FINANCIAL STATEMENTS AND


INDEPENDENT AUDITOR'S REPORT




PIONEER STREET ASSOCIATES


(A California Limited Partnership)


D.B.A. FOOTHILL VISTA APARTMENTS




DECEMBER 31, 2007















PIONEER STREET ASSOCIATES
 (A California Limited Partnership)
  TABLE OF CONTENTS
  
 PAGEREPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM
3FINANCIAL STATEMENTS:BALANCE SHEET
4STATEMENT OF OPERATIONS
6STATEMENT OF CHANGES IN PARTNERS' CAPITAL
7STATEMENT OF CASH FLOWS
8NOTES TO FINANCIAL STATEMENTS
9SUPPLEMENTAL INFORMATION:INDEPENDENT AUDITOR'S REPORT ON INFORMATIONACCOMPANYING THE BASIC FINANCIAL STATEMENTS
15SUPPLEMENTAL INFORMATION - SCHEDULE OF EXPENSES
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Pailet, MeunierandLeBlanc, L.L.P.
 Certified Public Accountants
 Management Consultants
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the Partners
 Pioneer Street Associates
 (A California Limited Partnership)
 Visalia, California
  We have audited the accompanying balance sheet of Pioneer Street Associates, A California Limited Partnership, as of December 31, 2007 and the related statements of operations, changes in partners' capital and cash flows for the year then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.
  We conducted our audit in accordance with the Standards of the Public Accounting Oversight Board (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. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting. Accordingly, we express no such opinion. 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 Pioneer Street Associates, A California Limited Partnership, as of December 31, 2007 and the results of its operations, changes in partners' capital and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
  
  /s/ Pailet, Meunier and LeBlanc, L.L.P.
  Metairie, Louisiana
 March 10, 2008
    3421 N. Causeway Blvd., Suite 701. Metairie, LA 70002               Telephone (504) 837-0770 . Fax (504) 837-7102
 Member of
 IGAF Worldwide - Member Firms in Principal Cities . PCAOB - Public Company Accounting Oversight Board
 AICPA Centers . Center for Public Company Audit Firms (SEC)
 Governmental Audit Quality Center . Private Companies Practice Section (PCPS)
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PIONEER STREET ASSOCIATES
 (A California Limited Partnership)
 BALANCE SHEET
  DECEMBER 31, 2007
  ASSETSCurrent AssetsCash


28,017Rents receivable


6,916Prepaid expenses


13,775Total Current Assets


48,708Restricted Deposits and Funded ReservesTenants' security deposits


45,979Replacement reserve


114,323Taxes and insurance escrow


2,529Total Restricted Deposits and Funded Reserves


162,831Property and EquipmentLand


300,000Buildings


3,727,276Equipment


179,2174,206,493Less: Accumulated depreciation


(1,880,650
)Property and Equipment - Net


2,325,843Other Assets

Deferred charges, less accumulated amortization


27,775Total Assets

$
2,565,157








See accompanying notes to financial statements.
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PIONEER STREET ASSOCIATES
 (A California Limited Partnership)
 BALANCE SHEET
  DECEMBER 31, 2007




LIABILITIES AND PARTNERS' CAPITAL




Current LiabilitiesAccounts payable

$
8,558Accrued reporting and administrative fees


4,000Accrued partnership management fee


5,600Current portion of long-term debt


48,343Total Liabilities


66,501Tenants' Security Deposits


40,190Long-Term LiabilitiesMortgage payable


1,628,069Less: current portion


(48,343
)Total Long-Term Liabilities


1,579,726Total Liabilities


1,686,417Partners' Capital


878,740Total Liabilities and Partners' Capital

$
2,565,157








See accompanying notes to financial statements.






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PIONEER STREET ASSOCIATES
 (A California Limited Partnership)
 STATEMENT OF OPERATIONS
  DECEMBER 31, 2007
  RevenueRental revenue


652,152Less: Vacancies


(37,213
)Other Revenue


44,022Total Revenue


658,961Operating expensesOperating and maintenance


182,097Utilities


45,376Tax and insurance


67,631Management fee


52,416General and administrative


55,606Total Operating expenses


403,126Operating Income


255,835Other ExpensesInterest income


5,925Interest expense


(114,537
)Depreciation and amortization


(154,686
)Reporting Fee


(2,000
)Administrative fee


(2,000
)Partnership management fee


(5,600
)Net Other Expenses


(272,898
)Net Income (Loss)


(17,063
)




See accompanying notes to financial statements.
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PIONEER STREET ASSOCIATES
 (A California Limited Partnership)
 STATEMENT OF CHANGES IN PARTNERS' CAPITAL
  DECEMBER 31, 2007
  1.0% General Partners


99.0%

Limited

Partner


Total

Partners'

CapitalBalance - January 1, 2007

$
(588,383
)

$
1,562,186


$
973,803Net Income (Loss)


(171
)


(16,892
)


(17,063
)Distributions to Members


(78,000
)


-



(78,000
)Balance - December 31, 2007

$
(666,554
)

$
1,545,294


$
878,740








See accompanying notes to financial statements.
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PIONEER STREET ASSOCIATES
 (A California Limited Partnership)
 STATEMENT OF CASH FLOWS
  DECEMBER 31, 2007
  Cash flows from operating activities:Net Income

$
(17,063
)Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization


154,686(Increase) decrease in accounts receivable


(6,916
)(Increase) decrease in prepaid expenses


(1,122
)Increase (decrease) in accounts payable


(1,076
)Increase (decrease) in security deposits payable


2,562Total adjustments


148,134Net cash provided (used) by operating activities


131,071(Deposit) withdrawal replacement reserve


34,774(Deposit) withdrawal security deposit account


(982
)(Deposit) withdrawal tax and insurance escrow


12,900Purchases of property and equipment


(37,659
)Net cash provided (used) by investing activities


9,033Cash flows from financing activities:Distributions to partner


(78,000
)Principal payments on long-term debt


(45,115
)Net cash provided (used) by financing activities


(123,115
)Net increase (decrease) in cash and equivalents


16,989Cash and equivalents, beginning of year


11,028Cash and equivalents, end of year

$
28,017Supplemental disclosures of cash flow information:Cash paid during the year for:Interest Expense

$
114,537







See accompanying notes to financial statements.
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   PIONEER STREET ASSOCIATES
 (A California Limited Partnership)
 
 NOTES TO FINANCIAL STATEMENTS
 DECEMBER 31, 2007
  NOTE A - NATURE OF OPERATIONS
  Pioneer Street Associates is a California Limited Partnership which was formed in February 1994, to develop, construct, own, maintain and operate a 112-unit multi-family apartment complex known as Foothill Vista Apartments and is located in the city of Bakersfield, California. The major activities of the Partnership are governed by the Partnership Agreement and Loan Agreement with the Pacific Life. Under the Loan Agreement, the Partnership is required to provide low cost housing to moderate or low-income households.
  The Partnership has three general partners and one investing limited partner. Partnership transactions with the general partners are described in other notes to this financial statement.
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  A summary of the Partnership's significant accounting policies consistently applied in the preparation of the accompanying financial statements follows:
  Basis of accounting
 The Partnership prepares its financial statements on the accrual basis of accounting and in accordance with accounting principles generally accepted in the United States of America.
  Capitalization and Depreciation
  Land, buildings and improvements are recorded at cost. Depreciation of buildings and equipment is computed principally using the Modified Accelerated Cost Recovery System which approximates straight-line for buildings and double-declining balance for equipment over the following estimated useful lives:
  YearsBuildings
27.5Equipment
7
 
 Improvements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Upon disposal of depreciable property, the appropriate property accounts are reduced by the related costs and accumulated depreciation. The resulting gains and losses are reflected in the statement of operations.
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 PIONEER STREET ASSOCIATES
 (A California Limited Partnership)
 NOTES TO FINANCIAL STATEMENTS
 DECEMBER 31, 2007
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  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 amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
  Cash and Cash Equivalents
  For purposes of reporting the statements of cash flows, the Partnership includes all cash accounts which are not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less as cash and cash equivalents on the accompanying balance sheet.
  Amortization
  Deferred charges are amortized over the following estimated useful lives using the straight-line method:
  YearsDeferred debt expense
30Tax credit monitoring fee
15
  Income Taxes
  No provision or benefit for income taxes has been included in these financial statements since taxable income or loss passes through to, and is reportable by, the partners individually.
  Personal Assets and Liabilities
 
 In accordance with the generally accepted method of presenting partnership financial statements, the financial statements do not include the personal assets and liabilities of the partners, including their obligation for income taxes on their distributive shares of the net income or the Partnership, nor any provision for income tax expense.
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PIONEER STREET ASSOCIATES
 (A California Limited Partnership)
 
 NOTES TO FINANCIAL STATEMENTS
 DECEMBER 31, 2007
  NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Impairment of Lonq-Lived Assets and Long-Lived Assets to be Disposed Of
  The Partnership applies the provisions of the Financial Accounting Standards Board's Statement of Financial Accounting Standards (SFAS) No. 121, Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of.This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount which the carrying value of the assets exceed the fair value of the assets. Assets to be disposed of are reported at the lower of carrying value or fair value less the costs to sell. There have been no asset impairments recorded as of December 31, 2007.
  SFAS No. 144
  Statement of Financial Accounting Standards (SFAS) No. 144 requires that long-lived assets and certain identifiable intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances that the carrying amount of an asset may not be recoverable. The adoption of SFAS No. 144 has not materially affected the partnership's reported earnings, financial condition or cash flows.
  NOTE C - DEFERRED CHARGES
  Deferred charges as of December 31, 2007, consists of the following:
  Deferred debt expense

$
39,200Tax credit monitoring fee


26,65065,850Less: accumulated amortization


(38,075
)$
27,775
  NOTE D - RESTRICTED DEPOSITS AND FUNDED RESERVES
 
 In accordance with the Partnership and the Pacific Life Replacement Reserve Agreements, the Partnership is required to maintain a Replacement Reserve Account. This account is to be funded annually in the amount of $28,000 until the aggregate balance of the account reaches $182,000.
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PIONEER STREET ASSOCIATES
 (A California Limited Partnership)
 NOTES TO FINANCIAL STATEMENTS
 DECEMBER 31, 2007
  NOTE E - LONG-TERM DEBT
  Long-term debt consists of a permanent loan with Pacific Life in the face amount of $1,960,000.
  Under the terms of the 30-year Promissory Note with Pacific Life, the loan provides for an initial interest rate of 8.17% and monthly payments of $14,614.74, commencing on November 1, 1995, and continuing through September 2025. The interest rate and monthly payment will be adjusted at year eleven (11) and year twenty-one (21), at which time the interest rate will be adjusted based on the Current Index plus 2.75% and the payment will be adjusted and determined by the amount of the monthly payment that would be sufficient to repay the note within 360 months of the initial payment date. As of December 31, 2007, the current interest rate and minimum monthly payment due is 6.93% and $13,304.35, respectively.
  The apartment complex is pledged as collateral for the mortgage and is secured by deeds of trust, assignment of rents, security agreements and fixture filings against the property.
  Aggregate maturities of Long-term debt for the next five years are as follows:
  Year ending December 31,2008


48,3432009


51,8022010


55,5082011


59,4792012


63,735Thereafter


1,349,2021.628.069
 
  NOTE F - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
 
 Management Fee
 
 In accordance with the management agreement, the Partnership paid Tetra Property Management Company, an affiliate of one of the general partners, a management fee during 2007 in the amount of $52,416 for services rendered in connection with the leasing and operation of the project. The fee for its services is approximately 8.5% of the project's rental income.
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PIONEER STREET ASSOCIATES
 (A California Limited Partnership)
 NOTES TO FINANCIAL STATEMENTS
 DECEMBER 31, 2007
  NOTE F - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED) Annual Reporting Fee
  An annual reporting fee of $2,000 is payable to the limited partner, WNC California Housing Tax Credit Fund IV, L.P. Series 2, an investor limited partner which holds a 99% interest in the partnership, for services to be rendered for accounting matters relating to preparation of tax returns and other reports required.
  Annual Partnership Administrative Fee
  An annual partnership administrative fee of $2,000 is payable to the general partners, for their services to be rendered for accounting matters relating to preparation of tax returns and other reports required.
  Partnership Management Fee
  An annual partnership management fee of $5,600 is payable to the Central Valley Coalition for Affordable Housing (A California Nonprofit Corporation) for services rendered for partnership administrative matters relating to day to day operations of the Partnership. For the year ended December 31, 2007, $5,600 was accrued and charged to operations.
  NOTE G - CONCENTRATION OF CREDIT RISK
  The Partnership maintains its cash and cash equivalents at two financial institutions located in California, which at times, may exceed federally insured limits. The Partnership has not experienced any losses in such accounts and believes it is not exposed at any significant credit risk on cash.
  NOTE H - COMMITMENT
  The Partnership entered into a Regulatory Agreement with the Tax Credit Allocation Committee (TCAC), established under Section 50185 of the Health and Safety Code of the State of California. Under this Agreement, the Partnership shall maintain the project as a Qualified Low-Income Housing Project for a period of 55 consecutive taxable years beginning with 1995, the first taxable year of the Credit Period. In exchange for this agreement, TCAC has authorized an allocation relating to the low-income housing credit under the provisions of Section 42 of the Internal Revenue Code.
  NOTE I - CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS
 
 The Partnership's sole asset is the Foothill Vista Apartments. The Partnership's operations are concentrated in the multi-family real estate market.
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