June 27, 1997 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, 1997 Commission File Number 0-19706 Dear Sir / Madam: Pursuant to the requirements rule 901 (d) of Regulation S-T, enclosed is one copy of subject report. Very truly yours, /s/Veronica Curioso Veronica Curioso Assistant Controller QH510K-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended Commission file number March 31, 1997 0-19706 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (Exact name of registrant as specified in its charter) Massachusetts 04-3054464 (State of organization) (I.R.S. Employer Identification No.) 101 Arch Street, 16th Floor Boston, Massachusetts 02110-1106 (Address of Principal executive office) (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. $68,928,650 as of March 31, 1997 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: "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, 1997 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-15 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-20 Item 13 Certain Relationships and Related Transactions K-20 PART IV 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. 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. Table A on the following page lists the Properties owned by the Local Limited Partnerships in which the Partnership has invested. Item 7 of this Report contains other significant information with respect to such 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 Maiden Choice 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 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 Villas III St. Croix, VI 03/21/91 Carib Villas II St. Croix, VI 03/01/91 Whispering Trace Woodstock, GA 05/01/91 Historic 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 Harmony 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 approximately 99% except for a 95% interest in Strathern Park/Lorne Park Apartments and an 88.6% 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. 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, 1997, 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 original investment in Local Limited Partnerships: (i) Timothy House and Maidens Choice, representing 10.05%, have Shelter Development Corp. as Local General Partner; (ii) Hillwood Pointe, Pinewood Pointe and Whispering Trace, representing 11.89%, have Flournoy Development Co. as Local General Partner; (iii) Silver Creek and Cedar Lane, representing .87%, have Robinson A. Williams as Local General Partner; (iv) Water Oak, Yester Oaks and Ocean View representing 1.71%, have Seals & Associates, Inc. & E. Lamar Seals as Local General Partners; (v) Bixel House and Harmony Apartments, representing 7.05%, have Julian Weinstock Construction Co., Inc. as Local General Partner; (vi) Carib Villas II and Carib Villas III, representing 1.21%, have First Centrum Corp. as Local General Partner (BF Lansing Limited Partnership, an affiliate of the Managing General Partner, became the Administrative General Partner in Carib Villas II and Carib Villas III on January 31, 1993). 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 which 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, and 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 V, Inc., the Managing General Partner of the Partnership. The other General Partner of the Partnership is Arch Street V Limited Partnership. To economize on direct and indirect payroll costs, the Partnership, which does not have any employees, reimburses The Boston Financial Group Limited Partnership, an affiliate of the General Partners, 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-seven 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, where the Partnership's ownership interest is 95%, and Huguenot Park which is 88.6%. 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 schedules 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 1997 1997 1996 Subsidy* 1997 - -------------------------------- ------------ ------------- --------------- --------------- ------------- ----------- Strathern Park/Lorne Park, a California Limited Partnership (1) Strathern Park/Lorne Park Los Angeles, CA 241 $8,418,667 $8,418,667 $17,552,451 None 100% Maiden Choice Limited Partnership ParkCaton Catonsville, MD 101 2,513,300 2,513,300 4,050,000 None 100% Cedar Lane I, Ltd. Cedar Lane I London, KY 36 288,587 288,587 1,122,677 None 100% Silver Creek II, Ltd. Silver Creek II Berea, KY 24 193,278 193,278 771,586 None 100% Tompkins/Rosecliff, Ltd. Rosecliff Sanford, FL 168 3,604,720 3,604,720 5,617,392 None 90% Brookwood L.D.H.A. Brookwood Ypsilanti, MI 81 2,373,295 2,373,295 3,042,439 None 95% Water Oak Apartment, L.P. Water Oak Orange City, FL 40 293,519 293,519 1,260,655 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 1997 1997 1996 Subsidy* 1997 - ----------------------------- ------------- ---------------- ------------- -------------- ------------- ------------ Yester Oaks, L.P. Yester Oaks Lafayette, GA 44 319,254 319,254 1,291,670 FmHA 88% Ocean View Apartments, L.P. Ocean View Fernandina Beach, FL 42 334,177 334,177 1,371,628 None 100% Burbank Limited Partnership I Wheeler House Nashua, NH 17 300,531 300,531 713,772 Section 8 100% Archer Village, Ltd. Archer Village Archer, FL 24 171,380 171,380 711,860 FmHA 95% The Oaks of Dunlop Farms, L.P. Oaks of Dunlop Colonial Heights, VA 144 2,791,280 2,791,280 4,453,719 None 99% Timothy House Limited Partnership Timothy House Towson, MD 112 3,064,250 3,064,250 2,572,215 None 100% Westover Station Associates, L.P. Westover Station Newport News, VA 108 1,972,947 1,972,947 2,674,741 None 94% 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 1997 1997 1996 Subsidy* 1997 - ------------------------------- -------------- ------------- ------------- ---------------- ------------- ----------- Christiansted Limited Dividend Housing Association Carib III St. Croix, VI 24 322,260 322,260 1,489,054 FmHA 92% St. Croix II Limited Partnership Carib II St. Croix, VI 20 347,680 347,680 1,407,642 FmHA 85% Whispering Trace Apartments, A Limited Partnership Whispering Trace Woodstock, GA 40 1,093,330 1,093,330 1,408,471 None 95% Historic New Center Apartments Limited Partnership New Center Detroit, MI 104 2,899,000 2,899,000 3,519,360 Section 8 90% 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 2,993,869 None 97% Kensington Place Townhomes, A Limited Partnership Pinewood Pointe Jacksonville, FL 136 3,153,173 3,153,173 4,053,614 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 1997 1997 1996 Subsidy* 1997 - ------------------------------ ------------ ------------- --------------- --------------- ------------- -------------- Westgate Apartments Limited Partnership Westgate Bismark, ND 60 935,893 935,893 1,389,836 None 95% Woodlake Hills Limited Partnership Woodlake Hills Pontiac, MI 144 4,154,670 4,154,670 3,875,742 None 94% Bixel House, a California Limited Partnership Bixel House Los Angeles, CA 76 710,677 710,677 1,442,282 Section 8 96% Harmony Apartments, a California Limited Partnership Magnolia Villas North Hollywood, CA 65 3,203,996 3,203,996 3,124,470 None 95% Schumaker Place Associates, L.P. Schumaker Place Salisbury, MD 96 2,910,453 2,910,453 2,941,443 None 92% Circle Terrace Associates Limited Partnership Circle Terrace Lansdowne, MD 303 5,811,234 5,811,234 9,962,770 Section 8 98% ------- ------------ ------------ ------------- 2,374 $55,520,042 $55,520,042 $86,215,358 ======= ============ ============ ============= * 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. 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 15.16% of the total original investment in 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 10.47% of the total original investment in 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 from 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. The duration of the leases for occupancy in the Properties described above are 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, is involved in certain litigation with an entity formerly affiliated with this Partnership and its previous local general partner. It is possible that the Partnership will be named as a defendant in this litigation. It does not currently appear that this matter presents a material risk to the Partnership. However, in the opinion of management, there is currently a remote possibility that this litigation could ultimately result in a loss of this property and its tax credits. The Partnership will vigorously pursue its legal rights if this becomes a material risk in the future. The Partnership has retained counsel to represent its interest in this matter. 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 March 31, 1997, there were 3,753 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, 1997, 1996 and 1995. In the Partnership's early years, cash available for distribution was derived from the interest earned on the temporary investment of funds held by the Partnership prior to paying capital contributions to Local Limited Partnerships. All cash distributions made to date have constituted a return of capital for generally accepted accounting principles. 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, 1997 1996 1995 1994 1993 ------------ ------------ ------------ ------------- ------------ Revenue $ 204,683 $ 224,012 $ 171,863 $ 232,489 $ 509,911 Equity in losses of Local Limited Partnerships (4,044,413) (4,695,617) (4,747,136) (4,698,334) (4,658,311) Net loss (4,337,761) (4,952,448) (5,110,677) (4,982,538) (4,714,671) Per Limited Partnership Unit (A) (62.30) (71.13) (73.40) (71.56) (67.71) Cash, cash equivalents and marketable securities 3,289,694 3,342,899 3,269,031 3,605,476 6,249,982 Investment in Local Limited Partnerships, at original cost 56,559,793 56,559,793 56,346,293 56,226,293 53,834,379 Total assets (B) 33,871,495 38,246,869 42,985,386 48,069,381 53,134,553 Cash Distributions - - - - - Other data: Passive loss (C) (5,154,301) (5,187,774) (5,204,384) (5,177,324) (5,616,384) Per Limited Partnership Unit (A,C) (74.03) (74.51) (74.75) (74.36) (80.67) Portfolio income (C) 281,707 350,417 233,083 379,338 1,154,692 Per Limited Partnership Unit (A,C) 4.05 5.03 3.35 5.45 16.58 Low-Income Housing Tax Credit (C) 10,512,996 10,506,229 10,519,636 10,447,764 8,528,518 Per Limited Partnership Unit (A,C) 150.99 150.90 151.09 150.06 122.49 Local Limited Partnership interests owned at end of period (D) 27 27 27 28 28 (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) On January 1, 1994, Strathern Park and Lorne Park merged. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources At March 31, 1997, the Partnership had cash and cash equivalents of $449,567, compared with $243,644 at March 31, 1996. The increase is attributable to proceeds from sales and maturities of marketable securities and cash distributions received from Local Limited Partnerships, partially offset by net cash used for operations and purchases of marketable securities. Approximately $2,735,000 of marketable securities 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. 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, 1997, the Partnership had no contractual or other obligation to any Local Limited Partnership which had not been paid or provided for. 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. No such event has occurred to date. Cash Distributions No cash distributions were made during the year ended March 31, 1997. In prior years, cash available for distribution was derived from the interest earned on the temporary investment of the Partnership's funds, at money market rates, prior to the funds being contributed to the Partnership's Local Limited Partnership investments. Based on the results of 1996 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. Therefore, it is expected that only a limited amount of cash will be distributed to investors from this source in the future. Results of Operations 1997 versus 1996 The Partnership's results of operations for the year ended March 31, 1997 resulted in a net loss of $4,337,761 as compared to a net loss of $4,952,448 for the same period in 1996. This improved net loss position is primarily attributable to a decrease in equity in losses of Local Limited Partnerships and an increase in investment revenue, offset by a decrease in other revenue. The decrease in equity in losses of Local Limited Partnerships is due to rental subsidy receipts in 1996 which were reserved for in the prior year. Investment revenue increased because of improved returns earned on investments in securities during fiscal year 1997. 1996 versus 1995 The Partnership's results of operations for the year ended March 31, 1996 resulted in a net loss of $4,952,448 as compared to a net loss of $5,110,677 for the same period in 1995. This improved net loss position is primarily attributable to lower general and administrative expenses and an increase in investment and other revenue. General and administrative expenses decreased primarily because of a decrease in investor reporting expenses. Investment and other revenue increased because of improved returns earned on investments in securities during fiscal year 1996. Effect of recently issued Accounting Standard The Financial Accounting Standards Board has issued Statement of Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, which is effective for fiscal years beginning after December 15, 1995. This standard requires that long-lived assets be reviewed for recoverability. Impairment losses are recognized when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Partnership adopted the new standard for its year ending March 31, 1997, however, it had no significant effect on its financial position or results of operations. Low-Income Housing Tax Credits The 1996, 1995 and 1994 Tax Credits per Unit were $150.99, $150.90 and $151.09, respectively. The Tax Credit per Limited Partnership Unit stabilized in 1993 at approximately $151.00 per Unit. The credits are expected to remain stable through the year 2000 and then they are expected to decrease as certain properties reach the end of the ten year credit period. Property Discussions Limited Partnership interests have been acquired in twenty-seven Local Limited Partnerships which are located in ten states and the Virgin Islands. Five of the properties, totaling 612 units, are existing and underwent rehabilitation; twenty-two properties, consisting of 1,762 units, are new construction. All properties have completed construction or rehabilitation and initial lease-up. Inflation and Other Economic Factors Inflation had no material impact on the operations or financial condition of the Partnerships for the years ended March 31, 1997, 1996 and 1995. 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 of 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 the 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 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 On November 10, 1995, the firm of Arthur Andersen LLP was dismissed as the principal accountant to audit the registrant's financial statements. The report on the financial statements of the registrant by Arthur Andersen LLP for the year ending March 31, 1995 did not contain any adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles. The decision to change accountants was approved by the Board of Directors of the General Partner of the registrant. During the year ending March 31, 1995 and for the subsequent interim period, April 1, 1995 through November 10, 1995, there were no disagreements with Arthur Andersen LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure. The firm of Coopers & Lybrand L.L.P. has been engaged as principal accountant to audit the registrant's financial statements. PART III Item 10. Directors and Executive Officers of the Registrant The Managing General Partner of the Partnership is Arch Street V, Inc., a Massachusetts Corporation (the "Managing General Partner" or "Arch Street, Inc."), an affiliate of The Boston Financial Group Limited Partnership ("Boston Financial"), a Massachusetts limited partnership. George Fantini, Jr., a Vice President of the Managing General Partner, resigned from his position on June 30, 1995. Donna Gibson, a Vice President of the Managing General Partner, resigned from her position on September 13, 1996. The Managing General Partner was incorporated in June 1989. William E. Haynsworth is the Chief Operating Officer of the Managing General Partner, and had the primary responsibility for evaluating, selecting and negotiating investments for the Partnership. 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 Georgia Murray Managing Director, Treasurer and Chief Financial Officer Fred N. Pratt, Jr. Managing Director William E. Haynsworth Managing Director, Vice President and Chief Operating Officer Paul F. Coughlan Vice President Peter G. Fallon, Jr. Vice President Randolph G. Hawthorne Vice President A. Harold Howell Vice President 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 individual general partners of Arch Street L.P. are Messrs. Pratt and Hawthorne. The Managing General Partner provides day-to-day management of the Partnership. Compensation is discussed in Item 13 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. Georgia Murray, age 46, is a graduate of Newton College of the Sacred Heart (B.A., 1972). She joined Boston Financial Management Company in 1973 and is currently a Senior Vice President of Boston Financial. Ms. Murray is a member of the Senior Leadership Team and Board of Directors and leads the Property Management division. Previously, she led the company's Institutional Tax Credit Team and managed Boston Financial's Investment Real Estate and Asset Management divisions. Ms. Murray currently serves as Director of Atlantic Bank and Trust Co., President of the Institute for Multi-Family Housing, Director of the Investment Program Association and member of the Direct Investment Committee of the Securities Industry Association. Previously, she served as the Industry Advisor to the Management Policy Review Committee of the Massachusetts Housing Finance Agency and as a commissioner of the Boston Public Facilities Department. Fred N. Pratt, Jr., age 52, graduated from Tufts University and the Amos Tuck School of Business Administration at Dartmouth College. Mr. Pratt was one of the original employees of Boston Financial when it was founded in late 1969. He currently serves as Boston Financial's Chief Executive Officer and Chairman of the Board of Directors of the General Partner of Boston Financial. William E. Haynsworth, age 57, graduated from Dartmouth College and Harvard Law School. Mr. Haynsworth was Acting Executive Director of the Massachusetts Housing Finance Agency, where he was also General Counsel, prior to becoming a Vice President of Boston Financial in 1977 and Senior Vice President in 1986. He has also served as Director of Non-Residential Development of the Boston Redevelopment Authority and as an associate of the law firm of Goodwin, Procter & Hoar in Boston. Mr. Haynsworth is a member of the firm's Senior Leadership Team and participates in the structuring of real estate investments and the development of new business opportunities. Paul F. Coughlan, age 53, is a graduate of Brown University (A.B., 1965) and served in the United States Navy before entering the securities business in 1969. He was employed as an Account Executive by Bache & Company until 1972, and then by Reynolds Securities Inc. He joined Boston Financial in 1975 and is currently a Senior Vice President in the Institutional Tax Credit Team. Peter G. Fallon, Jr., age 58, graduated from the College of The Holy Cross (B.S., 1960) and Babson College (M.B.A., 1965). He joined Boston Financial in 1970, shortly after its formation, and is currently a Senior Vice President and a member of the Investment Real Estate Division with responsibility for the marketing of the firm's Institutional Tax Credit product. Randolph G. Hawthorne, age 47, is a graduate of Massachusetts Institute of Technology (B.S. , 1971) and Harvard Graduate School of Business (M.B.A., 1973). He joined Boston Financial in 1973 and has served as Treasurer and managed the firm's Investment Real Estate division. He is a Senior Vice President serving on the Investment Acquisitions Team with 22 years of experience in property acquisitions. Mr. Hawthorne has primary responsibility for structuring real estate investments and developing new business opportunities. He is a member of the Investment Committee. He is Chairman of the National Multi Housing Council, a past president of the National Housing and Rehabilitation Association, a member of the Residential Development Council of the Urban Land Institute as well as a member of the Advisory Board of the Berkeley Real Estate Center at the University of California. A speaker at industry conferences, he is also on the Editorial Advisory Board of the Tax Credit Advisor. A. Harold Howell, age 56, graduated from Harvard College and the Amos Tuck School of Business Administration at Dartmouth College. He has been employed by Boston Financial since 1970. For most of this time he has been active in the overall administration of Boston Financial and its affiliates, but has also been involved in other areas of its business. Mr. Howell has served as head of Boston Financial's Property Management division and also as its Chief Financial Officer and Chief Executive Officer. He currently is a Senior Vice President and is in charge of a program being developed for properties managed by Boston Financial whereby heads-of-households who want to further their education can enroll in a program on-site which teaches economic self sufficiency, computer and internet skills, problem solving skills and related real-world skills. Mr. Howell recently spent a two year sabbatical from Boston Financial as a Visiting Professor at the Instituto de Estudios Superiores de la Empresa, a highly regarded International M.B.A. Program in Barcelona, Spain. While there, he taught courses in business strategy and real estate finance. Item 11. Management Remuneration Neither the directors or officers of Arch Street, Inc., nor 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 No person is known to the Partnership to be the beneficial owner of more than 5% of the outstanding Units. 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, 1997. 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. As of March 31, 1997, 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 paragraph, neither Arch Street, Inc., Arch Street L.P., Boston Financial, or 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 was required to pay certain fees to and reimburse certain expenses of the Managing General Partner or its affiliates (including Boston Financial) in connection with the organization of the Partnership and the offering of Units. The Partnership is also required to pay certain fees to and reimburse certain expenses of the Managing General Partner or its affiliates (including Boston Financial) 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 paid in the three years ending March 31, 1997 are described below and 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. 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 required under this item is contained in Note 5 to the financial statements presented as a separate section of this Report. The affiliates of the Managing General Partner which have received fee payments and expense reimbursements from the Partnership are as follows: Organizational fees and expenses and selling 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 $9,499,984 have been charged directly to Limited Partners' equity. In connection therewith, $5,858,935 of selling expenses and $3,641,049 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 expense 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, 1997. 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 total 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, 1997, 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, 1997 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, 1997. 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 .343% (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, 1997 are as follows: 1997 1996 1995 ------------ ------------ ------------ Asset Management Fees $ 231,035 $ 224,953 $ 219,149 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 made in each of the three years ended March 31, 1997 are as follows: 1997 1996 1995 ------------ ------------ ------------ Salaries and benefits expense reimbursements $ 117,763 $ 115,696 $ 116,177 Cash distributions paid to the General Partners In accordance with the Partnership Agreement, the General Partners of the Partnership, Arch Street V, Inc. and Arch Street V Limited Partnership, receive 1% of cash distributions made to partners. No cash distributions were paid to the General Partners in each of the three years ended March 31, 1997. 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 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 quarter ended March 31, 1997. (a)(3)(c) Exhibits Number and Description in Accordance with Item 601 of Regulation S-K 27. Financial Data Schedule 28. Additional Exhibits (a) 28.1 Reports of Other Independent Auditors (b) Audited financial statements of Local Limited Partnership Strathern Park/Lorne Park (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 V, Inc. its Managing General Partner By: /s/William E. Haynsworth Date: William E. Haynsworth, Managing Director, Vice President and Chief Operating Officer 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/William E. Haynsworth Date: William E. Haynsworth, Managing Director, Vice President and Chief Operating Officer By: /s/Fred N. Pratt, Jr. Date: Fred N Pratt, Jr., A Managing Director Item 8. Financial Statements and Supplementary Data BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Annual Report on Form 10-K For The Year Ended March 31, 1997 Index Page No. Reports of Independent Accountants For the years ended March 31, 1997 and 1996 F-2 For the year ended March 31, 1995 F-3 Financial Statements Balance Sheets - March 31, 1997 and 1996 F-4 Statements of Operations - Years Ended March 31, 1997, 1996 and 1995 F-5 Statements of Changes in Partners' Equity (Deficiency) - Years Ended March 31, 1997, 1996 and 1995 F-6 Statements of Cash Flows - Years Ended March 31, 1997, 1996 and 1995 F-7 Notes to the Financial Statements F-8 Financial Statement Schedule Schedule III - Real Estate and Accumulated Depreciation F-16 See also Index to Exhibits on Page K-22 for the financial statement of the Local Limited Partnership 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 Boston Financial Qualified Housing Tax Credits L.P. V: We have audited the accompanying balance sheets of Boston Financial Qualified Housing Tax Credits L.P. V as of March 31, 1997 and 1996 and the related statements of operations, changes in partners' equity (deficiency) and cash flows and the financial statement schedule listed in Item 14(a) of this Report on Form 10-K, for the years ended March 31, 1997 and 1996. These financial statements and the financial statement schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements, and the financial statement schedule based on our audits. As of March 31, 1997 and 1996, 83% and 87%, respectively, of total assets, and for the years ended March 31, 1997 and 1996, 100% of equity in losses of the Local Limited Partnerships, reflected in the financial statements of the Partnership, relate to Local Limited Partnerships for which we did not audit the financial statements. The financial statements of these Local Limited Partnerships were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to those investments in Local Limited Partnerships, is based solely on the reports of other auditors. 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, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position Boston Financial Qualified Housing Tax Credits L.P. V, as of March 31, 1997 and 1996 and the results of its operations and its cash flows for the years ended March 31, 1997 and 1996 in conformity with generally accepted accounting principles. In addition, in our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein. Coopers & Lybrand L.L.P. Boston, Massachusetts June 20, 1997 REPORT OF INDEPENDENT ACCOUNTANTS To the Partners Boston Financial Qualified Housing Tax Credits L.P. V: We have audited the accompanying statements of operations, changes in partners' equity (deficiency) and cash flows of Boston Financial Qualified Housing Tax Credits L.P. V (A Limited Partnership) for the year ended March 31, 1995. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of certain of the Local Limited Partnerships for the year ended March 31, 1995, the investments in which are recorded using the equity method of accounting (see Note 2). The equity in the losses of these partnerships represents 97% of the equity in the loss of the Local Limited Partnerships for the year ended March 31, 1995. Those financial statements were audited by other auditors whose reports have been furnished to us and our opinion, insofar as it relates to the amounts included for the Local Limited Partnerships, is based solely on the reports of other auditors. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the results of operations and cash flows of Boston Financial Qualified Housing Tax Credits L.P. V, for the year ended March 31, 1995, in conformity with generally accepted accounting principles. Arthur Andersen LLP Boston, Massachusetts June 16, 1995 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) BALANCE SHEETS March 31, 1997 and 1996 1997 1996 --------------- --------- Assets Cash and cash equivalents $ 449,567 $ 243,644 Investments in Local Limited Partnerships (Note 4) 30,531,768 34,878,562 Marketable securities, at fair value (Notes 1 and 3) 2,840,127 3,099,255 Other assets 50,033 25,408 --------------- --------------- Total Assets $ 33,871,495 $ 38,246,869 =============== =============== Liabilities and Partners' Equity Accounts payable to affiliate (Note 5) $ 88,227 $ 71,527 Accounts payable and accrued expenses 35,692 67,883 Deferred revenue (Note 6) 174,357 179,318 --------------- --------------- Total Liabilities 298,276 318,728 --------------- --------------- General, Initial and Investor Limited Partners' Equity 33,615,539 37,953,300 Net unrealized losses on marketable securities (42,320) (25,159) --------------- --------------- Total Partners' Equity 33,573,219 37,928,141 --------------- --------------- Total Liabilities and Partners' Equity $ 33,871,495 $ 38,246,869 =============== =============== 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, 1997, 1996 and 1995 1997 1996 1995 ------------ ------------ -------- Revenue: Investment (Note 3) $ 191,349 $ 146,575 $ 109,711 Other 13,334 77,437 62,152 ------------ ------------ ------------ Total Revenue 204,683 224,012 171,863 ------------ ------------ ------------ Expenses: General and administrative (includes reimbursements to an affiliate in the amounts of $117,763, $115,696 and $116,177) (Note 5) 237,545 225,369 275,733 Asset management fee, related party (Note 5) 231,035 224,953 219,149 Amortization 29,451 30,521 40,522 ------------ ------------ ------------ Total Expenses 498,031 480,843 535,404 ------------ ------------ ------------ Loss before equity in losses of Local Limited Partnerships (293,348) (256,831) (363,541) Equity in losses of Local Limited Partnerships (Note 4) (4,044,413) (4,695,617) (4,747,136) ------------ ------------ ------------ Net Loss $ (4,337,761) $ (4,952,448) $(5,110,677) ============ ============ =========== Net Loss allocated: General Partners $ (43,378) $ (49,524) $ (51,107) Limited Partners (4,294,383) (4,902,924) (5,059,570) ------------ ------------ ------------ $ (4,337,761) $(4,952,448) $(5,110,677) ============ =========== =========== Net Loss per Limited Partnership Unit (68,929 Units) $ (62.30) $ (71.13) $ (73.40) =========== =========== =========== 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, 1997, 1996 and 1995 Net Initial Investor Unrealized General Limited Limited Gains Partners Partners Partners (Losses) Total Balance at March 31, 1994 $ (111,942) $ 5,000 $ 48,123,367 $ (61,175) $ 47,955,250 Net change in net unrealized loss on marketable securities available for sale - - - (8,566) (8,566) Net Loss (51,107) - (5,059,570) - (5,110,677) ------------ ------------ ------------ ------------ ------------ Balance at March 31, 1995 (163,049) 5,000 43,063,797 (69,741) 42,836,007 Net change in net unrealized loss on marketable securities available for sale - - - 44,582 44,582 Net Loss (49,524) - (4,902,924) - (4,952,448) ------------ ------------ ---------- ------------ ------------ Balance at March 31, 1996 (212,573) 5,000 38,160,873 (25,159) 37,928,141 Net change in net unrealized loss on marketable securities available for sale - - - (17,161) (17,161) Net Loss (43,378) - (4,294,383) - (4,337,761) ------------ ------------ ------------ ------------ ------------ Balance at March 31, 1997 $ (255,951) $ 5,000 $ 33,866,490 $ (42,320) $ 33,573,219 ============= ============ ============ ============ ============ 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, 1997, 1996 and 1995 1997 1996 1995 ------------ ------------ -------- Cash flows from operating activities: Net loss $ (4,337,761) $(4,952,448) $(5,110,677) Adjustments to reconcile net loss to net cash used for operating activities: Equity in losses of Local Limited Partnerships 4,044,413 4,695,617 4,747,136 Amortization 29,451 30,521 40,522 (Gain) loss on sale of marketable securities (1,560) (1,027) 39,464 Increase (decrease) in cash arising from changes in operating assets and liabilities: Other assets (24,625) 23,217 (12,415) Accounts payable to affiliate 16,700 6,016 11,091 Accounts payable and accrued expenses (32,191) (15,985) 24,157 Deferred revenue (4,961) 179,318 - ------------- ------------ ------------ Net cash used for operating activities (310,534) (34,771) (260,722) ------------- ------------ ------------ Cash flows from investing activities: Investments in Local Limited Partnerships - (213,500) (120,000) Purchases of marketable securities (755,442) (2,462,289) (5,707,511) Proceeds from sales and maturities of marketable securities 998,969 2,605,139 5,975,939 Cash distributions received from Local Limited Partnerships 272,930 276,530 92,307 ------------ ------------ ------------ Net cash provided by investing activities 516,457 205,880 240,735 ------------ ------------ ------------ Net increase (decrease) in cash and cash equivalents 205,923 171,109 (19,987) Cash and cash equivalents, beginning 243,644 72,535 92,522 ------------ ------------ ------------ Cash and cash equivalents, ending $ 449,567 $ 243,644 $ 72,535 ============ ============ ============ 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 consisting of Arch Street V, Inc. and certain officers and stockholders of Arch Street V, Inc., which also serves as the Initial Limited Partner. Both of the General Partners are affiliates of the Boston Financial Group Limited Partnership ("Boston Financial"). 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 interests ("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 initially 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, 1997, the Managing General Partner has designated approximately $2,735,000 of marketable securities as such Reserves. 2. Significant Accounting Policies Basis of Presentation The Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting, because the Partnership does not have a majority control of 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 income or loss of the Local Limited Partnerships, additional investments and 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. The Partnership has no obligation to fund liabilities of the Local Limited Partnerships beyond its investment, therefore, a Local Limited Partnership's investment will not be carried below zero. To the extent that equity losses are incurred 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. In the event that a Local Limited Partnership with a carrying value of zero distributes cash to the Partnership, the distribution is recorded as revenue on the books of the Partnership in the accompanying financial statements. Excess investment cost 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. The Partnership recognizes a decline in carrying value of its investment 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 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (Continued) 2. Significant Accounting Policies (continued) Basis of Presentation (continued) 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 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, 1996, 1995 and 1994. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Cash Equivalents Cash equivalents consist of short-term money market instruments with original maturities of 90 days or less at acquisition and approximate fair value. Marketable Securities Marketable securities consists primarily of U.S. Treasury instruments and various asset-backed investment 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. 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. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 2. Significant Accounting Policies (continued) Effect of recently issued Accounting Standard The Financial Accounting Standards Board has issued Statement of Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, which is effective for fiscal years beginning after December 15, 1995. This standard requires that long-lived assets be reviewed for recoverability. Impairment losses are recognized when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Partnership adopted the new standard for its year ending March 31, 1997, however, it did not have a significant effect on the financial position or results of operations. 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 $ 2,646,693 $ 492 $ (42,951) $ 2,604,234 Mortgage backed securities 235,754 1,938 (1,799) 235,893 Marketable securities at March 31, 1997 $ 2,882,447 $ 2,430 $ (44,750) $ 2,840,127 =========== ======== ========= =========== Debt securities issued by the US Treasury and other US government corporations and agencies $ 2,941,472 $ 3,462 $ (31,743) $ 2,913,191 Mortgage backed securities 139,230 3,428 - 142,658 Other debt securities 43,712 - (306) 43,406 ----------- -------- --------- ----------- Marketable securities at March 31, 1996 $ 3,124,414 $ 6,890 $ (32,049) $ 3,099,255 =========== ======== ========= =========== The contractual maturities at March 31, 1997 are as follows: Fair Cost Value Due in one year or less $ 396,974 $ 395,120 Due in one year to five years 2,249,719 2,209,114 Mortgage backed securities 235,754 235,893 ----------- ----------- $ 2,882,447 $ 2,840,127 Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations. Proceeds from sales and maturities of marketable securities were approximately $999,000, $2,605,000 and $5,976,000 for the years ended March 31, 1997, 1996 and 1995, respectively. Included in investment income are gross gains of $2,951 and gross losses of $1,391 which were realized on the sales during the year ended March 31, 1997, gross gains of $13,257 and gross losses of $12,230 which were realized on the sales during the year ended March 31, 1996 and gross gains of $8,115 and gross losses of $47,579 which were realized on the sales during the year ended March 31, 1995. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 4. Investments in Local Limited Partnerships The Partnership has acquired interests in twenty-seven Local Limited Partnerships which own and operate multi-family housing complexes, most of which are government-assisted. The Partnership, as Investor Limited Partner pursuant to the various Local Limited Partnership Agreements, has generally acquired a 99% interest in the profits, losses, tax credits and cash flows from operations of each of the Local Limited Partnerships, with the exception of Strathern Park/Lorne Park Apartments and Huguenot Park, which are 95% and 88.6%, respectively. Upon dissolution, proceeds will be distributed according to each respective partnership agreement. The following is a summary of Investments in Local Limited Partnerships at March 31, 1997, 1996 and 1995: 1997 1996 1995 ------------- ------------ -------- Capital contributions paid to Local Limited Partnerships and purchase price paid to withdrawing partners of Local Limited Partnerships $55,520,042 $55,491,515 $55,278,015 Cumulative equity in losses of Local Limited Partnerships (excluding unrecognized losses of $2,143 in 1997) (25,141,481) (21,097,068) (16,401,451) Cumulative cash distributions received from Local Limited Partnerships (731,163) (458,233) (181,703) ------------- ------------ ------------ Investments in Local Limited Partnerships before adjustment 29,647,398 33,936,214 38,694,861 Excess of investment cost over the underlying net assets acquired: Acquisition fees and expenses 1,039,751 1,068,278 1,068,278 Accumulated amortization of acquisition fees and expenses (155,381) (125,930) (95,409) ------------- ------------ ------------ Investments in Local Limited Partnerships $30,531,768 $34,878,562 $39,667,730 =========== =========== =========== 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) Summarized financial information, as of December 31, 1996, 1995 and 1994 (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, 1996 1995 1994 --------------- --------------- ----------- Assets: Investment property, net $ 119,404,292 $ 124,034,671 $ 128,643,459 Current assets 3,109,145 3,233,198 3,657,076 Other assets 5,944,574 6,000,099 5,316,718 --------------- --------------- --------------- Total Assets $ 128,458,011 $ 133,267,968 $ 137,617,253 =============== =============== =============== Liabilities and Partners' Equity: Long-term debt $ 85,520,204 $ 86,578,579 $ 79,451,985 Current liabilities (including current portion of long-term debt) 7,141,058 6,037,081 11,390,414 Other liabilities 1,389,432 1,553,129 3,523,781 --------------- --------------- --------------- Total Liabilities 94,050,694 94,168,789 94,366,180 Partnership's Equity 29,528,552 33,857,070 38,008,462 Other Partners' Equity 4,878,765 5,242,109 5,242,611 --------------- --------------- --------------- Total Liabilities and Partners' Equity $ 128,458,011 $ 133,267,968 $ 137,617,253 =============== =============== ============= Summarized Income Statements - for the years ended December 31, Rental and other income: $ 14,377,262 $ 14,078,555 $ 14,123,399 -------------- ------------- --------------- Expenses: Operating 7,389,143 7,301,056 7,812,262 Interest 6,159,027 6,683,070 5,973,082 Depreciation and amortization 4,970,595 4,896,252 5,198,572 ------------- ------------- -------------- Total Expenses 18,518,765 18,880,378 18,983,916 ------------- ------------- -------------- Net Loss $ (4,141,503) $ (4,801,823) $ (4,860,517) ============= ============= ============== Partnership's share of Net Loss $ (4,046,556) $ (4,695,617) $ (4,747,136) ============= ============= ============== Other Partners' share of Net Loss $ (94,947) $ (106,206) $ (113,381) ============= ============= ============== For the year ended March 31, 1997, the Partnership has not recognized $2,143 of equity in losses of Local Limited Partnerships relating to one Local Limited Partnership where cumulative equity in losses exceeded its total investment. The Partnership's equity as reflected by the Local Limited Partnerships of $29,528,552 differs from the Partnership's Investments in Local Limited Partnerships before adjustment of $29,647,398 principally because: a) the Partnership has not recognized $2,143 of equity in loss of a Local Limited Partnership whose equity in losses exceeded its total investment; b) distributions made by Local Limited Partnerships during the quarter ended March 31, 1997 are not reflected in the December 31, 1996 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. On March 1, 1997, the local general partner of Burbank L.P. I ("Burbank"), which owns Wheeler House, a property in which the Partnership has invested, withdrew as general partner. On this date, Boston Financial GP-1, LLC, an affiliate of the Partnership, was admitted as general partner. As such, the Partnership and its affiliate are deemed to have control over Burbank. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 5. Transactions with Affiliates An affiliate of the Managing General Partner currently receives the base amount of .343% (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 of $231,035, $224,953 and $219,149 for the years ended March 31, 1997, 1996 and 1995, respectively, have been included in expenses. Included in accounts payable to affiliate at March 31, 1997 and 1996 are $59,177 and $57,286, 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, 1997, 1996 and 1995 are $117,763, $115,696 and $116,177, 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, 1997 and 1996 are $29,050 and $14,241, respectively. BF Lansing Limited Partnership ("BF Lansing"), an affiliate of the Managing General Partner, is the Administrative General Partner in two Local Limited Partnerships in which the Partnership has invested, St. Croix II, Limited Partnership ("Carib Villas II") and Christiansted Limited Partnership ("Carib Villas III"). BF Lansing's only responsibility in relation to the two Local Limited Partnerships is the selection of a management agent. BF Lansing selected Lansing Management Company ("LMC"), an affiliate of the Managing General Partner, as the management agent for Carib Villas II and III. The management fee charged to each property is equal to 5% of property gross revenues. Included in operating expenses in the summarized income statements in Note 4 to the financial statements are $15,305, $11,837 and $11,986 respectively, of fees paid to LMC for the years ended December 31, 1996, 1995 and 1994. Boston Financial Property Management ("BFPM"), an affiliate of the Managing General Partner, is the management agent for Woodlake Hills, a Local Limited Partnership in which the Partnership has invested. The management fee charged to the property is 5% of property gross revenues. Included in operating expenses in the summarized income statements in Note 4 to the financial statements are $37,497, $42,852 and $41,220, respectively, of fees earned by BFPM for the years ended December 31, 1996, 1995 and 1994. LMC is also the management agent for Historic New Center, another Local Limited Partnership in which the Partnership invested. Included in operating expenses in the summarized income statements in Note 4 to the financial statements are $24,561, $21,336 and $18,852 of fees earned by LMC for the years ended December 31, 1996, 1995 and 1994. 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. 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, 1997, $55,000 has been released to the Partnership. The balance of the Supplemental Reserve is included in cash and cash equivalents. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 7. Litigation The Partnership is not a party to any pending legal or administrative proceeding. However, Tompkins/Rosecliff, Ltd. which owns a property in Sanford, Florida, is involved in certain litigation with an entity formerly affiliated with this Partnership and its previous local general partner. It is possible that the Partnership will be named as a defendant in this litigation. It does not currently appear that this matter presents a material risk to the Partnership. However, in the opinion of management, there is currently a remote possibility that this litigation could ultimately result in a loss of this property and its tax credits. The Partnership will vigorously pursue its legal rights if this becomes a material risk in the future. The Partnership has retained counsel to represent its interest in this matter. 8. Federal Income Taxes A reconciliation of the loss reported in the Statements of Operations for the years ended March 31, 1997, 1996 and 1995 to the loss reported for federal income tax purposes for the years ended December 31, 1996, 1995 and 1994 is as follows: 1997 1996 1995 ------------ ------------ -------- Net Loss per Statement of Operations $(4,337,761) $(4,952,448) $(5,110,677) Adjustment for equity in losses of Local Limited Partnerships for financial reporting purposes over (under) equity in losses for tax purposes (557,946) 115,395 (304,548) Adjustment to reflect March 31, fiscal year-end to December 31, tax year-end (46,742) 28,653 (50,665) Related party expenses not paid in current year, not deductible for tax purposes 114,572 55,889 54,420 Related party expenses paid in current year but expensed for book purposes in prior year (55,889) (54,420) (52,989) Adjustment for accelerated amortization for tax purposes over amortization for financial reporting purposes (10,828) (8,426) (8,429) Forgiveness of indebtedness recognized by a Local Limited Partnership for tax purposes - - 501,587 Other 22,000 (22,000) - ------------ ------------ ------------ Net Loss for federal income tax purposes $ (4,872,594) $ (4,837,357) $ (4,971,301) ============ ============ ============ The differences of the assets and liabilities of the Partnership for financial reporting purposes and tax reporting purposes for the year ended March 31, 1997 are as follows: Financial Tax Reporting Reporting Purposes Purposes Differences Investments in Local Limited Partnerships $ 30,531,768 $29,997,313 $ 534,455 Other assets 3,339,727 13,071,499 (9,731,772) Liabilities 298,276 227,063 71,213 The differences in assets and liabilities of the Partnership for financial reporting purposes are primarily attributable to (i) the cumulative equity in losses of the Local Limited Partnerships is approximately $612,000 greater for tax return purposes; (ii) the amortization of acquisition fees for tax return purposes exceeds financial reporting purposes by approximately $43,000; (iii) approximately $121,000 of cash distributions received from Local Limited Partnerships during the quarter ended March 31, 1997 are not included in the Partnership's Investments in Local Limited Partnerships for tax return purposes at December 31, 1996; and (iv) organizational and offering costs of approximately $9,499,985 that have been capitalized for tax reporting 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, 1997 COST AT INTEREST 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 Park 241 $17,552,451 $4,369,500 $10,513,639 $10,993,326 Los Angeles, CA Maidens Choice 101 4,050,000 807,791 2,013,769 3,391,316 Baltimore, MD Cedar Lane 36 1,122,677 40,000 1,375,512 11,854 London, KY Silver Creek 24 771,586 20,000 946,812 0 Berea, KY Rosecliff 168 5,617,392 1,200,000 3,304,950 4,578,797 Orlando, FL Brookwood 81 3,042,439 91,470 344,580 4,519,699 Ypsilanti Township, MI Water Oak 40 1,260,655 98,058 1,467,944 4,343 Orange City, FL Yester Oaks 44 1,291,670 47,105 1,574,145 2,489 Lafayette, GA Ocean View 42 1,371,628 112,620 1,600,421 7,347 Ferandina Beach, FL Wheeler House 17 713,772 42,000 1,139,412 25,527 Nashua, NH Archer Village 24 711,860 40,000 861,288 38,869 Archer, FL Oaks of Dunlop 144 4,453,719 631,959 6,492,444 109,440 Colonial Heights, VA Timothy House 112 2,572,215 11,638 6,344,664 396,246 Towson, MD Westover Station 108 2,674,741 305,645 4,299,613 3,757 Newport News, VA Carib Villas III 24 1,489,054 107,582 1,802,466 2,764 St. Croix, VI Carib Villas II 20 1,407,642 57,720 1,787,528 2,764 St. Croix, VI Whispering Trace 40 1,408,471 218,000 2,413,145 (486,409) Woodstock, GA New Center 104 3,519,360 79,652 3,534,776 2,930,224 Detroit, MI Huguenot Park 24 1,400,000 83,000 2,088,664 0 New Paltz, NY Hillwood Pointe 100 2,993,869 454,185 5,103,711 1,459 Jacksonville, FL Pinewood Pointe 136 4,053,614 555,093 6,809,808 445,908 Jacksonville, FL Westgate 60 1,389,836 215,168 2,152,519 22,471 Bismark, ND Woodlake Hills 144 3,875,742 233,690 6,481,250 2,386,284 Pontiac, MI Bixel House 76 1,442,282 190,746 2,294,879 50,061 Los Angeles, CA COST AT INTEREST 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 Harmony 65 3,124,470 0 7,020,696 117,826 North Hollywood, CA Schumaker Place 96 2,941,443 531,776 1,627,716 3,603,531 Salisbury, MD Circle Terrace 303 9,962,770 0 7,884,733 8,495,063 Lansdown, MD ------------------------------------------------------------------------------- 2,374 $86,215,358 $10,544,398 $93,281,084 $41,654,956 =============================================================================== GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, LIFE ON 1996 -------------------------------------------------- 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 Park $5,889,320 $19,987,145 $25,876,465 $4,438,048 1991 various 07/05/90 Los Angeles, CA Maidens Choice 807,791 5,405,085 6,212,876 1,193,185 1991 various 08/17/90 Baltimore, MD Cedar Lane 40,000 1,387,366 1,427,366 269,462 1991 various 09/10/90 London, KY Silver Creek 20,000 946,812 966,812 189,935 1990 various 08/15/90 Berea, KY Rosecliff 1,120,000 7,963,747 9,083,747 1,856,102 1991 various 09/18/90 Orlando, FL Brookwood 79,178 4,876,571 4,955,749 984,488 1992 various 10/01/90 Ypsilanti Township, MI Water Oak 98,058 1,472,287 1,570,345 315,058 1991 various 01/01/91 Orange City, FL Yester Oaks 47,105 1,576,634 1,623,739 349,631 1991 various 01/01/91 Lafayette, GA Ocean View 112,620 1,607,768 1,720,388 366,864 1991 various 01/01/91 Ferandina Beach, FL Wheeler House 42,000 1,164,939 1,206,939 225,657 1991 various 01/01/91 Nashua, NH Archer Village 40,000 900,157 940,157 209,079 1991 various 01/01/91 Archer, FL Oaks of Dunlop 631,959 6,601,884 7,233,843 1,711,138 1991 various 01/01/91 Colonial Heights, VA Timothy House 11,638 6,740,910 6,752,548 883,228 1992 various 03/05/91 Towson, MD Westover Station 305,645 4,303,370 4,609,015 724,351 1991 various 03/30/91 Newport News, VA Carib Villas III 239,009 1,673,803 1,912,812 401,707 1992 various 03/21/91 St. Croix, VI Carib Villas II 197,195 1,650,817 1,848,012 386,389 1991 various 03/01/91 St. Croix, VI Whispering Trace 218,000 1,926,736 2,144,736 562,439 1990 various 05/01/91 Woodstock, GA New Center 96,116 6,448,536 6,544,652 1,164,004 1992 various 06/27/91 Detroit, MI Huguenot Park 83,000 2,088,664 2,171,664 435,847 1991 various 06/26/91 New Paltz, NY Hillwood Pointe 454,185 5,105,170 5,559,355 1,121,626 1991 various 07/19/91 Jacksonville, FL Pinewood Pointe 555,093 7,255,716 7,810,809 1,569,667 1991 various 07/31/91 Jacksonville, FL Westgate 236,689 2,153,469 2,390,158 421,740 1991 various 07/25/91 Bismark, ND Woodlake Hills 187,588 8,913,636 9,101,224 1,092,535 1992 various 08/01/91 Pontiac, MI Bixel House 190,746 2,344,940 2,535,686 656,472 1991 various 07/31/91 Los Angeles, CA GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1996 -------------------------------------------------- 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 Harmony 0 7,138,522 7,138,522 1,596,510 1991 various 07/31/91 North Hollywood, CA Schumaker Place 536,153 5,226,870 5,763,023 581,838 1992 various 09/20/91 Salisbury, MD Circle Terrace 1,104,269 15,275,527 16,379,796 2,369,146 1993 various 12/06/91 Lansdown, MD -------------------------------------------------- $13,343,357 $132,137,081 $145,480,438 $26,076,146 ================================================== (1) The aggregate cost for Federal Income Tax purposes is approximately $ 145,480,000. * 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 9.75% to 12%. The Partnership has not guaranteed any of these mortgage notes payable. Summary of property owned and accumulated depreciation: Property Owned December 31, 1996 Accumulated Depreciation December 31, 1996 - ----------------------------------------------------------- ------------------------------------------- Balance at beginning of $145,304,421 Balance at beginning of 21,269,750 period period Additions during period: Additions during period: Other acquisitions 13,520 Depreciation 4,806,396 ------------------ Improvements etc. 162,497 Balance at close of $26,076,146 period -------------- ================== 176,017 Deductions during period: Cost of real estate sold 0 Reclassification to 0 intangible assets -------------- 0 --------------- Balance at close of period $145,480,438 =============== Property Owned December 31, 1995 Accumulated Depreciation December 31, 1995 - ----------------------------------------------------------- ------------------------------------------- Balance at beginning of $145,215,379 Balance at beginning of 16,571,920 period period Additions during period: Additions during period: Other acquisitions 27,195 Depreciation 4,697,830 ------------------ Improvements etc. 131,065 Balance at close of $21,269,750 period -------------- ================== 158,260 Deductions during period: Cost of real estate sold (69,218) Reclassification to 0 intangible assets -------------- (69,218) --------------- Balance at close of period $145,304,421 =============== Property Owned December 31, 1994 Accumulated Depreciation December 31, 1994 - ----------------------------------------------------------- ------------------------------------------- Balance at beginning of $145,650,432 Balance at beginning of $11,565,575 period period Additions during period: Additions during period: Other acquisitions 31,594 Depreciation 5,006,345 ------------------ Improvements etc. 37,945 Balance at close of $16,571,920 period -------------- ================== 69,539 Deductions during period: Cost of real estate sold (504,592) Reclassification to 0 intangible assets -------------- (504,592) --------------- Balance at close of period $145,215,379 =============== Supplement No. 11 to the Prospectus dated March 2, 1990 Previously filed with the Securities and Exchange Commission on August 5, 1991. BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V (A Limited Partnership) Annual Report on form 10-K For The Year Ended March 31, 1997 Reports of Independent Auditors [Letterhead] [LOGO] JOHN J. LEHOTAN To The Partners of Woodlake Hills Limited Partnership Detroit, Michigan Independent Auditor's Report I have audited the accompanying balance sheet of Woodlake Hills Limited Partnership, a Michigan limited partnership as of December 31, 1996 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, 1996 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 Accountants February 5, 1997 [Letterhead] [LOGO] JOHN J. LEHOTAN To The Partners of Woodlake Hills Limited Partnership Detroit, Michigan Independent Auditor's Report I have audited the accompanying balance sheet of Woodlake Hills Limited Partnership, a Michigan limited partnership as of December 31, 1995 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 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 positions of Woodlake Hills Limited Partnership as of December 31, 1995 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 Accountants February 11, 1996 [Letterhead] [LOGO] JOHN J. LEHOTAN To The Partners of Woodlake Hills Limited Partnership Detroit, Michigan Independent Auditor's Report I have audited the accompanying balance sheet of Woodlake Hills Limited Partnership, a Michigan limited partnership as of December 31, 1994 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, 1994 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 Accountants February 14, 1995 [Letterhead] [LOGO] NANAS, STERN, BIERS, NEINSTEIN AND CO. 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, 1996 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, 1996, 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. NANAS, STERN, BIERS, NEINSTEIN AND CO. January 14, 1997 [Letterhead] [LOGO] NANAS, STERN, BIERS, NEINSTEIN AND CO. 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, 1995 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, 1995, 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. NANAS, STERN, BIERS, NEINSTEIN AND CO. January 23, 1996 [Letterhead] [LOGO] NANAS, STERN, BIERS, NEINSTEIN AND CO. 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, 1994 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, 1994 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. NANAS, STERN, BIERS, NEINSTEIN AND CO. January 20,1995 [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, 1996, 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, 1996, and the results of its operations, 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 20 through 34 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 6, 1997, on our consideration of Maiden Choice Limited Partnership's internal control structure and on its compliance with specific requirements applicable to CDA programs, affirmative fair housing, 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 January 6, 1997 [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, 1995, 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, 1995, and the results of its operations, 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 20 trough 29 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, we have also issued reports dated January 18, 1996, on our consideration of Maiden Choice Limited Partnership's internal control structure and on its compliance with specific requirements applicable to CDA programs, affirmative fair housing, 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 18, 1996 [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, 1994, 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. 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, 1994, and the results of its operations, 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 20 trough 28 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. /s/Reznick Fedder & Silverman Baltimore, Maryland January 11, 1995 [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, 1996 and 1995 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 audit. 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 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 Cedar Lane I, Ltd. as of December 31, 1996 and 1995, 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 a report dated January 27, 1997 on our consideration of Cedar Lane I, Lts.'s internal control structure and compliance with laws and regulations. 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 Lexington, Kentucky January 27, 1997 [Letterhead] [LOGO] Miller, Mayer, Sullivan & Stevens LLP INDEPENDENT AUDITORS' REPORT To the Partners Rural Econmic and Community 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, 1995 and 1994 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 audit. We conducted our audit 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 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 Cedar Lane I, Ltd. as of December 31, 1995 and 1994, 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 a report dated February 1, 1996 on our consideration of Cedar Lane I, Lts.'s internal control structure and compliance with laws and regulations. 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 Lexington, Kentucky February 1, 1996 [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, 1996 and 1995, 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 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 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 positions of Silver Creek II, Ltd. as of December 31, 1996 and 1995 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 Lexington, Kentucky January 28, 1997 [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, 1995 and 1994 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 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 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 positions of Silver Creek II, Ltd. as of December 31, 1995 and 1994, 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 Lexington, Kentucky February 2, 1996 [Letterhead] [LOGO] Deloitte & Touche LLP 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, 1996, 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, 1996, and the results of its operations and its cash flow for the year then ended in conformity with generally accepted accounting principles. /s/Deloitte & Touche LLP January 24, 1997 [Letterhead] [LOGO] Deloitte & Touche LLP 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, 1995, 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 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 Tomkins/Rosecliff, Ltd. (a Florida Limited Partnership) as of December 31, 1995, and the results of its operations and its cash flow for the year then ended in conformity with generally accepted accounting principles. /s/Deloitte & Touche LLP February 2, 1996 [Letterhead] [LOGO] Deloitte & Touche LLP 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, 1994, 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 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 positions of Tomkins/Rosecliff, Ltd. (a Florida Limited Partnership) as of December 31, 1994, and the results of its operations and its cash flow for the year then ended in conformity with generally accepted accounting principles. /s/Deloitte & Touche LLP February 10, 1995 [Letterhead] [LOGO] Follmer, Rudzewicz & Co., P.C. January 30, 1997 INDEPENDENT AUDITORS' REPORT To the Partners 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, 1996 and the related Statement of Profit and Loss, changes in 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, the financial statements referred to above present fairly, in all material respects, the financial positions of Brookwood L.D.H.A. Limited Partnership, MSHDA No. 832 as of December 31, 1996, 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 30, 1997 on our consideration of the partnership's internal control structure and a report dated January 30, 1997 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 [Letterhead] [LOGO] Follmer, Rudzewicz & Co., P.C. January 24, 1996 INDEPENDENT AUDITOR'S REPORT To the Partners Brookswood L.D.H.A. Limited Partnership 28388 Franklin Road Southfield, Michigan 48034 We have audited the accompanying balance sheet of Brookswood L.D.H.A. Limited Partnership (a Michigan Limited Partnership), MSHDA Development No. 832, as of December 31, 1995, and the related statements of profit and loss, 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 positions of Brookswood L.D.H.A. Limited Partnership at December 31, 1995 and the results of its operations and 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 supplemental data on pages 11 through 13 are 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/Follmer, Rudzewicz & Co., P.C. Follmer,Rudzewicz & Co. P.C. Certified Public Accountants Southfield, Michigan 38-1910111 [Letterhead] [LOGO] Follmer, Rudzewicz & Co., P.C. January 18, 1995 INDEPENDENT AUDITOR'S REPORT To the Partners Brookswood L.D.H.A. Limited Partnership 28388 Franklin Road Southfield, Michigan 48034 We have audited the accompanying balance sheet of Brookswood L.D.H.A. Limited Partnership (a Michigan Limited Partnership), MSHDA Development No. 832, as of December 31, 1994, and the related statements of profit and loss, 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 Brookswood L.D.H.A. Limited Partnership at December 31, 1994 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 conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental data on pages 10 through 12 are 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/Follmer, Rudzewicz & Co., P.C. Follmer,Rudzewicz & Co. P.C. Certified Public Accountants Southfield, Michigan 38-1910111 [Letterhead] BILLIE J. BURNETT,CPA 5 Benton Drive Nashua, NH 03060 (603) 883-4230 To The Partners Burbank Limited Partnership I I have audited the accompanying balance sheets of Burbank Limited Partnership I as of December 31, 1996 and 1995, and the related statements of income, partners' equity and cash flows for the years then ended. The 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 misstatements. 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 audits, 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 Burbank Limited Partnership I as of December 31, 1996 and 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/Billie J. Burnett Billie J. Burnett January 8, 1997 [Letterhead] [LOGO] Wall Einchorn & Chernitzer., P.C. Certified Public Accountants First Virginia Bank Towers 555 Main Street Suite 1500 Post Office Box 3610 Norfolk, Virginia 23514 Alvin A. Wall, CPA Telephone (757)625-4700 Martin A. Einhorn, CPA 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, 1996 and 1995, 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 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 VHDA Project Number 90-0300-C as of December 31, 1996 and 1995, 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 9 to 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/Wall, Einhorn & Chernitzer, P.C. Norfolk, Virginia January 22, 1997 -1- [Letterhead] [LOGO] Wall Einchorn & Chernitzer., P.C. Certified Public Accountants First Virginia Bank Towers 555 Main Street Suite 1500 Post Office Box 3610 Norfolk, Virginia 23514 Alvin A. Wall, CPA Telephone (757)625-4700 Martin A. Einhorn, CPA 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, 1995 and 1994, 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 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 VHDA Project Number 90-0300-C as of December 31, 1995and 1994 and the results of its operations changes in partners' equity, and cash flow for the years then ended in conformity with generally accepted accounting principles. The accompanying supplementary information (shown on pages 10 to 13) 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/Wall, Einhorn & Chernitzer, P.C. Norfolk, Virginia January 22, 1996 -1- [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, 1996, 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, 1996, and the results of its operations, 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 20 through 34 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 14, 1997, on our consideration of Timothy House Limited Partnership's internal control structure and on its compliance with specific requirements applicable to CDA programs, affirmative fair housing, and laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer January 14, 1997 Identification Number: 52-1088612 Audit Principal: William T. Riley, Jr. [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, 1995 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 positions of Timothy House Limited Partnership as of December 31, 1995 and the results of its operations, changes in partners' equity and its cash flow 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 20 through 28 is presented for the 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, we have also issued reports dated January 16, 1996, on our consideration of Timothy House Limited Partnership's internal control structure and on its compliance with specific requirements applicable to CDA programs, affirmative fair housing, and laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer January 16, 1996 Identification Number: 52-1088612 Audit Principal: William T. Riley, Jr. [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, 1994 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 positions of Timothy House Limited Partnership as of December 31, 1994 and the results of its operations, changes in partners' equity and its cash flow 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 20 trough 28 is presented for the 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. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer January 12, 1995 Identification Number: 52-1088612 Audit Principal: William T. Riley, Jr. [Letterhead] Wilfore & Wynn A Professional Corporation Certified Public Accountants INDEPENDENT AUDITORS' REPORT The Partners Westover Station Associates, L.P. (A Limited Partnership) Newport News, Virginia We have audited the accompanying balance sheets of Westover Station Associates, L.P. as of December 31, 1996 and 1995 and the related statements of operations, partners' capital and cash flows for the year then ended. These financial statements are the responsibility of the Company'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 Westover Station Associates, L.P. at December 31, 1996 and 1995, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. The supplemental schedules and supporting data required by VHDA are prepared in accordance with VHDA requirements and have been tested by us as part of our auditing procedures followed in the examinantion of the financial statements mentioned above and, in our opinion, they are 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 10, 1997 (2) 4530 Professional Circle Virginia Beach, Virginia 23455-6498 Telephone (804)456-0111 Fax (804)473-1095 Wilfore & Wynn A Professional Corporation Certified Public Accountants INDEPENDENT AUDITORS REPORT The Partners Westover Station Associates, L.P. (A Limited Partnership) Newport New, Virginia We have audited the accompanying balance sheets of Westover Station Associates L.P. as of December 31, 1995 and 1994 and the related statements of operations, partners' capital and cash flows for the year then ended. These financial statements are the responsibility of the Company'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 positions of Westover Station Associates, L.P. at of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. The supplemental schedules and supporting data required by VHDA are prepared in accordance with VHDA requirements and have been tested by us as part of our auditing procedures followed in the examinantion of the financial statements mentioned above and, in our opinion they are 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 7, 1996 (2) 4530 Professional Circle Virginia Beach, Virginia 23455-6498 Telephone (804)456-0111 Fax (804)473-1095 [Letterhead] Kirschner Hutton Perlin, P.C. Certified Public Accountants 26913 Northwestern Hwy. Suite 510 Southfield, Michigan 48034-8444 Telephone: (810) 356-3880 Facsimile: (810) 356-3885 Independent Auditors' Report Partners January 22, 1997 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, 1996 and 1995, 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 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 Christiansted Limited Dividend Housing Association Limited Partnership as of December 31, 1996 and 1995, 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. [Letterhead] Kirschner Hutton Perlin, P.C. Certified Public Accountants 26913 Northwestern Hwy. Suite 510 Southfield, Michigan 48034-8444 Telephone: (810) 356-3880 Facsimile: (810) 356-3885 Independent Auditors Report Partners January 15, 1996 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, 1995 and 1994, 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 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 positions of Christiansted Limited Dividend Housing Association Limited Partnership as of December 31, 1995 and 1994, and the results of its operations and its cash flow for the year then ended in conformity with generally accepted accounting principles. /s/Kirshner Huton Perlin, P.C. [Letterhead] Kirschner Hutton Perlin, P.C. Certified Public Accountants 26913 Northwestern Hwy. Suite 510 Southfield, Michigan 48034-8444 Telephone: (810) 356-3880 Facsimile: (810) 356-3885 Independent Auditors' Report Partners January 22, 1997 St. Croix II. Limited Partnership We have audited the accompanying balance sheet of St. Croix II, Limited Partnership as of December 31, 1996 and 1995, 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 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 St. Croix II, Limited Partnership as of December 31, 1996 and 1995, 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. [Letterhead] Kirschner Hutton Perlin, P.C. Certified Public Accountants 26913 Northwestern Hwy. Suite 510 Southfield, Michigan 48034-8444 Telephone: (810) 356-3880 Facsimile: (810) 356-3885 Independent Auditors Report Partners January 22, 1996 St. Croix II. Limited Partnership We have audited the accompanying balance sheet of St. Croix II, Limited Partnership as of December 31, 1995 and 1994, 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 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 positions of St. Croix II, Limited Partnership as of December 31, 1995 and 1994, and the results of its operations and its cash flow for the year then ended in conformity with generally accepted accounting principles. /s/Kirshner Huton Perlin, P.C. [Letterhead] [LOGO] KPMG Peat Marwick LLP Independent Auditors' Report The Partners Kensignton Place Townhomes, A Limited Partnership: We have audited the accompanying balance sheets of Kensignton Place Townhomes, A Limited Partnership as of December 31, 1996 and 1995, 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 misstatements. 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 Kensignton Place Townhomes, A Limited Partnership as of December 31, 1996 and 1995, 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 5, 1997 [Letterhead] [LOGO] KPMG Peat Marwick LLP Independent Auditors' Report The Partners Kensignton Place Townhomes, A Limited Partnership: We have audited the accompanying balance sheets of Kensignton Place Townhomes, A Limited Partnership as of December 31, 1995 and 1994, 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 misstatements. 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 Kensignton Place Townhomes, A Limited Partnership as of December 31, 1995 and 1994, 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 9, 1996 [Letterhead] [LOGO] KPMG Peat Marwick LLP 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, 1996 and 1995, 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 misstatements. 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 Cobblestone Place Townhomes, A Limited Partnership as of December 31, 1996 and 1995, 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 January 20, 1997 [Letterhead] [LOGO] KPMG Peat Marwick LLP 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, 1995 and 1994, 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 misstatements. 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 Cobblestone Place Townhomes, A Limited Partnership as of December 31, 1995 and 1994 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 2, 1996 [Letterhead] [LOGO] KPMG Peat Marwick LLP 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, 1996 and 1995, 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 misstatements. 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, 1996 and 1995, 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 10, 1997 [Letterhead] [LOGO] KPMG Peat Marwick LLP 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, 1995 and 1994, 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 misstatements. 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, 1995 and 1994 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 9, 1996 [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, 1996, 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 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 Huguenot Park Associates, L.P. as of December 31, 1996, 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 January 18, 1997 [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, 1995 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 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 positions of Huguenot Park Associates, L.P. as of December 31, 1995 and the results of its operations, changes in partners' equity and its cash flow for the year then ended in conformity with generally accepted accounting principles. /s/Reznick Fedder & Silverman Bethesda, Maryland January 22, 1996 [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, 1994 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 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 positions of Huguenot Park Associates, L.P. as of December 31, 1994 and the results of its operations, changes in partners' equity and its cash flow for the year then ended in conformity with generally accepted accounting principles. /s/Reznick Fedder & Silverman Bethesda, Maryland January 28, 1995 [Letterhead] [LOGO] Charles Bailly & Company P.L.L.P. INDEPENDENT AUDITOR'S REPORT The Partners Westgate Apartments Limited Partnesrhip Wahpeton, North Dakota We have audited the accompanying balance sheets of Westagate Apartments Limited Partnership as of December 31, 1996 and 1995, 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 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 Westgate Apartments Limited Partnership as of December 31, 1996 and 1995, and the results of its operations, and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/Charles Bailly & Company P.L.L.P. Fargo, North Dakota January 18, 1997 [Letterhead] [LOGO] Charles Bailly & Company P.L.L.P. INDEPENDENT AUDITORS REPORT The Partners Westgate Apartments Limited Partnesrhip Wahpeton, North Dakota We have audited the accompanying balance sheets of Westagate Apartments Limited Partnership as of December 31, 1995 and 1994, 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 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 positions of Westgate Apartments Limited Partnership as of December 31, 1995 and 1994 and the results of its operations, changes in partners' equity and its cash flow for the year then ended in conformity with generally accepted accounting principles. /s/Charles Bailly & Company P.L.L.P. Fargo, North Dakota January 22, 1996 [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 900731 Richard Suarez 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, 1996, and the related statements of operations, changes in partners' capital, and cash flows for the year then ended. The 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 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 misstatements. 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 audits 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 Bixel House at December 31, 1996, and the results of its operations and cash flows for the years then ended, in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation Certified Public Accountant San Pedro, California February 14, 1997 [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 900731 Richard Suarez 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, 1995, and the related statements of operations, changes in partners, capital, and cash flows for the years then ended. The 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 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 misstatements. 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 audits, 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 Bixel House as of December 31, 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation Certified Public Accountant San Pedro, California February 9, 1996 [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 900731 Richard Suarez 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, 1994, and the related statements of operations, changes in partners, capital, and cash flows for the years then ended. The 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 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 misstatements. 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 audits, 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 Bixel House as of December 31, 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation Certified Public Accountant San Pedro, California February 3, 1995 [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 900731 Richard Suarez 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, 1996, and the related statements of operations, changes in partners' capital, and cash flows for the year ended December 31, 1996. The 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 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 misstatements. 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 audits 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, 1996, and the results of its operations and cash flows for the year ended December 31, 1996 in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation Certified Public Accountant San Pedro, California February 14, 1997 [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 900731 Richard Suarez 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, 1995, and the related statements of operations, changes in partners, capital, and cash flows for the year ended December 31, 1995. The 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 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 misstatements. 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 audits, 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 as of December 31, 1995, and the results of its operations and its cash flows for the year ended December 31, 1995 in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation Certified Public Accountant San Pedro, California February 13, 1996 [Letterhead] SUAREZ ACCOUNTANCY CORPORATION 150 W. Seventh Street Suite 100 San Pedro, CA 900731 Richard Suarez 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, 1994, and the related statements of operations, changes in partners, capital, and cash flows for the year ended December 31, 1994. The 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 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 misstatements. 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 audits, 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 as of December 31, 1994, and the results of its operations and its cash flows for the year ended December 31, 1994 in conformity with generally accepted accounting principles. /s/Suarez Accountancy Corporation Certified Public Accountant San Pedro, California February 13, 1995 [Letterhead] [LOGO] Halbert, Katz & Co., P.C. 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, 1996 and December 31, 1995, 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 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 positions of Schumaker Place Associates, L.P., as of December 31, 1996 and December 31, 1995, 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 11) 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 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/Halbert Katz &Co January 30, 1997 [Letterhead] [LOGO] Halbert, Katz & Co., P.C. 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, 1995 and December 31, 1994 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 audit. 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 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 positions of Schumaker Place Associates, L.P. as of December 31, 1995 and December 31, 1994 and the results of its operations, changes in partners' capital (capital deficiency) 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 a report dated January 30, 1996 on our consideration of Schumaker Place Associates, L.P. `s, internal control structure. 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 13) 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 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/Halbert Katz &Co January 30, 1996 [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, 1996, 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 Circle TerraceAssociates Limited Partnership as of December 31, 1996, and the results of its operations, the changes in partners' equity 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 26 trough 40 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, 1997, on our consideration of Circle Terrace Associates Limited Partnership's internal control structure and on its compliance with specific requirements applicable to Major HUD and CDA programs, affirmative fair housing, and laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer January 14, 1997 Identification Number: 52-1088612 Audit Principal: Lester A. Kanis [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, 1995 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 positions of Circle TerraceAssociates Limited Partnership as of December 31, 1995 and the results of its operations, the changes in partners' equity and its cash flow 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 26 trough 32 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 29, 1996, on our consideration of Timothy House Limited Partnership's internal control structure and on its compliance with specific requirements applicable to CDA programs, affirmative fair housing, and laws and regulations applicable to the financial statements. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer January 29, 1996 Identification Number: 52-1088612 Audit Principal: Lester A. Kanis [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, 1994 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 positions of Circle TerraceAssociates Limited Partnership as of December 31, 1994 and the results of its operations, changes in partners' equity and its cash flow 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 25 trough 30 is presented for the 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. /s/Reznick Fedder & Silverman Baltimore, Maryland Federal Employer January 25, 1995 Identification Number: 52-1088612 Audit Principal: Lester A. Kanis [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS REPORT To the Partners Water Oaks Apartments, Ltd. We have audited the accompanying balance sheet of Water Oaks Apartments, Ltd.,RECD Project No. 09-64-581801555 as of December 31, 1995 and the related statements of operations, partners' 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. The financial statements of Water Oaks Apartments , Ltd. for the year ended December 31, 1994 were audited by other auditors whose report dated February 1, 1996, expressed an unqualified opinion on those statements. 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 positions of Water Oaks Apartments, Ltd., RECD Project No. 09-64-581801555 as of December 31, 1995 and the results of its operations, changes in partners' deficit and its cash flow 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 16 trough 18 is presented for the 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 we have also issued reports dated February 1, 1996, on our consideration of Ocean View Apartments L.P.'s internal control structure and a report dated February 1, 1996 on its compliance with laws and regulations. /s/Reznick Fedder & Silverman Atalnta, Georgia February 1, 1996 [Letterhead] [LOGO] Habif, Arogeti & Wynne, P.C. INDEPENDENT AUDITORS REPORT To the Partners Water Oaks Apartments, L.P. We have audited the accompanying balance sheet of Water Oaks Apartments, L.P. [a Limited Partnership] Project No. 09-64-581801555, as of December 31, 1994 and 1993, 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 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 positions of Water Oaks Apartments, L.P. as of December 31, 1994 and 1993 and the results of its operations, changes in partners' equity and its cash flow for the years 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 supporting information in this report is presented for the purpose 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 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 Atlanta, Georgia February 1, 1995 [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, 1996 and 1995, 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 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 positions of Archer Village, Ltd., RHS Project No.: 09-001-267869575 as of December 31, 1996 and 1995, and the results of its operations, changes in partners' equity 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 18 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 24, 1997, on our consideration of Archer Village, Ltd.'s internal control structure and on its compliance with laws and regulations. /s/Reznick Fedder & Silverman Atlanta, Georgia January 24, 1997 [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS REPORT To the Partners Archer Village, Ltd. We have audited the accompanying balance sheet of Archer Village, Ltd.,RECD Project No. 09-001-267869575 as of December 31, 1995 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. The financial statements of Archer Village, Ltd. for the year ended December 31, 1994 were audited by other auditors whose report, dated February 1, 1995, expressed an unqualified opinion on those statements. 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 positions of Archer Village, Ltd., RECD Project No. 09-001-267869575 as of December 31, 1995 and the results of its operations, changes in partners' equity and its cash flow 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 16 trough 18 is presented for the 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 we have also issued reports dated February 1, 1996, on our consideration of Ocean View Apartments L.P.'s internal control structure and a report dated February 1, 1996 on its compliance with laws and regulations. /s/Reznick Fedder & Silverman Atalnta, Georgia February 1, 1996 [Letterhead] [LOGO] Habif, Arogeti & Wynne, P.C. INDEPENDENT AUDITORS REPORT To the Partners Archer Village, Ltd.. We have audited the accompanying balance sheet of Archer Village Ltd.[a Limited Partnership] Project No. 09-001-0267869575 as of December 31, 1994 and 1993, 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. Except as discussed in the following paragraph, 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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. We did not obtain sufficient documentation of the operating property and accumulated depreciation for the period prior to January 1, 1991. Therefore we were unable to form an opinion regarding the amounts at which the operating property and accumulated depreciation are recorded in the accompanying balance sheet at December 31, 1994 and 1993 (stated at $935,234 and $934,505 and $146,848 and $116,529, respectively), or the amount of depreciation expense for the years ended (stated at $30,319 and $30,232, respectively). In our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary had we obtained sufficient documentation of the operating property and accumulated depreciation for the period prior to January 1, 1991, the financial statements referred to in the first paragraph fairly, in all material respects, the financial positions of Archer Village Ltd.. as of December 31, 1994 and 1993 and the results of its operations and its cash flow for the years 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 supporting information in this report is presented for the 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. /s/Habif, Arogeti & Wynne Atlanta, Georgia February 1, 1995 [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, 1996 and 1995, 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 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, 1996 and 1995, and the results of its operations, changes in partners' equity 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 19 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 24, 1997 on our consideration of Ocean View Apartments, L.P.'s internal control structure and on its compliance with laws and regulations. /s/Reznick Fedder & Silverman Atlanta, Georgia January 24, 1997 [Letterhead] [LOGO] Reznick Fedder & Silverman INDEPENDENT AUDITORS REPORT To the Partners Ocean View Apartments, L.P. We have audited the accompanying balance sheet of Ocean View Apartments, L.P..,RECD Project No. 09-45-581801553 as of December 31, 1995 and the related statements of operations, partners' 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. The financial statements of Ocean View Apartments , L.P.. for the year ended December 31, 1994 were audited by other auditors whose report dated February 1, 1995, expressed an unqualified opinion on those statements. 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 positions of Ocean View Apartments, L.P., RECD Project No. 09-45-581801553 as of December 31, 1995 and the results of its operations, changes in partners' deficit and its cash flow 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 16 trough 18 is presented for the 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 we have also issued reports dated February 1, 1996, on our consideration of Ocean View Apartments L.P.'s internal control structure and a report dated February 1, 1996 on its compliance with laws and regulations. /s/Reznick Fedder & Silverman Atalnta, Georgia February 1, 1996 [Letterhead] [LOGO] Habif, Arogeti & Wynne, P.C. INDEPENDENT AUDITORS REPORT To the Partners Ocean View Apartments, L.P. We have audited the accompanying balance sheet of Ocean View Apartments, L.P. [a Limited Partnership] Project No. 09-045-0581801553 as of December 31, 1994 and 1993, 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 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 positions of Ocean View Apartments, L.P. as of December 31, 1994 and 1993 and the results of its operations, changes in partners' equity and its cash flow for the years 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 supporting information in this report is presented for the 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. /s/Habif, Arogeti & Wynne Atlanta, Georgia February 1, 1995 [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, 1996 and 1995, 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 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 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 Yester Oaks, L.P., RECD Project No.: 11-046-0581814319 as of December 31, 1996 and 1995, and the results of its operations, changes in partners' equity 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 15 through 16 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 24, 1997, on our consideration of Ocean View Apartments L.P.'s internal control structure and on its compliance with laws and regulations. /s/Reznick Fedder & Silverman Atlanta, Georgia January 24, 1997 [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, 1995 and 1994, 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 audit. The financial statements of Yester Oaks , L.P.. for the year ended December 31, 1994 were audited by other auditors whose report dated February 1, 1995, expressed an unqualified opinion on those statements. 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 positions of Yester Oaks, L.P.., RECD Project No. 11046-0581814319 as of December 31, 1995, and the results of its operations, changes in partners' equity and its cash flow 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 16 trough 18 is presented for the 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 we have also issued reports dated February 1, 1996, on our consideration of Ocean View Apartments L.P.'s internal control structure and a report dated February 1, 1996 on its compliance with laws and regulations. /s/Reznick Fedder & Silverman Atalnta, Georgia February 1, 1996 [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 as of December 31, 1996, 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, 1996, 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, Illnois Illnois Certificate No. 060-3097692 January 29, 1997 [letterhead] Haran & Associates Ltd. INDEPENDENT AUDITORS REPORT To the Partners Historic New Center Apartments Limited Partnership Detroit, Michigan We have audited the accompanying statement of assets, liabilities and partners' equity -income tax basis of Historic New Center Apartments Limited Partnership (a limited partnership) as of December 31, 1995, and the related statements of profit and loss- income tax basis, changes in partners' equity -income tax basis and statement of cash flows- income tax basis 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. As described in the notes to the financial statements, the Partnership's policy is to prepare its financial statements on the basis of accounting used for income tax purposes and are not intended to be presented in conformity with generally acepted accounting principles. In our opinion, the financial statements referred to above present fairly in all material respects, the assets, liabilities and partners' equity of Historic New Center Apartments Limited Partnership as of December 31, 1994, and its statements of income (loss), changes in partners' equity and its cash flows for the year then ended, on the basis of accounting described in the notes to the financial statements. /s/Haran & Associates Ltd. January 20, 1995 [letterhead] Haran & Associates Ltd. INDEPENDENT AUDITORS REPORT To the Partners Historic New Center Apartments Limited Partnership Detroit, Michigan We have audited the accompanying statement of assets, liabilities and partners' equity -income tax basis of Historic New Center Apartments Limited Partnership (a limited partnership) as of December 31, 1994, and the related statements of income (loss)- income tax basis, changes in partners' equity -income tax basis and statement of cash flows- income tax basis 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. As described in the notes to the financial statements, the Partnership's policy is to prepare its financial statements on the basis of accounting used for income tax purposes and are not intended to be presented in conformity with generally acepted accounting principles. In our opinion, the financial statements referred to above present fairly in all material respects, the assets, liabilities and partners' equity of Historic New Center Apartments Limited Partnership as of December 31, 1994, and its statements of income (loss), changes in partners' equity and its cash flows for the year then ended, on the basis of accounting described in the notes to the financial statements. /s/Haran & Associates Ltd. January 20, 1995 Annual Report on Form 10-K For The Year Ended March 31, 1997 Audited Financial Statements of Local Limited Partnerships STRATHERN PARK DECEMBER 31, 1996 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, 1996 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, 1996, 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, Sterns, Biers, Neinstein and Co. LLP NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP January 14, 1997 STRATHERN PARK BALANCE SHEET DECEMBER 31, 1996 ASSETS Cash (Note 5) $215,615 Receivables 38,582 Reserve for replacements (Note 5) 96,652 Tenant security deposits (Note 5) 122,015 Rental property - at cost (Note 2) Land 5,889,320 Buildings 19,042,548 Equipment and furnishings 944,597 -------------- 25,876,465 Less: accumulated depreciation (4,438,048) -------------- 21,438,417 Other assets Syndication fee (Net of accumulated amortization of $94,252) 624,415 -------------- TOTAL ASSETS $22,535,696 ============== LIABILITIES Accounts payable and accrued expenses $85,799 Security deposits 107,497 Accrued interest payable (Note 2) 3,316,184 Long term debt (Notes 2 and 5) 17,552,451 -------------- TOTAL LIABILITIES 21,061,931 DEFERRED INCOME 20,238 PARTNERS' EQUITY (NOTE 3) 1,453,527 -------------- TOTAL LIABILITIES AND PARTNERS' EQUITY $22,535,696 ============== See accompanying auditors' report. The notes are an integral part of these financial statements. STRATHERN PARK STATEMENT OF PARTNERS' EQUITY YEAR ENDED DECEMBER 31, 1996 Profit Balance Net Distri- Balance and Loss January Loss butions December Percentage 1, 1996 for the year Paid 31, 1996 ------------------------------------------------------------------------ GENERAL PARTNER Safran Associates Investment Partnership II, A California Limited Partnership 1% $(44,808) $(12,443) $(788) $(58,039) CLASS A LIMITED PARTNER Safran Associates Investment Partnership II, A California Limited Partnership 4% (181,046) (49,771) (3,140) (233,957) INVESTOR LIMITED PARTNER Boston Financial Qualified Housing Tax Credits L.P.V., A Massachusetts Limited Partnership 95% 3,002,218 (1,182,070) (74,625) 1,745,523 SPECIAL LIMITED PARTNER S L P 90, Inc. --- --- --- --- --- ------------------------------------------------------------ $2,776,364 $(1,244,284) $(78,553) $1,453,527 ============================================================ See accompanying auditors' report. The notes are an integral part of these financial statements. STRATHERN PARK STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996 INCOME Gross possible rents $1,524,672 (Vacancies) (7,097) Interest 11,370 Miscellaneous 34,321 --------------- TOTAL INCOME $1,563,266 EXPENSES (Note 4) Administrative expense 128,724 Management fees 118,048 Utilities 114,579 Operating and maintenance expense 227,504 Taxes and insurance 167,311 Interest expense - Mortgage note payable 569,657 Interest expense - Notes payable 684,796 Depreciation and amortization 796,931 --------------- 2,807,550 --------------- NET LOSS $(1,244,284) =============== See accompanying auditors' report. The notes are an integral part of financial statements. STRATHERN PARK STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 1996 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $(1,244,284) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization $796,931 Increases in - Miscellaneous receivables (4,079) Rent receivable (28,375) Accrued interest payable 684,796 Accounts payable and accrued expenses 4,781 Deferred income 20,238 Decreases in - Tenant security deposits 3,445 Security deposits (5,643) Total Adjustments 1,472,094 ----------------- Net Cash Provided by Operating Activities 227,810 CASH FLOWS FROM INVESTING ACTIVITIES Increase in reserve for replacements (24,336) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on mortgage (52,868) Interest payments on notes payable from residual receipts (52,368) Distributions paid (78,553) ------------ Net Cash Used in Financing Activities (183,789) ----------------- Net Increase in Cash and Cash Equivalents 19,685 Cash and cash equivalents at Janaury 1, 1996 195,930 ----------------- Cash and cash equivalents at December 31, 1996 $215,615 ================= SUPPLEMENTAL DISCLOSURE OF CASH FROM INFORMATION: Cash paid during the year for interest $622,453 ============ Cash paid during the year for taxes $800 ============ See accompanying auditors' report. The notes are an integral part of these financial statements. STRATHERN PARK NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 Note 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES Organization Strathern Park (the partnership) was organized pursuant to a limited partnership agreement dated March 28, 1989 as amended. Effective June 1, 1990, the partnership agreement was amended with the admission of a new limited partner who purchased a 95% limited partnership interest for a total capital contribution of $5,963,067. On January 1, 1994 Lorne Park was merged into Strathern Park. The combined partnerships constructed a 241 unit apartment project (Lorne Park 72 unites, Strathern Park 169 units) located in Sun Valley, California for tenants whose income is very low to moderate. The project is regulated under the terms of certain of its loan agreements. Such agreements contain certain restrictions concerning rental charges, the number of units rented to tenants in the very low, low and moderate income levels and other matters. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Significant Accounting Policies - Method of Accounting - The partnership books are maintained and its financial statements and tax returns are prepared on the accrual basis. Cash Equivalents - For purposes of the statement of cash flows, the partnership considers all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents. Rental Property - The partnership records property, equipment and improvements at the cost of acquisition or construction. The cost of maintenance and repairs is charged to operations as incurred; significant renewals and betterments are capitalized. Depreciation is computed using the straight line method for financial statement purposes and accelerated methods for tax purposes. Estimated useful lives for financial statement purposes are as follows: Classification Life - --------------- Buildings 27.5 Years Equipment and furnishings 7 Years Amortization - amortization of syndication costs is computed using the straight line method over a period of 40 years. Note 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (Cont.) Income Taxes - The project receives low-income tax credits provided under Section 42 of the Internal Revenue Code. Also, no provision for income taxes has been included since the income or loss of the partnership as well as the tax credits are required to be reported by the respective partners on their separate income tax returns. Note 2 LONG TERM DEBT Mortgage note payable, secured by First Deed of Trust, requiring monthly payments of $51,913, including interest at 9.41% per annum, maturing February, 2022. $5,928,171 Note payable secured by Second Deed of Trust, payable to the Community Redevelopment Agency of the City of Los Angeles with interest at 7% per annum. Interest accrues from the date of issuance of the first certificate of occupancy which is December 26, 1991. Unpaid principal together with all accrued and unpaid interest are due and payable in full upon the maturity of the primary permanent loan, but not later than 40 years from date of issuance. Principal and interest payments may be made in annual installments from the residual receipts of the project, as the term residual receipts is defined in the loan agreement. The note was funded by a Housing Development Grant from the United States Department of Housing and Urban Development. The terms of the Grant agreement impose certain restrictions on the use of the Grant proceeds and operating policies of the partnership. Accrued interest on this note at December 31, 1996 amounted to $1,774,998. 5,179,105 Note payable secured by Third Deed of Trust, payable to the Community Redevelopment Agency of the City of Los Angeles, with interest at 5% per annum. Interest accrues from the date of issuance of the first certificate of occupancy which is December 26, 1991. Unpaid principal together with all accrued and unpaid interest are due and payable in full upon the maturity of the primary permanent loan, but not later than 40 years from date of issuance. Principal and interest payments may be made in annual installments from the residual receipts of the project, as the term residual receipts is defined in the loan agreement. Accrued interest on this note at December 31, 1996 amounted to $1,556,241. 6,445,175 ----------------- $17,552,451 ================= Note 2 LONG TERM DEBT (Contd.) Maturities of long term debt as of December 31, 1996 for the succeeding five years are as follows: Years ended December 31, 1997 $59,816 1998 65,779 1999 72,337 2000 77,942 2001 87,318 Thereafter 17,189,259 ----------------- $17,552,451 ================= Note 3 DISTRIBUTION TO PARTNERS Pursuant to the terms of the partnership agreement, as amended, and the loan agreement with the Community Redevelopment Agency of the City of Los Angeles, distributions are payable only from residual receipts, as defined in the agreements. Distributions are apportioned as follows: 1) 40% to the Community Redevelopment Agency of the City of Los Angeles (CRA) 2) The remaining 60% is allocated as follows: a) The Investor Limited Partner (Boston) is to receive any cumulative return ($60,000 annually) in arrears; b) The next $63,158 is distributed 95% to Boston, 4% to the Class A Limited Partner (SAIP II) and 1% to the General Partner (SAIP II); c) Any additional cash is used to repay any partner advances to the partnership; d) The next $63,158 is distributed 5% to Boston, 94% to SAIP II (Limited Partner) and 1% to SAIP II (General Partner); e) Thereafter, cash is distributed 50% to Boston, 49% to SAIP II (Limited Partner) and 1% to SAIP II (General Partner). Note 4 RELATED PARTY TRANSACTIONS There were no direct compensation payments to the partners during the year. However, there were related party transactions which occurred which are set forth below: (Income) Receivable Expense (Payable) Account for the At December Name Description No. Year 31, 1996 - --------------------------------------------------------------------------------- Thomas Safran and Associates, Inc. Management fee 6320 118,048 (73) =========================== In addition, the project reimbursed the management company for allocated common costs such as office supplies and health insurance. The aggregate total of such reimbursements was $17,341 for the year. The general partner has a direct ownership interest in the management company listed above. Note 5 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS Cash and Short Term Investments - The carrying amount approximates fair value because of the short maturity of those investments. Long Term Debt (First Deed of Trust) - The project does not have the right to prepay this debt during the first ten years of the term of this note. Accordingly, the carrying amount approximates its fair value. Long Term Debt (Second & Third Deed of Trust) - The carrying amount approximates fair value because there is no ready market for such debt, repayment/refinancing is severely restricted by the CRA and HUD. December 31, 1996 ----------------------------------- Carrying Fair Amount Value Cash and Short Term Investments $434,282 $434,282 Long Term Debt (First Deed of Trust) (5,928,171) (5,928,171) Long Term Debt (Second & Third Deed of Trust) (11,624,280) (11,624,280) STRATHERN PARK SCHEDULE I BOSTON FINANCIAL QUALIFIED HOUSING Page 1 of 2 BALANCE SHEET FORMAT DECEMBER 31, 1996 ASSETS CURRENT ASSETS Petty cash 500 Cash in bank 215,115 Rent receivables 35,940 Miscellaneous receivables 2,642 Tenant security deposits 122,015 ---------------- Total Current Assets 376,212 RESERVES AND DEPOSITS Reserve for replacements 96,652 FIXED ASSETS Land 5,889,320 Buildings 19,042,548 Equipment and furnishings 944,597 ---------------- 25,876,465 Less: accumulated depreciation (4,438,048) ---------------- Total Fixed Assets 21,438,417 OTHER ASSETS Syndication fee (Net of accumulated amortization of $94,252) 624,415 ---------------- TOTAL ASSETS 22,535,696 ================ STRATHERN PARK SCHEDULE I BOSTON FINANCIAL QUALIFIED HOUSING Page 2 of 2 BALANCE SHEET FORMAT DECEMBER 31, 1996 LIABILITIES AND PARTNERS' EQUITY CURRENT LIABILITIES Accounts payable 37,750 Accrued interest payable - 1st mortgage 48,049 Tenant security deposit liability 107,497 ---------------- Total Current Liabilities 193,296 MORTGAGE NOTE PAYABLE CURRENT PORTION 1st mortgage note payable current portion 59,816 LONG TERM LIABILITIES Accrued interest payable - notes 2nd mortgage note payable 1,818,646 3rd mortgage note payable 1,497,538 Mortgage notes payable 1st mortgage note payable 5,868,355 2nd mortgage note payable 5,179,105 3rd mortgage note payable 6,445,175 Deferred income 20,238 ---------------- Total Long Term Liabilities 20,829,057 OWNERS' EQUITY Limited partners' equity 1,511,566 General partners' equity (58,039) ---------------- Total Owners' Equity 1,453,527 ---------------- TOTAL LIABILITIES AND PARTNERS' EQUITY 22,535,696 ================ STRATHERN PARK SCHEDULE II BOSTON FINANCIAL QUALIFIED HOUSING - Page 1 of 4 STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996 REVENUE Rent revenue Apartments 1,465,438 Tenant assistance payments 46,529 Furniture and equipment --- Stores and commercial 12,705 Garage and parking spaces --- Flexible subsidy income --- Miscellaneous --- ------------- Total rent revenue 1,524,672 Vacancies Apartments (7,097) Stores and commercial --- Garage and parking spaces --- Miscellaneous --- ------------- Total Vacancies (7,097) --------------- Net Rental Revenue 1,517,575 Financial Revenue Interest Income - operations 2,973 Interest Income - residual receipts --- Interest income - reserve for replacements 3,835 Interest income - miscellaneous 4,562 ------------- Total Financial Revenue 11,370 Other Revenue Laundry and vending 21,534 NSF and late charges 2,848 Damages and cleaning fees 2,168 Forfeited tenant security deposits 2,486 Other revenue 5,285 Non-cash revenue --- ------------- Total Other Revenue 34,321 --------------- NET REVENUE 1,563,266 =============== STRATHERN PARK SCHEDULE II BOSTON FINANCIAL QUALIFIED HOUSING - Page 2 of 4 STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996 EXPENSES Administrative Expenses Advertising 469 Other renting expense --- Office salaries 6,815 Office supplies 48,699 Management fee 118,048 Manager or superintendent salary 47,125 Manager's rent free unit --- Legal expenses (project) 3,183 Auditing expenses (project) 9,500 Bookkeeping fees/accounting services --- Telephone and answering services 6,159 Bad debts 6,774 Miscellaneous administrative expenses --- ------------- Total Administrative Expenses 246,772 Utilities Expenses Fuel oil/coal --- Electricity 37,754 Water 43,777 Gas 5,686 Sewer 27,362 ------------- Total Utilities Expenses 114,579 Operating & Maintenance Janitor and cleaning payroll --- Janitor and cleaning supplies 8,164 Janitor and cleaning contract --- Exterminating payroll/contract 1,484 Exterminating supplies --- Garbage and trash removal 12,035 Security payroll/contract 4,295 STRATHERN PARK SCHEDULE II BOSTON FINANCIAL QUALIFIED HOUSING - Page 3 of 4 STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996 EXPENSES (Cont.) Operating & Maintenance (Cont.) Grounds payroll --- Grounds supplies 3,481 Grounds contract 27,060 Repairs payroll 59,020 Repairs material 23,635 Repairs contract 73,340 Elevator maintenance/contract --- Heating/cooling repairs and maintenance 403 Swimming pool maintenance/contract --- Snow removal --- Decorating payroll/contract 2,804 Decorating supplies 11,783 Other, gasoline --- Miscellaneous operating and maintenance --- ------------- Total Operating and Maintenance 227,504 Taxes and Insurance Real estate taxes 116,658 Payroll taxes (FICA) 11,306 Miscellaneous taxes, licenses 765 Property and liability insurance 22,635 Fidelity bond insurance 149 Workmen's compensation 5,698 Health insurance and other benefits 10,100 Other insurance --- Miscellaneous taxes and insurance --- ------------- Total Taxes and Insurance 167,311 Interest on Mortgage Notes Interest on 1st mortgage 569,657 STRATHERN PARK SCHEDULE II BOSTON FINANCIAL QUALIFIED HOUSING - Page 4 of 4 STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996 EXPENSES (Cont.) Other Financial Expenses Amortization 17,967 Interest on notes payable (long term) 684,796 Mortgage insurance premium --- Miscellaneous financial expenses --- Non-cash expense --- ------------- Total Financial Expenses 702,763 --------------- TOTAL EXPENSES BEFORE DEPRECIATION 2,028,586 --------------- PROFIT (LOSS) BEFORE DEPRECIATION (465,320) Depreciation 778,964 --------------- OPERATING PROFIT (LOSS) (1,244,284) Other Expenses Prior Period (Entity) --- --------------- NET PROFIT (LOSS) (1,244,284) =============== 1st mortgage principal payment 52,868 2nd mortgage principal payment --- 3rd mortgage principal payment --- --------------- Total mortgage principal payments 52,868 =============== Actual replacement reserve deposits 75,836 Replacement or painting reserve releases (51,500) Cash subsidies --- Capital improvements not expensed --- Capital contribution or disbursement 78,553 STRATHERN PARK SCHEDULE III COMPUTATION OF RESIDUAL RECEIPTS DECEMBER 31, 1996 Net income (loss) as of December 31, 1996 (1,244,284) ADD: Depreciation 778,964 Amortization 17,967 Community Redevelopment Agency loan interest 322,259 Housing Development Grant loan interest 362,537 Releases from reserve for replacements 51,500 1,533,227 ---------------- ---------------- 288,943 LESS: Principal payments on mortgage (52,868) Deposits to reserve for replacements (75,836) Payments for capital expenditures --- (128,704) ---------------- ---------------- RESIDUAL RECEIPTS, as defined in the partnership agreement 160,239 ================