November 14, 2003
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Boston Financial Qualified Housing Tax Credits L.P. IV
Report on Form 10-QSB for the Quarter Ended September 30, 2003
File Number 0-19765
Dear Sir/Madam:
Pursuant to the requirements of section 15(d) of the Securities Exchange Act of
1934, filed herewith a copy of subject report.
Very truly yours,
/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller
QH4-Q2.DOC
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
--------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-19765
Boston Financial Qualified Housing Tax Credits L.P. IV
- --------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-3044617
- ---------------------------------------------- -------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Arch Street, Boston, Massachusetts 02110-1106
- ----------------------------------------------------- ---------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-3911
-------------------------
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 .
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page No.
- ------------------------------ --------
Item 1. Financial Statements
Balance Sheet (Unaudited) - September 30, 2003 1
Statements of Operations (Unaudited) - For the Three and Six
Months Ended September 30, 2003 and 2002 2
Statement of Changes in Partners' Equity (Deficiency)
(Unaudited) - For the Six Months Ended September 30, 2003 3
Statements of Cash Flows (Unaudited) - For the
Six Months Ended September 30, 2003 and 2002 4
Notes to the Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 3. Controls and Procedures 12
PART II - OTHER INFORMATION
Items 1-6 13
SIGNATURE 14
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
BALANCE SHEET
September 30, 2003
(Unaudited)
Assets
Cash and cash equivalents $ 411,646
Marketable securities, at fair value 100,438
Investments in Local Limited Partnerships (Note 1) 12,630,563
Other assets 1,850
-------------
Total Assets $ 13,144,497
=============
Liabilities and Partners' Equity
Due to affiliate $ 370,204
Accrued expenses 72,762
-------------
Total Liabilities 442,966
-------------
General, Initial and Investor Limited Partners' Equity 12,700,284
Net unrealized gains on marketable securities 1,247
-------------
Total Partners' Equity 12,701,531
-------------
Total Liabilities and Partners' Equity $ 13,144,497
=============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
STATEMENTS OF OPERATIONS
For the Three and Six Months Ended September 30, 2003 and 2002
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30, September 30,September 30,
2003 2002 2003 2002
-------------- -------------- -------------- ---------------
Revenue:
Investment $ 2,034 $ 5,103 $ 4,700 $ 12,713
Other 11,484 104,660 81,557 109,135
-------------- -------------- -------------- ----------------
Total Revenue 13,518 109,763 86,257 121,848
-------------- -------------- -------------- ---------------
Expenses:
Asset management fees, affiliate 45,121 44,064 90,242 88,127
Provision for valuation of advances to
Local Limited Partnerships 7,008 6,496 8,964 173,774
General and administrative
(includes reimbursements to an
affiliate in the amounts of
$81,592 and $153,048 in 2003
and 2002, respectively) 69,543 105,857 140,375 234,547
Amortization 11,994 16,401 23,988 32,802
-------------- -------------- -------------- ---------------
Total Expenses 133,666 172,818 263,569 529,250
-------------- -------------- -------------- ---------------
Loss before equity in income
(losses) of Local Limited Partnerships (120,148) (63,055) (177,312) (407,402)
Equity in income (losses) of Local
Limited Partnerships (Note 1) (48,694) 21,712 (366,928) 127,731
-------------- -------------- -------------- ---------------
Net Loss $ (168,842) $ (41,343) $ (544,240) $ (279,671)
============== ============== ============== ================
Net Loss allocated:
General Partners $ (1,688) $ (414) $ (5,442) $ (2,797)
Limited Partners (167,154) (40,929) (538,798) (276,874)
-------------- -------------- -------------- ---------------
$ (168,842) $ (41,343) $ (544,240) $ (279,671)
============== ============== ============== ===============
Net Loss per Limited Partner
Unit (68,043 Units) $ (2.46) $ (0.60) $ (7.92) $ (4.07)
======= ======= ======= =======
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY (Deficiency)
For the Six Months Ended September 30, 2003
(Unaudited)
Initial Investor Net
General Limited Limited Unrealized
Partners Partners Partners Gains Total
------------ ----------- -------------- ----------- -------------
Balance at March 31, 2003 $ (458,641) $ 5,000 $ 13,698,165 $ 2,997 $ 13,247,521
------------ ----------- -------------- ----------- -------------
Comprehensive Loss:
Change in net unrealized gains
on marketable securities
available for sale - - - (1,750) (1,750)
Net Loss (5,442) - (538,798) - (544,240)
----------- ----------- -------------- ----------- -------------
Comprehensive Loss (5,442) - (538,798) (1,750) (545,990)
----------- ----------- -------------- ----------- -------------
Balance at September 30, 2003 $ (464,083) $ 5,000 $ 13,159,367 $ 1,247 $ 12,701,531
=========== =========== ============== =========== =============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Six Months Ended September 30, 2003 and 2002
(Unaudited)
2003 2002
------------- -------------
Net cash used for operating activities $ (275,630) $ (616,361)
Net cash provided by investing activities 97,593 212,102
------------- -------------
Net decrease in cash and cash equivalents (178,037) (404,259)
Cash and cash equivalents, beginning 589,683 747,914
------------- -------------
Cash and cash equivalents, ending $ 411,646 $ 343,655
============= =============
The accompanying notes are an integral part of these financial statements.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
Notes to the Financial Statements
(Unaudited)
The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-QSB and do not include all of the
information and note disclosures required by accounting principles generally
accepted in the United States of America. These statements should be read in
conjunction with the financial statements and notes thereto included with the
Partnership's Form 10-KSB for the year ended March 31, 2003. In the opinion of
the Managing General Partner, these financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the Partnership's financial position and results of operations.
The results of operations for the periods may not be indicative of the results
to be expected for the year.
The Managing General Partner of the Partnerships has elected to report results
of the Local Limited Partnerships in which the Partnership has a limited
partnership interest 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 June 30, 2003 and 2002.
1. Investments in Local Limited Partnerships
The Partnership has limited partnership interests in twenty-two Local Limited
Partnerships which were organized for the purpose of owning and operating
multi-family housing complexes, all of which are government-assisted. Upon
dissolution of the Local Limited Partnerships, proceeds will be distributed
according to the respective Local Limited Partnership agreements.
The following is a summary of investments in Local Limited Partnerships at
September 30, 2003:
Capital contributions and advances paid to Local Limited Partnerships
and purchase price paid to withdrawing partners of Local Limited Partnerships $ 43,948,972
Cumulative equity in losses of Local Limited Partnerships (excluding cumulative
unrecognized losses of $11,357,583) (26,259,436)
Cumulative cash distributions received from Local Limited Partnerships (3,904,668)
---------------
Investments in Local Limited Partnerships before adjustments 13,784,868
Excess investment cost over the underlying assets acquired:
Acquisition fees and expenses 3,613,837
Cumulative amortization of acquisition fees and expenses (1,128,901)
---------------
Investments in Local Limited Partnerships before reserve for valuation 16,269,804
Reserve for valuation of investments in Local Limited Partnerships (3,639,241)
---------------
Investments in Local Limited Partnerships $ 12,630,563
===============
For the six months ended September 30, 2003, the Partnership advanced $8,964 to
one of the Local Limited Partnerships, all of which was reserved. The
Partnership has recorded a reserve for valuation of its investments in certain
Local Limited Partnerships in order to appropriately reflect the estimated net
realizable value of these investments.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
Notes to the Financial Statements (continued)
(Unaudited)
1. Investments in Local Limited Partnerships (continued)
The Partnership's share of the net losses of the Local Limited Partnerships for
the six months ended September 30, 2003 is $1,088,547. For the six months ended
September 30, 2003, the Partnership has not recognized $721,619 of equity in
losses relating to certain Local Limited Partnerships where cumulative equity in
losses and cumulative distributions exceeded its total investments in these
Local Limited Partnerships.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
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 statements and is 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 its 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.
Accounting Policies
The Partnership's accounting policies include those that relate to its
recognition of investments in Local Limited Partnerships using the equity method
of accounting. The Partnership's policy is as follows:
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 Partnership's share of net income or loss and
for cash distributions from the Local Limited Partnerships; equity in income or
loss of the Local Limited Partnerships is included currently in the
Partnership's operations. Under the equity method, a Local Limited Partnership
investment will not be carried below zero. To the extent that equity in losses
are incurred when the Partnership's carrying value of the respective Local
Limited Partnership has been reduced to a zero balance, the losses will be
suspended and offset against future income. Income from Partnership investments
where cumulative equity in losses plus cumulative distributions have exceeded
the total investment in Local Limited Partnerships will not be recorded until
all of the related unrecorded losses have been offset. To the extent that a
Local Limited Partnership with a carrying value of zero distributes cash to the
Partnership, that distribution is recorded as income on the books of the
Partnership and is included in "Other Revenue" in the accompanying financial
statements.
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 there is a significant impairment in carrying value,
a provision to write down the asset to fair value will be recorded in the
Partnership's financial statements.
Liquidity and Capital Resources
The Partnership had a decrease in cash and cash equivalents of $178,037 from
$589,683 at March 31, 2003 to $411,646 at September 30, 2003. The decrease is
primarily attributable to cash used for operations and advances to a Local
Limited Partnership offset by cash distributions received from Local Limited
Partnerships.
The Managing General Partner originally designated 4% of the Gross Proceeds as
Reserves, as defined in the Partnership Agreement. The Reserves were established
to be used for working capital of the Partnership and contingencies related to
the 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 September 30, 2003, $512,084 of cash, cash equivalents and
marketable securities has been designated as Reserves.
To date, professional fees relating to various Property issues totaling
approximately $1,428,000 have been paid from Reserves. To date, Reserve funds in
the amount of approximately $304,000 also have been used to make additional
capital contributions to one Local Limited Partnership. In the event a Local
Limited Partnership encounters operating difficulties requiring additional
funds, the Managing General Partner might deem it in its best interest to
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources (continued)
voluntarily provide such funds in order to protect its investment. As of
September 30, 2003, the Partnership has advanced approximately $1,300,000 to
Local Limited Partnerships to fund operating deficits.
The Managing General Partner 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. Reserves may be used to fund Partnership
operating deficits, if the Managing General Partner deems funding appropriate.
If Reserves are not adequate to cover the Partnership's operations, the
Partnership will seek other financing sources including, but not limited to, the
deferral of Asset Management Fees paid to an affiliate of the Managing General
Partner or working with Local Limited Partnerships to increase cash
distributions. To date, the Partnership has used approximately $822,000 of
operating funds to replenish Reserves.
Since the Partnership invests as a limited partner, the Partnership has no
contractual obligation to provide additional funds to Local Limited Partnerships
beyond its specified investment. Thus, at September 30, 2003, 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 six months ended September 30, 2003.
Results of Operations
Three Month Period
The Partnership's results of operations for the three months ended September 30,
2003 resulted in a net loss of $168,842 as compared to a net loss of $41,343 for
the same period in 2002. The change between years is primarily attributable to
an increase in equity in losses and a decrease in other income, partially offset
by a decrease in general and administrative expenses. The increase in equity in
losses of Local Limited Partnerships is due to increased operating expenses at
several Local Limited Partnerships. The decrease in other income is due to a
reduction in distributions from Local Limited Partnerships with carrying values
of zero. General and administrative expenses decreased primarily due to a
reduction in charges from an affiliate to reflect a more current actual cost of
services provided to the Partnership.
Six Month Period
The Partnership's results of operations for the six months ended September 30,
2003 resulted in a net loss of $544,240 as compared to a net loss of $279,671
for the same period in 2002. The change between years is primarily attributable
to an increase in equity in losses, partially offset by a decrease in provision
for valuation of advances to Local Limited Partnerships and a decrease in
general and administrative expenses. The increase in equity in losses of Local
Limited Partnerships is due to an increase in operating expenses at several
Local Limited Partnerships. The decrease in provision for valuation of advances
to Local Limited Partnerships is due to a decrease in advances to one Local
Limited Partnership. General and administrative expenses decreased primarily due
to a reduction in charges from an affiliate to reflect a more current actual
cost of services provided to the partnership.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Portfolio Update
The Partnership's investment portfolio consists of limited partnership interests
in twenty-two Local Limited Partnerships, each of which owns and operates a
multi-family apartment complex and each of which has generated Tax Credits.
Since inception, the Partnership has generated Tax Credits, net of recapture, of
approximately $1,285 per Limited Partnership Unit with an immaterial amount of
Tax Credits expected to be generated during 2003 and 2004.
Properties that receive low income housing Tax Credits must remain in compliance
with rent restriction and set-aside requirements for at least 15 years from the
date the property is completed (the "Compliance Period"). Failure to do so would
result in recapture of a portion of the Property's Tax Credits. Between 2003 and
continuing through 2006, the Compliance Period of the twenty-two Properties in
which the Partnership has an interest will expire. The Managing General Partner
has negotiated agreements that will ultimately allow the Partnership to dispose
of its interest in eight Local Limited Partnerships. It is unlikely that the
disposition of any of these Local Limited Partnership interests will generate
any material cash distributions to the Partnership.
The Managing General Partner will continue to closely monitor the operations of
the Properties during the Compliance Period and will formulate disposition
strategies with respect to the Partnership's remaining Local Limited Partnership
interests. It is unlikely that the Managing General Partner's efforts will
result in the Partnership disposing of all of its remaining Local Limited
Partnership interests concurrently with the expiration of each Property's
Compliance Period. The Partnership shall dissolve and its affairs shall be wound
up upon the disposition of the final Local Limited Partnership interest and
other assets of the Partnership. Investors will continue to be Limited Partners,
receiving K-1s, quarterly and annual reports, until the Partnership is
dissolved.
Property Discussions
A majority of the Properties in which the Partnership has an interest 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 had 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 prior to the expiration of the Compliance Period. Also, the Managing
General Partner, in the normal course of the Partnership's business, may arrange
for the future disposition of its interest in certain Local Limited
Partnerships. The following Property discussions focus only on such Properties.
As previously reported, the Local General Partner of Hampton Lane, located in
Buena Vista, Georgia, and Green Tree Village, located in Greenville, Georgia,
expressed to the Managing General Partner some concerns over the long-term
financial health of these Properties. In response to these concerns and to
reduce possible future risk, the Managing General Partner reached agreement with
the Local General Partner on a plan that will ultimately transfer ownership of
the Local Limited Partnerships to the Local General Partner. The plan includes
provisions to minimize the risk of recapture. The Properties have generated the
majority of their total Tax Credits. The Managing General Partner has not yet
transferred any of the Partnership's interest in these Local Limited
Partnerships.
As previously reported, the Managing General Partner negotiated an agreement
with an unaffiliated entity to have the ability to transfer its interest to an
unaffiliated entity or its designee with respect to the following Local Limited
Partnerships: Orocovix IV, located in Orocovix, Puerto Rico, Canfield Crossing,
located in Milan, Michigan,
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
Orchard View, located in Gobles, Michigan and Whitehills II, located in Howell,
Michigan. Although these Properties do not share a common Local General Partner,
they are all Rural Housing Section 515 ("FMHA") properties. The Managing General
Partner has the right to put its interest in any of the Local Limited
Partnerships at any time in exchange for a contingent note that grants the
Partnership 50% of all future net cash receipts from such Local Limited
Partnership interest. Should the Partnership dispose of its interest in the
above-mentioned Local Limited Partnerships in any other manner, the Partnership
will be required to pay a $2,500 termination fee per Local Limited Partnership.
As previously reported, in June of 1998, the Managing General Partner was
informed that the Local General Partner of Bentley Court, located in Columbia,
South Carolina was indicted on various criminal charges and pled guilty on
certain counts. The Managing General Partner has replaced the Local General
Partner and replaced the site management company. Furthermore, an IRS audit of
the 1993 tax return for the Local Limited Partnership questioned the treatment
of certain items and had findings of non-compliance in 1993. The IRS then
expanded the scope of the audit to include the 1994 and 1995 tax returns. As a
result, the IRS disallowed the Property's Tax Credits for each of these years.
On behalf of the Partnership, the Managing General Partner retained counsel to
appeal the IRS's findings in order to minimize the loss of Tax Credits. In the
opinion of the Managing General Partner, there is a substantial risk that the
Property and, consequently, the Partnership will suffer significant Tax Credit
recapture and/or Tax Credit disallowance. However, it is not possible to
quantify the risk at this time. As a result of the continuing tax issues at this
Property, The Managing General Partner has decided to fully reserve the
Partnership's investment in Bentley Court.
On April 28, 2000, the Managing General Partner, on behalf of the Partnership,
filed suit against the former Local General Partner of Bentley Court and certain
affiliates of the former Local General Partner alleging mismanagement of the
Local Limited Partnership. During May 2001, the former Local General Partner
authorized the release of funds held in escrow in the amount of approximately
$640,000 to the Partnership which was used to reimburse the Partnership for
advances made in previous years.
Previously, weak market conditions had caused Bentley Court to be unable to
establish a stabilized occupancy. However, recent strong occupancy has enabled
the Property to operate above breakeven during 2003 with appropriate debt
service coverage and working capital levels. Previously, both the Local General
Partner and the Managing General Partner had advanced the Property funds to
enable it to stay current on its financial obligations.
As previously reported, in November 1997, due to concerns about the Property's
long-term viability, the Managing General Partner consummated a transfer of 50%
of the Partnership's interest in capital and profits of BK Apartments, located
in Jamestown, North Dakota, to the Local General Partner. The Property generated
its final year of Tax Credits in 2001 and the Partnership retained its full
share of the Property's Tax Credits through such time period. The Local General
Partner subsequently transferred its general partner interest to a new,
nonprofit general partner. The Managing General Partner also has the right to
put the Partnership's remaining interest to the new Local General Partner any
time after September 1, 2001. In addition, the new Local General Partner has the
right to call the remaining interest after the Compliance Period has expired.
The Property currently operates below break-even, and the new Local General
Partner has funded the deficits. The Property remains current on its debt
obligations.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Property Discussions (continued)
As previously reported, although the neighborhood in which 46 & Vincennes
(Chicago, Illinois) is located has improved in the last few years, potential
tenants are reluctant to occupy the Property due to its location. As a result,
maintaining occupancy, and therefore revenues, continues to be an issue. A site
visit by the Managing General Partner found the Property in need of some minor
improvements but in overall fair condition. However, the Managing General
Partner believes that the Local General Partner and its affiliated management
company are not adequately performing their responsibilities with respect to the
Property. The Managing General Partner has expressed these concerns to the Local
General Partner and will continue to closely monitor the Property's operations.
Advances from the Local General Partner's Developer Escrow have enabled the
Property to stay current on its loan obligations.
As previously reported, during 1994, the Local General Partner of Dorsett
Apartments, located in Philadelphia, Pennsylvania, transferred its interest in
the Local Limited Partnership. The IRS subsequently conducted a compliance audit
of the Property and has taken the position that the Property is subject to
recapture due to non-compliance issues. The Managing General Partner disagrees
with the IRS and is working to resolve the matter. In the opinion of the
Managing General Partner, there is a risk that the Property and the Partnership
could suffer significant Tax Credit recapture or Tax Credit disallowance.
However, it is not possible to quantify the potential amount at this time.
Further, the Property suffers from poor location and security issues. Vandalism
has caused an increase in maintenance and repair expenses and has negatively
affected the Property's occupancy levels and tenant profile. However, occupancy
has stabilized and working capital levels are adequate.
As previously reported, the Managing General Partner has negotiated an agreement
to transfer the Local General Partner interest in West Pine, located in Findlay,
Pennsylvania, to the Allegheny County Housing Authority ("ACHA"). The
transaction is contingent upon receiving approval from the U.S. Department of
Housing and Urban Development ("HUD"). Should the potential transaction receive
HUD approval, the Managing General Partner would also execute a disposition
agreement for the Partnership's interest in the Local Limited Partnership to an
affiliate of the ACHA. The ACHA has informed the Managing General Partner of its
interest in acquiring the Partnership's interest in the Local Limited
Partnership, pending their assumption of the Local General Partner interest.
Currently, the Managing General Partner continues to work with HUD to obtain
final approval to transfer the Partnership's remaining interest in the Local
Limited Partnership. West Pine generated its final year of Tax Credits in 2001.
Other Development
During the quarter ended September 30, 2003, Lend Lease Real Estate Investments,
Inc. sold its interest in, and association with, the General Partner and its
affiliated business unit, Housing and Community Investing ("HCI"), to Municipal
Mortgage and Equity, LLC ("Muni Mae"). Muni Mae is in the business of
originating, servicing and investing in multi-family housing. HCI will be
combined with Muni Mae's Midland subsidiary to operate under the name MMA
Financial.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
CONTROLS AND PROCEDURES
Controls and Procedures
Based on the Partnership's evaluation as of the end of the period covered by
this report, the Partnership's director has concluded that the Partnership's
disclosure controls and procedures are effective to ensure that information
required to be disclosed in the reports that the Partnership files or submits
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms.
There have been no significant changes in the Partnership's internal controls or
in other factors that could significantly affect those controls subsequent to
the date of their evaluation.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K
(a) Exhibits
31.1 Certification of Jenny Netzer pursuant to section
302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Jenny Netzer pursuant to section
906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the quarter ended September 30, 2003
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. IV
(A Limited Partnership)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DATED: November 14, 2003 BOSTON FINANCIAL QUALIFIED HOUSING
TAX CREDITS L.P. IV
By: Arch Street IV, Inc.,
its Managing General Partner
/s/Jenny Netzer
Jenny Netzer
Executive Vice President
MMA Financial, LLC