UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from__________to___________
Commission file number 0-17690
Krupp Insured Mortgage Limited Partnership
Massachusetts 04-3021395
(State or other jurisdiction of (IRS employer
incorporation or organization) identification no.)
One Beacon Street, Boston, Massachusetts 02108
(Address of principal executive offices) (Zip Code)
(617) 523-0066
(Registrant's telephone number, including area code)
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 whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).
Yes |_| No |X|
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PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. When used in this Form 10-Q, the words "believes," "anticipates,"
"expects," "plans," "intends," "estimates," "continue," "may" or "will" (or the
negative of such words) and similar expressions are intended to identify
forward-looking statements. Such statements are subject to a number of risks and
uncertainties, including but not limited to the following: federal, state or
local regulations; adverse changes in general economic or local conditions;
prepayments of mortgages; failure of borrowers to pay participation interests
due to poor operating results of properties underlying the mortgages; uninsured
losses and potential conflicts of interest between the Partnership and its
Affiliates, including the General Partners. The Company's filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K for
the year ended December 31, 2002, contain additional information concerning such
risk factors. Actual results in the future could differ materially from those
described in any forward-looking statements as a result of the risk factors set
forth above, and the risk factors described in the Annual Report.
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KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP
BALANCE SHEETS
ASSETS
March 31, December 31,
2003 2002
------------ ------------
Participating Insured Mortgages ("PIMs") (Note 2) $ 23,333,226 $ 23,414,472
Mortgage-Backed Securities ("MBS")(Note 3) 2,983,292 3,422,980
------------ ------------
Total mortgage investments 26,316,518 26,837,452
Cash and cash equivalents 2,806,747 2,816,834
Interest receivable and other assets 182,256 187,588
------------ ------------
Total assets $ 29,305,521 $ 29,841,874
============ ============
LIABILITIES AND PARTNERS' EQUITY
Liabilities $ 46,033 $ 47,465
------------ ------------
Partners' equity (deficit) (Note 4):
Limited Partners
(14,956,796 Limited Partner interests outstanding) 29,413,750 29,966,538
General Partners (387,174) (381,100)
Accumulated comprehensive income 232,912 208,971
------------ ------------
Total Partners' equity 29,259,488 29,794,409
------------ ------------
Total liabilities and partners' equity $ 29,305,521 $ 29,841,874
============ ============
The accompanying notes are an integral
part of the financial statements.
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KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Three Months
Ended March 31,
----------------------
2003 2002
-------- --------
Revenues:
Interest income - PIMs:
Basic interest $459,514 $457,646
Interest income - MBS 59,288 258,531
Other interest income 18,020 18,185
-------- --------
Total revenues 536,822 734,362
-------- --------
Expenses:
Asset management fee to an affiliate 29,781 56,329
Expense reimbursements to affiliates 73,395 24,232
Amortization of prepaid fees and expenses -- 18,326
General and administrative 78,368 47,902
-------- --------
Total expenses 181,544 146,789
-------- --------
Net income 355,278 587,573
Other comprehensive income:
Net change in unrealized gain on MBS 23,941 24,444
-------- --------
Total comprehensive income $379,219 $612,017
======== ========
Allocation of net income (Note 4):
Limited Partners $344,620 $569,946
======== ========
Average net income per Limited Partner
interest (14,956,796 Limited Partner interests outstanding) $ .02 $ .04
======== ========
General Partners $ 10,658 $ 17,627
======== ========
The accompanying notes are an integral
part of the financial statements.
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KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31,
--------------------------
2003 2002
----------- -----------
Operating activities:
Net income $ 355,278 $ 587,573
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of prepaid fees and expenses -- 18,326
Changes in assets and liabilities:
Decrease in interest receivable and other assets 5,332 12,100
Increase (decrease) in liabilities (1,432) 33,713
----------- -----------
Net cash provided by operating activities 359,178 651,712
----------- -----------
Investing activities:
Principal collections on PIMs 81,246 74,964
Principal collections on MBS 463,629 566,003
----------- -----------
Net cash provided by investing activities 544,875 640,967
----------- -----------
Financing activities:
Quarterly distributions (914,140) (916,842)
Special distributions -- (1,495,679)
----------- -----------
Net cash used for financing activities (914,140) (2,412,521)
----------- -----------
Net decrease in cash and cash equivalents (10,087) (1,119,842)
Cash and cash equivalents, beginning of period 2,816,834 3,603,846
----------- -----------
Cash and cash equivalents, end of period $ 2,806,747 $ 2,484,004
=========== ===========
Non cash activities:
Increase in unrealized gain on MBS $ 23,941 $ 24,444
=========== ===========
The accompanying notes are an integral
part of the financial statements.
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KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or
omitted in this report on Form 10-Q pursuant to the Rules and Regulations
of the Securities and Exchange Commission. However, in the opinion of the
General Partners, Krupp Plus Corporation and Mortgage Services Partners
Limited Partnership (collectively the "General Partners"), of Krupp
Insured Mortgage Limited Partnership (the "Partnership"), the disclosures
contained in this report are adequate to make the information presented
not misleading. See Notes to Financial Statements included in the
Partnership's Form 10-K for the year ended December 31, 2002 for
additional information relevant to significant accounting policies
followed by the Partnership.
In the opinion of the General Partners of the Partnership, the
accompanying unaudited financial statements reflect all adjustments
(consisting of only normal recurring accruals) necessary to present fairly
the Partnership's financial position as of March 31, 2003, and its results
of operations and cash flows for the three months ended March 31, 2003 and
2002.
The results of operations for the three months ended March 31, 2003 are
not necessarily indicative of the results which may be expected for the
full year. See Management's Discussion and Analysis of Financial Condition
and Results of Operations included in this report.
2. PIMs
At March 31, 2003, the Partnership has estimated that the GNMA MBS portion
of the Wildflower PIM and the FHA insured mortgage portion of the
Creekside PIM have a fair value of $23,333,226. Fair value is based on
expected payoff proceeds from the GNMA MBS and FHA insured mortgage and
does not include any value for the participation feature. The
Partnership's PIMs have maturities ranging from 2025 to 2031.
3. MBS
At March 31, 2003, the Partnership's MBS portfolio had an amortized cost
of $2,750,380 and gross unrealized gains of $232,912. The MBS portfolio
has maturity dates ranging from 2016 to 2024.
4. Changes in Partners' Equity
A summary of changes in Partners' Equity for the three months ended March
31, 2003 is as follows:
Accumulated Total
Limited General Comprehensive Partners'
Partners Partners Income Equity
------------- ------------- ------------- -------------
Balance at December 31, 2002 $ 29,966,538 $ (381,100) $ 208,971 $ 29,794,409
Net income 344,620 10,658 -- 355,278
Quarterly distributions (897,408) (16,732) -- (914,140)
Change in unrealized gain on MBS -- -- 23,941 23,941
------------- ------------- ------------- -------------
Balance at March 31, 2003 $ 29,413,750 $ (387,174) $ 232,912 $ 29,259,488
============= ============= ============= =============
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
financial statements and accompanying notes contained in the Partnership's 2002
Annual Report on Form 10-K and in this Form 10-Q.
Certain statements in this Management's Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this Form 10-Q constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. These forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the Partnership's actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by these forward-looking statements. These factors include, among other
things, federal, state or local regulations; adverse changes in general economic
or local conditions; pre-payments of mortgages; failure of borrowers to pay
participation interests due to poor operating results at properties underlying
the mortgages; uninsured losses and potential conflicts of interest between the
Partnership and its Affiliates, including the General Partners.
Liquidity and Capital Resources
At March 31, 2003, the Partnership had liquidity consisting of cash and cash
equivalents of approximately $2.8 million as well as the cash flow provided by
its investments in PIMs and MBS. The Partnership anticipates that these sources
will be adequate to provide the Partnership with sufficient liquidity to meet
its obligations as well as to provide distributions to its investors.
The most significant demand on the Partnership's liquidity is the quarterly
distribution paid to investors of approximately $900,000. Funds for the
quarterly distributions come from scheduled monthly principal and interest
payments received on the PIMs and MBS, the principal prepayments of the MBS and
interest earned on the Partnership's cash and cash equivalents. The portion of
distributions attributable to the principal collections and cash reserves
reduces the capital resources of the Partnership. As the capital resources
decrease, the total cash flows to the Partnership will also decrease and over
time will result in periodic adjustments to the distributions paid to investors.
The General Partners periodically review the distribution rate to determine
whether an adjustment is necessary based on projected future cash flows. In
general, the General Partners try to set a distribution rate that provides for
level quarterly distributions. To the extent that quarterly distributions do not
fully utilize the cash available for distributions and cash balances increase,
the General Partners may adjust the distribution rate or distribute such funds
through a special distribution. Based on current projections, the General
Partners have determined that the Partnership will continue to pay a
distribution of $.06 per Limited Partner interest per quarter for the near
future.
The Partnership agreed in December of 2000 to provide debt service relief for
the Wildflower PIM due to the property's poor operating performance in the
competitive Las Vegas market. Occupancy had fallen as low as 80%, and the
property had been unable to generate sufficient revenues to adequately maintain
the property. Consequently, a loan modification agreement, between the
Partnership, the borrower entity under the PIM, the principals of the borrower
entity and the affiliated property management agent, provided operating funds
for property repairs. At December 31, 2002 the repairs were complete, and the
property's occupancy was 90%. Under the modification, the principals of the
borrower entity converted $105,000 of cash advances to a long-term
non-interest-bearing loan. In addition, an escrow account to be used exclusively
for property repairs was established and was under the control of the
Partnership. The management agent made an initial deposit into the escrow equal
to 30% of the management fees it received during 2000 and continued to deposit a
similar amount through the end of the modification. The Partnership made an
initial deposit into the escrow account to match the $105,000 principals' loan
and the management agent's initial deposit and continued to match additional
deposits through the end of the modification. The Partnership's contributions to
the escrow account have been considered an interest rebate. The principals' loan
and the escrow deposits made by the management agent and the Partnership can be
repaid exclusively out of any Surplus Cash, as defined by HUD, that the property
may generate in future years. Any repayments will be made on a pro rata basis
among the parties. The effective interest rate after the interest rebate was
equivalent to the then prevailing rate for similar instruments.
The borrower on the Wildflower PIM is seeking to refinance the property. The
Partnership expects that this loan will be paid off during the third quarter of
2003. In addition, the Partnership expects that the interest rate rebate will be
returned by the borrower. At this time it is unclear if the Partnership will be
entitled to receive any proceeds from the participation feature of the PIM.
The Partnership's other remaining PIM investment is backed by the underlying
first mortgage loan on Creekside. Located in Clackamas County near Portland,
Oregon, property operations have been affected by an extensive road
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improvement project. The County is building a new road interchange, and
construction has impeded access to the property resulting in some loss of
occupancy as residents have been inconvenienced and leasing has been hampered.
The borrower has learned that a significant portion of the property will be
taken by eminent domain, possibly including some of the apartment buildings. The
borrower is contesting the condemnation action because the County's monetary
payment for the land taken will not fully compensate ownership for the adverse
effects that construction project will have on the remaining portion of the
property. It is expected that the legal proceedings will be complicated and
lengthy, particularly because the property is security for an FHA-insured
mortgage. However, the borrower on the Creekside PIM is seeking to refinance the
property. The Partnership expects that this loan will be paid off during the
second quarter of 2003. The Partnership does not expect to receive any proceeds
from the participation feature of the PIM.
In the event that both Wildflower and Creekside are paid off, the Partnership
would then commence an orderly liquidation of the remaining assets of the
Partnership and subsequently pay a liquidating distribution.
In addition to providing insured or guaranteed monthly principal and basic
interest payments from the insured first mortgage or GNMA MBS portion of the
PIM, the Partnership's PIM investments also may provide additional income
through its participation interest in the underlying properties. The Partnership
may receive a share in any operating cash flow that exceeds debt service
obligations and capital needs or a share in any appreciation in value when the
properties are sold or refinanced. However, this participation is neither
guaranteed nor insured, and it is dependent upon whether property operations or
its terminal value meet certain criteria.
In the event that the PIMs do not pay off as discussed above, the Partnership
does have the option to call these PIMs by accelerating their maturity. If the
call feature is exercised for both the participation feature and the insured
mortgage or MBS portion of the PIMs then the insurance feature of the loan would
be canceled. Therefore, the Partnership would determine the merits of exercising
the call option for each PIM as economic conditions warrant. Such factors as the
condition of the asset, local market conditions, the interest rate environment
and availability of financing would affect those decisions.
Critical Accounting Policies
The Partnership's critical accounting policies relate to revenue recognition
related to the Partnership's PIM investments, amortization of Prepaid Fees and
Expenses and the carrying value of MBS. The Partnership's policies are as
follows:
The Partnership accounts for its MBS portion of a PIM investment in accordance
with the Financial Accounting Standards Board's Statement 115, "Accounting for
Certain Investments in Debt and Equity Securities" ("FAS 115"), under the
classification of held to maturity as this investment has a participation
feature. As a result, the Partnership would not sell or otherwise dispose of the
MBS. Accordingly, the Partnership has both the intention and ability to hold
this investment to expected maturity. The Partnership carries this MBS at
amortized cost. The Partnership holds the insured mortgage portion of its
Federal Housing Administration (FHA) PIM at amortized cost and does not
establish loan loss reserves as this investment is fully insured by the FHA. The
Partnership, in accordance with FAS 115, classifies its MBS portfolio as
available-for-sale. The Partnership classifies its MBS portfolio as
available-for-sale as the Partnership expects that a portion of the MBS
portfolio will remain after all of the PIMs pay off and that it will be
necessary to then sell the remaining MBS portfolio at that time in order to
close out the Partnership. In addition, other situations such as liquidity needs
could arise which would necessitate the sale of a portion of the MBS portfolio.
As such the Partnership carries its MBS at fair market value and reflects any
unrealized gains (losses) as a separate component of Partners' Equity. The
Partnership amortizes purchase premiums or discounts over the life of the
underlying mortgages using the effective interest method.
Basic interest on PIMs is recognized based on the stated rate of the FHA
mortgage loan (less the servicer's fee) or the stated coupon rate of the GNMA
MBS. The Partnership recognizes interest related to the participation features
when the amount becomes fixed and the transaction that gives rise to such amount
is finalized, cash is received and all contingencies are resolved. This could be
the sale or refinancing of the underlying real estate, which results in a cash
payment to the Partnership or a cash payment made to the Partnership from
surplus cash relative to the participation feature.
Prepaid fees and expenses represented prepaid acquisition fees and expenses and
prepaid participation servicing fees paid for the acquisition and servicing fees
of PIMs. The Partnership amortized prepaid acquisition fees and expenses using a
method that approximated the effective interest method over a period of ten to
twelve years, which represented the estimated life of the underlying mortgage.
Acquisition expenses incurred on potential acquisitions which were not
consummated were charged to operations. The Partnership amortized prepaid
participation servicing fees using a method that approximated the effective
interest method over a ten-year period beginning at final endorsement of the
loan if a Department of Housing and Urban Development ("HUD") loan or GNMA loan.
Upon the repayment of a PIM, any
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unamortized acquisition fees and expenses and unamortized participation
servicing fees related to such loan were expensed.
Results of Operations
Net income decreased in the first quarter of 2003 as compared to the first
quarter of 2002 primarily due to lower MBS interest income and increases in
expense reimbursements to affiliates and general and administrative expense.
This decrease was partially offset by a decrease in asset management fees. MBS
interest income decreased due to the payoff of the Richmond Park Apartments MBS
in June 2002 and on-going single-family MBS principal collections. Asset
management fees decreased due to the decrease in the Partnership's investments
as a result of principal collections from MBS and PIMs. General and
administrative expenses and expense reimbursement to affiliates increased for
the period ended March 31, 2003 primarily due to a change in the estimated cost
of services provided to the Partnership in 2002.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Assessment of Credit Risk
The Partnership's investments in its insured mortgage and MBS portion of its
PIMs and its MBS are guaranteed and/or insured by the Government National
Mortgage Association ("GNMA"), Fannie Mae, the Federal Home Loan Mortgage
Corporation ("FHLMC") or the United States Department of Housing and Urban
Development ("HUD") and therefore the certainty of their cash flows and the risk
of material loss of the amounts invested depends on the creditworthiness of
these entities.
Fannie Mae is a federally chartered private corporation that guarantees
obligations originated under its programs. FHLMC is a federally chartered
corporation that guarantees obligations originated under its programs. These
obligations are not guaranteed by the U.S. Government or the Federal Home Loan
Bank Board. However, Fannie Mae and FHLMC are two of the largest corporations in
the United States with significant experience in mortgage securitizations. In
addition, their MBS instruments carry the highest credit rating given to
financial instruments. GNMA guarantees the full and timely payment of principal
and basic interest on the securities it issues, which represent interests in
pooled mortgages insured by HUD. Obligations insured by HUD, an agency of the
U.S. Government, are backed by the full faith and credit of the U.S. Government.
The Partnership includes in cash and cash equivalents approximately $2.5 million
of commercial paper, which is issued by entities with a credit rating equal to
one of the top two rating categories of a nationally recognized statistical
rating organization.
Interest Rate Risk
The Partnership's primary market risk exposure is to interest rate risk, which
can be defined as the exposure of the Partnership's net income, comprehensive
income or financial condition to adverse movements in interest rates. At March
31, 2003, the Partnerships PIMs and MBS comprise the majority of the
Partnership's assets. Decreases in interest rates may accelerate the prepayment
of the Partnership's investments. Increases in interest rates may decrease the
proceeds from a sale of the MBS. The Partnership does not utilize any
derivatives or other instruments to manage this risk as the Partnership plans to
hold its PIM investments to expected maturity, while it is expected that
substantially all of the MBS will prepay over the same time period, thereby
mitigating any potential interest rate risk to the disposition value of any
remaining MBS.
The Partnership monitors prepayments and considers prepayment trends, as well as
distribution requirements of the Partnership, when setting regular distribution
policy. For MBS, the Partnership forecasts prepayments based on trends in
similar securities as reported by statistical reporting entities such as
Bloomberg. For PIMs, the Partnership incorporates prepayment assumptions into
planning as individual properties notify the Partnership of the intent to prepay
or as they are scheduled to mature.
Item 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Within the 90 days prior to the date of this Quarterly Report on Form 10-Q, the
Principal Executive Officer and Chief Accounting Officer of Krupp Plus
Corporation, a general partner of the Partnership, carried out an evaluation of
the effectiveness of the design and operation of the Partnership's disclosure
controls and procedures. Based upon that
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evaluation, the Principal Executive Officer and the Chief Accounting Officer
concluded that the Partnership's disclosure controls and procedures were
effective as of the date of their evaluation in timely alerting them to material
information relating to the Partnership required to be included in this
Quarterly Report on Form 10-Q.
(b) Changes in Internal Controls
There were no significant changes in the Partnership's internal controls or in
other factors that could significantly affect such internal controls subsequent
to the date of the evaluation described in paragraph (a) above.
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KRUPP INSURED MORTGAGE LIMITED PARTNERSHIP
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(99.1) Principal Executive Officer Certification pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
(99.2) Chief Accounting Officer Certification pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
None
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Krupp Insured Mortgage Limited Partnership
(Registrant)
BY: /s/ Alan Reese
--------------------------------------------
Alan Reese
Treasurer and Chief Accounting Officer of
Krupp Plus Corporation, a General Partner
DATE: April 28, 2003.
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Certifications
I, Douglas Krupp, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Krupp Insured
Mortgage Limited Partnership;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: April 28, 2003
/s/ Douglas Krupp
--------------------------------
Douglas Krupp
Principal Executive Officer
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Certifications
I, Alan Reese, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Krupp Insured
Mortgage Limited Partnership;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: April 28, 2003
/s/ Alan Reese
---------------------------------------
Alan Reese
Chief Accounting Officer
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