1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended MARCH 31, 2001
Commission File Number 0-13808
HOUSING PROGRAMS LIMITED
(A California Limited Partnership)
I.R.S. Employer Identification No. 95-3906167
9090 WILSHIRE BLVD., SUITE 201
BEVERLY HILLS, CALIF. 90211
Registrant's Telephone Number,
Including Area Code (310) 278-2191
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve 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 [ ]
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2001
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets, March 31, 2001 and December 31, 2000 ............... 1
Statements of Operations,
Three Months Ended March 31, 2001 and 2000....................... 2
Statement of Partners' Deficiency,
Three Months Ended March 31, 2001 ............................... 3
Statements of Cash Flow,
Three Months Ended March 31, 2001 and 2000....................... 4
Notes to Financial Statements ...................................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation.............................. 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................................... 13
Item 6. Exhibits and Reports on Form 8-K.................................... 13
Signatures................................................................... 14
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
AS OF MARCH 31, 2001 AND DECEMBER 31, 2000
ASSETS
2001 2000
(Unaudited) (Audited)
------------ ------------
INVESTMENTS IN LIMITED PARTNERSHIPS (Notes 1 and 2) $ -- $ --
CASH AND CASH EQUIVALENTS (Note 1) 318,905 372,546
DUE FROM ESCROW (Note 2) -- 15,000
------------ ------------
TOTAL ASSETS $ 318,905 $ 387,546
============ ============
LIABILITIES AND PARTNERS' DEFICIENCY
LIABILITIES:
Notes payable (Notes 3) $ 4,600,000 $ 4,600,000
Accrued fees and expenses due general
partners (Note 4) 1,040,235 1,097,089
Accrued interest payable (Notes 3) 6,561,111 6,451,861
Accounts payable 71,803 69,855
------------ ------------
12,273,149 12,218,805
------------ ------------
COMMITMENTS AND CONTINGENCIES (Notes 4 and 5)
PARTNERS' DEFICIENCY:
General partners (370,290) (369,060)
Limited partners (11,583,954) (11,462,199)
------------ ------------
(11,954,244) (11,831,259)
------------ ------------
TOTAL LIABILITIES AND PARTNERS'
DEFICIENCY $ 318,905 $ 387,546
============ ============
The accompanying notes are an integral part of these financial statements.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Unaudited)
2001 2000
--------- ---------
INTEREST INCOME $ 4,291 $ 100
--------- ---------
OPERATING EXPENSES:
Management fees - general partner (Note 4) 50,802 80,196
General and administrative (Note 4) 14,574 9,449
Legal and accounting (Note 4) 17,650 52,658
Interest (Notes 3 and 4) 109,250 109,250
--------- ---------
Total operating expenses 192,276 251,553
--------- ---------
LOSS FROM OPERATIONS (187,985) (251,453)
GAIN IN SALE OF PARTNERSHIP INTERESTS (Note 2) 65,000 248,178
--------- ---------
NET LOSS $(122,985) $ (3,275)
========= =========
NET LOSS PER LIMITED PARTNERSHIP INTEREST $ (10) $ (0)
========= =========
The accompanying notes are an integral part of these financial statements.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENT OF PARTNERS' DEFICIENCY
THREE MONTHS ENDED MARCH 31, 2001
(Unaudited)
General Limited
Partners Partners Total
------------ ------------ ------------
PARTNERSHIP INTERESTS 12,368
============
DEFICIENCY, January 1, 2001 $ (369,060) $(11,462,199) $(11,831,259)
Net loss for the three months
ended March 31, 2001 (1,230) (121,755) (122,985)
------------ ------------ ------------
DEFICIENCY, March 31, 2001 $ (370,290) $(11,583,954) $(11,954,244)
============ ============ ============
The accompanying notes are an integral part of these financial statements.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Unaudited)
2001 2000
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(122,985) $ (3,275)
Adjustments to reconcile net loss to net cash used in
operating activities:
Gain on sale of partnership interests (65,000) (248,178)
Decrease in due from escrow 15,000 --
Increase in accrued interest payable 109,250 109,250
Decrease in accrued fees and expenses
due general partners (56,854) (94,804)
Increase in accounts payable 1,948 23,304
--------- ---------
Net cash used in operating activities (118,641) (213,703)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of partnership interests 65,000 248,178
--------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (53,641) 34,475
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 372,546 817,796
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 318,905 $ 852,271
========= =========
The accompanying notes are an integral part of these financial statements.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The information contained in the following notes to the financial
statements is condensed from that which would appear in the annual
audited financial statements; accordingly, the financial statements
included herein should be reviewed in conjunction with the financial
statements and related notes thereto contained in the Housing Programs
Limited (the "Partnership") annual report for the year ended December 31,
2000. Accounting measurements at interim dates inherently involve greater
reliance on estimates than at year end. The results of operations for the
interim period presented are not necessarily indicative of the results
for the entire year.
In the opinion of the Partnership, the accompanying unaudited financial
statements contain all adjustments (consisting primarily of normal
recurring accruals) necessary to present fairly the financial position of
the Partnership at March 31, 2001 and the results of operations and
changes in cash flows for the three months then ended.
ORGANIZATION
Housing Programs Limited (the "Partnership"), formed under the California
Uniform Limited Partnership Act, was organized on May 15, 1984. The
Partnership was formed to invest primarily in other limited partnerships
which own or lease and operate federal, state or local
government-assisted housing projects. The general partners of the
Partnership are National Partnership Investments Corp. (NAPICO),
Coast Housing Investment Associates (CHIA), a limited partnership, and
Housing Programs Corporation II.
The general partners have a 1 percent interest in profits and losses of
the Partnership. The limited partners have the remaining 99 percent
interest which is allocated in proportion to their respective individual
investments. National Partnership Investments Corp. (NAPICO) is the
corporate general partner of the Partnership. Casden Properties Inc. owns
a 95.25% economic interest in NAPICO, with the balance owned by Casden
Investment Corporation ("CIC"). CIC, which is wholly owned by Alan I.
Casden, owns 95% of the voting common stock of NAPICO.
On December 30, 1998, the Partnership sold its limited partnership
interests in 7 local limited partnerships for net proceeds of $202,714 to
subsidiaries of Casden Properties Inc.
BASIS OF PRESENTATION
The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of
America.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and reported amounts
of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
METHOD OF ACCOUNTING FOR INVESTMENT IN LIMITED PARTNERSHIPS
The investments in local limited partnerships are accounted for on the
equity method. Acquisition, selection fees and other costs related to the
acquisition of the projects have been capitalized to the investment
account and amortized on a straight line basis over the estimated lives
of the underlying assets, which is generally 30 years.
NET LOSS PER LIMITED PARTNERSHIP INTEREST
Net loss per limited partnership interest was computed by dividing the
limited partners' share of net loss by the number of limited partnership
interests outstanding during the period. The number of limited
partnership interests was 12,368 for all years presented.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash and bank certificates of
deposit with an original maturity of three months or less. The
Partnership has its cash and cash equivalents on deposit primarily with
one money market mutual fund. Such cash and cash equivalents are
uninsured.
INCOME TAXES
No provision has been made for income taxes in the accompanying financial
statements since such taxes, if any, are the liability of the individual
partners.
IMPAIRMENT OF LONG-LIVED ASSETS
The Partnership reviews long-lived assets to determine if there has been
any permanent impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. If
the sum of the expected future cash flows is less than the carrying
amount of the assets, the Partnership recognizes an impairment loss.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
As of March 31, 2001, the Partnership holds limited partnership interests
in 7 limited partnerships, after selling its interest in one limited
partnership in January 2001. The limited partnerships owned as of March
31, 2001, residential low income rental projects consisting of 1,153
apartment units. The mortgage loans of these projects are payable to or
insured by various governmental agencies.
The Partnership, as a limited partner, is entitled to 99 percent of the
profits and losses of the limited partnerships.
Distributions from the limited partnerships are recognized as a reduction
of capital until the investment balance has been reduced to zero or to a
negative amount equal to further capital contributions required.
Subsequent distributions are recognized as income.
The Partnership has no equity investment in limited partnerships as of
March 31, 2001.
The following are unaudited combined estimated statements of operations
for the three months ended March 31, 2001 and 2000 for the limited
partnerships in which the Partnership has investments:
Three months Three months
ended ended
March 31, 2001 March 31, 2000
-------------- --------------
INCOME
Rental and Other $ 1,892,000 $ 2,580,000
----------- -----------
EXPENSES
Depreciation 362,000 517,000
Interest 242,000 438,000
Operating 1,339,000 1,878,000
----------- -----------
Total expenses 1,943,000 2,833,000
----------- -----------
NET LOSS $ (51,000) $ (253,000)
=========== ===========
NAPICO, or one of its affiliates, is the general partner and property
management agent for certain of the limited partnerships included above.
Under recent adopted law and policy, the United States Department of
Housing and Urban Development ("HUD") has determined not to renew the
Housing Assistance Payment ("HAP") Contracts on a long term basis on the
existing terms. In connection with renewals of the HAP Contracts under
such new law and policy, the amount of rental assistance payments under
renewed HAP Contracts will be based on market rentals instead of above
market rentals, which was generally the case under existing HAP
Contracts. The payments under the renewed HAP Contracts may not be in an
amount that would provide sufficient cash flow to permit owners of
properties subject to HAP Contracts to meet the
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
debt service requirements of existing loans insured by the Federal
Housing Administration of HUD ("FHA") unless such mortgage loans are
restructured. In order to address the reduction in payments under HAP
Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 ("MAHRAA"), which was
adopted in October 1997, provides for the restructuring of mortgage loans
insured by the FHA with respect to properties subject to the Section 8
program. Under MAHRAA, an FHA-insured mortgage loan can be restructured
into a first mortgage loan which will be amortized on a current basis and
a low interest second mortgage loan payable to FHA which will only be
payable on maturity of the first mortgage loan. This restructuring
results in a reduction in annual debt service payable by the owner of the
FHA-insured mortgage loan and is expected to result in an insurance
payment from FHA to the holder of the FHA-insured loan due to the
reduction in the principal amount. MAHRAA also phases out project-based
subsidies on selected properties serving families not located in rental
markets with limited supply, converting such subsidies to a tenant-based
subsidy.
When the HAP Contracts are subject to renewal, there can be no assurance
that the local limited partnerships in which the Partnership has an
investment will be permitted to restructure its mortgage indebtedness
under MAHRAA. In addition, the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA is
uncertain.
During the three months ended March 31, 2001 and 2000, the Partnership
sold its interests in two limited partnerships for net payments of
$65,000 and $248,178, respectively. The Partnership recognized gains of
$65,000 from the sales equal to the net payments received because it had
no investment balance related to this partnership. At December 31, 2000,
the Partnership had a deposit in escrow of $15,000 related to the sale in
2001.
On December 30, 1998, after obtaining the consents of the limited
partners, the Partnership sold its limited partnership interests in 7
local limited partnerships to affiliates of Casden Properties Inc. The
sale resulted in cash proceeds to the Partnership of $202,714, which was
collected in 1999. In March 1999, the Partnership made cash distributions
of $695,687 to the limited partners and $7,027 to the general partners,
which included using proceeds from the sale of the partnership interests.
NOTE 3 - NOTES PAYABLE
Certain of the Partnership's investments involved purchases of
partnership interests from partners who subsequently withdrew from the
operating partnership. The Partnership is obligated for non-recourse
notes payable of $4,600,000 to the sellers of the partnership interests,
bearing interest at 9.5 percent. The Partnership was relieved of notes
payable in the amount of $4,069,743 in connection with the sale of the
partnership interests to the Operating Partnership in 1998. The notes
matured in December 1999. These obligations and the related interest are
collateralized by the Partnership's investment in the investee limited
partnerships and are payable only out of cash distributions from the
investee partnerships, as defined in the notes. Unpaid interest is due at
maturity of the notes.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE 3 - NOTES PAYABLE (CONTINUED)
Notes payable and related accrued interest payable aggregating
$11,051,861 as of December 31, 2000 become payable prior to December 31,
2000. The Partnership has not made any payments and is in default under
the terms of the notes. Due to the Partnership's lack of cash and
partners' deficiency, there is substantial doubt about its ability to
make these payments, which would result in the possible foreclosure of
the investments in the local limited partnerships. As a result, there is
substantial doubt about the Partnerships' ability to continue as a going
concern.
Management is in process of attempting to negotiate extensions of the
maturity dates on the notes payable.
NOTE 4 - FEES AND EXPENSES DUE TO GENERAL PARTNERS
Under the terms of the Restated Certificate and Agreement of the Limited
Partnership, the Partnership is obligated to the general partners for an
annual management fee equal to 0.5 percent of the original invested
assets of the limited partnerships. Invested assets is defined as the
costs of acquiring project interests including the proportionate amount
of the mortgage loans related to the Partnership's interests in the
capital accounts of the respective limited partnerships.
As of March 31, 2001, the fees and expenses due the general partners
exceeded the Partnership's cash. The general partners, during the
forthcoming year, will not demand payment of amounts due in excess of
such cash or such that the Partnership would not have sufficient
operating cash; however, the Partnership will remain liable for all such
amounts.
NOTE 5 - CONTINGENCIES
On August 27, 1998, two investors holding an aggregate of eight units of
limited partnership interests in Real Estate Associates Limited III (an
affiliated partnership in which NAPICO is the managing general partner)
and two investors holding an aggregate of five units of limited
partnership interest in Real Estate Associates Limited VI (another
affiliated partnership in which NAPICO is the managing general partner)
commenced an action in the United States District Court for the Central
District of California against the Partnership, NAPICO and certain other
affiliated entities. The complaint alleges that the defendants breached
their fiduciary duty to the limited partners of certain NAPICO managed
partnerships and made materially false and misleading statements in the
consent solicitation statements sent to the limited partners of such
partnerships relating to approval of the transfer of partnership
interests in limited partnerships, owning certain of the properties, to
affiliates of Casden Properties Inc., organized by an affiliate of
NAPICO. The plaintiffs seek equitable relief, as well as compensatory
damages and litigation related costs. On August 4, 1999, one investor
holding one unit of limited partnership interest in the Partnership
commenced a virtually identical action in the United States District
Court for the Central District of California against the Partnership,
NAPICO and certain other affiliated entities. The second action has been
subsumed in the first action, which has been certified as a class action.
The managing general partner of such NAPICO managed partnerships and the
other
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2001
NOTE 5 - CONTINGENCIES (CONTINUED)
defendants believe that the plaintiffs' claims are without merit and
intend to contest the actions vigorously.
NAPICO is a plaintiff in various lawsuits and has also been named as
defendant in other lawsuits arising from transactions in the ordinary
course of business. In the opinion of NAPICO, the claims will not result
in any material liability to the Partnership.
NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments, when it is practicable to
estimate that value. The notes payable are collateralized by the
Partnership's investments in investee limited partnerships, which account
for the Partnership's primary source of revenues, are subject to various
government rules, regulations and restrictions which make it
impracticable to estimate the fair value of the notes and related accrued
interest payable. It is impracticable to estimate the fair value of the
amounts due general partner due to their related party nature. The
carrying amount of other assets and liabilities reported on the balance
sheets that require such disclosure approximates fair value due to their
short-term maturity.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2001
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary sources of funds include interest income on
money market accounts and certificates of deposit and distributions from
limited partnerships in which the Partnership has invested. It is not
expected that any of the local limited partnerships in which the
Partnership has invested will generate cash flow sufficient to provide
for distributions to the Partnership's limited partners in any material
amount. The Partnership made a distribution to the investors in March
2000, which included using proceeds from disposition of its investments
in certain limited partnerships.
RESULTS OF OPERATIONS
Partnership revenues consist primarily of interest income earned on
certificates of deposit and other temporary investment of funds. The
Partnership also receives distributions from the lower-tier limited
partnerships in which it has invested.
Distributions received from limited partnerships are recognized as return
of capital until the investment balance has been reduced to zero or to a
negative amount equal to future capital contributions required.
Subsequent distributions received are recognized as income.
Except for certificates of deposit and money market funds, the
Partnership's investments consist entirely of interests in other limited
partnerships owning government-assisted housing projects. Available cash
is invested to provide interest income as reflected in the statements of
operations. These funds can be converted to cash to meet obligations as
they arise. The Partnership intends to continue investing available funds
in this manner.
A recurring partnership expense is the annual management fee. The fee is
payable to the General Partners of the Partnership and is calculated at
.5 percent of the Partnership's invested assets. The management fee is
paid to the General Partners for their continuing management of
partnership affairs. The fee is payable beginning with the month
following the Partnership's initial investment in a local limited
partnership. Management fees were $50,802 and $80,196 for the three
months ended March 31, 2001 and 2000, respectively.
The Partnership is obligated on non-recourse notes payable of $4,600,000
at March 31, 2001, which bear interest at 9.5 percent per annum and
matured on December 31, 1999. The notes and related interest were payable
from cash flow generated from operations of the related rental properties
as defined in the notes. These obligations are collateralized by the
Partnership's investments in the limited partnerships. The notes and
unpaid interests became payable on December 31, 1999. Management is in
process of attempting to negotiate extensions of the maturity dates on
the notes payable.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2001
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
RESULTS OF OPERATION (CONTINUED)
Operating expenses, other than management fees and interest expense,
consist of legal and accounting fees for services rendered to the
Partnership and administrative expenses, which were generally consistent
for periods presented. Legal and accounting fees were $17,650 and $52,658
for the three months ended March 31, 2001 and 2000, respectively. General
and administrative expenses were $14,574 and $9,449 for the periods ended
March 31, 2001 and 2000, respectively.
The Partnership accounts for its investments in the local limited
partnerships on the equity method, thereby adjusting its investment
balance by its proportionate share of the income or loss of the local
limited partnerships. Losses incurred after the limited partnership
investment account is reduced to zero are not recognized.
Under recent adopted law and policy, the United States Department of
Housing and Urban Development ("HUD") has determined not to renew the
Housing Assistance Payment ("HAP") Contracts on a long term basis on the
existing terms. In connection with renewals of the HAP Contracts under
such new law and policy, the amount of rental assistance payments under
renewed HAP Contracts will be based on market rentals instead of above
market rentals, which was generally the case under existing HAP
Contracts. The payments under the renewed HAP Contracts may not be in an
amount that would provide sufficient cash flow to permit owners of
properties subject to HAP Contracts to meet the debt service requirements
of existing loans insured by the Federal Housing Administration of HUD
("FHA") unless such mortgage loans are restructured. In order to address
the reduction in payments under HAP Contracts as a result of this new
policy, the Multi-family Assisted Housing Reform and Affordability Act of
1997 ("MAHRAA"), which was adopted in October 1997, provides for the
restructuring of mortgage loans insured by the FHA with respect to
properties subject to the Section 8 program. Under MAHRAA, an FHA-insured
mortgage loan can be restructured into a first mortgage loan which will
be amortized on a current basis and a low interest second mortgage loan
payable to FHA which will only be payable on maturity of the first
mortgage loan. This restructuring results in a reduction in annual debt
service payable by the owner of the FHA-insured mortgage loan and is
expected to result in an insurance payment from FHA to the holder of the
FHA-insured loan due to the reduction in the principal amount. MAHRAA
also phases out project-based subsidies on selected properties serving
families not located in rental markets with limited supply, converting
such subsidies to a tenant-based subsidy.
When the HAP Contracts are subject to renewal, there can be no assurance
that the local limited partnerships in which the Partnership has an
investment will be permitted to restructure its mortgage indebtedness
under MAHRAA. In addition, the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA is
uncertain.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2001
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
RESULTS OF OPERATION (CONTINUED)
During the three months ended March 31, 2001, the Partnership sold its
interest in one limited partnership for a net payment of $65,000. The
Partnership recognized a gain of $65,000 from the sale because it had no
investment balance related to this partnership.
On December 30, 1998, after obtaining the consents of the limited
partners, the Partnership sold its limited partnership interests in 7
local limited partnerships to affiliates of Casden Properties Inc. The
sale resulted in cash proceeds to the Partnership of $202,714, which was
collected in 1999. In March 1999, the Partnership made cash distributions
of $695,687 to the limited partners and $7,027 to the general partners,
primarily using proceeds from the sale of the partnership interests.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2001
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership interests in Real Estate Associates Limited III (an affiliated
partnership in which NAPICO is the managing general partner) and two investors
holding an aggregate of five units of limited partnership interest in Real
Estate Associates Limited VI (another affiliated partnership in which NAPICO is
the managing general partner) commenced an action in the United States District
Court for the Central District of California against the Partnership, NAPICO and
certain other affiliated entities. The complaint alleges that the defendants
breached their fiduciary duty to the limited partners of certain NAPICO managed
partnerships and made materially false and misleading statements in the consent
solicitation statements sent to the limited partners of such partnerships
relating to approval of the transfer of partnership interests in limited
partnerships, owning certain of the properties, to affiliates of Casden
Properties Inc., organized by an affiliate of NAPICO. The plaintiffs seek
equitable relief, as well as compensatory damages and litigation related costs.
On August 4, 1999, one investor holding one unit of limited partnership interest
in the Partnership commenced a virtually identical action in the United States
District Court for the Central District of California against the Partnership,
NAPICO and certain other affiliated entities. The second action has been
subsumed in the first action, which has been certified as a class action. The
managing general partner of such NAPICO managed partnerships and the other
defendants believe that the plaintiffs' claims are without merit and intend to
contest the actions vigorously.
As of March 31, 2001, NAPICO was a plaintiff or defendant in several lawsuits.
None of these suits are related to the Partnership. In the opinion of NAPICO,
the claims will not result in any material liability to the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are required per the provision of Item 6 of regulation
S-K and no reports on Form 8-K were filed during the quarter March
31, 2001.
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HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 2001
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HOUSING PROGRAMS LIMITED
(a California limited partnership)
By: National Partnership Investments Corp.
General Partner
/s/ BRUCE NELSON
----------------------------------------
Bruce Nelson
President
Date: MAY 15, 2001
----------------------------------------
/s/ BRIAN H. SHUMAN
----------------------------------------
Brian H. Shuman
Chief Financial Officer
Date: MAY 15, 2001
----------------------------------------
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