limited Partnesrhip [Letterhead] [LOGO] EideBailly LLP Consultants, Certified Public Accountants INDEPENDENT AUDITOR'S REPORT The Partners Westgate Apartments Limited Partnesrhip St. Paul, Minnesota We have audited the accompanying balance sheets of Westgate Apartments Limited Partnership as of December 31, 2000 and 1999, and the related statements of operations, partners' equity, and cash flows for the years 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 audits. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Westgate Apartments Limited Partnership as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/EideBailly LLP Fargo, North Dakota January 22, 2001 Westgate Apartments Limited Partnesrhip [Letterhead] [LOGO] EideBailly LLP Consultants, Certified Public Accountants INDEPENDENT AUDITOR'S REPORT The Partners Westgate Apartments Limited Partnesrhip Wahpeton, North Dakota We have audited the accompanying balance sheets of Westgate Apartments Limited Partnership as of December 31, 1999 and 1998, and the related statements of operations, partners' equity, and cash flows for the years 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 audits. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Westgate Apartments Limited Partnership as of December 31, 1999 and 1998, and the results of its operations, and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/EideBailly LLP Fargo, North Dakota January 21, 2000 Bixel House [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 90731 Richard Suarez, Jr., CPA Telephone (310) 832-7887 Fax (310) 832-6563 Independent Auditor's Report To The Partners of Bixel House Los Angeles, California I have audited the accompanying balance sheet of Bixel House as of December 31, 2000, and the related statements of operations, changes in partners' capital, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bixel House at December 31, 2000, and the results of its operations and cash flows for the year then ended, in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation San Pedro, California January 10, 2001 Bixel House [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 90731 Richard Suarez, Jr., CPA Telephone (310) 832-7887 Fax (310) 832-6563 Independent Auditor's Report To The Partners of Bixel House Los Angeles, California I have audited the accompanying balance sheet of Bixel House as of December 31, 1999, and the related statements of operations, changes in partners' capital, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bixel House at December 31, 1999, and the results of its operations and cash flows for the year then ended, in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation San Pedro, California February 8, 2000 Bixel House [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 90731 Richard Suarez, Jr., CPA Telephone (310) 832-7887 Fax (310) 832-6563 Independent Auditor's Report To The Partners of Bixel House Los Angeles, California I have audited the accompanying balance sheet of Bixel House as of December 31, 1998, and the related statements of operations, changes in partners' capital, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bixel House at December 31, 1998, and the results of its operations and cash flows for the year then ended, in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation San Pedro, California February 28, 1999 Harmony Apartments [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 90731 Richard Suarez, Jr., CPA Telephone (310) 832-7887 Fax (310) 832-6563 Independent Auditor's Report To The Partners of Harmony Apartments Los Angeles, California I have audited the accompanying balance sheet of Harmony Apartments as of December 31, 2000, and the related statements of operations, changes in partners' capital, and cash flows for the year ended December 31, 2000. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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 statements presentation. I believe that my audit provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Harmony Apartments at December 31, 2000, and the results of its operations and cash flows for the year ended December 31, 2000 in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation San Pedro, California January 29, 2001 Harmony Apartments [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 90731 Richard Suarez, Jr. CPA Telephone (310) 832-7887 Fax (310) 832-6563 Independent Auditor's Report To The Partners of Harmony Apartments Los Angeles, California I have audited the accompanying balance sheet of Harmony Apartments as of December 31, 1999, and the related statements of operations, changes in partners' capital, and cash flows for the year ended December 31, 1999. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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 statements presentation. I believe that my audit provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Harmony Apartments at December 31, 1999, and the results of its operations and cash flows for the year ended December 31, 1999 in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation San Pedro, California February 8, 2000 Harmony Apartments [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 90731 Richard Suarez, Jr., CPA Telephone (310) 832-7887 Fax (310) 832-6563 Independent Auditor's Report To The Partners of Harmony Apartments Los Angeles, California I have audited the accompanying balance sheet of Harmony Apartments as of December 31, 1998, and the related statements of operations, changes in partners' capital, and cash flows for the year ended December 31, 1998. These financial statements are the responsibility of the Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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 statements presentation. I believe that my audit provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Harmony Apartments at December 31, 1998, and the results of its operations and cash flows for the year ended December 31, 1998 in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation San Pedro, California February 28, 1999 Schumaker Place Associates, L.P. [Letterhead] [LOGO] Halbert, Katz & Co., P.C. 121 South Broad Street Philadelphia, Pennsylvania 19107 INDEPENDENT AUDITORS' REPORT To the Partners Schumaker Place Associates, L.P. Wilmington, Delaware We have audited the accompanying balance sheets of Schumaker Place Associates, L.P., as of December 31, 2000 and December 31, 1999, and the related statements of loss, partners' capital (capital deficiency) and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Schumaker Place Associates, L.P., as of December 31, 2000 and December 31, 1999, and the results of its operations, changes in partners' capital (capital deficiency) and its cash flows for the years then ended, in conformity with generally accepted accounting principles. /s/Halbert Katz & Co., P.C. January 31, 2001 Schumaker Place Associates, L.P. [Letterhead] [LOGO] Halbert, Katz & Co., P.C. 121 South Broad Street Philadelphia, Pennsylvania 19107 INDEPENDENT AUDITORS' REPORT To the Partners Schumaker Place Associates, L.P. Wilmington, Delaware We have audited the accompanying balance sheets of Schumaker Place Associates, L.P., as of December 31, 1999 and December 31, 1998, and the related statements of loss, partners' capital (capital deficiency) and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Schumaker Place Associates, L.P., as of December 31, 1999 and December 31, 1998, and the results of its operations, changes in partners' capital (capital deficiency) and its cash flows for the years then ended, in conformity with generally accepted accounting principles. Our audit were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supporting information included in the report (shown on page 12) is presented for the purpose of additional analysis and is not a required part of the basic financial statements of Schumaker Place Associates, L.P. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Halbert Katz & Co., P.C. January 31, 2000 Circle Terrace Associates [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Circle Terrace Associates Limited Partnership We have audited the accompanying balance sheet of Circle Terrace Associates Limited Partnership as of December 31, 2000, 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. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Circle Terrace Associates Limited Partnership as of December 31, 2000, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 27 through 36 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits of HUD Programs", we have also issued reports dated February 20, 2001 on our consideration of Circle Terrace Associates Limited Partnership's internal control and on its compliance with specific requirements applicable to Major HUD and fair housing and non-discrimination. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. /s/Reznick Fedder & Silverman Bethesda, Maryland Federal Employer February 20, 2001 Identification Number: 52-1088612 Lead Auditor: Robert J. Denmark Circle Terrace Associates [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Circle Terrace Associates Limited Partnership We have audited the accompanying balance sheet of Circle Terrace Associates Limited Partnership as of December 31, 1999, 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. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Circle Terrace Associates Limited Partnership as of December 31, 1999, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 27 through 37 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits of HUD Programs", we have also issued reports dated March 24, 2000 on our consideration of Circle Terrace Associates Limited Partnership's internal control and on its compliance with specific requirements applicable to Major HUD and fair housing and non-discrimination. /s/Reznick Fedder & Silverman Bethesda, Maryland Federal Employer March 24, 2000 Identification Number: 52-1088612 Lead Auditor: Robert J. Denmark Circle Terrace Associates [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Circle Terrace Associates Limited Partnership We have audited the accompanying balance sheet of Circle Terrace Associates Limited 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. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. 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 provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Circle Terrace Associates Limited Partnership as of December 31, 1998, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the year then ended, in conformity with generally accepted accounting principles. The Housing Assistance Payment contracts covering all 303 units expired on November 30, 1998 and November 30, 1997. It is uncertain whether HUD will renew these contracts under terms that are consistent with the successful operations of the project (see note G). Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 28 through 37 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards and the "Consolidated Audit Guide for Audits of HUD Programs", we have also issued reports dated January 20, 1999 on our consideration of Circle Terrace Associates Limited Partnership's internal control and on its compliance with specific requirements applicable to Major HUD and DHCD-assisted programs, fair housing and non-discrimination, and laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Bethesda, Maryland Federal Employer January 20, 1999 Identification Number: 52-1088612 Audit Principal: Lester Kanis Water Oak [Letterhead] [LOGO] Habif, Arogeti & Wynne, LLP INDEPENDENT AUDITORS REPORT To the Partners Water Oak Apartments, L.P. We have audited the accompanying balance sheets of WATER OAK APARTMENTS, L.P., RHS Project No. 09-64-581801555 as of December 31, 2000 and 1999, and the related statements of operations, changes in partners' equity (deficit), and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the U.S. Department of Agriculture, Farmers Home Administration's Audit Program. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In accordance with Government Auditing Standards, we have also issued reports dated January 20, 2001 on our consideration of WATER OAK APARTMENTS, L.P.'s internal control and on its compliance with laws and regulations applicable to the financial statements. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WATER OAK APARTMENTS, L.P., as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 13 through 22 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Habif, Arogeti & Wynne, LLP Atlanta, Georgia January 20, 2001 Water Oaks [Letterhead] [LOGO] Habif, Arogeti & Wynne, LLP INDEPENDENT AUDITORS REPORT To the Partners Water Oaks Apartments, L.P. We have audited the accompanying balance sheet of WATER OAKS APARTMENTS, L.P., RHS Project No. 09-64-581801555 as of December 31, 1999 and the related statements of operations, partners' equity (deficit), and cash flows for the years 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. The financial statements of WATER OAK APARTMENTS, L.P. as of December 31, 1998 were audited by other auditors whose report dated January 28, 1999 expressed and unqualified opinion on those statements. We conducted our audits in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the U.S. Department of Agriculture, Farmers Home Administration's Audit Program. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In accordance with Government Auditing Standards, we have also issued reports dated January 21, 2000 on our consideration of WATER OAK APARTMENTS, L.P.'s internal control and on its compliance with laws and regulations applicable to the financial statements. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WATER OAKS APARTMENTS, L.P., as of December 31, 1999, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 13 through 22 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Habif, Arogeti & Wynne, LLP Atlanta, Georgia January 21, 2000 Water Oaks [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS REPORT To the Partners Water Oaks Apartments, L.P. We have audited the accompanying balance sheets of Water Oaks Apartments, L.P., RHS Project No. 09-64-581801555 as of December 31, 1998 and 1997 and the related statements of operations, partners' equity (deficit), and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Water Oaks Apartments, L.P., RHS Project No. 09-64-581801555 as of December 31, 1998 and 1997, and the results of its operations, the changes in partners' equity (deficit), and its cash flows for the years then ended in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 16 through 22 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards, we have also issued reports dated January 28, 1999, on our consideration of Water Oak Apartments, L.P.'s internal control and on its compliance with laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Atlanta, Georgia January 28, 1999 Archer Village [Letterhead] [LOGO] Habif, Arogeti &Wynne, LLP INDEPENDENT AUDITORS' REPORT To the Partners Archer Village, Ltd. We have audited the accompanying balance sheets of ARCHER VILLAGE, LTD., (RHS Project No.: 09-001-267869575), as of December 31, 2000 and 1999, and the related statements of operations, changes in partners' accumulated deficit, and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the U.S. Department of Agriculture, Farmers Home Administration's Audit Program. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ARCHER VILLAGE, LTD. as of December 31, 2000 and 1999, and the results of its operations, its changes in partners' accumulated deficit, and its cash flows for the years then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued reports dated January 20, 2001, on our consideration of ARCHER VILLAGE, LTD. internal control and on its compliance with laws and regulations applicable to the financial statements. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 13 through 18 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Habif Arogeti &Wynne, LLP Atlanta, Georgia January 20, 2001 Archer Village [Letterhead] [LOGO] Habif, Arogeti & Wynne, LLP INDEPENDENT AUDITORS' REPORT To the Partners Archer Village, Ltd. We have audited the accompanying balance sheet of ARCHER VILLAGE, LTD., RHS Project No.: 09-001-267869575, as of December 31, 1999, and the related statements of operations, changes in partners' accumulated 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 audits. The financial statements of ARCHER VILLAGE , LTD., as of December 31, 1998 were audited by other auditors whose report dated January 28, 1999 expressed and unqualified opinion on those statements. We conducted our audits in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the U.S. Department of Agriculture, Farmers Home Administration's Audit Program. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ARCHER VILLAGE, LTD. as of December 31, 1999 and the results of its operations, its changes in partners' accumulated deficit and its cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued reports dated January 21, 2000 on our consideration of ARHCER VILLAGE, LTD. internal control and on its compliance with laws and regulations applicable to the financial statements. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 13 through 18 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Habif Arogeti & Wynne, LLP Atlanta, Georgia January 21, 2000 Archer Village [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Archer Village, Ltd. We have audited the accompanying balance sheets of Archer Village, Ltd., RHS Project No.: 09-001-267869575, as of December 31, 1998 and 1997, and the related statements of operations, partners' equity (deficit), and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Archer Village, Ltd., RHS Project No.: 09-001-267869575 as of December 31, 1998 and 1997, and the results of its operations, the changes in partners' equity (deficit) and its cash flows for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 16 through 22 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards, we have also issued reports dated January 28, 1999, on our consideration of Archer Village, Ltd.'s internal control and its compliance with laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Atlanta, Georgia January 28, 1999 Ocean View Apartments [Letterhead] [LOGO] Habif Arogeti & Wynne, LLP INDEPENDENT AUDITORS' REPORT To the Partners Ocean View Apartments, L.P. We have audited the accompanying balance sheets of OCEAN VIEW APARTMENTS, L.P., (RHS Project No.: 09-45-581801553), as of December 31, 2000 and 1999, and the related statements of operations, changes in partners' accumulated deficit, and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the U.S. Department of Agriculture, Farmers Home Administration's Audit Program. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In accordance with Government Auditing Standards, we have also issued reports dated January 20, 2001 on our consideration of OCEAN VIEW APARTMENTS, L.P's internal control structure and on its compliance with laws and regulations applicable to the financial statements. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of OCEAN VIEW APARTMENTS, L.P., as of December 31, 2000 and 1999, and the results of its operations, its changes in partners' equity (deficit), and its cash flows for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 11 through 15 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Habif Arogeti & Wynne, LLP Atlanta, Georgia January 20, 2001 Ocean View Apartments [Letterhead] [LOGO] Habif Arogeti & Wynne, LLP INDEPENDENT AUDITORS' REPORT To the Partners Ocean View Apartments, L.P. We have audited the accompanying balance sheet of OCEAN VIEW APARTMENTS, L.P., RHS Project No.: 09-45-581801553, as of December 31, 1999 and the related statements of operations, changes in partners' accumulated 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 audits. The financial statements of OCEAN VIEW APARTMENTS, L.P. as of December 31, 1998 were audited by other auditors whose report dated January 28, 1999 expressed and unqualified opinion on those statements. We conducted our audits in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the U.S. Department of Agriculture, Farmers Home Administration's Audit Program. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In accordance with Government Auditing Standards, we have also issued reports dated January 21, 2000 on our consideration of OCEAN VIEW APARTMENTS, L.P's internal control and on its compliance with laws and regulations applicable to the financial statements. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of OCEAN VIEW APARTMENTS, L.P., as of December 31, 1999 and the results of its operations, the changes in partners' equity (deficit) and cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 11 through 15 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Habif Arogeti & Wynne, LLP Atlanta, Georgia January 21, 2000 Ocean View Apartments [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Ocean View Apartments, L.P. We have audited the accompanying balance sheets of Ocean View Apartments, L.P., RHS Project No.: 09-45-581801553, as of December 31, 1998 and 1997, and the related statements of operations, changes in partners' equity (deficit) and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ocean View Apartments, L.P., RHS Project No.: 09-45-581801553, as of December 31, 1998 and 1997, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 16 through 22 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards we have also issued reports dated January 28, 1999 on our consideration of Ocean View Apartments, L.P.'s internal control structure and on its compliance with laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Atlanta, Georgia January 9, 1999 Yester Oaks [Letterhead] [LOGO] Habif Arogeti & Wynne, LLP INDEPENDENT AUDITORS' REPORT To the Partners Yester Oaks, L.P. We have audited the accompanying balance sheets of YESTER OAKS, L.P. (RHS Project No.: 11-046-581814319), as of December 31, 2000 and 1999, and the related statements of operations, changes in partners' accumulated deficit, and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the U.S. Department of Agriculture, Farmers Home Administration's Audit Program. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of YESTER OAKS, L.P. as of December 31, 2000 and 1999, and the results of its operations, its changes in partners' accumulated deficit, and its cash flows for the years then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued reports dated January 20, 2001 on our consideration of YESTER OAKS, L.P.'s internal control and on its compliance with laws and regulations applicable to the financial statements. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on page 12 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Habif Arogeti & Wynne, LLP Atlanta, Georgia January 20, 2001 Yester Oaks [Letterhead] [LOGO] Habif Arogeti & Wynne, LLP INDEPENDENT AUDITORS' REPORT To the Partners Yester Oaks, L.P. We have audited the accompanying balance sheet of YESTER OAKS, L.P. RHS Project No.: 11-046-581814319, as of December 31, 1999 and the related statements of operations, changes in partners' accumulated 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 audits. The financial statements of YESTER OAKS, L.P. as of December 31, 1998 were audited by other auditors whose report dated January 28, 1999 expressed and unqualified opinion on those statements. We conducted our audits in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the U.S. Department of Agriculture, Farmers Home Administration's Audit Program. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of YESTER OAKS, L.P., as of December 31, 1999 and the results of its operations, the changes in partners' equity (deficit) and cash flows for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued reports dated January 21, 2000 on our consideration of YESTER OAKS, L.P.'s internal control and on its compliance with laws and regulations applicable to the financial statements. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on page 12 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Habif Aroget & Wynne, LLP Atlanta, Georgia January 28, 2000 Yester Oaks [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS' REPORT To the Partners Yester Oaks, L.P. We have audited the accompanying balance sheets of Yester Oaks, L.P.,RHS Project No.: 11-046-0581814319, as of December 31, 1998 and 1997, and the related statements of operations, changes in partners' equity (deficit), and cash flows for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits 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 provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Yester Oaks, L.P., RHS Project No.: 11-046-0581814319 as of December 31, 1998 and 1997, and the results of its operations, the changes in partners' equity (deficit), and its cash flows for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 16 through 17 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. In accordance with Government Auditing Standards, we have also issued reports dated January 28, 1999, on our consideration of Yester Oaks L.P.'s internal control and on its compliance with laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Atlanta, Georgia January 28, 1999 HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP [letterhead] Haran & Associates Ltd. INDEPENDENT AUDITOR'S REPORT To the Partners HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP Detroit, Michigan We have audited the accompanying balance sheet of HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP (a Limited Partnership) as of December 31, 2000, and the related statements of profit and loss, changes in partners' equity and statement of 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. 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 provides a reasonable basis for our opinion. In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP as of December 31, 2000, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. /s/Haran & Associates Ltd. Certified Public Accountants Wilmette, Illinois Illnois Certificate No. 060-3097692 January 12, 2001 HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSH [letterhead] Haran & Associates Ltd. INDEPENDENT AUDITOR'S REPORT To the Partners HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP Detroit, Michigan We have audited the accompanying balance sheet of HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP (a Limited Partnership) as of December 31, 1999, and the related statements of profit and loss, changes in partners' equity and statement of 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. 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 provides a reasonable basis for our opinion. In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP as of December 31, 1999, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. /s/Haran & Associates Ltd. Certified Public Accountants Wilmette, Illinois Illnois Certificate No. 060-3097692 January 25, 2000 HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSH [letterhead] Haran & Associates Ltd. INDEPENDENT AUDITOR'S REPORT To the Partners HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP Detroit, Michigan We have audited the accompanying balance sheet of HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP (a Limited Partnership) as of December 31, 1998, and the related statements of profit and loss, changes in partners' equity and statement of 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. 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 provides a reasonable basis for our opinion. In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of HISTORIC NEW CENTER APARTMENTS 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. /s/Haran & Associates Ltd. Certified Public Accountants Wilmette, Illinois Illnois Certificate No. 060-3097692 February 3, 1999