**Exhibit 99.3**

 

Independent Auditor’s Report

 

To the Partners

Bennetts Pointe Limited Partnership

 

I have audited the accompanying balance sheets ofBennetts Pointe Limited Partnership as of December 31, 2002 and 2001, and therelated statements of operations, partners’ deficit and cash flows for theyears then ended. These financial statements are the responsibility of thePartnership’s management. My responsibility is to express an opinion on thesefinancial statements based on my audits.

 

I conducted my audits in accordance with generallyaccepted auditing standards and Government Auditing Standards issued by theComptroller General of the United States, and the U.S. Department ofAgriculture, Farmers Home Administration Audit Program. Those standards requirethat I plan and perform the audits to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. I believe that myaudits provide a reasonable basis for my opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofBennetts Pointe Limited Partnership as of December 31, 2002 and 2001 theresults of its operations, changes in partners’ deficit, and its cash flows forthe years then ended in conformity with generally accepted accountingprinciples.

 

In accordance with Government Auditing Standards, Ihave also issued my report dated February 15, 2003 on my consideration ofBennetts Pointe Limited Partnership’s internal control over financial reportingand on my tests of its compliance with certain provisions of laws andregulations.

 

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INDEPENDENT AUDITOR’S REPORT

 

To the Partners

Virginia Avenue Affordable Housing Limited Partnership

 

I have audited the accompanying balance sheets ofVirginia Avenue Affordable Housing Limited Partnership as of December 31, 2002and 2001, and the related statements of operations, partners’ equity and cashflows for the years then ended. These financial statements are theresponsibility of the partnership’s management. My responsibility is to expressan opinion on these financial statements based on my audit.

 

I conducted my audit in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that I plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. I believe that myaudit provides a reasonable basis for my opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofVirginia Avenue Affordable Housing Limited Partnership as of December 31, 2002and 2001, and the results of its operations, the changes in partners’ equityand cash flows1for-the years then ended in conformity with accountingprinciples generally accepted in the United States of America.

 

My audit was made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on page 14 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in my opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITOR’S REPORT

 

To the Partners

Lookout Ridge Limited Partnership

 

We have audited the accompanying balance sheet ofLookout Ridge Limited Partnership as of December 31, 2002, and the relatedstatements of operations, partners’ equity (deficit) and cash flows for theyear then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conducted our audit in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofLookout Ridge Limited Partnership as of December 31, 2002, and the results ofits operations, the changes in partners’ equity and cash flows for the yearthen ended in conformity with accounting principles generally accepted in theUnited States of America.

 

Our audit was made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on page 9 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statement and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

RANKIN, RANKIN & COMPANY

 

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February 15, 2003

 

To the Partners of

Elk Tower Apartments Limited Partnership

 

We have audited the accompanying balance sheets of ElkTower Apartments Limited Partnership as of December 31, 2002 and 2001, and therelated statements of operations, partners’ equity (deficit) and cash flows forthe years then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with generallyaccepted auditing standards. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of ElkTower Apartments Limited Partnership as of December 31, 2002 and 2001, and theresults of its operations, changes in partners’ equity (deficit) and cash flowsfor the years then ended, in conformity with generally accepted accountingprinciples.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on Page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners of

Kimbark 1200 Associates, Limited Partnership

Longmont, Colorado

 

We have audited the accompanying balance sheet ofKimbark 1200 Associates, Limited Partnership. FHA Project No. 101-98011 as ofDecember 31, 2002, and the related statements of operations, changes inpartners’ equity and cash flows for the year then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audit.

 

We conducted our audit in accordance with auditingstandards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whetherthe 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 accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofKimbark 1200 Associates, Limited Partnership FHA Project No. 101-98011, as ofDecember 31, 2002, and the results of its operations and the changes in itspartners’ equity and its cash flows for the year then ended, in conformity withaccounting principles generally accepted in the United States of America.

 

In accordance with Government Auditing Standards, wehave also issued our reports dated February 10, 2003 on our consideration ofKimbark 1200 Associates, Limited Partnership internal control and on our testsof its compliance with certain provisions of laws, regulations, contracts andgrants. Those reports are an integral part of the audit performed in accordancewith Government Auditing Standards and should be read in conjunction with thisreport in considering the results of our audit.

 

We conducted our audit to form an opinion on the basicfinancial statements of Kimbark 1200 Associates, Limited Partnership taken as awhole. The accompanying supplemental information (shown on pages thirteenthrough fifteen) is presented for purposes of additional analysis and is not arequired part of the basic financial statements of Kimbark 1200 Associates,Limited Partnership. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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Independent Auditors’ Report

 

To the Partners

Barlee Properties Limited Partnership

Barling, Arkansas

 

We have audited the accompanying balance sheets ofBarlee Properties, An Arkansas Limited Partnership (the Partnership) as ofDecember 31, 2002 and 2001, and the related statements of operations, changesin partners’ capital and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofBarlee Properties, An Arkansas Limited Partnership, as of December 31, 2002, anthe results of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners of

Colonna Redevelopment Company L.P.:

 

We have audited the accompanying balance sheet ofColonna Redevelopment Company, L.P (the “Partnership”) as of December 31, 2002,and the related statements of operations, cash flows and partners’ equity forthe year then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit. The financial statements of ColonnaRedevelopment Company L.P. as of December 31, 2001, were audited by otherauditors whose report dated May 13, 2002 expressed an unqualified opinion onthose statements.

 

We conducted our audit in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofColonna Redevelopment Company, L.P. as of December 31, 2002, and the results ofits operations and its cash flows for the year then ended in conformity withaccounting principles generally accepted in the United States of America.

 

Our audit was made for the purpose of forming anopinion on the financial statements taken as a whole. The accompanyingsupplemental schedule is presented for purposes of additional analysis and isnot a required part of the financial statements. The information in thisschedule has been subjected to the auditing procedures applied in the audit ofthe financial statements and, in our opinion, is fairly stated in all materialrespects in relation to the financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Brownsville Associates, Limited

 

We have audited the accompanying balance sheets ofBrownsville Associates, Limited (a Tennessee limited partnership) d/b/aBrownsville Village Apartments, RHS Project No.: 48-038-621467876, as ofDecember 31, 2002 and 2001, and the related statements of operations, partners’equity, and cash flows for the years then ended. These financial statements arethe responsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America and GovernmentAuditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofBrownsville Associates, Limited (a Tennessee limited partnership) d/b/aBrownsville Village Apartments, RHS Project No.: 48-038-621467876, as ofDecember 31, 2002 and 2001, and the results of its operations, the changes inpartners’ equity and its cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

In accordance with Government Auditing Standards, wehave also issued a report dated January 23, 2003 on our consideration ofBrownsville Associates, Limited’s internal control over financial reporting andour tests of its compliance with certain provisions of laws, regulations,contracts, and grants.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on page 12 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the audit procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialr9pects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Century East Apartments IV Limited Partnership

Bismarck, North Dakota

 

We have audited the accompanying balance sheets ofCentury East Apartments IV Limited Partnership, as of December 31, 2002 and2001 and the related statements of operations, partners’ equity and cash flowsfor the years then ended. These financial statements are the responsibility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofCentury East Apartments IV Limited Partnership as of December 31, 2002 and 2001and the results of its operations, the changes in partners’ equity, and itscash flows for the years then ended, in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 12 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basic financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Century East Apartments V Limited Partnership

Bismarck, North Dakota

 

We have audited the accompanying balance sheets ofCentury East Apartments V Limited Partnership, as of December 31, 2002 and 2001and the related statements of operations, partners’ equity and cash flows forthe years then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofCentury East Apartments V Limited Partnership as of December 31, 2002 and 2001and the results of its operations, the changes in partners’ equity, and itscash flows for the years then ended, in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Lake Apartments I Limited Partnership

Fargo, North Dakota

 

We have audited the accompanying balance sheets ofLake Apartments I Limited Partnership, as of December 31, 2002 and 2001 and therelated statements of operations, partners’ equity and cash flows for the yearsthen ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion,

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of LakeApartments I Limited Partnership as of December 31, 2002 and 2001 and theresults of its operations, the changes in partners’ equity, and its cash flowsfor the years then ended, in conformity with accounting principles generallyaccepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 12 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Lake Apartments I Limited Partnership

Fargo, North Dakota

 

We have audited the accompanying balance sheets ofLake Apartments I Limited Partnership, as of December 31, 2002 and 2001 and therelated statements of operations, partners’ equity and cash flows for the yearsthen ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion,

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of LakeApartments I Limited Partnership as of December 31, 2002 and 2001 and theresults of its operations, the changes in partners’ equity, and its cash flowsfor the years then ended, in conformity with accounting principles generallyaccepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 12 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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To the Partners

Pahrump Valley Investors

A Wyoming Limited Partnership

Pahrump, Nevada

 

Independent Auditors’ Report

 

We have audited the accompanying balance sheet ofPahrump Valley Investors, A Wyoming Limited Partnership, USDA, RuralDevelopment Project Number 33-019-680204949, as of December 31, 2002, and therelated statements of operations, changes in partners’ equity, and cash flowsfor the year then ended. These financial statements are the responsibility ofthe Partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audit. The financial statements ofPahrump Valley Investors as of December 31, 2002, were audited by otherauditors whose report, dated March 11, 2002 expressed an unqualified opinion onthose statements.

 

We conducted our audit in accordance with auditingstandards generally accepted in the United States of America and GovernmentAuditing Standards issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 toabove present fairly, in all material respects, the financial position ofPahrump Valley Investors, as of December 31, 2002, and the results of itsoperations, changes in partners’ equity, and cash flows for the year thenended, in conformity with accounting principles generally accepted in theUnited States of America.

 

In accordance with Government Auditing Standards, wehave also issued a report dated January 21, 2003 on our consideration ofPahrump Valley Investors’ internal control structure and a report dated January21, 2003 on its compliance with laws and regulations. Those reports are anintegral part of an audit performed in accordance with Government AuditingStandards and should be read in conjunction with this report in considering theresults of our audit.

 

Our audit was conducted for the purpose of forming anopinion on the basic financial statements taken as a whole. The accompanyingsupplemental and other information is presented for purposes of additionalanalysis and is not a required part of the financial statements of Pahrump,Valley Investors. Such information has been subjected to auditing proceduresapplied in our audit of the financial statements and, in our opinion, is fairlystated in all material respects in relation to the financial statements takenas a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Stanton Associates, Limited

 

We have audited the accompanying balance sheets ofStanton Associates, Limited (a Tennessee limited partnership) d/b/a StantonVillage Apartments, RHS Project No.: 48-038-621542356, as of December 31, 2002and 2001, and the related statements of operations, partners’ equity, and cashflows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America and GovernmentAuditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 toabove present fairly, in all material respects, the financial position ofStanton Associates, Limited (a Tennessee limited partnership) d/b/a StantonVillage Apartments, RHS Project No.: 48-038-621542356, as of December 31, 2002and 2001, and the results of its operations, the changes in partners’ equityand its cash flows for the years then ended, in conformity with accountingprinciples generally accepted in the United States of America.

 

In accordance with Government Auditing Standards, wehave also issued a report dated January 25, 2003 on our consideration ofStanton Associates, Limited’s internal control over financial reporting and ourtests of its compliance with certain provisions of laws, regulations,contracts, and grants.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on page 12 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the audit procedures applied in the audit of the basic financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Century East Apartments II Limited Partnership

Bismarck, North Dakota

 

We have audited the accompanying balance sheets ofCentury East Apartments 11 Limited Partnership, as of December 31, 2002 and2001 and the related statements of operations, partners’ equity and cash flowsfor the years then ended. These financial statements are the responsibility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofCentury East Apartments 11 Limited Partnership as of December 31, 2002 and 2001and the results of its operations, the changes in partners’ equity, and itscash flows for the years then ended, in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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The Partners

Ethel Housing, L.P.

Ethel, Mississippi

 

We have audited the accompanying balance sheets ofEthel Housing, L.P., RD Case No. 28-0040640823417 as of December 31, 2002 and2001, and the related statements of operations, partners’ equity, and cashflows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Government Auditing Standards,issued by the comptroller General of the United States. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includedexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also included assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provided a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of EthelHousing, L.P., as of December 31, 2002 and 2001, and the results of itsoperations and its cash flows for the years then ended, in conformity withgenerally accepted accounting principles.

 

In accordance with Government Auditing Standards andthe Audit Program issued by the United States Department of Agriculture, RuralDevelopment, we have also issued a report dated February 21, 2003, on itscompliance with specific requirements applicable to major RD programs andnonmajor RD program transactions.

 

Our audits were made for the purpose of forming anopinion on the financial statements taken as a whole. The supporting dataincluded on pages 12 through 19 are presented for purposes of additionalanalysis and are not a required part of the financial statements of EthelHousing, L.P. Such information, except for the current budget and proposed budgetcolumns on pages 15 through 18, on which we express no opinion, is fairlystated in all material respects in relation to the financial statements takenas a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the partners

Hurricane Hills I LC

 

I have audited the accompanying balance sheets ofHurricane Hills LC as of December 31, 2002, and the related statements ofoperations, partners’ equity and cash flows for the year then ended. Thesefinancial statements are the responsibility of the partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

I conducted my audit in accordance with generallyaccepted auditing standards. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examination, on a testbasis, evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significantestimates made by management as well as evaluating the overall financialstatement presentation. We believe that our audits provided a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofHurricane Hills I LC as of December 31, 2002, and the results of itsoperations, changes in Partners’ equity and cash flows for the years then endedin conformity with generally accepted accounting principles.

 

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INDEPENDENT AUDITOR’S REPORT

 
| To:    |   | The Partners                             |
|--------|--------|------------------------------------------|
|   |   | Main Everett Housing Limited Partnership |

 

We have audited the accompanying balance sheets ofMain Everett Housing Limited Partnership as of December 31, 2002 and 2001, andthe related statements of operations, partners’ equity, and cash flows for theyears then ended. These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

We conducted our audit in accordance with auditingstandards generally accepted in the Unites States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditIncludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentatl6n. We believethat our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of MainEverett Housing Limited Partnership as of December 31, 2002 and 2001, and theresults of its operations, changes in partners’ equity, and cash flows for theyears then ended in conformity with accounting principles generally accepted inthe United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITOR’S REPORT

 
| To:    |   | The Partners                        |
|--------|--------|-------------------------------------|
|   |   | Osborne Housing Limited Partnership |

 

We have audited the accompanying balance sheets ofOsborne Housing Limited Partnership as of December 31, 2002 and 2001, and therelated statements of operations, partners’ equity, and cash flows for theyears then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conducted our audit in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believe thatour audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofOsborne Housing Limited Partnership as of December 31, 2002 and 2001, and theresults of its operations, changes in partners’ equity, and cash flows for theyears then ended in conformity with accounting principles generally accepted inthe United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

Tobin & Company

Certified Public Accountants, PC

January 24, 2002

 

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The Partners

Shannon Housing, L.P.

Shannon, Mississippi

 

We have audited the accompanying balance sheets ofShannon Housing, L.P., RD Case No. 28- 041064835658, as of December 31, 2002and 2001, and the related statements of operations, partners’ equity, and cashflows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generallyaccepted auditing standards and Government Auditing Standards, issued by thecomptroller General of the United States. Those standards require that we planand perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includedexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also included assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provided a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofShannon Housing, L.P., as of December 31, 2002 and 2001, and the results of itsoperations and its cash flows for the years then ended, in conformity withgenerally accepted accounting principles.

 

In accordance with Government Auditing Standards andthe Audit Program issued by the United States Department of Agriculture, RuralDevelopment, we have also issued a report dated March 15, 2003, on itscompliance with specific requirements applicable to major RD programs andnonmajor RD program transactions.

 

Our audits were made for the purpose of forming anopinion on the financial statements taken as a whole. The supporting dataincluded on pages 12 through 19 are presented for purposes of additionalanalysis and are not a required part of the financial statements of ShannonHousing, L.P. Such information, except for the current budget and proposedbudget columns on pages 15 through 18, on which we express no opinion, is fairlystated in all material respects in relation to the financial statements takenas a whole.

 

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The Partners

West Point Housing, L.P.

West Point, Mississippi

 

We have audited the accompanying balance sheets ofWest Point Housing, L.P., RD Case No. 28-013-0640834734, as of December 31,2002, and 2001, and the related statements of operations, partners’ equity, andcash flows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audit in accordance with auditingstandards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Government Auditing Standards,issued by the comptroller General of the United States. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includedexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also included assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provided a reasonable basis for our opinion,

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of WestPoint Housing, L.P., as of December 31, 2002 and 2001, and the results of itsoperations and its cash flows for the years then ended, in conformity withgenerally accepted accounting principles.

 

In accordance with Government Auditing Standards andthe Audit Program issued by the United States Department of Agriculture, RuralDevelopment, we have also issued a report dated February 25, 2003, on itscompliance with specific requirements applicable to major RD programs and nonmajorRD program transactions.

 

Our audits were made for the purpose of forming anopinion on the financial statements taken as a whole. The supporting dataincluded on pages 12 through 19 are presented for purposes of additionalanalysis and are not a required part of the financial statements of West PointHousing, L.P. Such information, except for the current budget and proposedbudget columns on pages 15 through 18, on which we express no opinion, isfairly stated in all material respects in relation to the financial statementstaken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Calgory Apartments I Limited Partnership

Bismarck, North Dakota

 

We have audited the accompanying balance sheets of CalgoryApartments I Limited Partnership, as of December 31, 2002 and 2001 and therelated statements of operations, partners’ equity cash flows for the yearsthen ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofCalgory Apartments I Limited Partnership as of December 31, 2002 and 2001 andthe results of its operations, the changes in partners’ equity, and its cashflows for the years then ended, in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 12 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Calgory Apartments II Limited Partnership

Bismarck, North Dakota

 

We have audited the accompanying balance sheets ofCalgory Apartments II Limited Partnership, as of December 31, 2002 and 2001 andthe related statements of operations, partners’ equity and cash flows for theyears then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofCalgory Apartments II Limited Partnership as of December 31, 2002 and 2001 andthe results of its operations, the changes in partners’ equity, and its cashflows for the years then ended, in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Calgory Apartments III Limited Partnership

Bismarck, North Dakota

 

We have audited the accompanying balance sheets ofCalgory Apartments III Limited Partnership, as of December 31, 2002 and 2001and the related statements of operations, partners’ equity and cash flows forthe years then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects the financial position ofCalgory III Limited Partnership as of December 31, 2002 and 2001 and theresults of its operations, the changes in partners’ equity, and its cash flowsfor the years, then ended, in conformity with accounting principles generallyaccepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 12 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Country Edge Apartments I Limited Partnership

Fargo, North Dakota

 

We have audited the accompanying balance sheets ofCountry Edge Apartments I Limited Partnership, as of December 31, 2002 and 2001and the related statements of operations, partners’ equity and cash flows forthe years then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofCountry Edge Apartments I Limited Partnership as December 31, 2002 and 2001 andthe results of its operations, the changes in partners’ equity, and its cashflows for the years then ended, in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basic financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

East Park Apartments II Limited Partnership

Dilworth, Minnesota

 

We have audited the accompanying balance sheets ofEast Park Apartments II Limited Partnership, as of December 31, 2002 and 2001and the related statements of operations, partners’ equity and cash flows forthe years then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of EastPark Apartments II Limited Partnership as of December 31, 2002 and 2001 and theresults of its operations, the changes in partners’ equity, and its cash flowsfor the years then ended, in conformity with accounting principles generallyaccepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Grandview Limited Partnership Fargo, North Dakota

 

We have audited the accompanying balance sheets ofGrandview Apartments Limited Partners as of December 31, 2002 and 2001 and therelated statements of operations, partners’ equity and cash flows for the yearsthen ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofGrandview Limited Partnership, as of December, 31, 2002 and 2001 and theresults of operations, changes in partners’ equity and its cash flows for theyears then ended in conformity with accounting principles generally accepted inthe United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITOR’S REPORT

 

To the Partners

Grayson Manor Limited Partnership

 

We have audited the accompanying balance sheet ofGrayson Manor Limited Partnership as of December 31, 2002, and the relatedstatements of operations, and cash flows and changes in owners’ equity for theyear then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conducted our audit in accordance with auditingstandards generally accepted in the United States and Government AuditingStandards issued by the Comptroller General of the United States, and the U.S.Department of Agriculture, Farmers Home Administration Audit Program, Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 toabove present fairly, in all material respects, the financial position ofGrayson Manor Limited Partnership as of December 31, 2002, and the results ofits operations, changes in partners’ equity, and its cash flows for the yearthen ended in conformity with accounting principles generally accepted in theUnited States.

 

In accordance with Government Auditing Standards, wehave also issued our report dated February 7, 2003 on our consideration ofGrayson Manor Limited Partnership’s internal control over financial reportingand on our tests of its compliance with certain provisions of laws and regulations.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Lake Apartments IV Limited Partnership

Fargo, North Dakota

 

We have audited the accompanying balance sheets ofLake Apartments IV Limited Partnership, as of December 31, 2002 and 2001 andthe related statements of operations, partners’ equity and cash flows for theyears then ended. These financial statements are the ‘responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of LakeApartments IV Limited Partnership as of December 31, 2002 and 2001 and theresults of its operations, changes in partners’ equity, and its cash flows forthe years then ended, in conformity with accounting principles generallyaccepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Lake Apartments V Limited Partnership

Fargo, North Dakota

 

We have audited the accompanying balance sheets ofLake Apartments V Limited Partnership, as of December 31, 2002 and 2001 and therelated statements of operations, partners’ equity and cash flows for the yearsthen ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of LakeApartments V Limited Partnership as of December 31, 2002 and 2001 and theresults of its operations, the changes in partners’ equity, and its cash flowsfor the years then ended, in conformity with accounting principles generallyaccepted in the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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Independent Auditor’s Report

 

To the Partners

Powell Valley Limited Partnership

 

I have audited the accompanying balance sheets ofPowell Valley Limited Partnership as of December 31, 2002 and 2001, and therelated statements of operations, partners’ equity and cash flows for the yearsthen ended. These financial statements are the responsibility of thePartnership’s management. My responsibility is to express an opinion on thesefinancial statements based on my audits.

 

I conducted my audits in accordance with generallyaccepted auditing standards and Government Auditing Standards issued by theComptroller General of the United States, and the U.S. Department ofAgriculture, Farmers Home Administration Audit Program. Those standards requirethat I plan and perform the audits to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating theoverall financial statement presentation. I believe that my audits provide areasonable basis for my opinion.

 

In my opinion, the financial statements referred toabove present fairly, all material respects, the financial position of PowellValley Limited Partnership as of December 31, 2002 and 2001, and the results ofits operations, changes in partners’ equity, and its cash flows for the yearsthen ended in conformity with generally accepted accounting principles.

 

In accordance with Government Auditing Standards, Ihave also issued my report dated February 15, 2003 on my consideration ofPowell Valley Limited Partnership’s internal control over financial reportingand on my tests of its compliance with certain provisions of laws andregulations.

 

31

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To the Partners

 

Angelou Associates, L.P.

New York, New York

 

We have audited the accompanying balance sheet ofAngelou Associates, L.P. (a New York State limited partnership) as of December31, 2002 and 2001, and the related statements of operations, cash flows, andpartners’ capital, and the supplementary information included for the yearsthen ended. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

We conducted our audit in accordance with generallyaccepted auditing standards in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofAngelou Associates, L.P. as of December 31, 2002 and 2001, and the results ofits operations and its cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

Our audit was made for the purpose of forming anopinion on the basic financial statements taken as a whole. The accompanyingsupplementary information is presented for the purposes of additional analysisand is not a required part of the basic financial statements. Such informationhas been subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

Kahn Boyd Levychin,

Certified Public Accountants

 

February 20, 2003

 

32

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To the Partners of CR Housing Associates, L.P.

 

I have audited the accompanying balance sheets of CRHousing Associates, L.P. (the “Partnership”) as of December 31, 2002 and 2001,and the related statements of operations, partners’ capital and cash flows forthe years then ended. These financial statements are the responsibility of thePartnership’s management. My responsibility is to express an opinion on thesefinancial statements based on my audits.

 

I conducted my audits in accordance with generallyaccepted auditing standards in the United States of America. Those standardsrequire that I plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. I believe thatmy audits provide a reasonable basis for my opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of CRHousing Associates, L.P. as of December 31, 2002 and 2001, and the results ofit operations and its cash flows for the years then ended in conformity withgenerally accepted accounting principles in the United States of America.

 

My audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on page 9 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in my opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

Jose R. Barreras, CPA

January 31, 2003

 

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Lake Apartments II Limited Partnership

Fargo, North Dakota

 

We have audited the accompanying balance sheets ofLake Apartments II Limited Partnership, as of December 31, 2002 and 2001 andthe related statements of operations, partners’ equity and cash flows for theyears then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of LakeApartments 11 Limited Partnership as of December 31, 2002 and 2001 and theresults of its operations, the changes in partners’ equity, and its cash flowsfor the years then ended, in conformity with accounting principles generally acceptedin the United States of America.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementaryinformation on page 11 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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To the Partners

Terraceview Limited Partnership

 

We have audited the accompanying balance sheet ofTerraceview Limited Partnership as of December 31, 2002 and 2001, and therelated statements or operations; changes in partners’ equity (deficit) andcash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion these financial statements based on our audit.

 

We conducted our audit in. accordance, with generallyaccepted auditing standards. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andthe significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides areasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofTerraceview Limited Partnership as of December 31, 2002 and 2001 and theresults of its operations, changes in partners’ equity (deficit) and cash flowsfor the years then ended in conformity with generally accepted accounting principles.

 

Our audit was made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on page 12 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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The Partners

Collins Housing, L.P.

Collins, Mississippi

 

We have audited the accompanying balance sheets ofCollins Housing, L.P., RD Case No. 28-0160640864674, as of December 31, 2002and 2001, and the related statements of operations, partners’ equity, and cashflows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Government Auditing Standards,issued by the comptroller General of the United States. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includedexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also included assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our auditsprovided a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofCollins Housing, L.P. as of December 31, 2002 and 2001, and the results of itsoperations and its cash flows for the years then ended, in conformity withgenerally accepted accounting principles.

 

In accordance with Government Auditing Standards andthe Audit Program issued by the United States Department of Agriculture, RuralDevelopment, we have also issued a report dated February 20, 2003, on itscompliance with specific requirements applicable to major RD programs andnonmajor RD program transactions.

 

Our audits were made for the purpose of forming anopinion on the financial statements taken as a whole. The supporting dataincluded on pages 12 through 19 are presented for purposes of additionalanalysis and are not a required part of the financial statements of CollinsHousing, L.P. Such information, except for the current budget and proposedbudget columns on pages 15 through 18, on which we express no opinion, isfairly stated in all material respects in relation to the financial statementstaken as a whole.

 

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Independent Auditors’ Report

 

To the Partners

Bowie Apartments, Ltd.

 

We have audited the accompanying balance sheets ofBowie Apartments, Ltd. (a limited partnership), RD Project No.50-069-0752627345-01-7, as of December 31, 2002 and 2001, and the relatedstatements of operations, partners’ equity and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America and GovernmentAuditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 toabove present fairly, in all material respects, the financial position of BowieApartments, Ltd., RD Project No. 50-069-0752627345-01-7, as of December 31,2002 and 2001, and the related statements of operations, partners’ equity and cashflows for the years then ended in conformity with U.S. generally acceptedaccounting principles.

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on Page 1-16 and 1-17 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the audit procedures applied in the audit ofthe basic financial statements and in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

In accordance with Government Auditing Standards, wehave also issued a report dated January 24, 2003 on our consideration of BowieApartments, Ltd’s internal control over financial reporting and our tests ofits compliance with certain provisions of laws, regulations, contracts andgrants. This report is an integral part of an audit performed in accordancewith Government Auditing Standards and should be read in conjunction with thisreport in considering the results of our audit.

 

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Independent Auditors’ Report

 

To the Partners

Graham Apartments, Ltd.

 

We have audited the accompanying balance sheets of GrahamApartments, Ltd. (a limited partnership), RD Project No. 51-52-752663159-01-1,as of December 31, 2002 and 2001, and the related statements of operations,partners’ equity and cash flows for the years then ended. These financialstatements are the responsibility of the partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America and GovernmentAuditing Standard, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 toabove present fairly, in all material respects, the financial position ofGraham Apartments, Ltd., RD Project No. 51-52-752663159-01-1, as of December31, 2002 and 2001, and the related statements of operations, partners’ equityand cash flows for the years then ended in conformity with U.S. generallyaccepted accounting principles.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on Pages 1-16 and 1-17 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the audit procedures applied in the audit ofthe basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

In accordance with Government Auditing Standard, wehave also issued a report dated February 11, 2003 on our consideration ofGraham Apartments, Ltd’s internal control over financial reporting and ourtests of its compliance with certain provisions of laws, regulations, contractsand grants. This report is an integral part of an audit performed in accordancewith Government Auditing Standards and should be read in conjunction with thisreport in considering the results of our audit.

 

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Independent Auditors’ Report

 

To the Partners

Nocona Apartments, Ltd.

 

We have audited the accompanying balance sheets ofNocona Apartment, Ltd. (a limited partnership), RD Project No:50-069-0752685663-02-2 as of December 31, 2002 and 2001, and the relatedstatements of operations, partners’ equity and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financial statementsbased on our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America and GovernmentAuditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 toabove present fairly, in all material respects, the financial position ofNocona Apartments, Ltd. RD Project No.: 50-069-0752685663-02-2 as of December31, 2002 and 2001, and the related statements of operations, partners’ equityand cash flows for the years then ended in conformity with U.S. generallyaccepted accounting principles.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on Page 1-16 and 1-17 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the audit procedures applied in the audit ofthe basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

In accordance with Government Auditing Standards, wehave also issued a report dated January 30, 2003 on our consideration of NoconaApartments, Ltd.’s internal control over financial reporting and our tests ofits compliance with certain provisions of laws, regulations, contracts andgrants. This report is an integral part of an audit performed in accordancewith Government Auditing Standards and should be read in conjunction with thisreport in considering the results of our audit.

 

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INDEPENDENT AUDITORS’ REPORT

 

The Partners

Canton Housing One, L.P.

Jackson, Mississippi

 

We have audited the accompanying balance sheets ofCanton Housing One, L.P., a Mississippi limited partnership, Rural DevelopmentAgency U. S. Department of Agriculture (“RD”) Project No. 28- 045-064088606201-8, as of December 31, 2002 and 2001, and the related statements of income(loss), partners’ capital, and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America and GovernmentAuditing Standards issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 toabove present fairly, in all material respects, the financial position ofCanton Housing One, L.P., RD Project No. 28-045-0640886062 01-8, as of December31, 2002 and 2001, and the results of its operations and its cash flows for theyears then ended in conformity with accounting principles generally accepted inthe United States of America.

 

In accordance with Government Auditing Standards, wehave also issued a report dated February 5, 2003, on our consideration of thePartnership’s internal control and a report dated February 5, 2003, on itscompliance with specific requirements applicable to major RD programs.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The accompanyingfinancial information included on pages 14 through 21 is presented for purposesof additional analysis and is not a required part of the basic financialstatements. Such information, except for the current budget and proposed budgetcolumns in Part I and Il- and the information in Part IV included on pages 14through 18 on which we express no opinion, has been subjected to the auditingprocedures applied in the audits of the basic financial statements, and in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

The Partners

Canton Housing Two, L.P.

Jackson, Mississippi

 

We have audited the accompanying balance sheet ofCanton Housing Two, L.P., a Mississippi limited partnership, Rural DevelopmentAgency, U. S. Department of Agriculture (“RD”) Project No. 28-045-064088606101-5, as of December 31, 2002 and 2001, and the related statements of income(loss), partners’ capital, and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America and GovernmentAuditing Standards issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 toabove present fairly, in all material respects, the financial position ofCanton Housing Two, L.P., RD Project No. 28-045-0640886061 01-5, as of December31, 2002 and 2001, and the results of its operations and its cash flows for theyears then ended in conformity with accounting principles generally accepted inthe United States of America.

 

In accordance with Government Auditing Standards, wehave also issued a report dated February 5, 2003, on our consideration of thePartnership’s internal control and a report dated February 5, 2003, on itscompliance with specific requirements applicable to major Rural Developmentprograms.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The accompanyingfinancial information included on pages 13 through 20 is presented for purposesof additional analysis and is not a required part of the basic financialstatements. Such information, except for the current budget and proposed budgetcolumns in Part I and II and the information in Part IV included on pages 13through 18, on which we express no opinion, has been subjected to the auditingprocedures applied in the audits of the basic financial statements, and in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

The Partners

Canton Housing Three, L.P.

Jackson, Mississippi

 

We have audited the accompanying balance sheets ofCanton Housing Three, L.P., a Mississippi limited partnership, RuralDevelopment Agency, U. S. Department of Agriculture (“RD”) Project No. 28-045-0640886063 04-2, as of December 31, 2002 and 2001, and the related statementsof income (loss), partners’ capital, and cash flows for the years then ended.These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

We conducted our audit in accordance with auditingstandards generally accepted in the United States of America and GovernmentAuditing Standards issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 toabove present fairly, in all material respects, the financial position ofCanton Housing Three, L.P., RD Project No. 28-045-0640886063 04-2, as ofDecember 31, 2002 and 2001, and the results of its operations and its cashflows for the years then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

In accordance with Government Auditing Standards, wehave also issued a report dated February 5, 2003, on our consideration of thePartnership’s internal control and a report dated February 5, 2003, on itscompliance with specific requirements applicable to major RD programs.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The accompanyingfinancial information included on pages 13 through 20 is presented for purposesof additional analysis and is not a required part of the basic financialstatements. Such information, except for the current budget and proposed budgetcolumns in Part I and II and the information in part IV included on pages 13through 17, on which we express no opinion, has been subjected to the auditingprocedures applied in the audits of the basic financial statements, and in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

The Partners

Canton Housing Four, L.P.

Jackson, Mississippi

 

We have audited the accompanying balance sheets ofCanton Housing Four, L.P., a Mississippi limited partnership, Rural DevelopmentAgency, U. S. Department of Agriculture (“RD”) Project No. 28-045-064088606402-0, as of December 31, 2002 and 2001, and the related statements of income(loss), partners’ capital, and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America and GovernmentAuditing Standards issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 toabove present fairly, in all material respects, the financial position ofCanton Housing Four, L.P., RD Project No. 28-045-0640886064-02-0, as ofDecember 31, 2002 and 2001, and the results of its operations and its cash flowsfor the years then ended in conformity with accounting principles generallyaccepted in the United States of America.

 

In accordance with Government Auditing Standards, wehave also issued a report dated February 5, 2003, on our consideration of thePartnership’s internal control and a report dated February 5, 2003, on itscompliance with specific requirements applicable to major RD programs.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The accompanyingfinancial information included on pages 13 through 20 is presented for purposesof additional analysis and is not a required part of the basic financialstatements. Such information, except for the current budget and proposed budgetcolumns in Part I and II and the information in Part IV included on pages 13through 18, on which we express no opinion, has been subjected to the auditingprocedures applied in the audits of the basic financial statements, and in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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Independent Auditor’s Report

 

To the Partners of

Eagles Ridge Terrace, L. P.

Decatur, Texas

 

I have audited the accompanying balance sheets ofEagles Ridge Terrace, L P. as of December 31, 2002 and 2001, and the relatedstatements of operations, partners’ capital and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. My responsibility is to express an opinion on these financialstatements based on my audits.

 

I conducted my audits in accordance with generallyaccepted auditing standards. Those standards require that I plan and performthe audits to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. I believe that my audits provide a reasonablebasis for my opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofEagles Ridge Terrace, L. P. as of December 31, 2002 and 2001 and the results ofits operations, changes in partners’ capital and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

My audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on pages 1-16 and 1-17 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditof the basic financial statements and, in my opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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Independent Auditor’s Report

 

To the Partners of

Henderson Terrace, L. P.

Bridgeport, Texas

 

I have audited the accompanying balance sheets ofHenderson Terrace, L. P. as of December 31, 2002 and 2001 and the relatedstatements of operations, partners’ capital and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. My responsibility is to express an opinion on these financialstatements based on my audits.

 

I conducted my audits in accordance with generallyaccepted auditing standards. Those standards require that I plan and performthe audits to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. I believe that my audits provide a reasonablebasis for my opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofHenderson Terrace, L. P. as of December 31, 2002 and 2001 and the results ofits operations, changes in partners’ capital and cash flows for the years thenended in conformity with generally accepted accounting principles,

 

My audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on pages l- 16 and l- 17 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in my opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To the partners

Hurricane Hills II LC

 

I have audited the accompanying balance sheets ofHurricane Hills II LC as of December 31, 2002, and the related partners’ equityfor the year then ended. These financial statements are the responsibility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

I conducted my audit in accordance with generallyaccepted auditing standards. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examination, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management as well as evaluating the overallfinancial statement presentation. We believe that our audits provided areasonable basis for our opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofHurricane Hills II LC as of December 31, 2002, and the results of itsoperations, changes in Partners, equity and cash flows for the years then endedin conformity with generally accepted accounting principles.

 

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Independent Auditor’s Report

 

To the Partners of

Lakeview Little Elm, L. P.

Little Elm, Texas

 

I have audited the accompanying balance sheets ofLakeview Little Elm, L. P. as of December 31, 2002 and 2001, and the relatedstatements of operations, partners’ capital and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. My responsibility is to express an opinion on these financialstatements based on my audits.

 

I conducted my audits in accordance with generallyaccepted auditing standards. Those standards require that I plan and performthe audits to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. I believe that my audits provide a reasonablebasis for my opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofLakeview Little Elm, L. P. as of December 31, 2002 and 2001 and the results ofits operations, changes in partners’ capital and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

My audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplemental informationon pages 1-16 and 1-17 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in my opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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Independent Auditor’s Report

 

To the Partners of

Mesquite Trails, L. P.

Jacksboro, Texas

 

I have audited the accompanying balance sheets ofMesquite Trails, L.P. as of December 31, 2002 and 2001, and the relatedstatements of operations, partners’ capital and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. My responsibility is to express an opinion on these financialstatements based on my audit.

 

I conducted my audits in accordance with generallyaccepted auditing standards. Those standards require that I plan and performthe audits to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation.

 

I believe that my audits provide a reasonable basisfor my opinion, In my opinion, the financial statements referred to abovepresent fairly, in all material respects, the financial position of MesquiteTrails, L, P. as of December 31, 2002 and 2001 and the results of itsoperations, changes in partners’ capital and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

My audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on pages l-16 and 1- 17 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditof the basic financial statements and, in my opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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Independent Auditor’s Report

 

To the Partners of

Pilot Point Apartments, L. P.

Pilot Point, Texas

 

I have audited the accompanying balance sheets ofPilot Point Apartments, L. P. as of December 31, 2002 and 2001, and the relatedstatements of operations, partners’ capital and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. My responsibility is to express an opinion on these financialstatements based on my audits.

 

I conducted my audits in accordance with generallyaccepted auditing standards. Those standards require that I plan and perform theaudits to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. I believe that my audits provide a reasonablebasis for my opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of PilotPoint Apartments, L. P. as of December 31, 2002 and 2001 and the results of itsoperations, changes in partners’ capital and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

My audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on pages 1-16 and 1-17 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditof the basic financial statements and, in my opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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Independent Auditor’s Report

 

To the Partners of

Seagraves Apartments, L.P.

Ferris, Texas

 

I have audited the accompanying balance sheets ofSeagraves Apartments, L.P. as of December 31, 2002 and 2001, and theaccompanying statements of operations, partners’ capital and cash flows for theyears then ended. These statements are the responsibility of the partnership’smanagement. My responsibility is to express an opinion on the financialstatements based on my audits.

 

I conducted my audits in accordance with generallyaccepted auditing standards. Those standards require that I plan and performthe audits to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. I believe that my audits provide a reasonablebasis for my opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofSeagraves Apartments, L,P. as of December 31, 2002 and 2001 and the results ofits operations, changes in partners’ capital and cash flows for the years thenended in conformity with generally accepted accounting principles,

 

My audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on pages 1-16 and 1-17 is presented for purposes of additionalanalysis and is not a required part of basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditof the basic financial statements and, in my opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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Independent Auditor’s Report

 

To the Partners of

Granada Rose, L.P.

Edna, Texas

 

I have audited the accompanying balance sheets ofGranada Rose, L.P. as of December 31 2002 and 2001, and the accompanyingstatements of operations, partners’ capital and cash flows for the years thenended. These statements are the responsibility of the partnership’s management.My responsibility is to express an opinion on the financial statements based onmy audits,

 

I conducted my audits in accordance with generallyaccepted auditing standards. Those standards require that I plan and performthe audits to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. I believe that my audits provide a reasonablebasis for my opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofGranada Rose, L.P. as of December 31, 2002 and 2001 and the results of itsoperations, changes in partners’ capital and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

My audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on pages 1-16 and 1-17 is presented for purposes of additionalanalysis and is not a required part of basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in my opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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To the Partners

Parkside Plaza Associates, L. P.

New York, New York

 

We have audited the accompanying balance sheets ofParkside Plaza Associates, L.P. (a New York State limited partnership) as ofDecember 31, 2002 and 2001, and the related statements of operations, cashflows, and partners’ capital, and the supplementary information included forthe years then ended. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conducted our audit in accordance with generallyaccepted auditing standards in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofParkside Plaza Associates, L.P. as of December 31, 2002 and 2001 and theresults of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

Our audit was made for the purpose of forming anopinion on the basic financial statements taken as a whole. The accompanyingsupplementary information is presented for the purposes of additional analysisand is not a required part of the basic financial statements. Such informationhas been subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

Kahn Boyd Levychin,

Certified Public Accountants

 

February 8, 2003

 

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INDEPENDENT AUDITOR’S REPORT

 
| To the Partners                   |   | Oregon Housing and            |
|-----------------------------------|--------|-------------------------------|
| Aloha Housing Limited Partnership |   | Community Services Department |
|                              |   | Salem, Oregon                 |

 

We have audited the accompanying Balance Sheets ofAloha Housing Limited Partnership (a limited partnership), as of December 31,2002 and 2001 and the related statements of operations, changes in partners’capital, and cash flows for the years then ended. These financial statementsare the responsibility of the Partnership’s management. Our responsibility isto express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generallyaccepted auditing standards, and with Government Auditing Standards, issued bythe Comptroller General of the United States. Those standards require that weplan and perform our audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of AlohaHousing Limited Partnership as of December 31, 2002 and 2001, and the resultsof its operations and its cash flows for the years then ended, in conformitywith generally accepted accounting principles.

 

Our audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The accompanyingschedules of supplementary information required by the Oregon Housing andCommunity Services Department are presented for purposes of additional analysisand are not a required part of the basic financial statements. Such informationhas been subjected to the procedures applied in our audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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To the Partners of

Edna Vanderbilt, L.P.

Edna, Texas

 

I have audited the accompanying balance sheet of EdnaVanderbilt, L.P. as of December 31, 2002 and 2001, and the accompanyingstatements of operations, partners’ capital and cash flows for the years thenended. These statements are the responsibility of the partnership’s management.My responsibility is to express an opinion on the financial statements based onmy audits.

 

I conducted my audits in accordance with generallyaccepted auditing standards. Those standards require that I plan and performthe audits to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. I believe that my audits provide a reasonablebasis for my opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of EdnaVanderbilt L.P. as of December 31, 2002 and 2001 and the results of itsoperations, changes in partners’ capital and cash flows for the years thenended in with generally accepted accounting principles.

 

My audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on pages 1-16 and 1-17 is presented for purposes of additionalanalysis and is not a required part of basic financial statements. Such informationhas been subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in my opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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Independent Auditor’s Report

 

To the Partners of

Azle Fountainhead, L.P.

Azle, Texas

 

I have audited the accompanying balance sheets ofDecember 31, 2002 and 2001, and the related statement of operations, partners’capital and cash flows for years then ended. These financial statements are the responsibility of the partnership’smanagement. My responsibility is to express an opinion on these financialstatements based on my audits.

 

I conducted my audits in accordance with generallyaccepted auditing standards. Those standards require that I plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation.

 

I believe that my audits provide a reasonable basisfor my opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of AzleFountainhead, L.P. as of December 31, 2002 and 2001 and the results of itsoperations, changes in partners’ capital and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

My audits were made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on pages I-16 and I-17 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditof the basic financial statements and, in my opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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INDEPENDENT AUDITORS’ REPORT

 

General Partner

Cedar Grove Apartments Phase I, Ltd.

Shepherdsville, Kentucky 40165

 

We have audited the accompanying balance sheets ofCedar Grove Apartments Phase I, Ltd., (a Kentucky limited partnership, as ofDecember 31, 2002 and 2001, statements of operations, partners’ equity, andcash flows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our, audits.

 

We conducted our audits in accordance with generallyaccepted auditing standards and Government Auditing Standards issued by theComptroller General of the United States. Those standards require that we planand perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the’ amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provides, reasonable basis for our opinion.

 

In accordance with Government Auditing Standards wehave also issued our report dated February 17, 2003, on our consideration ofCedar Grove Apartments Phase 1, Ltd. internal control, and reports (datedFebruary 17, 2003 on its compliance with specific requirements applicable toRural Housing Service and to Fair Housing and Non-discrimination. Those reportsare an integral part of an audit performed in accordance with GovernmentAuditing Standards and should be read in conjunction with this report inconsidering the results of our audit.

 

Our audits were conducted for the purpose of formingan opinion on the basic financial statements taken as a whole. The accompanyingsupplementary information on pages 11-18 is presented for purposes ofadditional analysis and is not a required part of the basic financialstatements of Cedar Grove Apartments Phase I, Ltd. Such information has beensubjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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Independent Auditors’ Report

 

To the Partners

Dorchester Court LDHA, Limited Partnership

 

We have audited the accompanying balance sheet ofDorchester Court LDHA, Limited Partnership, as of December 31, 2002. Thisfinancial statement is the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on this financial statement based onour audit.

 

We conducted our audit in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the balance sheet is free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe balance sheet. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating theoverall balance sheet presentation. We believe that our audit of the balancesheet provides a reasonable basis for our opinion.

 

In our opinion, the balance sheet referred to abovepresents fairly, in all material respects, the financial position of DorchesterCourt LDHA Limited Partnership as of December 31, 2002, in conformity withaccounting principles generally accepted in United States of America.

 

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To the Members of

Strawberry Lane, LLC

 

We have audited the accompanying balance sheet ofStrawberry Lane, LLC as, of December 31, 2002, and the related statements ofoperations, changes in members’ capital and cash flows for the year then ended.These financial statements are the responsibility of the management ofStrawberry Lane, LLC. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conducted our audit in accordance with U.S.generally accepted auditing standards and Government Auditing Standards issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofStrawberry Lane, LLC as of December 31, 2002, and the results of its operationsand its cash flows for the year then ended in conformity with U.S. generallyaccepted accounting principles.

 

In accordance with Government Auditing Standards andthe Consolidated Audit Guide for Audits of HUD Programs issued by the U.S.Department of Housing and Urban Development, we have also issued a report datedFebruary 12, 2003, on our consideration of the entity’s internal control andreport dated February 12, 2003, on its compliance with specific requirementsapplicable to its major HUD program and specific requirements applicable toFair Housing and Non-Discrimination.

 

Our audit was conducted for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation is presented for the purpose of additional analysis and is not arequired part of the basic financial statements of Strawberry Lane, LLC.  Such information has been subjected to theauditing procedures applied in the audit of the basic financial statements and,in our opinion, is fairly stated in all material respects in relation to thebasic financial statements taken as a whole.

 

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Independent Auditors’ Report

 

To the Partners

Dorchester Court LDHA, Limited Partnership

 

We have audited the accompanying balance sheet ofDorchester Court LDHA, Limited Partnership, as of December 31, 2002. Thisfinancial statement is the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on this financial statement based onour audit.

 

We conducted our audit in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance aboutwhether the balance sheet is free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe balance sheet. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating theoverall balance sheet presentation. We believe that our audit of the balancesheet provides a reasonable basis for our opinion.

 

In our opinion, the balance sheet referred to abovepresents fairly, in ail material respects, the financial position of DorchesterCourt LDHA Limited Partnership as of December 31, 2002, in conformity withaccounting principles generally accepted in the United States of America.

 

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To the Partners of

Henderson Fountainhead, L.P.

Seven Points, Texas

 

I have audited the accompanying balance sheet ofHenderson Fountainhead, L.P. as of December 31, 2002 , and the accompanyingstatements of operations, partners’ capital and cash flows for the year thenended. These statements are the responsibility of the partnership’s management.My responsibility is to express an opinion on the financial statements based onmy audit.

 

I conducted my audit in accordance with generallyaccepted auditing standards. Those standards require that I plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. I believe that my audit provides a reasonable basis formy opinion.

 

In my opinion, the financial statements referred toabove present fairly, in all material respects, the financial position ofHenderson Fountainhead, L.P. as of December 31, 2002 and the results of itsoperations, changes in partners’ capital and cash flows for the year then endedin conformity with generally accepted accounting principles.

 

My audit was made for the purpose of forming anopinion on the basic financial statements taken as a whole. The supplementalinformation on pages 1-16 and 1-17 is presented for purposes of additionalanalysis and is not a required part of basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditof the basic financial statements and, in my opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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**Independent Auditor’s Report**

 

To the Partners

Bennetts Pointe Limited Partnership

 

I have audited the accompanying balancesheets of Bennetts Pointe Limited Partnership as of December 31, 2001 and 2000,and the related statements of operations, partners’ deficit and cash flows forthe years then ended. These financial statements are the responsibility of thePartnership’s management. My responsibility is to express an opinion on thesefinancial statements based on my audits.

 

I conducted my audits in accordance withgenerally accepted auditing standards and *Government Auditing Standards*issued bythe Comptroller General of the United States, and the U.S. Department ofAgriculture, Farmers Home Administration Audit Program Those standards requirethat I plan and perform the audits to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. I believe that myaudits provide a reasonable basis for my opinion.

 

In my opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Bennetts Pointe Limited Partnership as of December 31, 2001 and2000, and the results of its operations, changes in partners’ deficit, and itscash flows for the years then ended in conformity with generally acceptedaccounting principles.

 

In accordance with *Government Auditing Standards,*Ihave also issued my report dated February 15, 2002 on my consideration ofBennetts Pointe Limited Partnership’s internal control over financial reportingand on my tests of its compliance with certain provisions of’ laws andregulations.

 

February 15, 2002

 

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

Clarksville Estates

DBA Clarksville Estates

Clarkton, MO 63837

 

We have audited the accompanying balancesheet of Clarksville Estates (a limited partnership) DBA Clarksville Estates asof December 31, 2001 and the related statements of income, cash flow, andpartners’ equity for the year then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Thosestandards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of Clarksville Estates (a limited partnership) DBA Clarksville Estatesas of December 31, 2001 and the results of its operations and its cash flow forthe year then ended in conformity with accounting principles generally acceptedin the United States of America.

 

Our audit was performed for the purpose offorming an opinion on the basic financial statements of Clarksville Estatestaken as a whole. The supplementary data included on pages 12-13 is notnecessary for a fair presentation of the financial statements, but is presentedfor purposes of additional analysis. This supplementary data has been subjectedto the same tests and other procedures applied in the audits of the statementsmentioned above, and in our opinion, is fairly presented in all materialrespects in relation to the financial statements taken as a whole.

 

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In accordance with Government AuditingStandards, we have also issued our report dated February 1, 2002, on ourconsideration of Clarksville Estates internal control over financial reportingand our tests of its compliance with certain provisions of laws andregulations. The report is an integral part of an audit performed in accordancewith Government Auditing Standards and should be read in conjunctionwith this report in considering the results of our audit.

 

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IndependentAuditors’ Report

 

To the partners of

East Douglas Apartments Limited Partnership(An Illinois Limited Partnership)

 

We haveaudited the accompanying balance sheets of East Douglas Apartments Limited(IHDA Development Number HFI/HTF-354), as of December 31, 2001 and 2000, andthe related statements of operations, cash flows and changes in partners’equity for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America, *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates and the Illinois Housing Development Authority’s Financial Reporting andAudit Guidelines for Mortgagors of Multifamily Hosing Developments. Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the financialstatements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement 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 statementsreferred to above present fairly, in all material respects, the financialposition of East Douglas Apartments Limited Partnership as of December 31, 2001and 2000, and the results of its operations and its cash flows for the yearsthen ended in conformity with accounting principles generally accepted in theUnited States of America.

 

In accordance with *Government Auditing Standards,*theIllinois Housing Development Authority’s Financial Reporting and AuditGuidelines for Mortgagors of Multifamily Housing Developments and theConsolidated Audit Guide for Audits of HUD Programs issued by the U.S.Department of Housing and Urban Development, we have also issued a report datedJanuary 29, 2002, on our consideration of the Partnership’s internal controls,compliance with specific requirements applicable to major IHDA-assistedprograms and specific requirements applicable to affirmative fair housing.

 

The accompanying supplementary information ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the financialstatements taken as a whole.

 

January 29, 2002

Carmel, Indiana

 

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

FLORAL ACRES APARTMENTS II

 

We have auditedthe accompanying balance sheets of FLORAL ACRES APARTMENTS II, RHS PROJECT NO.22-026-721172913 as of December 31, 2001 and 2000 and the related statements ofoperations, changes in partners’ equity (deficit) and cash flows for the yearsthen ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of FLORAL ACRES APARTMENTS II as ofDecember 31, 2001 and 2000 and the results of its operations, changes inpartners’ equity and cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 16through 24, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 18,2002 on our consideration of FLORAL ACRES APARTMENTS II’s internal control anda report dated February 18, 2002 on its compliance with laws and regulationsapplicable to the financial statements.

 

Metairie, Louisiana

February 18, 2002

 

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

HARRISONBURG SENIORS APARTMENTS

 

We haveaudited the accompanying balance sheets of HARRISONBURG SENIORS APARTMENTS, RHSPROJECT NO. 22-013-721199864 as of December 31, 2001 and 2000 and the relatedstatements of operations, changes in partners’ equity (deficit) and cash flowsfor the years then ended. These financial statements are the responsibility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of HARRISONBURG SENIORS APARTMENTS asof December 31, 2001 and 2000 and the results of its operations, changes inpartners’ equity and cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 16through 24, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated January 29,2002 on our consideration of HARRISONBURG SENIORS APARTMENTS’s internal controland a report dated January 29, 2002 on its compliance with laws and regulationsapplicable to the financial statements.

 

Metairie, Louisiana

January 29, 2002

 

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

SHADY LANE SENIORS APARTMENTS

 

We haveaudited the accompanying balance sheets of SHADY LANE SENIORS APARTMENTS, RHSPROJECT NO. 22-064-721100471 as of December 31, 2001 and 2000 and the relatedstatements of operations, changes in partners’ equity (deficit) and cash flowsfor the years then ended. These financial statements are the responsibility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of SHADY LANE SENIORS APARTMENTS asof December 31, 2001 and 2000 and the results of its operations, changes inpartners’ equity and cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 17through 25, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 18,2002 on our consideration of SHADY LANE SENIORS APARTMENTS’s internal controland a report dated February 18, 2002 on its compliance with laws andregulations applicable to the financial statements.

 

Metairie, Louisiana

February 18, 2002

 

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IndependentAuditors’ Report

 

To the Partners of

Better Homes for Havelock Limited Partnership

(A North Carolina Limited Partnership)

 

We have audited the accompanying balancesheets of Better Homes for Havelock Limited Partnership (a North CarolinaLimited Partnership) as of December 31, 2001 and 2000, and the relatedstatements of operations, changes in partners’ equity (deficit), and cash flowsfor the years then ended. These financial statements are the responsibility ofthe Partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Better Homes for Havelock LimitedPartnership as of December 31, 2001 and 2000, and the results of its operationsand its cash flows for the years then ended in conformity with accountingprinciples generally accepted in the United States of America.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated January 24,2002, on our consideration of the Partnership’s internal controls and a reportdated January 24, 2001, on its compliance with laws and regulations.

 

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Theaccompanying supplementary information is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the financial statements taken as a whole.

 

January 24, 2002

Carmel, Indiana

 

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Independent Auditor’s Report

 

To the Partners

Liveoak Village Limited Partnership

Charlotte, North Carolina

 

We have audited the accompanying balancesheets of Liveoak Village Limited Partnership (an Alabama limited partnership)as of December 31, 2001 and 2000, and the related statements of operations,partners’ equity, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Our responsibilityis to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Liveoak Village Limited Partnership as of December 31, 2001 and2000, and the results of its operations and its cash flows for the years thenended in conformity with accounting principles generally accepted in the UnitedStates of America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated January 31, 2002, on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts, and grants.

 

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Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information listed in the table of contents is presented for purposesof additional analysis and is not a required part of the basic financialstatements of the Partnership. Such information has been subjected to theauditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

Lookout Ridge Limited Partnership

 

We have audited the accompanying balancesheet of Lookout Ridge Limited Partnership as of December 31, 2001, and therelated statements of operations, partners’ equity (deficit) and cash flows forthe year then ended. These financial statements are the re­sponsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of mate­rialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of Lookout Ridge Limited Partnership as of December 31, 2001, and theresults of its operations, the changes in partners’ equity and cash flows forthe year then ended in conformity with accounting principles generally ac­ceptedin the United States of America.

 

Our audit was made for the purpose of formingan opinion on the basic financial state­ments taken as a whole. The supplementalinformation on page 9 is presented for pur­poses of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statement and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

Ft. Wright, Kentucky

February 22, 2002

 

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IndependentAuditor’s Report

 

To the Partners

Pinedale II Limited Partnership

 

We have audited the accompanying balancesheets of*Pinedale II Limited Partnership*as of December 31, 2001 and 2000,and the related statements of operations, partners’ equity, and cash flows forthe years then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition *ofPinedale II Limited Partnership,*as of December 31, 2001 and 2000,and the results of its operations, changes in partners’ equity, and cash flowsfor the years then ended in conformity with accounting principles generallyaccepted in the United States of America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information on page 12 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

January 11, 2002

 

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IndependentAuditor’s Report

 

To the Partners

Pumphouse Crossing II Limited Partnership

 

We have audited the accompanying balancesheets of *PumphouseCrossing II Limited Partnership*as of December 31, 2001 and 2000,and the related statements of operations, partners’ equity, and cash flows forthe years then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financial position*ofPumphouse Crossing II Limited Partnership,*as of December 31, 2001and 2000, and the results of its operations, changes in partners’ equity, andcash flows for the years then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information on page 12 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

January 15, 2002

 

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IndependentAuditor’s Report

 

To the Partners

Black River Run Limited Partnership

 

We have audited the accompanying balancesheets *ofBlack River Run Limited Partnership*as of December 31, 2001 and2000, and the related statements of operations, partners’ equity, and cashflows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is to expressan opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition *ofBlack River Run Limited Partnership,*as of December 31, 2001 and2000, and the results of its operations, changes in partners’ equity, and cashflows for the years then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information on page 12 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

January 11, 2002

 

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INDEPENDENTAUDITORS’ REPORT 

 

February 15,2002

 

To the Partners

Elk Tower Apartments Limited Partnership

 

We haveaudited the accompanying balance sheets of Elk Tower Apartments LimitedPartnership as of December 31, 2001 and 2000, and the related starts ofoperations, partners’ equity (deficit) and cash flows for the years then ended,these financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

We conductedour audits in accordance with generally accepted auditing standards. Thosestandards require that we plan and perform the audit to obtain reasonableassurance whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial starts. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Elk Tower Apartments LimitedPartnership as of December 31, 2001 and 2000, and the results of itsoperations, changes in partners’ equity (deficit) and cash flows for the yearsthen ended, in conformity with generally accepted accounting principles.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 11 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial starts and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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INDEPENDENT AUDITOR’S REPORT

 

To the Partners

Philadelphia Housing II,Limited Partnership

Philadelphia, Mississippi

 

We have audited the accompanying balancesheets of Philadelphia Housing II, Limited Partnership (a Mississippi limitedpartnership), RHS Project No. 28-050-640808922 as of December 31, 2001 and2000, and the related statements of operations, partners’ capital (deficit) andcash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Philadelphia Housing II, Limited Partnership as of December 31,2001 and 2000, and the results of its operations and its cash flows for theyears then ended in conformity with accounting principles generally accepted inthe United States of America.

 

Our audits were made for the purposes offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information is presented for purposes of additional analysis andis not a required part of the basic financial statements. We have prepared theMultiple Family Housing Borrower Balance Sheet (RHS Form RD 1930-8) and theMultiple Family Housing Project Budget (RHS Form RD 1930-7). Such informationhas been subjected to the audit procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

January 24, 2002

 

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Independent’sAuditor’s Report

To the Partner’s of

Roxbury Veterans Housing Limited Partnership

 

 

I have audited the accompany statement offinancial position of Roxbury Veterans Housing Limited Partnership( aMassachusetts Limited Partnership) as of December 31, 2001, and the relatedstatements of operations, changes in partners’ equity, and cash flows for theyear then ended, These financial statements are the responsibility of the Partnership’smanagement management. My responsibility is to express an opinion on thesefinancial statements based on my audit.

 

I conducted my audit in accordance withgenerally accepted auditing standards. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialsstatements are free of material misstatement. An audit includes examining, on atest bash, evidence supporting the amounts and disclosures in the financialstatements. An audit includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. I believe that my audit provides a reasonablebasis for my opinion.

 

In my opinion, the financial statementsreferred to above presents fairly, in all material respects, the financialposition of Roxbury Veterans Housing Limited Partnership as of December 31, 200I, and the results of its operations, changes in partners’ equity, and cashflows and cash flows for the year ended in conformity with accountingprinciples generally accepted in the United States.

 

My audit was made for the purpose of formingan opinion on the basic financial statements taken as a whole. The accompanyingschedule of operating expenses is presented for purposes of additional analysisand is not a required part of the basic financial statements. Such informationhas been subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in my opinion, is fairly state in all materialrespects in relation to the basic financial statements taken as a whole. Thefinancial statements for the year ended June 30, 2000 were audited by otheraccountants, and they expressed an unqualified opinion on them in their reportdated June 15, 2001.

 

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To the partners of

Swedesboro Housing Limited Partnership

443 Congress Street, 7th Floor

Portland, Maine 04101

 

We haveaudited the accompanying Balance sheet of SWEDESBORO HOUSING LIMITED PARTNERSHIP, as of December 31, 2001 and therelated Statements of  Income andPartners’ Capital and Statement of Cash Flows for the year then ended. Thesefinancial statements are the responsibility of the partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audit, The financial statements of SWEDESBORO HOUSING LIMITEDPARTNERSHIP as of December 31, 2000 were audited by other auditors whose reportdated January 9, 2001 expressed an unqualified opinion on these statements.

 

We conductedout audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial auditscontained in Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides areasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of SWEDESBORO HOUSING LIMITED PARTNERSHIP at December 31, 2001 and  the results of its operations and its cashflow for the year then ended, in conformity with accounting principlesgenerally accepted in the United  Statesof America.

 

In accordancewith Government Auditing Standards, we have also issued a report dated April29, 2002, on our consideration of SWEDESBORO HOUSING LIMITED PARTNERSHIPinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts and grants. That report isan integral part of an audit performed in accordance with GovernmentAuditing Standards and should be read in conjunction with this report inconsidering the results of our audit.

 

Thesupplementary information is presented in this report for purposes ofadditional analysis and, although not required for a fair presentation offinancial position, results of operations and cash flows, was subjected to theaudit procedures applied in the audit of the basic financial statements. In ouropinion, the accompanying supplementary information is fairly stated in allmaterial respects in conjunction with those statements.

 

April 29, 2002

Haddonfield,New Jersey

 

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IndependentAuditors’ Report

 

To the Partners

Barlee Properties,

An Arkansas Limited Partnership

Barling, Arkansas

 

We have audited the accompanying balancesheets of Barlee Properties, An Arkansas Limited Partnership, as of December31, 2001 and 2000, and the related statements of operations, changes inpartners’ capital and cash flows for the years then ended These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of Barlee Properties, An Arkansas Limited Partnership, as of December31, 2001 and 2000, and the results of its operations and its cash flows for theyears then ended in conformity with accounting principles generally accepted inthe United States of America.

 

Lawrence, Schluterman & Schwartz, Ltd.

Certified Public Accountants

Fort Smith, Arkansas

February 28, 2002

 

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Report of Independent Accountants

 

Partners

Colonna Redevelopment Company L.P.

Hempstead, New York

 

We have audited the accompanying balance sheets of Colonna RedevelopmentCompany L.P. (a New York limited partnership) (the “Partnership”) as ofDecember 31, 2001 and 2000 and the related statements of operations, cash flowsand partners’ equity for the years then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of Colonna Redevelopment Company L.P. as of December 31, 2001 and2000, and the results of its operations and its cash flows for the years thenended in conformity with accounting principles generally accepted in the UnitedStates of America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on page 12 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

May 13, 2002,except for Note 8,as to which the date is        ,2002

 

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

Halls Ferry Apartments, L.P.

 

We have audited the accompanying balancesheets of Halls Ferry Apartments, L.P. as of December 31, 2001 and 2000 and therelated statements of operations, partners’ equity and cash flows for the yearsthen ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America.  Those standards require that we plan andperform the audits to obtain reasonable assurance about whether the financial,statements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable oasis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Halls Ferry Apartments, L.P. as of December 31, 2001 and 2000, andthe results of its operations, changes in partners’ equity and cash flows forthe years then ended in conformity with accounting principles generallyaccepted in the United States of America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on pages 15 and 16 is presented for purposes ofadditional analysis and is not a required part of the basic financialstatements. Such information has been subjected to the auditing proceduresapplied in the audits of the basic financial statements and, in our opinion, isfairly stated in all material respects in relation to the basic financialstatements taken as a whole.

 

Mechsner & Cp., L.L.C.

Certified Public Accountants

Springfield, Missouri

February 4, 2002

 

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IndependentAuditors’ Report

 

Partners

Ithaca I Limited Partnership

Ithaca, Michigan

 

We have audited the accompanying balancesheets of Ithaca I Limited Partnership Rural Housing Service Project No.26-029-383113117 as of December 31, 2001 and 2000, and the related statementsof income, partners’ equity and cash flows for the years ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Ithaca I Limited Partnership as of December 31, 2001 and 2000, andthe results of its operations, changes in partner’s equity and its cash flowsfor the years then ended in conformity with accounting principles generallyaccepted in the United States of America.

 

In accordance with *Government Auditing Standards,*wehave also issued a report dated February 19, 2002 on our consideration ofIthaca I Limited Partnership’s internal control over financial reporting andour tests of compliance with certain provisions of laws and regulations,contracts and grants. That report is an integral part of an audit performed inaccordance with *Government Auditing Standards*and should be read inconjunction with this report in considering the results of our audit.

 

Our audits were conducted for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information presented on pages 11 through 19 is presented for purposesof complying with the requirements of Rural Housing Service and is not arequired part of the basic financial statements. Such information has beensubjected to the audit procedures applied in the audit of the basic financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the basic financial statements taken as a whole.

 

CERTIFIED PUBLIC ACCOUNTANTS

February 19, 2002

 

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INDEPENDENTAUDITORS’ REPORT

 

To the Partners of

Kimbark 1200 Associates, Limited Partnership

Longmont, Colorado

 

We have audited the accompanying balancesheet of Kimbark 1200 Associates, Limited Partnership, FHA Project No.101-98011, as of December 31, 2001, and the related statement of operations,changes in partners’ equity and cash flows for the year then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audit.

 

We conducted our audit in accordance withgenerally accepted auditing standards and Government Auditing Standards, issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Kimbark 1200 Associates, Limited Partnership FHA Project No.101-98011, as of December 31, 2001, and the results of its operations and thechanges in its partners’ equity and its cash flows for the year then ended, inconformity with generally accepted accounting principles.

 

In accordance with Government AuditingStandards, we have also issued a report dated February 13, 2002 on ourconsideration of Kimbark 1200 Associates, Limited partnership, internalcontrols and reports dated February 13, 2002 on its compliance with specificrequirements applicable to major HUD programs and Fair Housing andNon-Discrimination.

 

Denver, Colorado

February 13, 2002

 

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

MATHIS APARTMENTS, LTD.

 

We haveaudited the accompanying balance sheets of MATHIS APARTMENTS, LTD., RHS PROJECTNO. 51-005-721010606 as of December 31, 2001 and 2000 and the relatedstatements of operations, changes in partners’ equity (deficit) and cash flowsfor the years then ended. These financial statements are the responsibility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of MATHIS APARTMENTS, LTD. as ofDecember 31, 2001 and 2000 and the results of its operations, changes inpartners’ equity and cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 16through 24, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 13,2002 on our consideration of MATHIS APARTMENTS, LTD.’s internal control and areport dated February 13, 2002 on its compliance with laws and regulationsapplicable to the financial statements.

 

Metairie, Louisiana

February 13, 2002

 

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

ORANGE GROVE SENIORS APARTMENTS, LTD.

 

We haveaudited the accompanying balance sheets of ORANGE GROVE SENIORS APARTMENTS,LTD., RHS PROJECT NO. 50-025-742670408 as of December 31, 2001 and 2000 and therelated statements of operations, changes in partners’ equity (deficit) andcash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of ORANGE GROVE SENIORS APARTMENTS,LTD. as of December 31, 2001 and 2000 and the results of its operations,changes in partners’ equity and cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 17through 25, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

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In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 18,2002on our consideration of ORANGE GROVE SENIORS APARTMENTS, LTD.’s internalcontrol and a report dated February 18, 2002 on its compliance with laws andregulations applicable to the financial statements.

 

Metairie, Louisiana

February 18, 2002

 

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To The Partners

Sacramento SRO Limited Partnership

A California Limited Partnership

710 West Ivy

San Diego, CA 92101

 

IndependentAuditor’s Report

 

We have auditedthe accompanying balance sheets of Sacramento SRO Limited Partnership, ACalifornia Limited Partnership, as of December 31, 2001 and 2000, and therelated statements of operations and partners’ capital and statements of cashflows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that we plan and perform theaudits to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the mounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Sacramento SRO LimitedPartnership, A California Limited Partnership as of December 31, 2001 and 2000,and the results of its operations and cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

CONSIDINE & CONSIDINE

An Accountancy Corporation

January 31, 2002

 

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INDEPENDENTAUDITORS’ REPORT

 

To the Partners

South Hills Apartments, L.P.

 

We haveaudited the accompanying balance sheets of south Hills Apartments, L.P. as ofDecember 31, 2001 and 2000, and the related statements of operations, partners’equity and cash flows for the years then ended. These financial statements arethe responsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conductedour audits in accordance with generally accepted auditing standards. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation,we believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of South Hills Apartments, L.P. as ofDecember 31, 2001 and 2000, and the results of its operations, changes inpartners’ equity and cash flows for the years then ended in conformity withgenerally accepted accounting principles.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 14 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements, such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

Goracke, Ritterbush & Piotrowski, L.L.P.

 

January 18, 2002

 

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IndependentAuditors’ Report

 

To the Partners:

Village Woods Estates, L.P.

 

We haveaudited the accompanying balance sheets of Village Woods Estates, L.P. as ofDecember 31, 2001 and 2000, and the related statements of operations, changesin partners’ equity, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Village Woods Estates, L.P. as ofDecember 31, 2001 and 2000, and the results of its operations, changes inpartners’ equity, and cash flows for the years then ended in conformity with accountingprinciples generally accepted in the United States of America.

 

January 29, 2002

 

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IndependentAuditors’ Report

 

To the Partners

Woodland Hills Properties,

A Limited Partnership

Barling, Arkansas

 

We have audited the accompanying balancesheets of Woodland Hills Properties, A Limited Partnership, as of December 31,2001 and 2000, and the related statements of operations, changes in partners’capital and cash flows for the years then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of Woodland Hills Properties, A Limited Partnership, as of December31, 2001 and 2000, and the results of its operations and its cash flows for theyears then ended in conformity with accounting principles generally accepted inthe United States of America.

 

Lawrence, Schlutennan & Schwartz, Ltd.

Certified Public Accountants

Fort Smith, Arkansas

February 28, 2002

 

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INDEPENDENTAUDITOR’S REPORT

 

To The Partners

Autumn Ridge Associates

Roanoke, Virginia

 

We haveaudited the accompanying balance sheet of Autumn Ridge Associates (A VirginiaLimited Partnership) as of December 31, 2001 and 2000 and the related statementof operations and partners’ equity (deficit) and cash flow for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

We conductedour audit in accordance with auditing standards generally accepted in theUnited States of America and Government Auditing Standards issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides areasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Autumn Ridge Associates as ofDecember 31, 2001 and 2000, and the results of its operation and its cash flowfor the year then ended in conformity with accounting principles generallyaccepted in the United States of America.

 

Our audit wasmade for the purpose of forming an opinion on the basic financial statements takenas a whole. The supplemental information on pages 14 through 17 is presentedfor the purpose of additional analysis and is not a required part of the basicfinancial statements. Such information has been subjected to the auditprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

February 14, 2002

 

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To the Partners

Brownsville Associates, Limited

 

We have audited the accompanying balancesheets of Brownsville Associates, Limited (a Tennessee limited partnership)d/b/a Brownsville Village Apartments, RHS Project No.: 48-038-621467876, as ofDecember 31, 2001 and 2000, and the related statements of operations, partners’equity, and cash flows for the years then ended. These financial statements arethe responsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Brownsville Associates, Limited (a Tennessee limited partnership)d/b/a Brownsville Village Apartments, RHS Project No.: 48-038-621467876, as ofDecember 31, 2001 and 2000, and the results of its operations, the changes inpartners’ equity and its cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

In accordance with *Government Auditing Standards,*wehave also issued a report dated January 30, 2002 on our consideration ofBrownsville Associates, Limited’s internal control over financial reporting andour tests of its compliance with certain provisions of laws, regulations,contracts, and grants.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on page 12 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the audit procedures applied in the audit ofthe basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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IndependentAuditors’ Report

 

To The Partners

Centenary Housing Limited Partnership

St. Louis, Missouri

 

We have audited the accompanying balancesheet of Centenary Housing Limited Partnership (Centenary Towers Apartments,Project No. 085-35239-PM-SR-PR-WAH-L8) as of December 31, 2001, and the relatedstatements of profit and loss, partners’ equity and cash flows for the yearthen ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America and *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Centenary Housing Limited Partnership as of December 31, 2001, andthe results of its operations and its cash flows for the year then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

In accordance with *Government Auditing Standards*andthe *ConsolidatedAudit Guide for Audits of HUD Programs*issued by the U.S. Departmentof Housing and Urban Development, we have also issued a report dated January16, 2002 on our consideration of Centenary Housing Limited Partnership’s internalcontrol and reports dated January 16, 2002 on its compliance with specificrequirements applicable to major HUD programs and specific requirementsapplicable to Fair Housing and Non-Discrimination. Those reports are anintegral part of an audit performed in accordance with *Government Auditing Standards*andshould be read in conjunction with this report in considering the results ofour audit.

 

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Our audit was conducted for the purpose offorming an opinion on the basic financial statements taken as a whole. Theaccompanying supplementary information shown on pages 16 to 19 is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. Such information has been subjected to the auditingprocedures applied in the audit of the financial statements and, in ouropinion, is fairly stated in all material respects in relation to the financialstatements taken as a whole.

 

January 16, 2002

 

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INDEPENDENTACCOUNTANTS’ REPORT

 

To the Partners

New Hilltop Apartments, A Limited Partnership

Columbia, South Carolina

 

We have audited the accompanying balancesheets of New Hilltop Apartments, A Limited Partnership (A South CarolinaLimited Partnership), as of December 31, 2001 and 2000, and the relatedstatements of operations, partners’ equity and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America and *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of New Hilltop Apartments, A Limited Partnership, as of December 31,2001 and 2000, and the results of its operations and its cash flows for theyears then ended, in conformity with accounting principles generally acceptedin the United States of America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information is presented for purposes of additional analysis andis not a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

99

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In accordance with *Government Auditing Standards,*wehave also issued a report dated January 24, 2002 on our consideration of NewHilltop Apartments, A Limited Partnership’s internal control over financialreporting and on our tests of its compliance with certain provisions of laws,regulations, contracts and grants. That report is an integral part of an auditperformed in accordance with *Government Auditing Standards*and shouldbe read in conjunction with this report in considering the results of ouraudit.

 

January 24, 2002

 

100

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IndependentAuditors’ Report

 

Partners

Shadowcreek Apartments

Elko, Nevada

 

We have audited the accompanying balancesheets of Shadowcreek Apartments (the Project), Rural Development Case No.33-002-0880283493, as of December 31, 2001 and 2000 and the related statementsof operations, changes in partners’ equity and cash flows for the years thenended. These financial statements are the responsibility of the Project’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and with *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of the Project as of December 31, 2001 and 2000 and the results of itsoperations, changes in partners’ equity, and cash flows for the years thenended in conformity with accounting principles generally accepted in the UnitedStates of America.

 

Our audits were conducted for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on pages 10 through 12 is presented for the purpose ofadditional analysis and is not a required part of the basic financialstatements of the Project for the year ended December 31, 2001. Suchinformation has been subjected to the auditing procedures applied in the auditof the basic financial statements and, in our opinion, is fairly presented inall material respects in relation to the financial statements taken as a whole.

 

101

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In accordance with *Government Auditing Standards,*wehave issued a report dated January 23, 2002, on our consideration of theProject’s internal control over financial reporting and over tests of itscompliance with laws, regulations, contracts and grants. This report is anintegral part of an audit performed in accordance with *Government Auditing Standards*andshould be read in conjunction with this report in considering the results ofour audit.

 

Kaysville, Utah

January 23, 2002

 

102

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To the Partners

Stanton Associates, Limited

 

We have audited the accompanying balancesheets of Stanton Associates, Limited (a Tennessee limited partnership) d/b/aStanton Village Apartments, RHS Project No.: 48-038-621542356, as of December31, 2001 and 2000, and. the related statements of operations, partners’ equity,and cash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Stanton Associates;, Limited (a Tennessee limited partnership)d/b/a Stanton Village Apartments, RHS Project No.: 48-038-621542356, as ofDecember 31, 2001 and 2000, and the results of its operations, the changes inpartners’ equity and its cash flows for the years then ended, in conformitywith accounting principles generally accepted in the United States of America.

 

In accordance with *Government Auditing Standards,*wehave also issued a report dated January 30, 2002 on our consideration ofStanton Associates, Limited’s internal control over financial reporting and ourtests of its compliance with certain provisions of laws, regulations,contracts, and grants.

 

103

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Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on page 12 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the audit procedures applied in the audit ofthe basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

Columbia,Tennessee

January 30,2002

 

104

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

Pahrump Valley Investors

(A Wyoming Limited Partnership)

Cheyenne, WY

 

I have audited the accompanying balance sheetsof Pahrump Valley Investors (A Wyoming Limited Partnership), USDA RuralDevelopment Case No. 33-019-680204949, as of December 31, 2001 and 2000, andthe related statements of income, partners’ equity, and cash flows for theyears then ended. These financial statements are the responsibility of thePartnerships management. My responsibility is to express an opinion on thesefinancial statements based on my audits.

 

I conducted my audits in accordance withgenerally accepted auditing standards and *Government Auditing Standards*issued bythe Comptroller General of the United States. Those standards require that Iplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management as well asevaluating the overall financial statement presentation. I believe that myaudits provide a reasonable basis for my opinion.

 

In my opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Pahrump Valley Investors (A Wyoming Limited Partnership) as ofDecember 31, 2001 and 2000, and the results of its operations and its cashflows for the years then ended, in conformity with generally acceptedaccounting principles.

 

In accordance with G*overnment Auditing Standards,*Ihave also issued a report dated March 11, 2002 on my consideration of PahrumpValley Investors’ internal control structure and a report dated March 11, 2002on its compliance with laws and regulations.

 

Stockton, California

March 11, 2002

 

105

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IndependentAuditors’ Report

 

To the Partners

Woodlands Apartments

Elko, Nevada

 

We have audited the accompanying balancesheets of Woodlands Apartments (the Project), Rural Development Case No.33-004-0880314570, as of December 31, 2001 and 2000 and the related statementsof operations, changes in Partners’ equity and cash flows for the years thenended. These financial statements are the responsibility of the Project’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and with *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of the Project as of December 31, 2001 and 2000 and the results of itsoperations, changes in partners equity, and cash flows for the years thenended, in conformity with accounting principles generally accepted in theUnited States of America.

 

In accordance with *Government Auditing Standards,*wehave issued a report dated January 23, 2002, on our consideration of theWoodlands Apartments’ internal control over financial reporting and over testsof its compliance with laws, regulations, contracts and grants. This report isan integral part of an audit performed in accordance with *Government Auditing Standards*andshould be read in conjunction with this report in considering the results ofour audit.

 

Our audits were conducted for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on pages 11 through 13, is presented for the purposeof additional analysis and is not a required part of the basic financialstatements of the Project for the year ended December 31, 2001. Suchinformation has been subjected to the auditing procedures applied in the auditof the basic financial statements and, in our opinion, is fairly presented inall material respects in relation to the financial statements taken as a whole.

 

Kaysville, Utah

January 23, 2002

 

106

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

ZWOLLE PARTNERSHIP

 

We haveaudited the accompanying balance sheets of ZWOLLE PARTNERSHIP, RHS PROJECT NO.22-043-721260425 as of December 31, 2001 and 2000 and the related statements ofoperations, changes in partners’ equity (deficit) and cash flows for the yearsthen ended. These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of ZWOLLE PARTNERSHIP as of December31, 2001 and 2000 and the results of its operations, changes in partners’equity and cash flows for the years then ended in conformity with accountingprinciples generally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 16through 24, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

107

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In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 18,2002 on our consideration of ZWOLLE PARTNERSHIP’s internal control and a reportdated February 18, 2002 on its compliance with laws and regulations applicableto the financial statements.

 

Metairie, Louisiana

February 18, 2002

 

108

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INDEPENDENTAUDITORS’ REPORT

 

To the Partners

352 Lenox Associates, L.P.

 

We haveaudited the accompanying balance sheet of 352 Lenox Associates, L.P. as ofDecember 31, 2001, and the related statements of operations, changes inpartners’ equity and cash flows for the year then ended. These financialstatements are the responsibility of the partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audit.

 

We conductedour audit in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of 352 Lenox Associates, L.P. as ofDecember 31, 2001, and the results of its operations, the changes in partners’equity and cash flows for the year then ended, in conformity with accountingprinciples generally accepted in the United States of America.

 

Our audit wasmade for the purpose of forming an opinion on the basic financial statementstaken as a whole. The supplemental information on page 13 is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

February 13, 2002

 

109

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The Partners

Ethel Housing, L.P.

Ethel, Mississippi

 

We have audited the accompanying balancesheets of Ethel Housing, L.P., RD Case No. 28-0040640823417 as of December 31,2001, and 2000, and the related statements of operations, partners’ equity, andcash flows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards,*issuedby the comptroller General of the United States. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includedexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also included assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provided a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Ethel Housing, L.P., as of December 31, 2001 and 2000, and theresults of its operations and its cash flows for the years then ended, inconformity with generally accepted accounting principles.

 

In accordance with Government AuditingStandards and the Audit Program issued by the United States Department ofAgriculture, Rural Development, we have also issued a report dated February 22,2002, on its compliance with specific requirements applicable to major RDprograms and nonmajor RD program transactions.

 

Our audits were made for the purpose offorming an opinion on the financial statements taken as a whole. The supportingdata included on pages 12 through 19 are presented for purposes of additionalanalysis and are not a required part of the financial statements of EthelHousing, L.P. Such information, except for the current budget and proposedbudget columns on pages 15 through 18, on which we express no opinion, isfairly stated in ail material respects in relation to the financial statementstaken as a whole.

 

February 22, 2002

 

110

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INDEPENDENTAUDITORS’ REPORT

 

To the partners

Hurricane Hills I LC

 

I have audited the accompanying balancesheets of Hurricane Hills LC as of December 31, 2001, and the relatedstatements of operations, partners’ equity and cash flows for the year thenended. These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

I conducted my audit in accordance withgenerally accepted auditing standards. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examination, ona test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management as well as evaluating the overallfinancial statement presentation. We believe that our audits provided areasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Hurricane Hills I LC as of December 31, 2001, and the results ofits operations, changes in Partners’ equity and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

111

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INDEPENDENTAUDITOR’S REPORT

 
| To:    | The Partners                             |
|--------|------------------------------------------|
|   | Main Everett Housing Limited Partnership |

 

We have audited the accompanying balancesheets of Main Everett Housing Limited Partnership as of December 31, 2001 and2000, and the related statements of operations, partners’ equity, and cashflows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance withgenerally accepted auditing standards. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides areasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Main Everett Housing Limited Partnership as of December 31, 2001and 2000, and the results of its operations, changes in partners’ equity, andcash flows for the years then ended in conformity with generally acceptedaccounting principles.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on page 11 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

Tobin & Company, CPA’s

 

January 18, 2002

 

112

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To the Partners

M.R.H., L.P.

 

We haveaudited the accompanying balance sheets of M.R.H., L.P. as of December 31, 2001and 2000, and the related statements of operations, partners’ equity and cashflows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that we plan and perform theaudits to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of M.R.H., L.P. as of December 31,2001 and 2000, and the results of its operations, changes in partners’ equityand cash flows for the years then ended in conformity with accountingprinciples generally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

January 25, 2002

 

113

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INDEPENDENT AUDITORS’REPORT

 

To the Partners

Washington Arms Apartments

(A Limited Partnership)

Dayton, Ohio

 

We have audited the accompanying balance sheet of HUD Project #046-NI093of Washington Arms Apartments (a limited partnership) as of December 31, 2001and the related statements of profit and loss, changes in deficiency inpartners’ capital and cash flows for the year ended December 31, 2001. Thesefinancial statements are the responsibility of the Project’s management. Ourresponsibility is to express an opinion on these financial statements based onour audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America, *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates, and Consolidated Audit Guide for Audits of HUD Programs (the“Guide”) issued by the U. S. Department of Housing and Urban Development,Office of Inspector General in August 1997. Those standards and the Guide requirethat we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of HUD project #046-NI093 as of December 31, 2001 and the results ofits operations and its cash flows and its changes in deficiency in partners’capital for the year then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

In accordance with Government AuditingStandards, we have alsoissued a report dated January 23, 2002 onour consideration of Washington Arms Apartments’ internal controls and a reportdated January 23, 2002 on its compliance with laws and regulations. Thosereports are an integral part of an audit performed in accordance withGovernment Auditing Standards and should be read in conjunction with thisreport in considering the results of our audit.

 

Our audit was made for the purpose of formingan opinion on the financial statements taken as a whole. The additionalinformation included in the report shown on pages 12-16 is presented for thepurposes of additional analysis and is not a required part of the financialstatements of HUD Project #046-NI093. Such information has been subjected tothe auditing procedures applied in the audit of the financial statements and,in our opinion, is fairly stated in all material respects in relation to thefinancial statements taken as a whole.

 

Waite, Schultz & Associates,Ltd.

Certified Public Accountants

Cincinnati, Ohio

January 23, 2002

 

114

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INDEPENDENTAUDITOR’S REPORT

 
| To:    | The Partners                        |
|--------|-------------------------------------|
|   | Osborne Housing Limited Partnership |

 

We have audited the accompanying balancesheets of Osborne Housing Limited Partnership as of December 31, 2001 and 2000,and the related statements of operations, partners’ equity, and cash flows forthe years then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conducted our audit in accordance withgenerally accepted auditing standards. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides areasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Osborne Housing Limited Partnership as of December 31, 2001 and2000, and the results of its operations, changes in partners’ equity, and cashflows for the years then ended in conformity with generally accepted accountingprinciples.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on page 11 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

Tobin & Company, CPA’s

 

January 18, 2001

 

115

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To the Partners

Sandstone Village Limited Partnership

Great Falls, Montana

 

INDEPENDENTAUDITORS’ REPORT

 

We have audited the accompanying balancesheets of Sandstone Village Limited Partnership as of December 31, 2001 and2000 and the related statements of operations, partners’ equity and cash flowsfor the years then ended. These financial statements are the responsibility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of Sandstone Village Limited Partnership as of December 31, 2001 and2000, and the results of its operations, changes in partners’ equity and cashflows for the years then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on page 14 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in thc auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

Great Falls, Montana

February 8, 2002

 

116

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The Partners

Shannon Housing, L.P.

Shannon, Mississippi

 

We have audited the accompanying balancesheets of Shannon Housing, L.P., RD Case No. 28-041064835658, as of December31, 2001, and 2000, and the related statements of operations, partners’ equity,and cash flows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withgenerally accepted auditing standards and Government Auditing Standards, issuedby the comptroller General of the United States. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includedexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also included assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provided a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Shannon Housing, L.P., as of December 31, 2001 and 2000, and theresults of its operations and its cash flows for the years then ended, inconformity with generally accepted accounting principles.

 

In accordance with Government AuditingStandards and the Audit Program issued by the United States Department ofAgriculture, Rural Development, we have also issued a report dated March 16,2002, on its compliance with specific requirements applicable to major RDprograms and nonmajor RD program transactions.

 

Our audits were made for the purpose offorming an opinion on the financial statements taken as a whole. The supportingdata included on pages 12 through 19 are presented for purposes of additionalanalysis and are not a required part of the financial statements of ShannonHousing, L.P. Such information, except for the current budget and proposed budgetcolumns on pages 15 through 18, on which we express no opinion, is fairlystated in all material respects in relation to the financial statements takenas a whole.

 

March 16, 2002

 

117

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners of

Sutton Place Apartments

(A Limited Partnership)

Cincinnati, Ohio

 

We have audited the accompanying balancesheet of HUD Project #073-55035, 073-55037, 073-55038, 073-55061 and 073-55062of Sutton Place Apartments (a limited partnership) as of December 31, 2001, andthe related statements of profit and loss, changes in deficiency in partners’capital and cash flows for the year then ended. These financial statements arethe responsibility of the Project’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America, *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates, and Consolidated Audit Guide for Audits of HUD Programs (the“Guide”) issued by the U. S. Department of Housing and Urban Development,Office of Inspector General in August 1997. Those standards and the Guide requirethat we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of HUD Project #073-55035, 073-55037, 073-55038, 073-55061 and073-55062 as of December 31, 2001 and the results of its operations and its cashflows and its changes in deficiency in partners’ capital for the year thenended in conformity with accounting principles generally accepted in the UnitedStates of America.

 

In accordance with Government AuditingStandards, we have also issued a report dated January 23, 2002 on ourconsideration of Sutton Place Apartments’ internal control and a report datedJanuary 23, 2002 on its compliance with laws and regulations.

 

We were engaged to conduct an audit for thepurpose of forming an opinion on the financial statements taken as a whole. Theadditional information included in the report shown on pages 13-19 is presentedfor the purposes of additional analysis and is not a required part of thefinancial statements of HUD Project #073-55035, 073-55037, 073-55038, 073-55061and 073-55062. Such information has been subjected to the auditing proceduresapplied in the audit of the financial statements and, in our opinion, is fairlystated in all material respects in relation to the financial statements takenas a whole.

 

Waite, Schultz & Associates,Ltd.

Certified Public Accountants

Cincinnati, Ohio

January 23, 2002

 

118

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The Partners

West Point Housing, L.P.

West Point, Mississippi

 

We have audited the accompanying balancesheets of West Point Housing, L.P., RD Case No. 28-013-0640834734, as ofDecember 31, 2001, and 2000, and the related statements of operations,partners’ equity, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards,*issuedby the comptroller General of the United States. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includedexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also included assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provided a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of West Point Housing, L.P., as of December 31, 2001 and 2000, and theresults of its operations and its cash flows for the years then ended, inconformity with generally accepted accounting principles.

 

In accordance with *Government Auditing Standards*andthe Audit Program issued by the United States Department of Agriculture, RuralDevelopment, we have also issued a report dated February 25, 2002, on itscompliance with specific requirements applicable to major RD programs andnonmajor RD program transactions.

 

Our audits were made for the purpose offorming an opinion on the financial statements taken as a whole. The supportingdata included on pages 12 through 19 are presented for purposes of additionalanalysis and are not a required part of the financial statements of West PointHousing, L.P. Such information, except for the current budget and proposedbudget columns on pages 15 through 18, on which we express no opinion, isfairly stated in all material respects in relation to the financial statementstaken as a whole.

 

February 25, 2002

 

119

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

200 East Avenue Associates, L.P.

 

We have audited the accompanying balancesheet of 200 East Avenue Associates, L.P. (a limited partnership) as ofDecember 31,2001 and 2000 and the related statements of operations andpartners’ capital (deficit) and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of 200 East Avenue Associates, L.P. as of December 31, 2001 and 2000,and the results of its operations and its cash flows for the years then endedin conformity with accounting principles generally accepted in the UnitedStates of America.

 

Salmin, Celona, Wehrle & Flaherty, LLP

 

February 11, 2002

 

120

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IndependentAuditor’s Report

 

To the Partners

A.V.A. Limited Partnership

Charlotte, North Carolina

 

We have audited the accompanying balancesheets of A.V.A. Limited Partnership (a Virginia limited partnership) as ofDecember 31, 2001 and 2000, and the related statements of operations, partners’equity, and cash flows for the years then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of A.V.A. Limited Partnership as of December 31, 2001 and 2000, andthe results of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated January 31, 2002, on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts, and grants.

 

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Our audits were made for the purpose of formingan opinion on the basic financial statements taken as a whole. Thesupplementary information listed in the table of contents is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements of the Partnership. Such information has been subjected tothe auditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

January 31, 2002

 

122

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

Beckwood Manor One Limited Partnership

 

We have audited the accompanying balancesheets of Beckwood Manor One Limited Partnership, RD Project No.03-025-710677259 (the Partnership), as of December 31, 2001 and 2000 and therelated statements of profit (loss), changes in partners’ equity (deficit) andcash flows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Beckwood Manor One Limited Partnership as of December 31, 2001 and2000, and its results of operations, changes in partners’ equity (deficit), andcash flows for the years then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated January 26, 2002 on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts and grants.That report is an integral part of an audit performed in accordance with *GovernmentAuditing Standards*and should be read in conjunction with thisreport in considering the results of our audit.

 

LITTLE, SHANEYFELT, MARSHALL, ROMINE &CO.

 

JANUARY 26, 2002

 

123

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To the Partners

G.V.A. Limited Partnership

Charlotte, North Carolina

 

We have audited the accompanying balancesheets of G.V.A. Limited Partnership (a Virginia limited partnership) as ofDecember 31, 2001 and 2000, and the related statements of operations, partners’equity, and cash flows for the years then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of G.V.A. Limited Partnership as of December 31, 2001 and 2000, andthe results of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated January 31, 2002, on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts, and grants.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information listed in the table of contents is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements of the Partnership. Such information has been subjected tothe auditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

January 31, 2002

 

124

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IndependentAuditor’s Report

 

To the Partners

Grayson Manor Limited Partnership

 

I have audited the accompanying balancesheets of Grayson Manor Limited Partnership as of December 31, 2001 and 2000,and the related statements of operations, partners’ equity and cash flows forthe years then ended. These financial statements are the responsibility of thePartnership’s management. My responsibility is to express an opinion on thesefinancial statements based on my audits.

 

I conducted my audits in accordance withgenerally accepted auditing standards and *Government Auditing Standards*issued bythe Comptroller General of the United States, and the U.S Department ofAgriculture, Farmers Home Administration Audit Program. Those standards requirethat I plan and perform the audits to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. I believe that myaudits provide a reasonable basis for my opinion.

 

In my opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Grayson Manor Limited Partnership as of December 31, 2001 and 2000,and the results of its operations, changes in partners’ equity, and its cashflows for the years then ended in conformity with generally accepted accountingprinciples.

 

In accordance with *Government Auditing Standards,*Ihave also issued my report dated February 15, 2002 on my consideration ofGrayson Manor Limited Partnership’s internal control over financial reportingand on my tests of its compliance with certain provisions of laws andregulations.

 

February 15, 2002

 

125

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners of

SG – Hazeltine, L.P.

(A California Limited Partnership)

Fresno, California

 

We have audited the accompanying balancesheet of SO – Hazeltine, L.P., a California Limited Partnership, (the“Partnership”), as of December 31, 2001, and the related statements ofoperations, partners’ equity (deficit), and cash flows for the year then ended.These financial statements are the responsibility of he Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

We conducted our audit in accordance withgenerally accepted auditing standards. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides areasonable basis for our opinion.

 

In our opinion, the financial statementreferred to above present fairly, in all material respects, the financialposition of the Partnership as of December 31, 2001 and the results of itsoperations, changes in partners’ equity (deficit) and cash flows for the yearthen ended in conformity with generally accepted accounting principles.

 

126

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To The Partners

M.B. Apartments Associates, Ltd.

 

We have audited the accompanying balancesheets of M.B. Apartments Associates, Ltd. (A Limited Partnership) as ofDecember 31, 2001 and 2000, and the related statements of operations, partners’equity and cash flows for the years then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 referredto above present fairly, in all material respects, the financial position ofM.B. Apartments Associates, Ltd. (A Limited Partnership) as of December 31,2001 and 2000, and the results of its operations, changes in partners’ equityand cash flows for the years then ended in conformity with accountingprinciples generally accepted in the United States of America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on page 13 is presented for the purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

127

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INDEPENDENTAUDITOR’S REPORT

 

# **To the Partners**

Meridian Housing, L.P.

Meridian, Mississippi

 

We have audited the accompanying balancesheets of Meridian Housing, L.P. (a Mississippi limited partnership), RHSProject No. 28-038-0640893892 as of December 31, 2001 and 2000, and the relatedstatements of operations, partners’ capital (deficit) and cash flows for theyears then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Meridian Housing, L.P. as of December 31, 2001 and 2000, and theresults of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information is presented for purposes of additional analysis andis not a required part of the basic financial statements. We have prepared theMultiple Family Housing Borrower Balance Sheet (RHS Form RD 1930-8) and theMultiple Family Housing Project Budget (RHS Form RD 1930-7). Such informationhas been subjected to the audit procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

January 30, 2002

 

128

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

New Devonshire II Limited Partnership

(An Ohio Limited Partnership)

London, Ohio

 

We have audited the accompanying balancesheets of New Devonshire II Limited Partnership (an Ohio Limited Partnership),RD Project No. 41-049-311449843, as of December 31, 2001 and 2000, and therelated statements of operations, changes in partners’ equity (deficit) andcash flows for the years then ended. These financial statements are theresponsibility of the management of New Devonshire II Limited Partnership. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conducted our audits in accordance withthe auditing standards generally accepted in the United States of America, *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates, and the U.S. Department of Agriculture, Farmers Home Administration“Audit Program”. Those standards require that we plan and perform the audits toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of New Devonshire II Limited Partnership as of December 31, 2001 and2000, and the results of its operations, the changes in partners’ deficit andcash flows for the years then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

In accordance with *Government Auditing Standards,*wehave also issued a report dated February 15, 2002, on our consideration of NewDevonshire II Limited Partnership’s internal control and a report datedFebruary 15, 2002, on its compliance with laws and regulations.

 

Our audits were conducted for the purpose offorming an opinion on the basic financial statements taken as a whole. Theaccompanying information included in the report (shown on pages 11 to 18) ispresented for the purpose of additional analysis and is not a required part ofthe basic financial statements of New Devonshire II Limited Partnership. Suchinformation has been subjected to the auditing procedures applied in the auditof the basic financial statements, and, in our opinion, is fairly stated in allmaterial respects in relation to the financial statements taken as a whole.

 

Beachwood, Ohio

February 15, 2002

 

129

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INDEPENDENTAUDITOR’S REPORT

 

To the partners

New Devonshire West Limited partnership

(an Ohio Limited Partnership)

West Jefferson, Ohio

 

We have audited the accompanying balancesheets of New Devonshire West Limited Partnership (an Ohio LimitedPartnership), RD Project No. 41-049-3l 1449844, as of December 31, 2001 and2000, and the related statements of operations, changes in partners’ equity(deficit) and cash flows for the years then ended. These financial statementsare the responsibility of the management of New Devonshire West LimitedPartnership. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

We conducted our audits in accordance withthe auditing standards generally accepted in the Unites States of America and *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates, and the U.S. Department of Agriculture, Farmers Home Administration“Audit Program”. Those standards require that we plan and perform the audits toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of New Devonshire West Limited Partnership as of December 31, 2001 and2000, and the results of its operations, the changes in partners’ equity(deficit) and cash flows for the years then ended in conformity with accountingprinciples generally accepted in the United States of America.

 

In accordance with *Government Auditing Standards,*wehave also issued a report dated February 15, 2002, on our consideration of NewDevonshire West Limited Partnership’s internal control and a report datedFebruary 15, 2002, on its compliance with laws and regulations.

 

Our audits were conducted for the purpose offorming an opinion on the basic financial statements taken as a whole. Theaccompanying information included in the report (shown on pages 11 to 18) ispresented for the purpose of additional analysis and is not a required part ofthe basic financial statements of New Devonshire West Limited Partnership. Suchinformation has been subjected to the auditing procedures applied in the auditof the basic financial statements, and, in our opinion, is fairly stated in allmaterial respects in relation to the financial statements taken as a whole.

 

Beachwood, Ohio

February 15, 2002

 

130

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IndependentAuditor’s Report

 

To the Partners

Powell Valley Limited Partnership

 

I have audited the accompanying balancesheets of Powell Valley Limited Partnership as of December 31, 2001 and 2000,and the related statements of operations, partners’ equity and cash flows forthe years then ended. These financial statements are the responsibility of thePartnership’s management. My responsibility is to express an opinion on thesefinancial statements based on my audits.

 

I conducted my audits in accordance withgenerally accepted auditing standards and *Government Auditing Standards*issued bythe Comptroller General of the United States, and the U.S. Department ofAgriculture. Farmers Home Administration Audit Program. Those standards requirethat I plan and perform the audits to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. I believe that myaudits provide a reasonable basis for my opinion.

 

In my opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of’ Powell Valley Limited Partnership as of December 31, 2001 and2000, and the results of its operations, changes in partners’ equity and itscash flows for the years then ended il, conformity with, generally acceptedaccounting principles.

 

In accordance with *Government Auditing Standards,*Ihave also issued my report dated February 15, 2002 on my consideration ofPowell Valley Limited Partnership’s internal control over financial reportingand on my tests of its compliance with certain provisions of laws andregulations.

 

February 15, 2002

 

131

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IndependentAuditor’s Report

 

To the Partners

V. V. A. Limited Partnership

Charlotte, North Carolina

 

We have audited the accompanying balancesheets of V.V.A. Limited Partnership (a Virginia limited partnership) as ofDecember 31, 2001 and 2000, and the related statements of operations, partners’equity, and cash flows for the years then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America arm thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating thc overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of V. V. A. Limited Partnership as of December 31, 2001 and 2000 andthe results of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated January 31, 2002, on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts, and grants.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information listed in the table of contents is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements of the Partnership. Such information has been subjected tothe auditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

January 31, 2002

 

132

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IndependentAuditor’s Report

 

To the Partners

W. P. V. A. Limited Partnership

Charlotte, North Carolina

 

We have audited the accompanying balancesheets of W. P. V. A. Limited Partnership (a Virginia limited partnership) asof December 31, 2001 and 2000, and the related statements of operations,partners’ equity, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express all opinion on these financial statements based onour audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of W. P. V. A. Limited Partnership as of December 31, 2001 and 2000,and the results of its operations and its cash flows for the years then endedin conformity with accounting principles generally accepted in the UnitedStates of America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated January 31, 2002, on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts, and grants.

 

Our audits were made for the purpose of formingan opinion on the basic financial statements taken as a whole. Thesupplementary information listed in the table of contents is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements of the Partnership. Such information has been subjected tothe auditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

January 31, 2002

 

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For the Partners

Angelou Associates, L. P,

New York, New York

 

We have audited the accompanying balancesheets of Angelou Associates, L. P. (a New York State limited partnership) asof December 31, 2001 and 2000, and the related statements of operations, cashflows, and partners’ capital, and the supplementary information included forthe years then ended. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conducted our audit in accordance withgenerally accepted auditing standards. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation, we believe that our audit provides areasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Angelou Associates, L. P. as of December 31, 2001 and 2000, and theresults of its operations and its cash flows for the years then ended inconformity with generally accepted accounting principles.

 

Our audit was made for the purpose of formingan opinion on the basic financial statements taken as a whole. The accompanyingsupplementary information is presented for the purposes of additional analysisand is not a required part of the basic financial statements. Such informationhas been subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

January 22, 2002

 

134

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Report of Independent Accountant

 

To the Partners of CR Housing Associates,L.P.

 

I have audited the accompanying balancesheets of CR Housing Associates, L.P. (the “Partnership”) as of December 31,2001 and 2000, and the related statements of operations, partners’ capital andcash flows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. My responsibility is to expressan opinion on these financial statements based on my audits.

 

I conducted myaudits in accordance with generally accepted auditing standards in the UnitedStates of America. Those standards require that I plan and perform the audit toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. I believe that my audits provide a reasonable basis formy opinion.

 

In my opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of CR Housing Associates, L.P. as of December 31, 2001 and 2000, andthe results of it operations and its cash flows for the years then ended inconformity with generally accepted accounting principles in the United Statesof America.

 

My audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on page 10 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditof the basic financial statements and, in my opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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## **INDEPENDENT AUDITORS’ REPORT**

 

To the Partners

Holly Heights Apartments, L.P.

 

We haveaudited the accompanying balance sheets of Holly Heights Apartments, L.P. as ofDecember 31, 2001 and 2000, and the related statements of operations, partners’equity and cash flows for the years then ended. These financial statements arethe responsibility of the partnership’s management, our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conductedour audits in accordance with generally accepted auditing standards. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Holly Heights Apartments, L.P. asof December 31, 2001 and 2000, and the results of its operations, changes inpartners, equity and cash flows for the years then ended in conformity withgenerally accepted accounting principles.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 14 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

Goracke, Riggerbush & Piotrowski, L.L.P.

 

January 18, 2002

 

136

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INDEPENDENT AUDITORS’ REPORT

 

TO THE PARTNERS OF 1374 BOSTON ROAD LIMITEDPARTNERSHIP

 

We haveaudited the accompanying balance sheet of 1374 BOSTON ROAD LIMITED PARTNERSHIPas of December 31, 2001 and 2000, and the related statements of operations,changes in partners’ capital and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of 1374 BOSTON ROAD LIMITEDPARTNERSHIP as of December 31, 2001 and 2000, and the results of its operationsand its cash flows for the years then ended in conformity with accountingprinciples generally accepted in the United States of America.

 

February 28, 2002

 

137

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

BIENVILLE III APARTMENTS

 

We have auditedthe accompanying balance sheets of BIENVILLE III APARTMENTS, RHS PROJECT NO.:22-007-721280566 as of December 31, 2001 and 2000 and the related statements ofoperations, changes in partners’ equity (deficit) and cash flows for the yearsthen ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of BIENVILLE III APARTMENTS as ofDecember 31, 2001 and 2000 and the results of its operations, changes inpartners’ equity and cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 16through 24, is presented for purposes of additional analysis and is not a requiredpart of the basic financial statements. Such information has been subjected tothe auditing procedures applied in the audit of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 18,2002 on our consideration of BIENVILLE III APARTMENTS’s internal control and areport dated February 18, 2002 on its compliance with laws and regulationsapplicable to the financial statements.

 

Metairie, Louisiana

February 18, 2002

 

138

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

BLANCHARD II APARTMENTS

 

We haveaudited the accompanying balance sheets of BLANCHARD II APARTMENTS, RHS PROJECTNC). 22-009-721313034 as of December 31, 2001 and 2000 and the relatedstatements of operations, changes in partners’ equity (deficit) and cash flowsfor the years then ended. These financial statements are the responsibility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in the UnitedStates of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of BLANCHARD II APARTMENTS as ofDecember 31, 2001 and 2000 and the results of its operations, changes inpartners’ equity and cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 16through 24, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 19,2002 on our consideration of BLANCHARD II APARTMENTS’s internal control and areport dated February 19, 2002 on its compliance with laws and regulationsapplicable to the financial statements.

 

Metairie, Louisiana

February 19, 2002

 

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

COTTONWOOD APARTMENTS I

 

We haveaudited the accompanying balance sheets of COTTONWOOD APARTMENTS I, RHS PROJECTNO. 22-005-721313387 as of December 31, 2001 and 2000 and the relatedstatements of operations, changes in partners’ equity (deficit) and cash flowsfor the years then ended. These financial statements are the responsibility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of COTTONWOOD APARTMENTS I as ofDecember 31, 2001 and 2000 and the results of its operations, changes inpartners’ equity and cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 16through 24, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated January 31,2002 on our consideration of COTTONWOOD APARTMENTS I’s internal control and areport dated January 31, 2002 on its compliance with laws and regulationsapplicable to the financial statements.

 

Metairie, Louisiana

January 31, 2002

 

140

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Partners

Fairway II Limited Dividend HousingAssociation

Limited Partnership

Marlette, Michigan

 

We have audited the accompanying balancesheet of Fairway II Limited Dividend Housing Association Limited Partnership,Rural Housing Service Project No. 26-074-383047638 as of December 31, 2001 and2000, and the related statements of income, partners’ equity and cash flows forthe years then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Fairway II Limited Dividend Housing Association Limited Partnershipas of December 31, 2001 and 2000, and the results of its operations, changes inpartners’ equity and its cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

In accordance with *Government Auditing Standards,*wehave also issued a report dated February 19, 2002 on our consideration ofFairway II Limited Dividend Housing Association Limited Partnership’s internalcontrol over financial reporting and our tests of compliance with certainprovisions of laws, regulations, contracts and grants. That report is an integralpart of an audit performed in accordance with *Government Auditing Standards*andshould be read in conjunction with this report in considering the results ofour audit.

 

Our audits were conducted for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information presented on pages 11 through 19 is presented forpurposes of complying with the requirements of Rural Housing Service and is nota required part of the basic financial statements. Such information has beensubjected to the audit procedures applied in the audit of the basic financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the basic financial statements taken as a whole.

 

CERTIFIED PUBLIC ACCOUNTANTS

February 19, 2002

 

141

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IndependentAuditor’s Report

 

To the Partners of

Fort Bend NHC L.P.

(A Virginia Limited Partnership)

 

We haveaudited the accompanying balance sheet of Fort Bend NHC L.P. as of December 31,2001, and the related statements of operations, changes in partners’ equity(deficit) and cash flows for the year then ended. These financial statementsare the responsibility of the Partnership’s management. Our responsibility isto express an opinion on these financial statements based on our audit.

 

We conductedour audit in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Fort Bend NHC L.P. as of December31, 2001, and the results of its operations and its cash flows for the yearthen ended in conformity with accounting principles generally accepted in theUnited States of America.

 

Our audit wasmade for the purpose of forming an opinion on the basic financial statementstaken as a whole. The supplementary information is presented for purposes ofadditional analysis and is not a required part of the basic financialstatements. Such information has been subjected to the auditing proceduresapplied in the audit of the basic financial statements and, in our opinion, isfairly stated in all material respects in relation to the financial statementstaken as a whole.

 

 

February 2, 2002 

Carmel, Indiana

 

142

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

EVANGELINE PARTNERSHIP

 

We haveaudited the accompanying balance sheets of EVANGELINE PARTNERSHIP, RHS PROJECT NO.22-027-721313386 as of December 31, 2001 and 2000 and the related statements ofoperations, changes in partners’ equity (deficit) and cash flows for the yearsthen ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued by theComptroller General of the United States. Those standards require that we planand perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of EVANGELINE PARTNERSHIP as ofDecember 31, 2001 and 2000 and the results of its operations, changes inpartners’ equity and cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 17through 25, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has been subjectedto the auditing procedures applied in the audit of the basic financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the basic financial statements taken as a whole.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 19,2002 on our consideration of EVANGELINE PARTNERSHIP’s internal control and areport dated February 19, 2002 on its compliance with laws and regulationsapplicable to the financial statements.

 

Metairie, Louisiana

February 19, 2002

 

143

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To the Partners

Neighborhood Restorations Limited PartnershipVII

Dresher, Pennsylvania

 

We have audited the accompanying balancesheets of Neighborhood Restorations Limited Partnership VII (a PennsylvaniaLimited Partnership) as of December 31, 2001 and 2000, and the relatedstatement of operations, changes in partners’ capital ‘and cash flows for theyears then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Neighborhood Restorations Limited Partnership VII as of December31, 2001 and 2000, and the results of its operations and its cash flows for theyears then ended in conformity with accounting principles generally accepted inthe United States of America.

 

144

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Independent Auditor’s Report

 

To the Partners

R.V.K.Y. Limited Partnership

Charlotte, North Carolina

 

We have audited the accompanying balancesheets of R.V.K.Y. Limited Partnership (a Kentucky limited partnership) as ofDecember 31, 2001 and 2000, and the related statements of operations, partners’equity, and cash flows for the years then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of R.V.K.Y. Limited Partnership as of December 31, 2001 and 2000, andthe results of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated January 31, 2002, on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts, and grants.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information listed in the table of contents is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements of the Partnership. Such information has been subjected tothe auditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

145

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To The Partners

Sumner House Limited Partnership

 

### INDEPENDENTAUDITORS’ REPORT

 

We have audited the accompanying balancesheets of Sumner House Limited Partnership as of December 31, 2001 and 2000,and the related statements of operations and changes in partners’ capital, andcash flows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of Sumner House Limited Partnership as of December 31, 2001 and 2000,and the results of its operations and cash flows for the years then ended, inconformity with accounting principles generally accepted in the United Statesof America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on Pages 8 and 9 is presented for purposes ofadditional analysis and is not a required part of the basic financialstatements. Such information has been subjected to the auditing proceduresapplied in the audits of the basic financial statements and is fairly stated inall material respects in relation to the basic financial statements taken as awhole.

 

Farmington, Connecticut

February 22, 2002

 

146

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To the Partners

Terraceview Limited Partnership

 

We have audited the accompanying balance ofTerraceview Limited Partnership as of December 31, 2001 and 2000, and therelated statements of operations, partners’ equity (deficit) and cash flows forthe year then ended.  These financialstatements are the responsibility of the partnership’s management. Ourresponsibility is to express an opinion these financial statements based on ouraudit.

 

We conducted our audit in accordance withgenerally accepted auditing standards. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing the accounting principles used and thesignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides areasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Terraceview Limited Partnership as of December 31, 2001 and. 2000and the results of its operations, changes in partners’ equity (deficit) andcash flows for the year then ended in conformity with generally acceptedaccounting principle.

 

Our audit was made for the purpose of formingan opinion on the basic financial statements taken as a whole. The supplementalinformation on page 12 is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

Stangl & Jaskcowiak, Ltd

 

May 10, 2002

 

147

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INDEPENDENTAUDITORS’ REPORT

 

To the Partners

Bryson Apartments, LTD.

 

We haveaudited the accompanying balance sheet of Bryson Apartments, Ltd. (a limitedpartnership), RD Project No.: 50-019-752658906-01-8 as of December 31, 2001 andthe related statement of operations, partners’ equity and cash flows for theyear then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conductedour audit in accordance with auditing standards generally accepted in theUnited States of America and Government Auditing Standards, issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation, we believe that ouraudit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly,inall material respects, the financial position of Bryson Apartments, Ltd. RDProject No.: 50-019-752658906-01-8 as of December 31, 2001, and the results ofits operations, changes in partners’ equity and cash flows for the year thenended in conformity with U.S. generally accepted accounting principles.

 

Our audit wasmade for the purpose of forming an opinion on the basic financial statementstaken as a whole. The supplemental information on Page 1-18 is presented forpurposes of additional analysis and is not a required part of the basicfinancial state­ments. Such information has been subjected to the auditprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

In accordancewith Government Auditing Standards, we have also issued a report datedFebruary 6, 2002 on our consideration of Bryson Apartments, Ltd. internalcontrol over financial reporting and on our tests of its compliance withcertain provisions of laws, regulations, contracts and grants. That report isan integral part of an audit performed in accordance with GovernmentAuditing Standards and should be read in conjunction with this report inconsidering the results of our audit.

 

Wichita Falls, Texas

  February 6, 2002

 

148

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The Partners

Collins Housing, L.P.

Collins, Mississippi

 

We have audited the accompanying balance sheetsof Collins Housing, L.P., RD Case No. 28-0160640864674, as of December 31, 2001and 2000, and the related statements of operations, partners’ equity, and cashflows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards,*issuedby the comptroller General of the United States. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includedexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also included assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provided a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Collins Housing, L.P. as of December 31, 2001 and 2000, and theresults of its operations and its cash flows for the years then ended, inconformity with generally accepted accounting principles.

 

In accordance with *Government Auditing Standards*andthe Audit Program issued by the United States Department of Agriculture, RuralDevelopment, we have also issued a report dated February 20, 2002, on itscompliance with specific requirements applicable to major RD programs andnonmajor RD program transactions.

 

Our audits were made for the purpose offorming an opinion on the financial statements taken as a whole. The supportingdata included on pages 12 through 19 are presented for purposes of additionalanalysis and are not a required part of the financial statements of CollinsHousing, L.P. Such information, except for the current budget and proposedbudget columns on pages 15 through 18, on which we express no opinion, isfairly stated in all material respects in relation to the financial statementstaken as a whole.

 

February 20, 2002

 

149

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INDEPENDENTAUDITORS’ REPORT

 

To the Partners

Glenbrook Apartments, Ltd.

 

We haveaudited the accompanying balance sheet of Glenbrook Apartments, Ltd. (a limitedpartnership), RD Project No.: 50-069-0752627351-01-4 as of December 31, 2001and the related statements of operations, partners’ equity and cash flows forthe year then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conductedour audit in accordance with auditing standards generally accepted in theUnited States of America and Government Auditing Standards, issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Glenbrook Apartments, Ltd., RDProject No.: 50-069-0752627351-01-4 as of December 31, 2001, and the results ofits operations, changes in partners’ equity and cash flows for the year thenended in conformity with U.S. generally accepted accounting principles.

 

Our audit wasmade for the purpose of forming an opinion on the basic financial statementstaken as a whole. The supplemental information on Page 1-18 is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

In accordancewith Government Auditing Standards, we have also issued a report datedFebruary 6, 2002 on our consideration of Glenbrook Apartments, Ltd.’s internalcontrol over financial reporting and on our tests of its compliance withcertain provisions of laws, regulations, contracts and grants. That report isan integral part of an audit performed in *accordance*with Government AuditingStandards and should be read in conjunction with this report in consideringthe results of our audit.

 

Wichita Falls, Texas

February 6, 2002

 

150

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INDEPENDENTAUDITORS’ REPORT

 

To the Partners

Jacksboro Apartments, LTD.

 

We have audited the accompanying balancesheet of Jacksboro Apartments, Ltd. (a limited partnership) , RD Project No.:50-0190-75-2-657-4-5’7 - 01 - 6 as of December 31, 2001 and the relatedstatements of operations, partners’ equity and cash flows for the year thenended. These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America and GovernmentAuditing Standards, issued by the Comptroller General of the UnitedStates.  Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit also includesassessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation. We believethat our audit provides reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly in all material respects, the financialposition of Jacksboro Apartments, Ltd. RD Project No.: 50-0190752657457-01-6 asof December 31, 2001, and the results of its operations, changes in partners’equity and cash flows for the year then ended in conformity with U.S. generallyaccepted accounting principles.

 

Our audit was made for the purpose of formingan opinion on the basic financial statements taken as a whole. The supplementalinformation on Page 1-19 is presented for purposes of additional analysis andis not a required part of the basic financial state­ments. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordance with Government AuditingStandards, we have also issued a report dated February 5, 2002 on ourconsideration of Jacksboro Apartments, Ltd.’s internal control over financialreporting and on our tests of its compliance with certain provisions of laws,regulations, contracts and grants. That report is an integral part of an auditperformed in accordance with Government Auditing Standards and should beread in conjunction with this report in considering the results of our audit.

 

Wichita Falls,Texas

  February5, 2002

 

151

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To The Partners

Lincoln Hotel Partnership

A California Limited Partnership

710 West Ivy

San Diego, CA 92101

 

## **Independent Auditor’s Report**

 

We haveaudited the accompanying balance sheets of Lincoln Hotel Partnership, ACalifornia Limited Partnership, as of December 31, 2001 and 2000, and therelated statements of operations and partners’ capital and statements of cashflows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in the UnitedStates of America. Those standards require that we plan and perform the auditsto obtain reasonable assurance about whether the financial statements are freeof material misstatement An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audita/so includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Lincoln Hotel Partnership, ACalifornia Limited Partnership as of December 3l, 2001 and 2000, and theresults of its operations and cash flows for the years then ended in conformitywith accounting principles generally accepted in the United States of America.

 

CONSIDINE & CONSIDINE

An Accountancy Corporation

January 31, 2002

 

152

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To the Partners

Lutkin Bayou Apartments, LP

Drew, Mississippi

 

 

We have audited the accompanying balancesheets of Lutkin Bayou Apartments, LP (a Mississippi limited partnership), RHSProject No. 28-083-640863241 as of December 31, 2001 and 2000, and the relatedstatements of operations, partners’ capital (deficit) and cash flows for theyears then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Lutkin Bayou Apartments, LP, as of December 31, 2001 and 2000 andthe results of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

Our audits were made for the purposes offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information is presented for purposes of additional analysis andis not a required part of the basic financial statements. We have prepared theMultiple Family Housing Borrower Balance Sheet (RHS FORM RD 1980-8) and theMultiple Family Housing Project Budget (RHS FORM RD 1980-7). Such informationhas been subjected to the audit procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

February 6, 2002

 

153

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To The Partners

Northway Drive, Ltd.

Bryan, Texas

 

We have audited the accompanying balance sheets of Northway Drive. Ltd.– (A Texas Limited Partnership) as of December 31, 2001 and 2000, and therelated statements of income, partners’ equity and cash flows for the yearsended December 31, 2001 and 2000. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withGenerally Accepted Auditing Standards. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the balancesheet is free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the balance sheet. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall balance sheetpresentation. We believe that our audits provide a reasonable basis for ouropinion.

 

In our opinion, the balance sheet referred toabove presents fairly, in all material respects, the financial position ofNorthway Drive, Ltd. - (A Texas Limited Partnership) as of December 31, 2001and 2000, in conformity with Generally Accepted Accounting Principles.

 

154

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INDEPENDENTAUDITORS’ REPORT

 

To the Partners

Rhome Apartments, Ltd.

 

We haveaudited the accompanying balance sheet of Rhome Apartments, Ltd. (a limitedpartnership), RD Project No: 51-049-0752627348-02-2 as of December 31, 2001 andthe related statements of operations, partners’ equity and cash flows for theyear then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conductedour audit in accordance with auditing standards generally accepted in theUnited States of America and Government Auditing Standards, issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Rhome Apartments, Ltd., RD ProjectNO.: 51-049-0752627348 as of December 31, 2001, and the results of itsoperations, changes in partners’ equity and cash flows for the year then endedin conformity with U.S. generally accepted accounting principles.

 

Our audit wasmade for the purpose of forming an opinion on the basic financial statementstaken as a whole. The supplemental information on page 1-19 is presented forpurposes of additional analysis and is not a required part of the basicfinancial state­ments. Such information has been subjected to the auditing pro­ceduresapplied in the audit of the basic financial statements and, in our opinion, isfairly stated in all material respects in relation to the basic financialstatements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 1, 2002 on our consideration of RhomeApartments, Ltd.’s internal control over financial reporting and on our testsof its compliance with certain provisions of laws, regulations, contracts andgrants.  That report is an integral partof an audit performed in accordance with Government Auditing Standardsand should be read in conjunction with this report in considering the resultsof our audit.

 

Wichita Falls, Texas

February 1, 2002

 

155

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## **INDEPENDENT AUDITOR’S REPORT**

 

To the Partners

Bellwood Four Limited Partnership

 

We have audited the accompanying balancesheets of Bellwood Four Limited Partnership, (the Partnership), as of December31, 2001 and 2000 and the related statements of profit (loss), changes inpartners’ equity (deficit) and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits,

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion,

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Bellwood Four Limited Partnership as of December 31, 2001 and 2000,and its results of operations, changes in partners’ equity (deficit), and cashflows for the years then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated February 4, 2002 on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts and grants,That report is an integral part of an audit performed in accordance with *GovernmentAuditing Standards*and should be read in conjunction with thisreport in considering the results of our audit.

 

LITTLE, SHANEYFELT, MARSHALL, ROMINE &C0.

 

FEBRUARY 4, 2002

 

156

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### IndependentAuditors’ Report

 

To the Partners

Bowie Apartments, Ltd.

 

 We have audited the accompanyingbalance sheets of Bowie Apartments, Ltd. (a limited partnership), RD ProjectNo. 50-069-0752627345-01-7, as of December 31, 2001 and 2000, and the relatedstatements of operations, partners’ equity and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and Government Auditing Standards, issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Bowie Apartments, Ltd., RD ProjectNo. 50-069-0752627345-01-7, as of December 31, 2001 and 2000, and the resultsof its operations, changes in partners’ equity and cash flows for the yearsthen ended in conformity with U.S. generally accepted accounting principles.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on Page I~20 and 1-21is presented for purposes of additional analysis and is not a required part ofthe basic financial statements. Such information has been subjected to theaudit procedures applied in the audit of the basic financial statements and, inour opinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

In accordancewith Government Auditing Standards, we have also issued a report datedJanuary 30, 2002 on our consideration of Bowie Apartments, Ltd’s internalcontrol over financial reporting and our tests of its compliance with certainprovisions of laws, regulations, contracts and grants. This report is anintegral part of an audit performed in accordance with Government AuditingStandards and should be read in conjunction with this report in consideringthe results of our audit.

 

Wichita Falls,

Texas January 30, 2002

 

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## **Independent Auditor’s Report**

 

To the Partners

C.V.V.A. Limited Partnership

Charlotte, North Carolina

 

We have audited the accompanying balancesheets of C.V.V.A. Limited Partnership (a Virginia limited partnership) as ofDecember 31, 2001 and 2000, and the related statements of operations, partners’equity, and cash flows for the years then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards’*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of C.V.V.A. Limited Partnership as of December 31,2001 and 2000, andthe results of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated January 31, 2002, on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts, and grants.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information listed in the table of contents is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements of the Partnership. Such information has been subjected tothe auditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

January 31, 2002

 

158

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### IndependentAuditors’ Report

 

To the Partners

Graham Apartments, Ltd.

 

We haveaudited the accompanying balance sheets of Graham Apartments, Ltd. (a limitedpartnership), RD Project No. 51-52-752663159-01-1, as of December 31, 2001 and2000, and the related statements of operations, partners’ equity and cash flowsfor the years then ended. These financial statements are the responsi­bility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and Government Auditing Standards, issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluatingthe overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Graham Apartments, Ltd., RDProject No. 51-52-752663159-01-1, as of December 31, 2001 and 2000, and theresults of its operations, changes in partners’ equity and cash flows for theyears then ended in conformity with U.S. generally accepted accounting principles.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on Page 1-20 ispresented for purposes of additional analysis and is not a required part of thebasic financial state­ments. Such information has been subjected to the auditprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

In accordancewith Government Auditing Standards, we have also issued a report datedJanuary 25, 2002 on our consideration of Graham Apartments, Ltd’s internalcontrol over financial reporting and our tests of its compliance with certainprovisions of laws, regulations, contracts and grants. This report is anintegral part of an audit performed in accordance with Government AuditingStandards and should be read in conjunction with this report in consideringthe results of our audit.

 

Wichita Falls, Texas

January 25, 2002

 

159

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

Hillside Terrace Associates, L.P.

 

We have audited the accompanying balance sheet of Hillside TerraceAssociates, L.P. (a limited partnership) as of December 31, 2001 and 2000 andthe related statements of operations and partners’ capital (deficit) and cashflows for the years then ended.  Thesefinancial statements are the responsibility of the Partnership’smanagement.  Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with auditing standards generallyaccepted in the United States of America. Those standards require that we planand perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financialstatements referred to above present fairly, in all material respects, thefinancial position of Hillside Terrace Associates, L.P. as of December 31, 2001and 2000, and the results of its operations and its cash flows for the yearsthen ended in conformity with accounting principles generally accepted in theUnited States of America.

 

Salmin,Celona, Wehrle & Flaherty, LLP

 

January 31, 2002

 

160

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## **Independent Auditor’s Report**

 

To the Partners

K.G.V.A. Limited Partnership

Charlotte, North Carolina

 

We have audited the accompanying balancesheets of K.G.V.A. Limited Partnership (a Virginia limited partnership) as ofDecember 31, 2001 and 2000, and the related statements of operations, partners’equity, and cash flows for the years then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress all opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards’*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of K.G.V.A. Limited Partnership as of December 31, 2001 and 2000, andthe results of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated January 31, 2002, on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts, and grants.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information listed in the table of contents is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements of the Partnership. Such information has been subjected tothe auditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

January 31,2002

 

161

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To the Members

Linden Partners II, LLC

 

We haveaudited the accompanying balance sheets of Linden Partners 11, LIC (a NebraskaLimited Liability Company) as of December 3 I, 2001 and 2000, and the relatedstatements of operations, members’ equity (deficit) and cash flows for theyears then ended.  These financialstatements are the responsibility of the Partnership’s management.  Our responsibility is to express an opinionon these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted it the United States of America. Thosestandards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, is a all material respects, the financialposition of Linden Partners II, LLC as of December 31, 2001 and 2000, and theresults of its operations, and changes in members’ equity (deficit) and cashflows for the years then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on page 12 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

Omaha, Nebraska

February I 1,2002

 

162

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### IndependentAuditor’s Report

 

To the Partners

Mesa Grande Apartments, Limited Partnership

Irvine, California

 

I have audited the accompanying balance sheetof Mesa Grande Apartments, Limited Partnership as of December 31, 2001, and therelated statements of operations, changes in partners’ capital, and cash flowsfor the year then ended. These financial statements are the responsibility ofthe Partnership’s management. My responsibility is to express an opinion onthese financial statements based on my audit.

 

I conducted my audit in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that I plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of Mesa Grande Apartments, Limited Partnership at December 31, 2001,and the results of its operations and cash flows for the year then ended inconformity with accounting principles generally accepted in the United Statesof America

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information is presented for purposes of additional analysis andis not a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

February 4, 2002

 

163

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IndependentAuditors’ Report

 

To the Partners

Nocona Apartments, Ltd.

 

We haveaudited the accompanying balance sheets of Nocona Apartments, Ltd. (a limitedpartnership), RD Project No: 50-069-0752685663-02-2 as of December 31, 2001 and2000, and the related statements of operations, partners’ equity and cash flowsfor the years then ended. These financial statements are the responsibility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and Government Auditing Standards, issued by theComptroller General of the United States. Those standards require that we planand perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Nocona Apartments, Ltd. RD ProjectNo.: 50-069-0752685663-02-2 as of December 31, 2001 and 2000, and the resultsof its operations, changes in partners’ equity and cash flows for the yearsthen ended in conformity with U.S. generally accepted accounting principles.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on Page 1-20 and 1-21is presented for purposes of additional analysis and is not a required part ofthe basic financial statements. Such information has been subjected to theaudit procedures applied in the audit of the basic financial statements and, inour opinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

In accordancewith Government Auditing Standards, we have also issued a report datedJanuary 30, 2002 on our consideration of Nocona Apartments, Ltd.’s internalcontrol over financial reporting and our tests of its compliance with certainprovisions of laws, regulations contracts and grants. This report is anintegral part of an audit performed in accordance with Government AuditingStandards and should be read in conjunction with this report in consideringthe results of our audit.

 

Wichita Falls, Texas

January 30, 2002

 

164

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

Pyramid One Limited Partnership

 

We have audited the accompanying balancesheets of Pyramid One Limited Partnership, {the Partnership), as of December31, 2001 and 2000 and the related statements of profit (loss), changes inpartners’ equity (deficit) cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statement8 are free of material misstatement. An audit includesexamining on a test basis, evidence supporting the amounts and disclosures inthe financial statements. All audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly all material respects, the financial positionof Pyramid One Limited Partnership as of December 31, 2001 and 2000, and itsresults of operations, changes in partners’ equity {deficit), and cash flowsfor the year then ended in conformity with accounting principles generallyaccepted in the United States of America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated February 20, 2002 on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts and grants.That report is an integral part of an audit performed in accordance with *GovernmentAuditing Standards*and should be read in conjunction with thisreport in considering the results of our audit.

 

Little, Shaneyfelt, Marshall, Romine &Co.

 

February 20, 2002

 

165

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### IndependentAuditor’s Report

 

To the Partners

 

Sunrise Homes Apartments, Limited Partnership

Irvine, California

 

I have audited the accompanying balance sheetof Sunrise Homes Apartments, Limited Partnership as of December 31, 2001, andthe related statements of operations, changes in partners’ capital, and cashflows for the year then ended. These financial statements are theresponsibility of the Partnership’s management. My responsibility is to expressan opinion on these financial statements based on my audit.

 

I conducted my audit in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that I plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.I believe that nay audit provides a reasonable basis for my opinion.

 

In my opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Sunrise Homes Apartments, Limited Partnership at December 31, 2001,and the results of its operations and cash flows for the year then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

My audit was made for the purpose of formingan opinion on the basic financial statements taken as a whole. The supplementalinformation is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in my opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

 

February 4,2002

 

166

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#### **INDEPENDENTAUDITORS’ REPORT**

 

The Partners

Canton Housing One, L.P.

Jackson, Mississippi

 

We haveaudited the accompanying balance sheets of Canton Housing One, L.P., aMississippi limited partnership, FmHA Project No. 28-045-0640886062 01-8, as ofDecember 31, 2001 and 2000, and the related statements of income (loss),partners’ capital, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards*issued bythe Comptroller General of the United States· Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are tree of material misstatement. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Canton Housing One, L.P., FmHA ProjectNo. 28-045-0640886062 01-8, as of December 31, 2001 and 2000, and the resultsof its operations and its cash flows for the years then ended in conformitywith accounting principles generally accepted in the United States of America.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 26,2002, on our consideration of the Partnership’s internal control and a reportdated February 26, 2002, on its compliance with specific requirementsapplicable to major FmHA programs.

 

167

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Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The accompanying financial information included onpages 14 through 21 is presented for purposes of additional analysis and is nota required part of the basic financial statements. Such information, except forthe current budget and proposed budget columns in Part I and II and theinformation in Part IV included on pages 14 through 18 on which we express noopinion, has been subjected to the auditing procedures applied in the audits offile basic financial statements, and in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as a whole.

 

EUBANK & BETTS, PLLC

Jackson, Mississippi

February 26, 2002

 

168

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#### **INDEPENDENTAUDITORS’ REPORT**

 

The Partners

Canton Housing Two, L.P,

 

 

Jackson, Mississippi

 

We haveaudited the accompanying balance sheet of Canton Housing Two, L.P., aMississippi limited partnership, FmHA Project No. 28-045-0640886061 01-5, as ofDecember 31, 2001 and 2000, and the related statements of income (loss),partners’ capital, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Canton Housing Two, L.P., FmHAProject No. 28-045-0640886061 01-5, as of December 31, 2001 and 2000, and theresults of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 26,2002, on our consideration of the Partnership’s internal control and a reportdated February 26, 2002, on its compliance with specific requirementsapplicable to major FmHA programs.

 

169

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Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The accompanying financial information included onpages 13 through 20 is presented for purposes of additional analysis and is nota required part of the basic financial statements. Such information, except forthe current budget and proposed budget columns in Part I and II and the informationin Part IV included on pages 13 through 18, on which we express no opinion, hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements, and in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

 

EUBANK & BETTS, PLLC

 

Jackson, Mississippi

February 26, 2002

 

170

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#### **INDEPENDENTAUDITORS’ REPORT**

 

The Partners

Canton Housing Three, L.P.

Jackson, Mississippi

 

We haveaudited the accompanying balance sheets of Canton Housing Three, L.P., aMississippi limited partnership, FmHA Project No. 28-045-0640886063 04-2, as ofDecember 31, 2001 and 2000, and the related statements of income (loss),partners’ capital, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conductedour audit in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects the financial position of Canton Housing Three, L.P., FmHAProject No. 28-045-0640886063 04-2, as of December 31, 2001 and 2000, and theresults of its operations and its cash flows for the years then ended in conformitywith accounting principles generally accepted in the United States of America.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 26,2002, on our consideration of the Partnership’s internal control and a reportdated February 26, 2002, on its compliance with specific requirementsapplicable to major FmHA programs.

 

171

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Our auditswere made for the purpose of forming an opinion on file basic financial statementstaken as a whole. The accompanying financial information included on pages 12through 19 is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information, except forfile current budget and proposed budget columns in Part I and II and theinformation in part IV included on pages 12 through 16, on which we express noopinion, has been subjected to the auditing procedures applied in the audits ofthe basic financial statements, and in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

EUBANK & BETTS, PLLC

Jackson, Mississippi

February 26, 2002

 

172

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### INDEPENDENTAUDITORS’ REPORT

 

The Partners

Canton Housing Four, L.P.

Jackson, Mississippi

 

We haveaudited the accompanying balance sheets of Canton Housing Four, L.P., aMississippi limited partnership, FmHA Project No. 28-045-0640886064 02-0, as ofDecember 31, 2001 and 2000, and the related statements of income (loss),partners’ capital, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Canton Housing Four, L.P., FmHAProject No. 28-045-0640886064-02-0, as of December 31, 2001 and 2000, and theresults of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 26,2002, on our consideration of the Partnership’s internal control and a reportdated February 26, 2002, on its compliance with specific requirementsapplicable to major FmHA programs.

 

Our auditswere made for the purpose of forming an opinion on the basic financial statementstaken as a whole. The accompanying financial information included on pages 13through 20 is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information, except forthe current budget and proposed budget columns in Part I and II and theinformation in Part IV included on pages 13 through 18, on which we express noopinion, has been subjected to the auditing procedures applied in the audits ofthe basic financial statements, and in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

EUBANK & BETTS, PLLC

 

Jackson, Mississippi

February 26, 2002

 

173

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To the Partners

Ellisville Housing, L.P.

West Point, Mississippi

 

We have audited the accompanying balancesheets of Ellisville Housing, L.P. (a Mississippi limited partnership), RHSProject No. 28-034-0640864667 as of December 31, 2001 and 2000, and the relatedstatements of operations, partners’ capital (deficit) and cash flows for theyears then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Ellisville Housing, L.P. as of December 31, 2001 and 2000, and theresults of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information is presented for purposes of additional analysis andis not a required part of the basic financial statements. We have prepared theMultiple Family Housing Borrower Balance Sheet (RHS Form RD 1930-8) and theMultiple Family Housing Project Budget (RHS Form RD 1930-7). Such informationhas been subjected to the audit procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

February 18, 2002

 

174

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

Hattiesburg Housing, LP

Jackson, Mississippi

 

We have audited the accompanying balancesheets of Hattiesburg Housing, LP (a Mississippi limited partnership), RHSProject No. 28-018-640864668 as of December 31, 2001 and 2000, and the relatedstatements of operations, partners’ capital (deficit) and cash flows for theyears then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Hattiesburg Housing, LP as of December 31, 2001 and 2000, and theresults of its operations and its cash flows for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information is presented for purposes of additional analysis andis not a required part of the basic financial statements. We have prepared theMultiple Family Housing Borrower Balance Sheet (RHS FORM RD 1930-8) and theMultiple Family Housing Project Budget (RHS FORM RD 1930-7). Such informationhas been subjected to the audit procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

February 14, 2002

 

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INDEPENDENT AUDITORS’ REPORT

 

To the partners

Hurricane Hills II LC

 

I have audited the accompanying balancesheets of Hurricane Hills II LC as of December 31, 2001, and the relatedpartners’ equity for the year then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

I conducted my audit in accordance withgenerally accepted auditing standards. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examination, ona test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management as well as evaluating the overall financialstatement presentation. We believe that our audits provided a reasonable basisfor our opinion.

 

In my opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Hurricane Hills II LC as of December 31, 2001, and the results ofits operations, changes in Partners’ equity and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

176

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Independent Auditor’sReport

 

To the Partners

N. M. V. A. Limited Partnership

Charlotte, North Carolina

 

We have audited the accompanying balancesheets of N. M. V. A. Limited Partnership (a Virginia limited partnership) asof December 31, 2001 and 2000, and the related statements of operations,partners’ equity, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of N. M. V. A. Limited Partnership as of December 31, 2001 and 2000,and the results of its operations and its cash flows for the years then endedin conformity with accounting principles generally accepted in the UnitedStates of America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated January 31, 2002, on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts, and grants.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplementary information listed in the table of contents is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements of the Partnership. Such information has been subjected tothe auditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

January 31, 2002

 

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### INDEPENDENTAUDITOR’S REPORT

 

Partners

Sencit Hampden Associates, L.P.

 

We haveaudited the accompanying balance sheets of SENCIT HAMPDEN ASSOCIATES, L.P.,ROTH VILLAGE TOWNHOMES as of December 31, 2001 and 2000, and the relatedstatements of profit and loss, partners’ equity and cash flows for the yearsthen ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Sencit Hampden Associates, L.P. asof December 31, 2001 and 2000, and the results of its operations, changes inpartners’ equity and its cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

 

January 25, 2002

Elkins Park, Pennsylvania

 

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## **INDEPENDENT AUDITOR’S REPORT**

 

To the Partners

Silver Creek/MHT Limited Dividend Housing

Association Limited Partnership

 

We have audited the accompanying balancesheet of Silver Creek/MHT Limited Dividend Housing Association LimitedPartnership (a Michigan limited partnership) as of December 31, 2001, and therelated statements of income, partners’ equity and cash flows for the year thenended. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of Silver Creek/MHT Limited Dividend Housing Association LimitedPartnership as of December 31, 2001, and the results of its operations, changesin partners’ equity and cash flows for the year then ended, in conformity withaccounting principles generally accepted in the United States of America.

 

Our audit was made for the purpose of formingan opinion on the basic financial statements taken as a whole. The supplementalinformation on pages 11 and 12 is presented for purposes of additional analysisand is not a required part of the basic financial statements. Such informationhas been subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated, in all materialrespects, in relation to the basic financial statements taken as a whole.

 

January 23, 2002

 

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### IndependentAuditor’s Report

 

February 1,2002

 

To the Partners

Indiana Development Limited Partnership

Novi, Michigan

 

We have audited the accompanying balancesheets of Indiana Development Limited Partnership as of December 31, 2001 and2000 and the related statements of operation, partner capital and cash flowsfor the years then ended. These financial statements are the responsibility ofIndiana Development Limited Partnership’s management. Our responsibility is toexpress an opinion on the financial statement based upon our audit.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thesestandards require that we plan and perform the audit to obtain reasonableassurance whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statements presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Indiana Development Limited Partnership as of December 31,2001 and2000 and the results of its operations and its cash flow for the years then endedin conformity with accounting principles generally accepted in the UnitedStates of America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on pages 14, 15 and 16 is presented for purposes ofadditional analysis and is not a required part of the basic financialstatements. Such information has been subjected to the auditing proceduresapplied in the audits of the basic financial statements and, in our opinion, isfairly stated in all material respects in relation to the basic financialstatements taken as whole.

 

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## **INDEPENDENT AUDITOR’S REPORT**

 

To the Partners of

Martinsville-I, Ltd.

 

I have audited the accompanying balancesheets of Martinsville-I, Ltd. (a Kentucky limited partnership) as of December31, 2001 and 2000 and the related statements of operations, changes inpartners’ capital and cash flows for the years then ended. The financialstatements are the responsibility of the Partnership’s management. Myresponsibility is to express an opinion on these financial statements based onmy audit.

 

I conducted my audit in accordance withgenerally accepted auditing standards. Those standards require that I plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amount and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by the Partnership’s general partner and contractedmanagement agent, as well as evaluating the overall financial statementpresentation. I believe that my audit provides a reasonable basis for myopinion.

 

In my opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Martinsville-I, Ltd. at December 31, 2001 and 2000, and itsoperations, changes in partners’ capital and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

February 8, 2002

 

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## **Auditors’ report**

 

To the Partners

Parkside Plaza Associates, L. P.

New York, New York

 

We have audited the accompanying balancesheets of Parkside Plaza Associates, L. P.

(a New York State limited partnership) as ofDecember 31, 2001 and 2000, and the related statements of operations, cashflows, and partners’ capital, and the supplementary information included forthe years then ended. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

 

We conducted our audit in accordance withgenerally accepted auditing standards. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used‘and significant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Parkside Plaza Associates, L. P. as of December 31, 2001 and 2000,and the results of its operations and its cash flows for the years then endedin conformity with generally accepted accounting principles.

 

Our audit was made for the purpose of formingan opinion on the basic financial statements taken as a whole. The accompanyingsupplementary information is presented for the purposes of additional analysisand is not a required part of the basic financial statements. Such informationhas been subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

Kahn Boyd Levychin,

Certified Public Accountants

 

January 22, 2002

 

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## **INDEPENDENT AUDITOR’S REPORT**

 

To the Partners

Pyramid Four Limited Partnership

 

We have audited the accompanying balancesheets of Pyramid Four Limited Partnership, (the Partnership), as of December81, 2001 and 2000 and the related statements of profit (loss), changes inpartners’ equity (deficit) and cash flows fop the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in *Government Auditing Standards*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Pyramid Four Limited Partnership as of December 31, 2001 and 2000,and its results of operations, changes in partners’ equity (deficit), and cashflows for the years then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated January 29, 2002 on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts and grants.That report is an integral part of an audit performed in accordance with *GovernmentAuditing Standards*and should be read in conjunction with thisreport in considering the results of our audit.

 

LITTLE, SHANEYFELT, MARSHALL, ROMINE &CO.

 

JANUARY 29, 2002

 

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MCFARLAND ANDGANN, P.C.

CERTIFIEDPUBLIC ACCOUNTANTS

 

INDEPENDENTAUDITOR’S REPORT

 

To the Partners

Bradford Group Partners of Jefferson County,L.P.

893 Forgety Road

Jefferson City, Tennessee

 

We have audited the accompanying balancesheet of Bradford Group Partners of Jefferson County, L.P. (a limitedpartnership) as of December 31, 2001, and the related statements of income(loss), partners’ equity and cash flows for the year then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of Bradford Group Partners of Jefferson County, L.P. as of December31, 2001, and the results of its operations, changes in partners’ equity andcash flows for the year then ended, in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our audit was made for the purpose of formingan opinion on the basic financial statements taken as a whole. The supplementalinformation is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

McFarland and Gann, P.C.

March 15, 2002

 

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## **INDEPENDENT AUDITOR’S REPORT**

 

To the Partners

Harbor Pointe/MHT Limited Dividend Housing

Association Limited Partnership

 

We have audited the accompanying balancesheet of Harbor Pointe/MHT Limited Dividend Housing Association LimitedPartnership (a Michigan limited partnership) as of December 31, 2001, and therelated statements of income, partners’ equity and cash flows for the year thenended. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audit provides a reasonable basis for our opinion.

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Harbor Pointe/MHT Limited Dividend Housing Association LimitedPartnership as of December 31, 2001, and the results of its operations, changesin partners’ equity and its cash flows for the year then ended, in conformitywith accounting principles generally accepted in the United States of America.

 

Our audit was made for the purpose of formingan opinion on the basic financial statements taken as a whole. The supplementalinformation on pages 11 and 12 is presented for purposes of additional analysisand is not a required part of the basic financial statements. Such informationhas been subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated, in all materialrespects, in relation to the basic financial statements taken as a whole.

 

January 22, 2002

 

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### IndependentAuditors’ Report

 

To the Partners of

NHC Partnership 5, L.P.

(A Virginia Limited Partnership)

 

We haveaudited the accompanying balance sheet of NHC Partnership 5, L.P. as ofDecember 31, 2001, and the related statements of operations, changes inpartners’ equity (deficit) and cash flows for the year then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audit.

 

We conductedour audit in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of NHC Partnership 5, L.P. as ofDecember 31, 2001, and the results of its operations and its cash flows for theyear then ended in conformity with accounting principles generally accepted inthe United States of America.

 

Theaccompanying supplementary information is presented for purposes of additionalanalysis and is not a required part of the basic financial statements.  Such information has been subjected to theauditing 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 financialstatements taken as a whole.

 

February 2, 2002

Carmel, Indiana

 

186

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INDEPENDENT AUDITORS’ REPORT

 

To the Partners

Belmont Affordable Housing II, L.P.

Springfield, Pennsylvania

 

We have audited the accompanying balancesheets of Belmont Affordable Housing II, L.P. (a Pennsylvania LimitedPartnership) as of December 31, 2001 and 2000, and the related statements ofoperations and other comprehensive loss, changes in partners’ capital and cashflows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Belmont Affordable Housing II, L.P. as of December 31, 2001 and2000, and the results of its operations and its cash flows for the years thenended in conformity with U.S generally accepted accounting principles.

 

Bala Cynwyd, Pennsylvania

January 23, 2002

 

187

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To the Partners

Howard Park, Ltd.

 

We have audited the accompanying balancesheet of Howard Park Ltd. as of December 31, 2001 and the relatedstatements of income, partners’ equity and cash flow for the year then ended.These financial statements are the responsibility of the Howard Park, Ltd.management. Our responsibility is to express an opinion on these financialstatements based on our audit. The financial statements of Howard Park, Ltd. asof December 31, 2000, were audited by other auditors whose report dated March9, 2001, expressed an unqualified opinion on those statements.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects, the financialposition of Howard Park, Ltd. as of December 31, 2001, and the results of itsoperations and its cash flows for the year then ended in conformity withaccounting principles generally accepted in the United States of America.

 

Our audit was conducted for the purpose offorming an opinion on the basic financial statements taken as a whole. Theschedule of administrative, utilities, maintenance, taxes, insurance andinterest expense on page 10 is presented for purposes of additional analysisand is not a required part of the basic financial statements. Such informationhas been subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

February 22, 2002

 

188

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### IndependentAuditor’s Report

 

February 1, 2002

 

Partners

RHP 96-1 Limited Partnership

Novi, Michigan

 

We have audited the accompanying balancesheets of RHP 96-1 Limited Partnership as of December 31, 2001 and 2000 and therelated statements of operations, partner capital and cash flows for the yearsthen ended. These financial statements are the responsibility of RHP 96-1Limited Partnership’s management. Our responsibility is to express an opinionon the financial statement based upon our audit.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thesestandards require that we plan and perform the audit to obtain reasonableassurance whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statements presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of RHP 96-1 Limited Partnership as of December 31,2001 and 2000 and theresults of its operations and its cash flow for the years then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on pages 12 and 13 is presented for purposes ofadditional analysis and is not a required part of the basic financialstatements. Such information has been subjected to the auditing proceduresapplied in the audits of the basic financial statements and, in our opinion, isfairly stated in all material respects in relation to the basic financialstatements taken as whole.

 

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INDEPENDENTAUDITOR’S REPORT

 

June 18, 2002

 

To the Partners

New Caney Housing II, Ltd.

 

We have audited the accompanying balancesheet of New Caney Housing II, Ltd. as of December 31, 2001 and 2000, and therelated statements of operations, partners’ equity (deficit), and cash flow forthe years ended December 31, 2001 and 2000. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based oil our audits.

 

We conducted our audits in accordance withaccounting principles generally accepted in the United States of America. Thosestandards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 accompanying financialstatements referred to above present fairly, in all material respects, thefinancial position of New Caney Housing II, Ltd. as of December 31, 2001 and2000, and the results of its operation and its cash flows for the year endingDecember 31, 2001 and 2000, in conformity with accounting principles generallyaccepted in the United States of America.

 

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To the Partners

Riverwalk Apartment Homes, Phase II LLC

Madison, Wisconsin

 

We have audited the accompanying balancesheet of Riverwalk Apartment Homes, Phase II LLC as of December 31, 2001 andthe related statements of operations, members’ equity and cash flows for theyear then ended.  These financialstatements are the responsibility of the company’s management.  Our responsibility is to express an opinionon these financial statements based on our audit.  The financial statements of Riverwalk Apartments Homes, Phase IILLC as of December 31, 2000 were audited by other auditors whose report datedJanuary 16, 2001 expressed an unqualified opinion on those statements.

 

We conducted our audits in accordance with auditingstandards generally accepted in the United States of America. Those standardsrequire that we Plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management as wellas evaluating the overall financial statement Presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Riverwalk ApartmentHomes, Phase II LLC as of December 31, 2001 and the results of its operationsand cash flows for the year then ended—in conformity with accounting,principles generally accepted in the United States of America.

 

Madison, Wisconsin

January 9, 2002

 

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To the Partners

Aloha Housing Limited Partnership

Oregon Housing and

CommunityServices Department

Salem, Oregon

 

 

We have audited the accompanying BalanceSheets of Aloha Housing Limited Partnership *(a limited partnership),*as of December31, 2001 and 2000 and the related statements of operations, changes inpartners’ capital, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conducted our audits in accordance withgenerally accepted auditing standards, and with *Government Auditing Standards,*issuedby the Comptroller General of the United States. Those standards require thatwe plan and perform our audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Aloha Housing Limited Partnership, as of December 31, 2001 and2000, and the results of its operations and its cash flows for the years thenended, in conformity with generally accepted accounting principles.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Theaccompanying schedules of supplementary information required by the OregonHousing and Community Services Department are presented for purposes ofadditional analysis and are not a required part of the basic financialstatements. Such information has been subjected to the procedures applied in ouraudits of the basic financial statements and, in our opinion, is fairly statedin all material respects in relation to the basic financial statements taken asa whole

 

Portland, Oregon

 

January 30, 2002

 

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IndependentAuditors’ Report

 

To The Partners

Riverview Bend Limited Partnership

Crystal City, Missouri

 

We have audited the accompanying balancesheet of Riverview Bend Limited Partnership (Riverview Bend Apartments, ProjectNo. 085-35329-PM-L8) as of December 31,2001, and the related statements ofprofit and loss, partners’ equity and cash flows for the year then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America and *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basis forour opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Riverview Bend Limited Partnership as of December 31,2001, and theresults of its operations and its cash flows for the year then ended inconformity with accounting principles generally accepted in the United Statesof America.

 

In accordance with *Government Auditing Standards*andthe *ConsolidatedAudit Guide for Audits of HUD Programs*issued by the U.S. Departmentof Housing and Urban Development, we have also issued a report dated January16, 2002 on our consideration of Riverview Bend Limited Partnership’s internalcontrol and reports dated January 16, 2002 on its compliance with specificrequirements applicable to major HUD programs and specific requirementsapplicable to Fair Housing and Non-­Discrimination. Those reports are anintegral part of an audit performed in accordance with *Government Auditing Standards*andshould be read in conjunction with this report in considering the results ofour audit.

 

Our audit was conducted for the purpose offorming an opinion on the basic financial statements taken as a whole. Theaccompanying supplementary information shown on pages 16 to 19 is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. Such information has been subjected to the auditingprocedures applied in the audit of the financial statements and, in ouropinion, is fairly stated in all material respects in relation to the financialstatements taken as a whole.

 

January 16, 2002

 

193

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### IndependentAuditor’s Report

 

February 1,2002

 

Partners

Baldwin Villas Limited Dividend

Housing Association Limited Partnership

Novi, Michigan

 

We have audited the accompanying balancesheets of Baldwin Villas Limited Dividend Housing Association LimitedPartnership as of December 31, 2001 and 2000 and the related statements ofoperations, partner capital and cash flows for the years then ended. Thesefinancial statements are the responsibility of Baldwin Villas Limited DividendHousing Association Limited Partnership’s management. Our responsibility is toexpress an opinion on the financial statement based upon our audits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America. Thesestandards require that we plan and perform the audit to obtain reasonableassurance whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statements presentation. We believethat our audit provide a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of Baldwin Villas Limited Dividend Housing Association LimitedPartnership as of December 31, 2001 and 2000 and the results of its operationsand its cash flow for the years then ended in conformity with accountingprinciples generally accepted in the United States of America.

 

Our audits were made for the purpose offorming an opinion on the basic financial statements taken as a whole. Thesupplemental information on pages 15 and 16 is presented for purposes ofadditional analysis and is not a required part of the basic financialstatements. Such information has been subjected to the and/ting proceduresapplied in the audits of the basic financial statements and, in our opinion, isfairly stated in all material respects in relation to the basic financialstatements taken as whole.

 

194

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

Gouverneur Senior Housing Associates, L.P.

 

We have audited the accompanying balance sheet of Gouverneur SeniorHousing Associates, L.P, (a limited partnership) as of December 31, 2001 and2000, and the related statements of operations and partners’ capital (deficit)and cash flows for the years then ended. These financial statements are theresponsibility of the Partnership’s management, our responsibility is toexpress an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America. Thosestandards require that we Plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 statementsreferred to above present fairly, in all material respects the financialposition of Gouverneur Senior Housing Associates, L.P. as of December 31, 2001and 2000 and the results of its operations and its cash flows for the yearsthen ended in conformity with accounting principles generally accepted in theUnited States of America.

 

 

Salmin, Celona, Wehrle & Flaherty, LLP

 

February15, 2002

 

195

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To the Partners

TALLY HO APARTMENTS II PARTNERSHIP

 

We haveaudited the accompanying balance sheet of TALLY HO APARTMENTS II PARTNERSHIP,RHS PROJECT NO 22-035-721457920 as of December 31, 2001 and the relatedstatements of operations, changes in partners’ equity (deficit) and cash flowsfor the year then ended, These financial statements are the responsibility ofthe partnership’s management, our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conductedour audit in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing standards,*issued bythe comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of TALLY HO APARTMENTS II PARTNERSHIPas of December 31, 2001 and the results of its operations, changes in partners’equity and cash flows for the year then ended in conformity with accountingprinciples generally accepted in the United States  of America.

 

Our auditswere made for the Purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 17through 27, is presented for purposes of additional analysis and is not arequired part of the basic financial statements, such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated March 12,2002 on our consideration of TALLY HO APARTMENTS II PARTNERSHIP’s internalcontrol and a report dated March 12, 2002 on its compliance with laws andregulations applicable to the financial statements.

 

 

Metairie, Louisiana

March 12, 2002

 

196

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INDEPENDENT AUDITOR’S REPORT

 

To the Partners

TIMBER TRAILS I PARTNERSHIP

 

We haveaudited the accompanying balance sheet of TIMBER TRAILS I PARTNERSHIP, RHSPROJECT NO. 22-040-721457919 as of December 31, 2001 and the related statementsof operations, changes in partners’ equity (deficit) and cash flows for theyear then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements, An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of TIMBER TRAILS PARTNERSHIP as ofDecember 31, 2001 and the results of its operations, changes in partners’equity and cash flows for the year then ended, in conformity with accounting,principles generally accepted in the United States of America.

 

Our audit wasmade for the purpose of forming an opinion on the basic financial statementstaken as a whole. The supplemental information presented on pages 17 through27, is presented for purposes of additional analysis and is not a required partof the basic financial statements. Such information has been subjected to theauditing procedures applied in the audit of the basic financial statements and,in our opinion, is fairly stated in all material respects in relation to thebasic financial statements taken as a whole.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated February 28,2002 on our consideration of TIMBER TRAILS I PARTNERSHIP’s internal control anda report dated February 28, 2002 on its compliance with laws and regulationsapplicable to the financial statements.

 

 

Metairie, Louisiana

February 28, 2002

 

197

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To the Partners

Capital Five Limited Partnership

 

We have audited the accompanying balancesheets of Capital Five Limited Partnership, (the Partnership), as of December31, 2001 and the related statements of profit (loss), changes in partners’equity (deficit) and cash flows for the year then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audit.

 

We conducted our audit inaccordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for ouropinion.

 

In our opinion, the financialstatements referred to above present fairly, in all material respects, thefinancial position of Capital Five Limited Partnership as of December 31, 2001,and its results of operations, changes in partners’ equity (deficit), and cashflows for the year then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

In accordance with *Government Auditing Standards,*wehave also issued our report dated February 13, 2002 on our consideration of thePartnership’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts and grants,That report is an integral pant of an audit performed in accordance with *GovernmentAuditing Standards*and should be read in conjunction with thisreport in considering the results of our audit.

 

LITTLE,SHANEYFELT, MARSHALL,ROMINE & CO,

FEBRUARY 13, 2002

 

198

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INDEPENDENT AUDITOR’S REPORT

 

To the Partners

CENTER PLACE APARTMENTS II, LTD

 

We haveaudited the accompanying balance sheet of CENTER PLACE APARTMENTS II, LTD, RHSPRQJECT NO. 51-010-721481069 as of December 31, 2001 and the related statementsof operations, changes in partners’ equity (deficit) and cash flows for theyear then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of CENTER PLACE APARTMENTS II, LTD asof December 31, 2001 and the results of its operations, changes in partners’equity and cash flows for the year then ended in conformity with accountingprinciples generally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 17through 27, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated March 14,2002 on our consideration of CENTER PLACE APARTMENTS II, LTD’s internal controland a report dated March 14, 2002 on its compliance with laws and regulationsapplicable to the financial statements.

 

199

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INDEPENDENTAUDITOR’S REPORT

 

To the Members

MA NO, 2 LLC

San Diego, California

 

We have audited the accompanying balancesheet of MA NO. 2 LLC, (a Nevada Limited Liability Company) as of December 31,2001, and the related statement of income, changes in members’ equity, and cashflows from March 1, 2001 (date of recapitalization) through December 31, 2001.These financial statements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financial statements basedon our audit.

 

We conducted our audit in accordance withU.S. generally accepted auditing standards. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures Inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of MA NO. 2 LLC as of December 31, 2001 and the results of itsoperations and its cash flows from March 1, 2001 (date of recapitalization) toDecember 31, 2001, in conformity with U.S. generally accepted accountingprinciples.

 

Escondido, California

March 15, 2002

 

200

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

OAKLAND PARTNERSHIP

 

We haveaudited the accompanying balance sheet of OAKLAND PARTNERSHIP, RHS PROJECTNO.  22-002-721457988 as of December 31,2001 and the related statements of operations, changes in partners’ equity(deficit) and cash flows for the year then ended. These financial statementsare the responsibility of the partnership’s management. Our responsibility isto express an opinion on these financial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinionthe financial statements referred to above present fairly, in all materialrespects, the financial position of OAKLAND PARTNERSHIP as of December 31, 2001and the results of its operations, changes in partners’ equity and cash flowsfor the year then ended in conformity with accounting principles generallyaccepted in the United  States

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 17through 27, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated March 25,2002 on our consideration of OAKLAND PARTNERSHIP’s internal control and areport dated March 25, 2002 on its compliance with laws and regulationsapplicable to the financial statements.

 

201

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To the Partners

WESTERN GARDEN PARTNERSHIP

 

We haveaudited the accompanying balance sheet of WESTERN GARDEN PARTNERSHIP, RHSPROJECT NO. 22-010-721457978 as of December 31, 2001 and the related statementsof operations, changes in partners’ equity (deficit) and cash flows for theyear then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conductedour audits in accordance with auditing standards generally accepted in theUnited States of America and *Government Auditing Standards,*issued bythe Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In our opinionthe financial statements referred to above present fairly, in all materialrespects, the financial position of WESTERN GARDEN PARTNERSHIP as of December31, 2001 and the results of its operations, changes in partners’ equity andcash flows for the year then ended in conformity with accounting principlesgenerally accepted in the United States of America.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 17through 27, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordancewith *GovernmentAuditing Standards,*we have also issued a report dated March 13,2002 on our consideration of WESTERN GARDEN PARTNERSHIP’s internal control anda report dated March 13, 2002 on its compliance with laws and regulationsapplicable to the financial statements.

 

202

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INDEPENDENTAUDITOR’S REPORT

 

To the Partners

Harbor Pointe II/MHT Limited Dividend Housing

Association Limited Partnership

 

We have audited the accompanying balancesheet of Harbor Pointe II/MHT Limited Dividend Housing Association LimitedPartnership (a Michigan limited partnership) as December 31, 2001.  This financial statement is theresponsibility of the Company’s management. Our responsibility is to express an opinion on this financial statementbased on our audit.

 

We conducted our audit in accordance withauditing standards generally accepted in the United States of America· Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statement is free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statement. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 balance sheet referred toabove presents fairly, in all material respects, the financial position ofHarbor Pointe’ II/MHT Limited Dividend Housing Association Limited Partnershipas December 31, 2001 in conformity with accounting principles generallyaccepted in the United States of America.

 

April 4, 2002

 

203

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Independent Auditor’s Report

 

To ThePartners

BennettsPointe Limited Partnership

 

I haveaudited the accompanying balance sheets of Bennetts Pointe Limited Partnershipas of December 31, 2000 and 1999, and the related statements of operations,partners’ deficit and cash flows for the years then ended. These financialstatements are the responsibility of tile Partnership’s management. Myresponsibility is to express an opinion on these financial statements based onmy audits.

 

Iconducted my audits in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards’*issued by the Comptroller General of the UnitedStates, and the U.S. Department of Agriculture, Farmers Home AdministrationAudit Program. Those standards require that I plan and perform the audits toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. I believe that my audits provide a reasonable basis formy opinion.

 

In myopinion, the financial statements referred to above present fairly, in all materialrespects, the financial position of Bennetts Pointe Limited Partnership as ofDecember 31, 2000 and 1999, and the results of its operations, changes inpartners’ deficit, and its cash flows for the years then ended in conformitywith generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*I have also issued my reportdated March 19, 2001 on my consideration of Bennetts Pointe LimitedPartnership’s internal control over financial reporting and on my tests of itscompliance with certain provisions of laws and regulations.

 

204

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INDEPENDENT AUDITOR’S REPORT

 

# **To The Partners**

CollegeGreene Rental Associates, L.P.

 

We haveaudited the accompanying balance sheet of College Greene Rental Associates,L.P. (a Limited Partnership) as of’ December 31, 2000 and 1999,**andthe related statements of operations, changes in partners’ capital (deficit)and cash flows for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of College Greene Rental Associates,L.P. as of December 31, 2000 and 1999, and the results of its operations andits cash flows for the years then ended in conformity with generally acceptedaccounting principles.

 

205

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Independent Auditors’ Report

 

To thePartners of

EastDouglas Apartments Limited Partnership (An Illinois Limited Partnership)

 

We have audited the accompanying balance sheet of East DouglasApartments Limited Partnership (IHDA Development Number HFI/HTF-354), as ofDecember 31, 2000, and the related statements of operations, cash flows andchanges in partners’ equity for the year then ended. These financial statementsare the responsibility of the Partnership’s management. Our responsibility isto express an opinion on these financial statements based on our audit. Thefinancial statements for the year ended December 31, 1999 were audited by otherauditors whose report dated January 31, 2000 expressed an unqualified opinionon those statements.

 

We conducted our audit in accordance with generally accepted auditingstandards, *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates and the Illinois Housing Development Authority’s Financial Reporting andAudit Guidelines for Mortgagors of Multifamily Hosing Developments. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 presentfairly, in all material respects, the financial position of East DouglasApartments Limited Partnership as of December 31, 2000, and the results of itsoperations and its cash flows for the year then ended, in conformity withgenerally accepted accounting principles.

 

In accordance with *Government Auditing Standards,*theIllinois Housing Development Authority’s Financial Reporting and AuditGuidelines for Mortgagors of Multifamily Housing Developments and theConsolidated Audit Guide for Audits of HUD Programs issued by the U.S.Department of Housing and Urban Development, we have also issued a report datedMarch 14, 2001, on our consideration of the Partnership’s internal controls,compliance with specific requirements applicable to major IHDA-assisted programs,specific requirements applicable to affirmative fair housing, and specificrequirements applicable to nonmajor IHDA-assisted program transactions.

 

The accompanying supplementary information is presented for purposes ofadditional analysis and is not a required part of the basic financialstatements. Such information has been subjected to the auditing proceduresapplied in the audit of the basic financial statements and, in our opinion, isfairly stated in all material respects in relation to the financial statementstaken as a whole.

 

206

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INDEPENDENT AUDITOR’S REPORT

 

To TilePartners

EvergreenHills Associates, L.P.

 

We haveaudited the accompanying balance sheet of Evergreen Hills Associates, L.P. (alimited partnership) as of December 31, 2000 and 1999, and the relatedstatements of operations and partners’ capital (deficit) and cash flows for theyears then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Evergreen Hills Associates, L.P.as of December 31, 2000 and 1999, and the results of its operations and itscash flows for the year then ended in conformity with generally acccptcdaccounting principles.

 

207

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

FLORALACRES APARTMENTS II

 

We have audited the accompanying balance sheets of FLORAL ACRESAPARTMENTS II, RHS PROJECT NO. 22-026-721172913 as of December 31, 2000 and1999 and the related statements of operations, changes in partners’ equity(deficit) and cash flows for the years then ended. These financial statementsare the responsibility of the partnership’s management. Our responsibility isto express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide a reasonablebasis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of FLORAL ACRESAPARTMENTS II as of December 31, 2000 and 1999 and the results of itsoperations, changes in partners’ equity and cash flows for the years then endedin conformity with generally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole, The supplemental information presentedon pages 17 through 25, is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 6, 2001 on our consideration of FLORAL ACRESAPARTMENTS II’s internal control and a report dated February 6, 2001 on itscompliance with laws and regulations applicable to the financial statements.

 

208

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

HARRISONBURGSENIORS APARTMENTS

 

We have audited the accompanying balance sheets of HARRISONBURG SENIORSAPARTMENTS, RHS PROJECT NO. 22-013-721199864 as of December 31, 2000 and 1999and the related statements of operations, changes in partners’ equity (deficit)and cash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of HARRISONBURGSENIORS APARTMENTS as of December 31, 2000 and 1999 and the results of itsoperations, changes in partners’ equity and cash flows for the years then endedin conformity with generally accepted accounting principles.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages 16through 24, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 6, 2001 on our consideration of HARRISONBURGSENIORS APARTMENTS’s internal control and a report dated February 6, 2001 onits compliance with laws and regulations applicable to the financialstatements.

 

209

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# **INDEPENDENT AUDITOR’S REPORT**

 

To thePartners

SHADYLANE SENIORS APARTMENTS

 

We have audited the accompanying balance sheets of SHADY LANE SENIORSAPARTMENTS, RHS PROJECT NO. 22-064-72i 100471 as of December 31, 2000 and 1999and the related statements of operations, changes in partners’ equity (deficit)and cash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of SHADY LANE SENIORSAPARTMENTS as of December 31, 2000 and 1999 and the results of its operations,changes in partners’ equity and cash flows for the years then ended inconformity with generally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information presentedon pages 17 through 25, is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 9, 2001 on our consideration of SHADY LANESENIORS APARTMENTS’s internal control and a report dated February 9, 2001 onits compliance with laws and regulations applicable to the financial statements.

 

210

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

VirginiaAvenue Affordable Housing Limited Partnership

 

I haveaudited the accompanying balance sheets of Virginia Avenue Affordable HousingLimited Partnership as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. My responsibility is to express an opinion on these financialstatements based on my audit.

 

Iconducted my audit in accordance with generally accepted auditing standards.Those standards require that I plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.I believe that my audit provides a reasonable basis for my opinion.

 

In myopinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Virginia Avenue Affordable HousingLimited Partnership as of December 31, 2000 and 1999, and the results of itsoperations, the changes in partners’ equity and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

My auditwas made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 14 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied it; the audit of the basic financial statements and, in myopinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

211

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Independent Auditors’ Report

 

To thePartners of

BetterHomes for Havelock Limited Partnership (A North Carolina Limited Partnership)

 

We have audited the accompanying balance sheets of Better Homes forHavelock Limited Partnership (a North Carolina Limited Partnership) as ofDecember 31, 2000 and 1999, and the related statements of operations, changesin partners’ equity (deficit), and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and *Government Auditing Standards,*issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audits to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Better Homes forHavelock Limited Partnership as of December 31, 2000 and 1999, and the resultsof its operations and its cash flows for the years then ended in conformitywith generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*we have also issued a reportdated January 26, 2001, on our consideration of the Partnership’s internalcontrols and a report dated January 24, 2001, on its compliance with laws andregulations.

 

The accompanying purposes of additional financial statements auditingprocedures statements and, in respects in relation supplementary information ispresented for analysis and is not a required part of the basic.  Such information has been subjected to theapplied in the audits of the basic financial our opinion, is fairly stated inall material to the financial statements taken as a whole.

 

212

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Independent Auditor’s Report

 

To thePartners

BlackRiver Run Limited Partnership

 

We haveaudited the accompanying balance sheets *of Black River Run Limited Partnership*asof December 31, 2000 and 1999, and the related statements of operations,partners’ equity, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position *of Black River Run Limited Partnership,*asof December 31, 2000 and 1999, and the results of its operations, changes inpartners’ equity, and cash flows for the years then ended in conformity withgenerally accepted accounting principles.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 12 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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## **Independent Auditor’s Report**

 

To thePartners

LiveoakVillage Limited Partnership

Charlotte,North Carolina

 

We haveaudited tile accompanying balance sheets of Liveoak Village Limited Partnership(all Alabama limited partnership) as of December 31, 2000 and 1999, and therelated statements of operations, partners’ equity, and cash flows for theyears then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand thc standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by thc Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

in ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Liveoak Village LimitedPartnership as of December 31, 2000 and 1999, and the results of its operationsand its cash flows for the years then ended in conformity with generallyaccepted accounting principles.

 

Inaccordance with *Government Auditing Standards’,*we have also issued ourreport dated January 31, 2001, on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplementary information listed in the tableof contents is presented for purposes of additional analysis and is not a requiredpart of the basic financial statements of the Partnership. Such information hasbeen subjected to the auditing procedures applied in the audits of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

214

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

LookoutRidge Limited Partnership

 

We haveaudited the accompanying balance sheet of Lookout Ridge Limited Partnership asof December 31, 2000, and the related statements of operations, partners’equity and cash flows for the year then ended. These financial statements arethe responsibility of the partnership’s management. Our responsibility is toexpress an opinion on these fi­nancial statements based on our audit.

 

Weconducted our audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassur­ance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in all materialrespects, the financial position of Lookout Ridge Limited Partnership as ofDecember 31, 2000, and the results of its operations, the changes in partners’equity and cash flows for the year then ended in conformity with generallyaccepted accounting princi­ples.

 

Our auditwas made for the purpose of forming an opinion on the basic financial state­mentstaken as a whole. The supplemental information on page 9 is presented for pur­posesof additional analysis and is not a required part of the basic financialstatements. Such information has been subjected to the auditing proceduresapplied in the audit of the basic financial statement and, in our opinion, isfairly stated in all material respects in relation to the basic financialstatements taken as a whole.

 

215

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Independent Auditor’s Report

 

To thePartners

PinedaleII Limited Partnership

 

We haveaudited the accompanying balance sheets *of Pinedale II Limited Partnership*as ofDecember 31, 2000 and 1999, and the related statements of operations, partners’equity, and cash flows for the years then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of *Pinedale II Limited Partnership,*asof December 31, 2000 and 1999, and the results of its operations, changes inpartners’ equity, and cash flows for the years then ended in conformity withgenerally accepted accounting principles.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 12 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

216

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Independent Auditor’s Report

 

To thePartners

PumphouseCrossing II Limited Partnership

 

We haveaudited the accompanying balance sheets *of Pumphouse Crossing II Limited Partnership*asof December 31, 2000 and 1999, and the related statements of operations,partners’ equity, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of *Pumphouse Crossing II LimitedPartnership,*as of December 31, 2000 and 1999, and the results ofits operations, changes in partners’ equity, and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 12 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

217

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INDEPENDENT AUDITORS’ REPORT

 

 

To thePartners

Elk TowerApartments Limited Partnership

 

We have audited the accompanying balance sheets of Elk Tower ApartmentsLimited Partnership as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity (deficit) and cash flaws for theyears then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Elk TowerApartments Limited Partnership as of December 31, 2000 and 1999, and theresults of its operations, changes in partners’ equity (deficit) and cash flowsfor the years then ended, in conformity with generally accepted accountingprinciples.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 11 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

218

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INDEPENDENT AUDITORS’ REPORT

 

 

To thePartners of

Kimbark1200 Associates, Limited Partnership

Longmont,Colorado

 

We have audited the accompanying balance sheet of Kimbark 1200Associates, Limited Partnership, FHA Project No. 101-98011, as of December 31,2000, and the related statement of operations, changes in partners’ equity andcash flows for the year then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

 

Weconducted our audit in accordance with generally accepted auditing standardsand Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the auditto obtain reasonable assurance about whether the financial statements are freeof material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Kimbark 1200 Associates, LimitedPartnership FHA Project No. 101-98011, as of December 31, 2000, and the resultsof its operations and the changes in its partners’ equity and its cash flowsfor the year then ended, in conformity with generally accepted accountingprinciples.

 

Inaccordance with Government Auditing Standards, we have also issued areport dated February 2, 2001 on our consideration of Kimbark 1200 Associates,Limited partnership, internal controls and reports dated February 2, 2001 onits compliance with specific requirements applicable to major HUD programs andFair Housing and Non-Discrimination.

 

219

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

Lost TreeLimited Partnership

 

I haveaudited the accompanying balance sheets of Lost Tree Limited Partnership as ofDecember 31, 2000 and 1999, and the related statements of operations, partners’equity (deficit) and cash flows for the years then ended. These financialstatements are the responsibility of the partnership’s management. Myresponsibility is to express an opinion on these financial statements based onmy audits.

 

Iconducted my audits in accordance with generally accepted auditing standards.Those standards require that I plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. I believe thatmy audits provide a reasonable basis for my opinion.

 

In myopinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Lost Tree Limited Partnership asof December 31, 2000 and 1999, and the results of its operations, changes inpartners’ equity (deficit) and cash flows for the years then ended inconformity with generally accepted accounting principles.

 

My auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on pages 14 and 15 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in myopinion, is fairly stated in all material respects in relation to the basisfinancial statements taken as a whole.

 

220

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# **INDEPENDENT AUDITOR’S REPORT**

 

To thePartners

PhiladelphiaHousing II, Limited Partnership

Philadelphia,Mississippi

 

We haveaudited the accompanying balance sheets of Philadelphia Housing II, LimitedPartnership (a Mississippi limited partnership), RHS Project No.28-050-640808922 as of December 31, 2000 and 1999, and the related statementsof operations, partners’ capital (deficit) and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Philadelphia Housing II, LimitedPartnership, and the results of its operations and its cash flows for the yearsthen ended in conformity with generally accepted accounting principles.

 

Ouraudits were made for the purposes of forming an opinion on the basic financialstatements taken as a whole. The supplemental information is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. We have prepared the Multiple Family Housing BorrowerBalance Sheet (RHS Form RD 1930-8) and the Multiple Family Housing ProjectBudget (RHS Form RD 1930-7). Such information has been subjected to the auditprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

221

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*IndependentAuditor’s Report*

 

To thePartners of

RoxburyVeterans Housing Limited Partnership

 

We haveaudited the accompanying balance sheet of Roxbury Veterans Housing LimitedPartnership (a Massachusetts Limited Partnership) as of December 31, 2000, andthe related statements of operations, changes in partners’ equity, and cashflows for the year then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

 

Weconducted our audit in accordance with auditing standards generally accepted inthe United States. Those standards require that we plan and perform the auditto obtain reasonable assurance about whether the financial statements are freeof material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

 In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Roxbary Veterans Housing LimitedPartnership as of December 31, 2000, and  theresults of its operations, changes in partners’ equity, and cash flows for theyear ended in conformity with accounting principles generally accepted in theUnited States.

 

Our auditwas made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The accompanying schedule of operating expenses ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

222

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Independent Auditors’ Report

 

To thePartners

BarleeProperties,

AnArkansas Limited Partnership

Barling,Arkansas

 

We haveaudited the accompanying balance sheet of Barlee Properties, An ArkansasLimited partnership, as of December 31, 2000, and the related statement ofoperations, changes in partners’ capital and cash flows for the year thenended. These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit. The financial statements of Barlee Properties,An Arkansas Limited partnership as of December 31, 1999, were audited by otherauditors whose report dated January 27, 2000, expressed an unqualified opinionon those statements.

 

Weconducted our audit in accordance with generally accepted auditing standards.These standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 2000 financial statements referred to above present fairly, in all materialrespects, the financial position of Barlee Properties, An Arkansas LimitedPartnership, as of December 31, 2000, and the results of its operations and itscash flows for the year then ended in conformity with generally acceptedaccounting principles.

 

223

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Report ofIndependent Accountants

 

Partners

ColonnaRedevelopment Company L.P.

Hempstead,New York

 

We haveaudited the accompanying balance sheets of Colonna Redevelopment Company L.P.(a New York Limited Partnership) (the “Partnership”) as of December 31, 2000and 1999 and the related statements of operations, cash flows and partners’equity for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Colonna Redevelopment Company L.P.as of December 31, 2000 and 1999, and the results of its operations and itscash flows for the years then ended in conformity with generally acceptedaccounting principles.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 12 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

224

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INDEPENDENTAUDITOR’ S REPORT

 

To thePartners

HallsFerry Apartments, L.P.

 

I haveaudited the accompanying balance sheets of Halls Ferry Apartments, L.P. as ofDecember 31, 2000 and 1999 and the related statements of operations, partners’equity and cash flows for the years then ended. These financial statements arethe responsibility of the partnership’s management. My responsibility is toexpress an opinion on these financial statements based on my audits.

 

Iconducted my audits in accordance with generally accepted auditing standards.Those standards require that I plan arid perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. I believe that my audits provide a reasonable basis formy opinion.

 

In myopinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Halls Ferry Apartments, L.P. as ofDecember 31, 2000 and 1999, and the results of its operations, changes inpartners’ equity and cash flows for the years then ended in conformity withgenerally accepted accounting principles.

 

My auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole, The supplemental information on pages 15 and 16 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in myopinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

225

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Independent Auditors’ Report

 

Partners

Ithaca ILimited Partnership

Ithaca,Michigan

 

We haveaudited the accompanying balance sheet of Ithaca I Limited Partnership RuralHousing Service Project No. 26-029-383119117 as of December 31, 2000 and 1999,and the related statements of income, partners’ equity and cash flows for theyears ended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with auditing standards generally acceptedin the United States of America and the standards applicable to financialaudits contained in *Government Auditing Standards*issued bythe Comptroller General of the United States, and the U.S. Department ofAgriculture, Rural Housing Service Audit Program. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Ithaca I Limited Partnership as ofDecember 31, 2000 and 1999, and the results of its operations, changes inpartner’s equity and its cash flows for the years then ended in conformity withgenerally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*we have also issued a reportdated February 9, 2001 on our consideration of Ithaca I Limited Partnership’sinternal control over financial reporting and our tests of compliance withcertain provisions of laws and regulations, contracts and grants.

 

Ouraudits were conducted for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplementary information presentedon pages 11 through 19 is presented for purposes of complying with therequirements of Rural Housing Service and is not a required part of the basicfinancial statements. Such information has been subjected to the auditprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

226

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

MATHISAPARTMENTS, LTD.

 

We have audited the accompanying balance sheets of MATHIS APARTMENTS,LTD., RHS PROJECT NO. 51-005-721010606 as of December 31, 2000 and 1999 and therelated statements of operations, changes in partners’ equity (deficit) andcash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of MATHIS APARTMENTS,LTD. as of December 31, 2000 and 1999 and the results of its operations,changes in partners’ equity and cash flows for the years then ended inconformity with generally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information presentedon pages 16 through 24, is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 16, 2001 on our consideration of MATHISAPARTMENTS, LTD.’s internal control and a report dated February 16, 2001 on itscompliance with laws and regulations applicable to the financial statements.

 

227

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

ORANGEGROVE SENIORS APARTMENTS, LTD.

 

We have audited the accompanying balance sheets of ORANGE GROVE SENIORSAPARTMENTS, LTD, RHS PROJECT NO. 50-025-742670408 as of December 31, 2000 and1999 and the related statements of operations, changes in partners’ equity(deficit) and cash flows for the years then ended. These financial statementsare the responsibility of the partnership’s management. Our responsibility isto express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of ORANGE GROVESENIORS APARTMENTS, LTD. as of December 31, 2000 and 1999 and the results ofits operations, changes in partners’ equity and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information presentedon pages 16 through 24, is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

Inaccordance with Government Auditing Standards, we have also issued areport dated February 9, 2001 on our consideration of ORANGE GROVE SENIORSAPARTMENTS, LTD.’s internal control and a report dated February 9, 2001 on itscompliance with laws and regulations applicable to the financial statements.

 

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To ThePartners

SacramentoSRO Limited Partnership

ACalifornia Limited Partnership

600 WestBroadway, #1070

SanDiego, CA 92101

 

Independent Auditor’s Report

 

We haveaudited the accompanying balance sheets of Sacramento SRO Limited Partnership,as of December 31, 2000 and 1999 and the related statements of operations andpartners’ capital and statements of cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Sacramento SRO LimitedPartnership, as of December 31, 2000 and 1999, and the results of theiroperations and cash flows for the years then ended in conformity with generallyaccepted accounting principles.

 

229

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INDEPENDENT AUDITORS’ REPORT

 

To thePartners

SouthHills Apartments, L.P.

 

We have audited the accompanying balance sheets of South Hills Apartments,L.P. as of December 31, 2000 and 1999, and the related statements ofoperations, partners’ equity and cash flows for the years then ended. Thesefinancial statements are the responsibility of the partnership’s management,our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation, we believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of south HillsApartments, L.P. as of December 31, 2000 and 1999, and the results of itsoperations, changes in partners’ equity and cash flows for the years then endedin conformity with generally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on page 14is presented for purposes of additional analysis and is not a required part ofthe basic financial statements, such information has been subjected to theauditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

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Independent Auditors’ Report

 

To thePartners:

VillageWoods Estates, L.P.

 

We have audited the accompanying balance sheets of Village WoodsEstates, L.P. as of December 31, 2000 and 1999, and the related statements ofincome, changes in partners’ capital, and cash flows for the years then ended.These financial statements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement 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 presentfairly, in ail material respects, the financial position of Village WoodsEstates, L.P. as of December 31, 2000 and 1999, and the results of itsoperations and its cash flows for the years then ended in conformity withgenerally accepted accounting principles.

 

231

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Independent Auditors’ Report

 

To thePartners

WoodlandHills Properties,

A LimitedPartnership

Barling,Arkansas

 

We haveaudited the accompanying balance sheet of Woodland Hills Properties, A LimitedPartnership, as of December 31, 2000, and the related statement of operations,changes in partners’ capital and cash flows for the year then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audit. The financial statements of Woodland Hills Properties, A LimitedPartnership, as of December 31, 1999, were audited by other auditors whosereport dated January 31, 2000, expressed an unqualified opinion on thosestatements.

 

We conductedour audit in accordance with generally accepted auditing standards. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

 

In ouropinion, the 2000 financial statements referred to above present fairly, in allmaterial respects, the financial position of Woodland Hills Properties, ALimited Partnership, as of December 31, 2000, and the results of its operationsand its cash flows for the year then ended in conformity with generallyaccepted accounting principles.

 

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INDEPENDENT AUDITOR’S REPORT

 

To ThePartners

AutumnRidge Associates

Roanoke,Virginia:

 

We have audited the accompanying balance sheet of Autumn RidgeAssociates (A Virginia Limited Partnership) as of December 31, 2000 and 1999and the related statement of operations and partners’ equity (deficit) and cashflow for the years then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with generally accepted auditingstandards and Government Auditing Standards issued by the Comptroller Generalof the United States. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred to above present fairly,in all material respects, the financial position of Autumn Ridge Associates asof December 31, 2000 and 1999, and the results of its operation and its cashflow for the year then ended in conformity with generally accepted accountingprinciples.

 

Our audit was made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on pages 14through 17 is presented for the purpose of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the audit procedures applied in the audit of the basic financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the basic financial statements taken as a whole.

 

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### INDEPENDENTAUDITORS’ REPORT

 

 

To thePartners

BrownsvilleAssociates, Limited

 

We haveaudited the accompanying balance sheets of Brownsville Associates, Limited (aTennessee limited partnership) d/b/a Brownsville Village Apartments, RHSProject No.: 48-038-621467876, as of December 31, 2000 and 1999, and therelated statements of operations, partners’ equity, and cash flows for theyears then ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Brownsville Associates, Limited (aTennessee limited partnership) d/b/a Brownsville Village Apartments, RHSProject No.: 48-038-621467876, as of December 31, 2000 and 1999, and theresults of its operations, the changes in partners’ equity and its cash flowsfor the years then ended in conformity with generally accepted accountingprinciples.

 

Inaccordance with *Government Auditing Standards,*we have also issued a reportdated February 9, 2001 on our consideration of Brownsville Associates,Limited’s internal control over financial reporting and our tests of its compliancewith certain provisions of laws, regulations, contracts, and grants.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 12 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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Independent Auditors’ Report

 

To ThePartners

CentenaryHousing Limited Partnership

St.Louis, Missouri

 

We haveaudited the accompanying balance sheet of Centenary Housing Limited Partnership(Centenary Towers Apartments, Project No. 085-35239-PM-SR-PR-WAH-L8) as ofDecember 31, 2000, and the related statements of profit and loss, partners’equity and cash flows for the year then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

 

Weconducted our audit in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Centenary Housing LimitedPartnership as of December 31, 2000, and the results of its operations and itscash flows for the year then ended in conformity with generally acceptedaccounting principles.

 

Our auditwas conducted for the purpose of forming an opinion on the basic financialstatements taken as a whole. The accompanying supplementary information shownon pages 16 to 19 is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the financial statements taken as a whole.

 

Inaccordance with *Government Auditing Standards*and the *Consolidated Audit Guide for Audits ofHUD Programs*issued by the U.S. Department of Housing and UrbanDevelopment, we have also issued a report dated January 23, 2001 on ourconsideration of Centenary Housing Limited Partnership’s internal control andreports dated January 23, 2001 on its compliance with specific requirementsapplicable to major HUD programs and specific requirements applicable to FairHousing and Non-Discrimination. Those reports are an integral part of an auditperformed in accordance with *Government Auditing Standards*and shouldbe read in conjunction with this report in considering the results of ouraudit.

 

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

 

To thePartners of

JeremyAssociates Limited Partnership

 

We haveaudited the accompanying balance sheets of JEREMY ASSOCIATES LIMITEDPARTNERSHIP (a Colorado limited partnership) as of December 3l, 2000 and 1999,and the related statements of operations, partners’ capital accounts and cashflows for the years then ended.  Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility, is to express an opinion on these financial statementsbased on our audits.

 

Weconducted our audits in accordance with auditing standards generally acceptedin the United States. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits  provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Jeremy Associates Limited Partnershipas of December 31, 2000 and 1999 and the results of its operations and its cashflows for the years then ended in conformity with accounting principlesgenerally accepted in the United States.

 

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INDEPENDENT ACCOUNTANTS’ REPORT

 

To thePartners

NewHilltop Apartments, A Limited Partnership

Columbia,South Carolina

 

We haveaudited the accompanying balance sheets of New Hilltop Apartments, A LimitedPartnership (A South Carolina Limited Partnership), as of December 31, 2000 and1999, and the related statements of operations, partners’ equity and cash flowsfor the years then ended. These financial statements are the responsibility ofthe Partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audit.

 

Weconducted our audit in accordance with generally accepted auditing standardsand Government Auditing Standards issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the auditto obtain reasonable assurance about whether the financial statements are freeof material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of New Hilltop Apartments, A LimitedPartnership, as of December 31, 2000 and 1999, and the results of itsoperations and its cash flows for the years then ended, in conformity withgenerally accepted accounting principles.

 

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Independent Auditors’ Report

 

Partners

ShadowcreekApartments

Elko,Nevada

 

We haveaudited the accompanying balance sheets of Shadowcreek Apartments (Project),Rural Development Case No. 33-002-0880283493, as of December 31, 2000 and 1999and the related statements of operations, changes in partners equity and cashflows for the years then ended. These financial statements are theresponsibility of the Project’s management. Our responsibility is to express anopinion on these financial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand with *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of the Project as of December 31,2000 and 1999 and the results of its operations, changes in partners equity andcash flows for the years then ended. In contbrmity with general acceptedaccounting principles.

 

Our auditwas conducted for the purpose of forming an opinion on the financial statementstaken as a whole. The supplemental information on pages l0 through 13 ispresented for the purpose of additional analysis and is not a required part ofthe basic financial statements of the Project for the year ended December 31,2000. Such information has been subjected to the auditing procedures applied inthe audit of the basic financial statements and, in our opinion, is fairlypresented in all material respects in relation to the financial statementstaken as a whole.

 

Inaccordance with *Government Auditing Standards,*we have issued a report datedJanuary 24, 2001, on our consideration of the Project’s internal control overfinancial reporting and over tests of its compliance with laws, regulations,contracts and grants. This report is an integral part of an audit performed inaccordance with *Government Auditing S’tandards*and should be read inconjunction with this report in considering the results of our audit.

 

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INDEPENDENT AUDITOR’ S REPORT

 

To thePartners

PahrumpValley Investors

(AWyoming Limited Partnership)

Cheyenne,WY

 

I haveaudited the accompanying balance sheets of Pahrump Valley Investors (A WyomingLimited Partnership), USDA Rural Development Case No. 33-019-680204949, as ofDecember 31, 2000 and 1999, and the related statements of income, partners’equity, and cash flows for the years then ended. These financial statements arethe responsibility of the Partnership’s management. My responsibility is toexpress an opinion on these financial statements based on my audits.

 

Iconducted my audits in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that I plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management as well as evaluating the overall financialstatement presentation. I believe that my audits provide a reasonable basis formy opinion.

 

In myopinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Pahrump Valley Investors (AWyoming Limited Partnership) as of December 31, 2000 and 1999, and the resultsof its operations and its cash flows for the years then ended, in conformitywith generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*I have also issued a reportdated March 16, 2001 on my consideration of Pahrump valley Investors’ internalcontrol structure and a report dated March 16, 2001 on its compliance with lawsand regulations.

 

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### INDEPENDENTAUDITORS’ REPORT

 

To thePartners

StantonAssociates, Limited

 

We haveaudited the accompanying balance sheets of Stanton Associates, Limited (aTennessee limited partnership) d/b/a Stanton Village Apartments, RHS ProjectNo.: 48-038-621542356, as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity, and cash flows for the years thenended. These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Stanton Associates, Limited (aTennessee limited partnership) d/b/a Stanton Village Apartments, RHS ProjectNo.: 48-038-621542356, as of December 31, 2000 and 1999, and the results of itsoperations, the changes in partners’ equity and its cash flows for the yearsthen ended in conformity with generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*we have also issued a reportdated February 17, 2001 on our consideration of Stanton Associates, Limited’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 12 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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Independent Auditors’ Report

 

To thePartners

WoodlandsApartments

Elko,Nevada

 

We haveaudited the accompanying balance sheets of Woodlands Apartments (the Project),Rural Development Case No. 33-004-0880314570, as of December 31, 2000 and 1999and the related statements of operations, changes in Partners’ equity and cashflows for the years then ended, These financial statements are theresponsibility of the Project’s management, Our responsibility is to express anopinion on these financial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand with *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of the Project as of December 3l,2000 and 1999 and the results of its operations, changes in partners equity,and cash flows for the years then ended, in conformity with generally acceptedaccounting principles.

 

Ouraudits were conducted for the purpose of forming an opinion on the basicfinancial statements taken as a whole, The supplemental information on pages 10through 13, is presented for the purpose of additional analysis and is not arequired part of the basic financial statements of the Project for the yearended December 31, 2000. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly presented in all material respects in relation to thefinancial statements taken**as a whole.

 

Inaccordance with *Government Auditing Standards,*we have issued a report datedJanuary 24, 2001, on our consideration of the Woodlands Apartments’ internalcontrol over financial reporting and over tests of its compliance with laws,regulations, contracts and grants. This report is an integral part of an auditperformed in accordance with *Government Auditing Standards’*and shouldbe read in conjunction with this report in considering the results of ouraudit.

 

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

ZWOLLEPARTNERSHIP

 

We haveaudited the accompanying balance sheets of ZWOLLE PARTNERSHIP, RHS PROJECT NO.22-043-721260425 as of December 31, 2000 and 1999 and the related statements ofoperations, changes in partners’ equity (deficit) and cash flows for the yearsthen ended. These financial statements are the responsibility of thepartnership’s management. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

in our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of ZWOLLE PARTNERSHIPas of December 31, 2000 and 1999 and the results of its operations, changes inpartners’ equity and cash flows for the years then ended in conformity withgenerally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information presentedon pages 16 through 24, is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 9, 2001 on our consideration of ZWOLLEPARTNERSHIP’s internal control and a report dated February 9, 2001 on itscompliance with laws and regulations applicable to the financial statements,

 

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INDEPENDENT AUDITORS’ REPORT

 

To thePartners

352 Lenox Associates, L.P.

 

We have audited the accompanying balancesheet of 352 Lenox Associates, L.P. as of December 31,2000, and the related statements of operations, changes inpartners’ equity and cash flows for the year then ended. These financialstatements are the responsibility of the partnerships management. Ourresponsibility is to express an opinion on these financial statements based onour audit.

 

We conducted our audit in accordance with auditing standards generallyaccepted in the United States of America. Those standards require that we planand perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of 352 LenoxAssociates, L.P. as of December 31, 2000, and the results of its operations,the changes in partners’ equity and cash flows for the year ended December 31,2000, in conformity with accounting principles generally accepted in the UnitedStates of America.

 

Our audit was made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on page 13is presented for purposes of additional analysis and is not a required part ofthe basic financial statements. Such information has been subjected to theauditing procedures applied in the audit of the basic financial statements and,in our opinion, is fairly stated in all material respects in relation to thebasic financial statements taken as a whole.

 

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ThePartners

EthelHousing, L.P.

Ethel,Mississippi

 

We haveaudited the accompanying balance sheets of Ethel Housing, L.P., RD Case No.28-0040640823417 as of December 31, 2000 and 1999, and the related statementsof operations, partners’ equity, and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand Government Auditing Standards, issued by the comptroller General of theUnited States. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit included examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso included assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audits provided a reasonable basis for ouropinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Ethel Housing, L.P., as ofDecember 31, 2000 and 1999, and the results of its operations and its cashflows for the years then ended, in conformity with generally acceptedaccounting principles.

 

Inaccordance with Government Auditing Standards and the Audit Program issued bythe United States Department of Agriculture, Rural Development, we have alsoissued a report dated March 21, 2001, on its compliance with specificrequirements applicable to major RD programs and nonmajor RD programtransactions.

 

Ouraudits were made for the purpose of forming an opinion on the financialstatements taken as a whole. The supporting data included on pages 12 through19 are presented for purposes of additional analysis and are not a requiredpart of the financial statements of Ethel Housing, L.P. Such information,except for the current budget and proposed budget columns on pages 15 through18, on which we express no opinion, is fairly stated in all material respectsin relation to the financial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To thepartners

HurricaneHills I LC

 

I haveaudited the accompanying balance sheets of Hurricane Hills LC as of December31, 2000, and the related statements of operations, partners’ equity and cashflows for the year then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

Iconducted my audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examination, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement as well as evaluating the overall financial statement presentation.We believe that our audits provided a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Hurricane Hills I LC as ofDecember 31, 2000, and the results of its operations, changes in Partners’equity and cash flows for the years then ended in conformity with generallyaccepted accounting principles.

 

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INDEPENDENTAUDITOR’S REPORT

 

To: ThePartners

Main Everett Housing Limited Partnership

 

We haveaudited the accompanying balance sheets of Main Everett Housing LimitedPartnership as of December 31, 2000 and 1999, and the related statements ofoperations, partners’ equity, and cash flows for the years then ended. These financialstatements are the responsibility of the partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audit.

 

Weconducted our audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Main Everett Housing LimitedPartnership as of December 31, 2000 and 1999, and the results of itsoperations, changes in partners’ equity, and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 11 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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To thePartners

M.R.H.,L.P.

 

We have audited the accompanying balance sheets of M.R.H., L.P. as ofDecember 31, 2000 and 1999, and the related statements of operations, partners’equity and cash flows for the years then ended. These financial statements arethe responsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards. Those standards require that we plan and perform the audits toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred to above present fairly,in all material respects, the financial position of M.R.H., L.P. as of December31, 2000 and 1999, and the results of its operations, changes in partners’equity and cash flows for the years then ended in conformity with generallyaccepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

# **To the Partners**

WashingtonArms Apartments

(ALimited Partnership)

Dayton,Ohio

 

We haveaudited the accompanying balance sheet of HUD Project #046-NI093 of WashingtonArms Apartments (a limited partnership) as of December 31, 2000, and therelated statements of profit and loss, changes in deficiency in partners’capital and cash flows for the year ended December 31, 2000. These financialstatements are the responsibility of the Project’s management. Ourresponsibility is to express an opinion on these financial statements based onour audit.

 

Weconducted our audit in accordance with generally accepted auditing standards, *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates, and Consolidated Audit Guide for Audits of HUD Programs (the“Guide”) issued by the U. S. Department of Housing and Urban Development,Office of Inspector General in August 1997. Those standards and the Guide requirethat we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of HUD Project #046-NI093 as ofDecember 31, 2000 and the results of its operations and its cash flows and itschanges in deficiency in partners’ capital for the year then ended inconformity with generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*we have also issued a reportdated January 24, 2001 on our consideration of Washington Arms Apartments’ internalcontrols and a report dated January 24, 2001 on its compliance with laws andregulations. Those reports are an integral part of an audit performed inaccordance with Government Auditing Standards and should be read in conjunctionwith this report in considering the results of our audit.

 

Our auditwas made for the purpose of forming an opinion on the financial statementstaken as a whole. The additional information included in the report shown onpages 12-16 is presented for the purposes of additional analysis and is not arequired part of the financial statements of HUD Project #046-NI093. Suchinformation has been subjected to the auditing procedures applied in the auditof the financial statements and, in our opinion, is fairly stated in all materialrespects in relation to the financial statements taken as a whole.

 

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INDEPENDENT AUDITOR’S REPORT

 

To: ThePartners

## **Osborne Housing Limited Partnership**

 

We haveaudited the accompanying balance sheets of Osborne Housing Limited Partnershipas of December 31, 2000 and 1999, and the related statements of operations,partners’ equity, and cash flows for the years then ended. These financialstatements are the responsibility of the partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audit.

 

Weconducted our audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Osborne Housing LimitedPartnership as of December 31, 2000 and 1999, and the results of itsoperations, changes in partners’ equity, and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 11 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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To thePartners

SandstoneVillage Limited Partnership

GreatFalls, Montana

 

INDEPENDENT AUDITORS’ REPORT

 

We haveaudited the accompanying balance sheets of Sandstone Village LimitedPartnership as of December 31, 2000 and 1999 and the related statements ofoperations, partners’ equity and cash flows for the years then ended. Thesefinancial statements are the responsibility of the partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Sandstone Village LimitedPartnership as of December 31, 2000 and 1999, and the results of itsoperations, changes in partners’ equity and cash flows for the years then endedin conformity with generally accepted accounting principles.

 

Ouraudits were made for the purpose of forming an opinion on thc basic financialstatements taken as a whole. The supplemental information on page 14 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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ThePartners

ShannonHousing, L.P,

Shannon,Mississippi

 

We haveaudited the accompanying balance sheets of Shannon Housing, L.P., RD Case No. 28-041064835658,as of December 31 2000, and 1999, and the related statements of operations,partners’ equity, and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand Government Auditing Standards, issued by the comptroller General of theUnited States. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit included examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso included assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provided a reasonable basis forour opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Shannon Housing, L.P., as ofDecember 31, 2000 and 1999, and the results of its operations and its cashflows for the years then ended, in conformity with generally acceptedaccounting principles.

 

Inaccordance with Government Auditing Standards and the Audit Program issued bythe United States Department of Agriculture, Rural Development, we have alsoissued a report dated March 21, 2001, on its compliance with specificrequirements applicable to major RD programs and nonmajor RD programtransactions.

 

Ouraudits were made for the purpose of forming an opinion on the financialstatements taken as a whole. The supporting data included on pages 12 through19 are presented for purposes of additional analysis and are not a requiredpart of the financial statements of Shannon Housing, L.P. Such information,except for the current budget and proposed budget columns on pages 15 through18, on which we express no opinion, is fairly stated in all material respectsin relation to the financial statements taken as a whole.

 

251

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INDEPENDENT AUDITORS’ REPORT

 

To thePartners of

SuttonPlace Apartments

(ALimited Partnership)

Cincinnati,Ohio

 

We haveaudited the accompanying balance sheet of HUD Project #073-55035, 073-55037,073-55038, 073-55061 and 073-55062 of Sutton Place Apartments (a limitedpartnership) as of December 31, 2000, and the related statements of profit andloss, changes in deficiency in partners’ capital and cash flows for the yearthen ended. These financial statements are the responsibility of the Project’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

Weconducted our audit in accordance with generally accepted auditing standards, *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates, and Consolidated Audit Guide for Audits of HUD Programs (the“Guide”) issued by the U. S. Department of Housing and Urban Development,office of Inspector General in August 1997. Those standards and the Guide requirethat we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In our opinion, the financial statementsreferred to above present fairly, in all material respects, the financialposition of HUD    Project #073-55035,073-55037, 073-55038, 073-55061 and 073-55062 as of December 31, 2000 and theresults of its operations and its cash flows and its changes in deficiency inpartners’ capital for the year then ended in conformity with generally acceptedaccounting principles.

 

Inaccordance with Government Auditing Standards, we have also issued a reportdated January 24, 2001 on our consideration of Sutton Place Apartments’internal control and a report dated January 24, 2001 on its compliance withlaws and regulations.

 

We wereengaged to conduct an audit for the purpose of forming an opinion on thefinancial statements taken as a whole. The additional information included inthe report shown on pages 13-19 is presented for the purposes of additionalanalysis and is not a required part of the financial statements of HUD Project#073-55035, 073-55037, 073-55038, 073-55061 and 073-55062. Such information hasbeen subjected to the auditing procedures applied in the audit of the financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the financial statements taken as a whole.

 

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ThePartners

WestPoint Housing, L.P.

WestPoint, Mississippi

 

We haveaudited the accompanying balance sheets of West Point Housing, L.P., RD CaseNo. 28-013-0640834734, as of December 31,2000, and 1999, and the relatedstatements of operations, partners’ equity, and cash flows for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards,*issued by the comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit included examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includedassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provided a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of West Point Housing, L.P., as ofDecember 31, 2000 and 1999, and the results of its operations and its cashflows for the years then ended, in conformity with generally acceptedaccounting principles.

 

Inaccordance with *Government Auditing Standards*and the Audit Program issuedby the United States Department of Agriculture, Rural Development, we have alsoissued a report dated March 21,2001, on its compliance with specificrequirements applicable to major RD programs and nonmajor RD program transactions.

 

Ouraudits were made for the purpose of forming an opinion on the financialstatements taken as a whole. The supporting data included on pages 12 through10 are presented for purposes of additional analysis and are not a requiredpart of the financial statements of West Point Housing, L.P. Such information,except for the current budget and proposed budget columns on pages 15 through18, on which we express no opinion, is fairly stated in all material respectsin relation to the financial statements taken as a whole.

 

253

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INDEPENDENT AUDITOR’S REPORT

 

To ThePartners

200 EastAvenue Associates, L.P.

 

We haveaudited the accompanying balance sheet of 200 East Avenue Associates, L.P. (alimited partnership) as of December 31, 2000 and 1999 and the relatedstatements of operations and partners’ capital (deficit) and cash flows for theyears then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of 200 East Avenue Associates, L.P.as of December 31, 2000 and 1999, and the results of its operations and itscash flows for the years then ended in conformity with generally acceptedaccounting principles.

 

254

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To thePartners

A.V.A.Limited Partnership

Charlotte,North Carolina

 

We haveaudited the accompanying balance sheets of A.V.A. Limited Partnership (aVirginia limited partnership) as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity, and cash flows for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of A.V.A. Limited Partnership as ofDecember 31, 2000 and 1999, and the results of its operations and its cashflows for the years then ended in conformity with generally accepted accountingprinciples.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated January 31, 2001, on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplementary information listed in the tableof contents is presented for purposes of additional analysis and is not arequired part of the basic financial statements of the Partnership. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

255

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To thePartners

BeckwoodManor One Limited Partnership

 

We haveaudited the accompanying balance sheets of Beckwood Manor One LimitedPartnership, RD Project No. 03-025-710677259 (the Partnership), as of December31, 2000 and 1999 and the related statements of profit (loss), changes inpartners’ equity (deficit) and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

Weconducted our audits in accordance with U.S. generally accepted auditingstandards and the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Beckwood Manor One LimitedPartnership as of December 31, 2000 and 1999, and its results of operations,changes in partners’ equity (deficit), and cash flows for the years then endedin conformity with U.S. generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated February 14, 2001 on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts and grants. That report isan integral part of an audit performed in accordance with *Government Auditing Standards*andshould be read in conjunction with this report in considering the results ofour audit.

 

256

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

DecroNordhoff, L.P.

 

We have audited the accompanying balance sheets of Decro Nordhoff, L.P.as of December 31, 2000 and 1999, and the related statements of operations,partners’ equity (deficit) and cash flows for the years then ended. Thesefinancial statements are the responsibility of the partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Decro Nordhoff,L.P. as of December 31, 2000 and 1999, and the results of its operations,changes in partners’ equity (deficit) and cash flows for the years then ended, inconformity with generally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on pages 13and 14 is presented for purposes of additional analysis and is not a requiredpart of the basic financial statements. Such information has been subjected tothe auditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

257

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INDEPENDENTAUDITORS’ REPORT

 

To thePartners

EscherSRO Project, L.P.

(HUDProject No. NJ-39-K087-020-2)

 

We haveaudited the accompanying balance sheets of Escher SRO Project, L.P. (HUDProject No. NJ-39-K087-020-2) as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ capital and cash flows for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with auditing standards generally acceptedin the United States of America and Government Auditing Standards, issued bythe Comptroller General of the United States, Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Escher SRO Project, L.P. (HUDProject No. NJ-39-K087-020-2) as of December 31, 2000 and 1999, and the resultsof its operations and its cash flows for the years then ended, in conformitywith accounting principles generally accepted in the United States of America.

 

In accordancewith Government Auditing Standards, we have also issued a report dated January26, 2001 on our consideration of Escher SRO Project, L.P.’s internal controlsand a report dated January 26, 2001 on its compliance with specificrequirements applicable to major HUD programs.

 

258

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### IndependentAuditor’s Report

 

To thePartners

G. V. A.Limited Partnership

Charlotte,North Carolina

 

We haveaudited the accompanying balance sheets of G. V. A. Limited Partnership (aVirginia limited partnership) as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity, and cash flows for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of G. V. A. Limited Partnership as ofDecember 31, 2000 and 1999, and the results of its operations and its cashflows for the years then ended in conformity with generally accepted accountingprinciples.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated January 31, 2001, on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplementary information listed in the tableof contents is presented for purposes of additional analysis and is not arequired part of the basic financial statements of the Partnership. Suchinformation has been subjected to the auditing procedures applied in the auditsof thc basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

259

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Independent Auditor’s Report

 

To thePartners

GraysonManor Limited Partnership

 

I haveaudited the accompanying balance sheets of Grayson Manor Limited Partnership asof December 31,2000 and 1999, and the related statements of operations,partner’s equity and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Myresponsibility is to express an opinion on these financial statements based onmy audits.

 

Iconducted my audits in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates, and the U.S. Department of Agriculture, Farmers Home AdministrationAudit Program. Those standards require that I plan and perform the audits toobtain reasonable assurance about whether thc financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. I believe that my audits provide a reasonable basis formy opinion.

 

In myopinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Grayson Manor Limited Partnershipas of December 31,2000 and 1999, and the results of its operations, changes inpartners’ equity, and its cash flows for the years then ended in conformitywith generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*I have also issued my reportdated March 19,2001 on my consideration of Grayson Manor Limited Partnership’sinternal control over financial reporting and on my tests of its compliancewith certain provisions of laws and regulations.

 

260

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Independent Accountants’ Report

 

To ThePartners

M.B.Apartments Associates, Ltd.

 

We haveaudited the accompanying balance sheets of M.B. Apartments Associates, Ltd. (ALimited Partnership) as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity and cash flows for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of M.B. Apartments Associates, Ltd.(A Limited Partnership) as of December 31,2000 and 1999, and the results of itsoperations, changes in partners’ equity and cash flows for the years then endedin conformity with generally accepted accounting principles.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 13 ispresented for the purposes of additional analysis and is not a required part ofthe basic financial statements. Such information has been subjected to theauditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

261

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To thePartners

MeridianHousing, L.P.

Meridian,Mississippi

 

We haveaudited the accompanying balance sheet of Meridian Housing, L.P. (a Mississippilimited partnership), RHS Project No. 28-038-0640893892 as of December 31,2000, and the related statements of operations, partners’ capital (deficit) andcash flows for the year then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit. Thefinancial statements of Meridian Housing, L.P. as of December 31, 1999, wereaudited by other auditors whose report dated February 9, 2000 expressed anunqualified opinion on those statements.

 

Weconducted our audit in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Meridian Housing, L.P., and theresults of its operations and its cash flows for the year then ended inconformity with generally accepted accounting principles.

 

Our auditwas made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. We have prepared the Multiple Family Housing BorrowerBalance Sheet (RHS Form RD 1930-8) and the Multiple Family Housing ProjectBudget (RHS Form RD 1930-7). Such information has been subjected to the auditprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basic financialstatements taken as a whole.

 

262

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

NewDevonshire II Limited Partnership

(an OhioLimited Partnership)

London,Ohio

 

We haveaudited the accompanying balance sheets of New Devonshire II LimitedPartnership (an Ohio Limited Partnership), RD Project No. 41-049-311449843, asof December 31, 2000 and 1999, and the related statements of operations,changes m partners’ equity (deficit) and cash flows for the years then ended.These financial statements are the responsibility of the management of NewDevonshire II Limited Partnership. Our responsibility is to express an opinionon these financial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards, *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates, and the U.S. Department of Agriculture, Farmers Home Administration“Audit Program”. Those standards require that we plan and perform the audits toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of New Devonshire II LimitedPartnership as of December 31. 2000 and 1999, and the results of itsoperations, the changes in partners’ deficit and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*we have also issued a reportdated February 16, 2001, on our consideration of New Devonshire II LimitedPartnership’s internal control and a report dated February 16, 2001, on itscompliance with laws and regulations.

 

Ouraudits were conducted for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The accompanying information included inthe report (shown on pages l 1 to 18) is presented for the purpose ofadditional analysis and is not a required part of the basic financialstatements of New Devonshire II Limited Partnership.

 

Such information has been subjected to the auditing procedures appliedin the audit of the basic financial statements, and, in our opinion, is fairlystated in all material respects in relation to the financial statements takenas a whole.

 

263

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

NewDevonshire West Limited Partnership

(an OhioLimited Partnership)

WestJefferson. Ohio

 

We haveaudited the accompanying balance sheets of New Devonshire West LimitedPartnership (an Ohio Limited Partnership), RD Project No. 41-049-311449844. asof December 3 l, 2000 and 1999, 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 management of NewDevonshire West Limited Partnership. Our responsibility is to express anopinion on these financial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards. *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. and the U.S. Department of Agriculture. Farmers Home Administration“Audit Program”. Those standards require that we plan and perform the audits toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statementpresentation. We believe that our audits provide a reasonable basis for ouropinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of New Devonshire West LimitedPartnership as of December 31, 2000 and 1999, and the results of itsoperations, the changes in partners’ equity (deficit) and cash flows for theyears then ended in conformity with generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards*we have also issued a reportdated February 16, 2001, on our consideration of New Devonshire West LimitedPartnership’s internal control and a report dated February 16, 2001, on itscompliance with laws and regulations.

 

Ouraudits were conducted for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The accompanying information included inthe report (shown on pages 11 to 18) is presented for the purpose of additionalanalysis and is not a required part of the basic financial statements of NewDevonshire West Limited Partnership. Such information has been subjected to theauditing procedures applied in the audit of the basic financial statements,and, in our opinion, is fairly stated in all material respects in relation tothe financial statements taken as a whole.

 

264

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Independent Auditor’s Report

 

To thePartners

PowellValley Limited Partnership

 

I haveaudited the accompanying balance sheets of Powell Valley Limited Partnership asof December 3 l, 2000 and 1999, and the related statements of operations,partners’ equity and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Myresponsibility is to express an opinion on these financial statements based onmy audits.

 

Iconducted my audits in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates, and the U.S. Department of Agriculture, Farmers Home AdministrationAudit Program. Those standards require that I plan and perform the audits toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statementpresentation. I believe that my audits provide a reasonable basis for myopinion.

 

In myopinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Powell Valley Limited Partnershipas of December 31,2000 and 1999, and the results of its operations, changes inpartners’ equity, and its cash flows for the years then ended in conformity,with generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*I have also issued my reportdated March 19, 2001 on my consideration of Powell Valley Limited Partnership’sinternal control over financial reporting and on my tests of its compliancewith certain provisions of laws and regulations.

 

265

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### IndependentAuditor’s Report

 

To thePartners

V. V. A.Limited Partnership

Charlotte,North Carolina

 

We haveaudited the accompanying balance sheets of V. V. A. Limited Partnership (aVirginia limited partnership) as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity, and cash flows for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of V. V. A. Limited Partnership as ofDecember 31, 2000 and 1999 and the results of its operations and its cash flowsfor the years then ended in conformity with generally accepted accountingprinciples.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated January 31, 2001, on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplementary information listed in the tableof contents is presented for purposes of additional analysis and is not arequired part of the basic financial statements of the Partnership. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as a whole.

 

266

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### IndependentAuditor’s Report

 

To thePartners

W. P. V.A. Limited Partnership

Charlotte,North Carolina

 

We haveaudited the accompanying balance sheets of W. P. V. A. Limited Partnership (aVirginia limited partnership) as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity, and cash flows for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by thc Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in alimaterial respects, the financial position of W. P. V. A. Limited Partnership asof December 31, 2000 and 1999, and tile results of its operations and its cashflows for the years then ended in conformity with generally accepted accountingprinciples.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated January 31, 2001, on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplementary information listed in the tableof contents is presented for purposes of additional analysis and is not arequired part of the basic financial statements of the Partnership. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

AHABProject One, L.P.

 

I haveaudited the accompanying balance sheets of AHAB Project One, L.P. as ofDecember 31, 2000 and 1999, and the related statements of operations, partners’equity (deficit) and cash flows for the years then ended. These financialstatements are the responsibility of the partnership’s management. Myresponsibility is to express an opinion on these financial statements based onmy audits.

 

Iconducted my audits in accordance with generally accepted auditing standards.Those standards require that I plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.I believe that my audits provide a reasonable basis for my opinion.

 

In myopinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of AHAB Project One, L.P. as ofDecember 31, 2000 and 1999, and the results of its operations, changes inpartners’ equity (deficit) and cash flows for the years then ended inconformity with generally accepted accounting principles.

 

My auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on pages 16 and 17 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in myopinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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To thePartners

AngelouAssociates, L. P.

New York,New York

 

We haveaudited the accompanying balance sheet of Angelou Associates, L. P- (a New YorkState limited partnership) as of December 31, 2000, and the related statementsof operations, cash flows, and partners’ capital, and the supplementaryinformation included for the year then ended. These financial statements arethe responsibility of the Company’s management. Our responsibility is toexpress art opinion on these financial statements based on our audit. The financialstatements of Angelou Associates, L. P. as of December 31, 1999, were auditedby other auditors whose report dated March 1, 2000, expressed an unqualifiedopinion on those financial statements.

 

Weconducted our audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Angelou Associates, L. P. as ofDecember 31, 2000, and the results of its operations and its cash flows for theyear then ended in conformity with generally accepted accounting principles.

 

Our auditwas made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The accompanying supplementary information ispresented for the purposes of additional analysis and is not a required part ofthe basic financial statements. Such information has been subjected to theauditing procedures applied in the audit of the basic financial statements and,in our opinion, is fairly stated in all material respects in relation to thebasic financial statements taken as a whole.

 

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Report ofIndependent Accountant

 

To thePartners of CR Housing Associates, L.P.

 

I haveaudited the accompanying balance sheets of CR HOUSING ASSOCIATES, L.P. (the“Partnership”) as of December 31, 2000 and 1999, and the related statements ofoperations, partners’ capital and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management. Myresponsibility is to express an opinion on these financial statements based onmy audit.

 

Iconducted my audit in accordance with generally accepted auditing standards.Those standards require that I plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 ail materialrespects, the financial position of CR HOUSING ASSOCIATES, L.P. as of December31, 2000 and 1999, and the results of it operations and its cash flows for theyears then ended in conformity with generally accepted accounting principles.

 

My auditwas made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 10 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in myopinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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INDEPENDENT AUDITORS’ REPORT

 

To thePartners

HollyHeights Apartments, L.P.

 

We have audited the accompanying balance sheets of Holly Heights Apartments,L.P. as of December 31, 2000 and 1999, and the related statements ofoperations, partners’ equity and cash flows for the years then ended. Thesefinancial statements are the responsibility of the partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Holly HeightsApartments, L.P. as of December 31, 2000 and 1999, and the results of itsoperations, changes in partners’ equity and cash flows for the years then endedin conformity with generally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on page 14is presented for purposes of additional analysis and is not a required part ofthe basic financial statements, such information has been subjected to theauditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

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INDEPENDENTAUDITORS’REPORT

 

TO THEPARTNERS OF 1374 BOSTON ROAD LIMITED PARTNERSHIP

 

We have audited the accompanying balance sheet of 1374 BOSTON ROADLIMITED PARTNERSHIP as of December 31, 2000, and the related statements ofoperations, changes in partners’ capital and cash flows for the year thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

We conducted our audit in accordance with auditing standards generallyaccepted in the United States of America. Those standards require that we planand perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of 1374 BOSTON ROADLIMITED PARTNERSHIP as of December 31, 2000, and the results of its operationsand its cash flows for the year then ended in conformity with accountingprinciples generally accepted in the United States of America.

 

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

BIENVILLEII APARTMENTS

 

We haveaudited the accompanying balance sheets of BIENVILLE II APARTMENTS, RHS PROJECTNO.: 22-007-721280566 as of December 31, 2000 and 1999 and the relatedstatements of operations, changes in partners’ equity (deficit) and cash flowsfor the years then ended. These financial statements are the responsibility ofthe partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide a reasonablebasis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in ail material respects, the financial position of BIENVILLE IIAPARTMENTS as of December 31, 2000 and 1999 and the results of its operations,changes in partners’ equity and cash flows for the years then ended inconformity with generally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information presentedon pages 16 through 24, is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 12, 2001 on our consideration of BIENVILLE IIAPARTMENTS’s internal control and a report dated February 12, 2001 on itscompliance with laws and regulations applicable to the financial statements.

 

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

BLANCHARDII APARTMENTS

 

We have audited the accompanying balance sheets of BLANCHARD IIAPARTMENTS, RHS PROJECT NO. 22-009-721313034 as of December 31, 2000 and 1999and the related statements of operations, changes in partners’ equity (deficit)and cash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of BLANCHARD IIAPARTMENTS as of December 31, 2000 and 1999 and the results of its operations,changes in partners’ equity and cash flows for the years then ended inconformity with generally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information presentedon pages 16 through 24, is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 12, 2001 on our consideration of BLANCHARD IIAPARTMENTS’s internal control and a report dated February 12, 2001 on itscompliance with laws and regulations applicable to the financial statements.

 

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

COTTONWOODAPARTMENTS I

 

We have audited the accompanying balance sheets of COTTONWOOD APARTMENTSI, RHS PROJECT NO. 22-005-721313387 as of December 31, 2000 and 1999 and therelated statements of operations, changes in partners’ equity (deficit) andcash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of COTTONWOODAPARTMENTS I as of December31, 2000 and 1999 and the results of its operations,changes in partners’ equity and cash flows for the years then ended inconformity with generally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information presentedon pages 16 through 24, is presented for purposes of additional analysis and isnot a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 10, 2001 on our consideration of COTTONWOODAPARTMENTS I’s internal control and a report dated February 10, 2001 on itscompliance with laws and regulations applicable to the financial statements.

 

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

EVANGELINEPARTNERSHIP

 

We have audited the accompanying balance sheets of EVANGELINEPARTNERSHIP, RHS PROJECT NO. 22-027-721313386 as of December 31, 2000 and 1999and the related statements of operations, changes in partners’ equity (deficit)and cash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and Government Auditing Standards, issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of EVANGELINEPARTNERSHIP as of December31, 2000 and 1999 and the results of its operations,changes in partners’ equity and cash flows for the years then ended inconformity with generally accepted accounting principles.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information presented on pages i8through 26, is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in our opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 20, 2001 on our consideration of EVANGELINEPARTNERSHIP’s internal control and a report dated February 20, 2001 on itscompliance with laws and regulations applicable to the financial statements.

 

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Independent Auditors’ Report

 

Partners

FairwayII Limited Dividend Housing Association

LimitedPartnership

Marlette,Michigan

 

We haveaudited the accompanying balance sheet of Fairway II Limited Dividend HousingAssociation Limited Partnership, Rural Housing Service Project No.26-074-0383047638 as of December 31, 2000 and 1999, and the related statementsof income, partners’ equity and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

Weconducted our audits in accordance with auditing standards generally acceptedin the United States of America and the standards applicable to financialaudits contained in *Government Auditing Standards*issued bythe Comptroller General of the United States, and the U.S. Department ofAgriculture, Rural Housing Service Audit Program. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Fairway II Limited DividendHousing Association Limited Partnership as of December 31, 2000 and 1999, andthe results of its operations, changes in partners’ equity and its cash flowsfor the years then ended in conformity with generally accepted accountingprinciples.

 

Inaccordance with *Government Auditing Standards,*we have also issued a reportdated February 9, 2001 on our consideration of Fairway II Limited DividendHousing Association Limited Partnership’s internal control over financialreporting and our tests of compliance with certain provisions of laws,regulations, contracts and grants.

 

Ouraudits were conducted for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplementary information presentedon pages 11 through 19 is presented for purposes of complying with therequirements of Rural Housing Service and is not a required part of the basicfinancial statements. Such information has been subjected to the auditprocedures 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 financialstatements taken as a whole.

 

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Independent Auditors’ Report

 

To thePartners of

Fort Bend NHC L.P.

(AVirginia Limited Partnership)

 

We haveaudited the accompanying balance sheet of Fort Bend NHC L.P. as of December 31,2000, and the related statements of operations, changes in partners’ equity(deficit) and cash flows for the year then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with generally accepted auditingstandards. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Fort Bend NHC L.P.as of December 31, 2000, and the results of its operations and its cash flowsfor the year then ended in conformity with generally accepted accountingprinciples.

 

278

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INDEPENDENT AUDITORS’ REPORT

 

To thePartners

NeighborhoodRestorations Limited Partnership VII

Dresher,Pennsylvania

 

We haveaudited the accompanying balance sheets of Neighborhood Restorations LimitedPartnership VII (a Pennsylvania Limited Partnership) as of December 31,2000 and1999, and the related statement of operations, changes in partners’ capital andcash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe our audits provide a reasonable basis forour opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Neighborhood Restorations LimitedPartnership VII as of December 31, 2000 and 1999, and the results of itsoperations and its cash flows for the years then ended in conformity withgenerally accepted accounting principles.

 

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### IndependentAuditor’s Report

 

To thePartners

R.V.K.Y.Limited Partnership

Charlotte,North Carolina

 

We haveaudited the accompanying balance sheets of R.V.K.Y. Limited Partnership (aKentucky limited partnership) as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity, and cash flows for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand the standards applicable to financial audits contained in *GovernmentAuditing Standards’*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of R.V.K.Y. Limited Partnership as ofDecember 31, 2000 and 1999, and the results of its operations and its cashflows for the years then ended in conformity with generally accepted accountingprinciples.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated January 31, 2001, on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplementary information listed in the tableof contents is presented for purposes of additional analysis and is not arequired part of the basic financial statements of the Partnership. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

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To ThePartners

SumnerHouse Limited Partnership

 

INDEPENDENT AUDITORS’ REPORT

 

We haveaudited the accompanying balance sheets of Sumner House Limited Partnership asof December 31, 2000 and 1999, and the related statements of operations andchanges in partners’ capital, and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Sumner House Limited Partnershipas of December 31, 2000 and 1999, and the results of its operations and cashflows for the years then ended, in conformity with generally acceptedaccounting principles.

 

Ouraudits were made for the purpose of forming all opinion on the basic financialstatements taken as a whole. The supplemental information on pages 9 and 10 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and isfairly stated in all material respects in relation to the basic financial statementstaken as a whole.

 

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To thePartners

TerraceviewLimited Partnership

 

We have audited the accompanying balance sheet of Terraceview LimitedPartnership as of December 31, 2000 and 1999, and the related statements ofoperations, partners’ equity (deficit) and cash flows for the year then ended.These financial statements are the responsibility of the partnership’smanagement. Our responsibility is to express an opinion these financialstatements based on our audit.

 

Weconducted our audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and the significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Terraceveiw Limited Partnership asof December 31, 2000 and 1999 and the results of its operations, changes inpartners’ equity (deficit) and cash flows for the year then ended in conformitywith generally accepted accounting principles.

 

Our auditwas made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 12 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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ThePartners

CollinsHousing, L.P.

Collins,Mississippi

 

We haveaudited the accompanying balance sheets of Collins Housing, L.P., RD Case No.28-0160640864674, as of December 31 2000, and 1999, and the related statementsof operations, partners’ equity, and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conductedour audits in accordance with generally accepted auditing standards and *GovernmentAuditing Standards,*issued by the comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit included examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso included assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provided a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Collins Housing, L.P. as ofDecember 31, 2000 and 1999, and the results of its operations and its cashflows for the years then ended, in conformity with generally acceptedaccounting principles.

 

Inaccordance with *Government Auditing Standards*and the Audit Program issuedby the United States Department of Agriculture, Rural Development, we have alsoissued a report dated March 21, 2001, on its compliance with specificrequirements applicable to major RD programs and nonmajor RD programtransactions.

 

Ouraudits were made for the purpose of forming an opinion on the financialstatements taken as a whole. The supporting data included on pages 12 through19 are presented for purposes of additional analysis and are not a requiredpart of the financial statements of Collins Housing, L.P. Such information,except for the current budget and proposed budget columns on pages 15 through18, on which we express no opinion, is fairly stated in all material respectsin relation to the financial statements taken as a whole.

 

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

HarborPointe/MHT Limited Dividend Housing

AssociationLimited Partnership

 

We haveaudited the accompanying balance sheet of Harbor Pointe/MHT Limited DividendHousing Association Limited Partnership (a Michigan limited partnership) as ofDecember 31, 2000, and the related statements of income, partners’ equity andcash flows for the year then ended. These financial statements are theresponsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

 

Weconducted our audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Harbor Pointe/MHT Limited DividendHousing Association Limited Partnership as of December 31, 2000, and theresults of its operations and its cash flows for the year then ended, inconformity with generally accepted accounting principles.

 

Our auditwas made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on pages 11 and 12 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in ouropinion, is fairly stated, in all material respects, in relation to the basicfinancial statements taken as a whole.

 

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To ThePartners

LincolnHotel Partnership

A CaliforniaLimited Partnership

600 WestBroadway, #1070

SanDiego, CA 92101

 

### IndependentAuditor’s Report

 

We haveaudited the accompanying balance sheets of Lincoln Hotel Partnership, aCalifornia Limited Partnership, as of December 31, 2000 and 1999 and the relatedstatements of operations and partners’ capital and statements of cash flews forthe years then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Lincoln Hotel Partnership, aCalifornia Limited Partnership, as of December 31, 2000 and 1999, and theresults of operations and cash flows for the years then ended in conformitywith generally accepted accounting principles.

 

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

LutkinBayou Apartments, LP

DrewMississippi

 

 

We haveaudited the accompanying balance sheets of Lutkin Bayou Apartments, LP (aMississippi limited partnership), RHS Project No. 28-083-640863241 as ofDecember 31, 2000 and 1999, and the related statements of operations, partners’capital (deficit) and cash flows for the years then ended. These financialstatements are the responsibility of the partnership’s management. Our responsibilityis to express an opinion on these financial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Lutkin Bayou Apartments, LP, andthe results of its operations and its cash flows for the years then ended inconformity with generally accepted accounting principles.

 

Ouraudits were made for the purposes of forming an opinion on the basic financialstatements taken as a whole. The supplemental information is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. We have prepared the Multiple Family Housing BorrowerBalance Sheet (RHS FORM RD 1980-8) and the Multiple Family Housing ProjectBudget (RHS FORM RD 1980-7). Such information has been subjected to the auditprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

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To ThePartners

NorthwayDrive, Ltd.

Bryan,Texas

 

We haveaudited the accompanying balance sheets of Northway Drive, Ltd. - (A TexasLimited Partnership) as of December 31, 2000 and 1999, and the relatedstatements of income, partners’ equity and cash flows for the years endedDecember 31, 2000 and 1999.These financial statements are the responsibility ofthe Partnership’s management. Our responsibility is to express an opinion onthese financial statements based on our audits.

 

Weconducted our audits in accordance with Generally Accepted Auditing Standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the balance sheet is free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the balance sheet. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall balance sheet presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

In ouropinion, the balance sheet referred to above presents fairly, in all materialrespects, the financial position of Northway Drive, Ltd. - (A Texas LimitedPartnership) as of December 31, 2000 and 1999, in conformity with GenerallyAccepted Accounting Principles

 

287

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INDEPENDENT AUDITOR’ S REPORT

 

 

To thePartners

BellwoodFour Limited Partnership

 

We haveaudited the accompanying balance sheets of Bellwood Four Limited Partnership,(the Partnership), as of December 31, 2000 and 1999 and the related statementsof profit (loss), changes in partners’ equity (deficit) and cash flows for theyears then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

Weconducted our audits in accordance with U.S. generally accepted auditingstandards and the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Bellwood Four Limited Partnershipas of December 31, 2000 and 1999, and its results of operations, changes inpartners’ equity (deficit), and cash flows for the years then ended inconformity with U.S. generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated February 16, 2001 on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts and grants. That report isan integral part of an audit performed in accordance with *Government Auditing Standards*andshould be read in conjunction with this report in considering the results ofour audit.

 

288

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Independent Auditors’ Report

 

To thePartners

BowieApartments, Ltd.

 

We have audited the accompanying balance sheets of Bowie Apartments,Ltd. (a limited partnership), RD Project No. 50-069-0752627345-01-7, as ofDecember 31, 2000 and 1999, and the related statements of operations, partners’equity and cash flows for the years ended December 31, 2000 and 1999. Thesefinancial statements are the responsibility of the partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audit.

 

We conducted our audits in accordance with generally accepted auditingstandards and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, 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 presentfairly, in all material respects, the financial position of Bowie Apartments,Ltd., RD Project No. 50-069-0752627345-01-7, as of December 31, 2000 and 1999,and the results of its operations, changes in partners’ equity and cash flowsfor the years then ended in conformity with generally accepted accountingprinciples.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on Page1-19 and 1-20 is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the audit procedures applied in the audit of the basic financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 9, 2001 on our consideration of BowieApartments, Ltd’s internal control over financial reporting and our tests ofits compliance with certain provisions of laws, regulations, contracts andgrants. This report is an integral part of an audit performed in accordancewith Government Auditing Standards and should be read in conjunctionwith this report in considering the results of our audit.

 

289

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To thePartners

C.V.V.A.Limited Partnership

Charlotte,North Carolina

 

We haveaudited the accompanying balance sheets of C.V.V.A. Limited Partnership (aVirginia limited partnership) as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity, and cash flows for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of C.V.V.A. Limited Partnership as ofDecember 31, 2000 and 1999, and the results of its operations and its cashflows for the years then ended in conformity with generally accepted accountingprinciples.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated January 31, 2001, on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplementary information listed in the tableof contents is presented for purposes of additional analysis and is not arequired part of the basic financial statements of the Partnership. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

290

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Independent Auditors’ Report

 

To thePartners

GrahamAoartments, Ltd.

 

We have audited the accompanying balance sheets of Graham Apartments,Ltd. (a limited partnership), RD Project No. 51-52-752663159-01-1, as ofDecember 31, 2000 and 1999, and the related statements of operations, partners’equity and cash flows for the years then ended. These financial statements arethe responsi­bility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Graham Apartments,Ltd., RD Project No. 51-52-752663159-01-1, as of December 31, 2000 and 1999,and the results of its operations, changes in partners’ equity and cash flowsfor the years then ended in conformity with generally accepted accountingprinciples.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on Page1-20 is presented for purposes of additional analysis and is not a requiredpart of the basic financial state­ments. Such information has been subjected tothe audit procedures applied in the audit of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 23, 2001 on our consideration of GrahamApartments, Ltd’s internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts and grants.This report is an integral part of an audit performed in accordance with GovernmentAuditing Standards and should be read in conjunction with this report inconsidering the results of our audit.

 

291

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INDEPENDENT AUDITOR’S REPORT

 

To ThePartners

HillsideTerrace Associates, L.P.

 

We haveaudited the accompanying balance sheet of Hillside Terrace Associates, L.P. (aLimited Partnership) as of December 31, 2000 and 1999 and the relatedstatements of operations and partners’ capital (deficit) and cash flows for theyears then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Hillside Terrace Associates, L.P.as of December 31, 2000 and 1999, and the results of its operations and itscash flows for the years then ended in conformity with generally acceptedaccounting principles.

 

292

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IndependentAuditor’s Report

 

To thePartners

K. G. V.A. Limited Partnership

Charlotte,North Carolina

 

We haveaudited the accompanying balance sheets of K. G. V. A. Limited Partnership (a Virginialimited partnership) as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity, and cash flows for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of K. G. V. A. Limited Partnership asof December 31, 2000 and 1999, and the results of its operations and its cashflows for the years then ended in conformity with generally accepted accountingprinciples.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated January 31, 2001, on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplementary information listed in the tableof contents is presented for purposes of additional analysis and is not arequired part of the basic financial statements of the Partnership. Such informationhas been subjected to the auditing procedures applied in the audits of thebasic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

293

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INDEPENDENT AUDITORS’ REPORT

 

To theMembers

LindenPartners II, LLC

 

We haveaudited the accompanying balance sheets of Linden Partners II, LLC (a NebraskaLimited Liability Company) as of December 31, 2000 and 1999, and the relatedstatements of operations, members’ equity (deficit) and cash flows for theyears then ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Linden Partners II, LLC as ofDecember 3l, 2000 and 1999, and the results of its operations, and changes inmembers’ equity (deficit) and cash flows for the years then ended in conformitywith generally accepted accounting principles.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page 12 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

294

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Independent Auditor’s Report

 

# **To the Partners**

MesaGrande Apartments, Limited Partnership

Irvine,California

 

I haveaudited the accompanying balance sheet of Mesa Grande Apartments, LimitedPartnership as of December 31, 2000, and the related statements of operations,changes in partners’ capital, and cash flows for the year then ended. Thesefinancial statements are the responsibility of the Partnership’s management. Myresponsibility is to express an opinion on these financial statements based onmy audit.

 

Iconducted my audit in accordance with generally accepted auditing standards.Those standards require that I plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amount and disclosures in the financial statements.  An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. I believe thatmy audit provides a reasonable basis for my opinion.

 

In myopinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Mesa Grande Apartments, LimitedPartnership at December 31, 2000, and thc results of its operations and cashflows for the year then ended in conformity with generally accepted accountingprinciples.

 

295

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Independent Auditor’s Report 

 

To thePartners

## **Sunrise Homes Apartments, Limited Partnership**

Irving,California

 

I haveaudited thc accompanying balancesheet of Sunrise Homes Apartments,Limited Partnership as of December 31, 2000, and the related statements ofOperations, changes in partners’ capital, and cash flows for thc year thenended. These financial statements are the responsibility of the Partnership’smanagement. My responsibility is to express an opinion on these financialstatements based on my audit.

 

Iconducted my audit in accordance with generally accepted auditing standards.Those standards required that I plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingtire accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation. I believethat my audit provides a reasonable basis for my opinion.

 

In myopinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Sunrise Homes Apartments, LimitedPartnership at December 31, 2000, and thc remits of its operations and cashflows for the year then ended in conformity with generally accepted accountingprinciples.

 

296

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### INDEPENDENTAUDITOR’S REPORT

 

 

To thePartners

PyramidOne Limited Partnership

 

We haveaudited the accompanying balance sheet of Pyramid One Limited Partnership, (thePartnership), as of December 31, 2000 and the related statements of profit(loss), changes in partners’ equity (deficit) and cash flows for the year thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

Weconducted our audit in accordance with U.S. generally accepted auditingstandards and the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Pyramid One Limited Partnership asof December 31, 2000, and its results of operations, changes in partners’equity (deficit), and cash flows for the year then ended in conformity withU.S. generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated March 2, 2001 on our consideration of the Partnership’s internalcontrol over financial reporting and our tests of its compliance with certainprovisions of laws, regulations, contracts and grants. That report is anintegral part of an audit performed in accordance with *Government Auditing Standards*andshould be read in conjunction with this report in considering the results ofour audit.

 

297

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Independent Auditors’ Report

 

To thePartners

NoconaApartments, Ltd.

 

We have audited the accompanying balance sheets of Nocona Apartments,Ltd. (a limited partnership), RD Project No: 50-069-0752685663-02-2 as ofDecember 31, 2000 and 1999, and the related statements of operations, partners’equity and cash flows for the years then ended. These financial statements arethe responsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Nocona Apartments, Ltd. RD ProjectNo.: 50-069-0752685663-02-2 as of December 31, 2000 and 1999, and the resultsof its operations, changes in partners’ equity and cash flows for the yearsthen ended in conformity with generally accepted accounting principles.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on Page1-20 and 1-21 is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the audit procedures applied in the audit of the basic financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the basic financial statements taken as a whole.

 

In accordance with Government Auditing Standards, we have alsoissued a report dated February 5, 2001 on our consideration of NoconaApartments, Ltd.’s internal control over financial reporting and our tests ofits compliance with certain provisions of laws, regulations, contracts andgrants. This report is an integral part of an audit performed in accordancewith Government Auditing Standards and should be read in conjunctionwith this report in considering the results of our audit.

 

298

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INDEPENDENT AUDITORS’ REPORT

 

ThePartners

CantonHousing One, L.P.

Jackson,Mississippi

 

We have audited the accompanying balance sheets of Canton Housing One,L.P., a Mississippi limited partnership, FmHA Project No. 28-045-064088606201-8, as of December 31, 2000 and 1999, and the related statements of income(loss), partners’ capital, and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and *Government Auditing Standards*issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide a reasonablebasis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Canton Housing One,L.P., FmHA Project No. 28-045-0640886062 01-8, as of December 31, 2000 and1999, and the results of its operations and its cash flows for the years thenended in conformity with accounting principles generally accepted in the UnitedStates of America.

 

In accordance with *Government Auditing Standards,*we havealso issued a report dated February 6, 2001, on our consideration of thePartnership’s internal control and a report dated February 6, 2001, on itscompliance with specific requirements applicable to major FmHA programs.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The accompanying financial informationincluded on pages 14 through 19 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation, except for file current budget and proposed budget columns in PartI and II and file information in Part IV included on pages 14 through 17 onwhich we express no opinion, has been subjected to the auditing proceduresapplied in file audits of the basic financial statements, and in our opinion,is fairly stated in all material respects in relation to the basic financialstatements taken as a whole.

 

299

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#### **INDEPENDENTAUDITORS’ REPORT**

 

ThcPartners

CantonHousing Two, L.P.

Jackson,Mississippi

 

We have audited the accompanying balance sheet of Canton Housing Two,L.P., a Mississippi limited partnership, FmHA Project No. 28-045-064088606101-5, as of December 31, 2000 and 1999, and the related statements of income(loss), partners’ capital, and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and *Government Auditing Standard*issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in alt material respects, the financial position of Canton Housing Two,L.P., FmHA Project No. 28-045-0640886061 01-5, as of December 31, 2000 and1999, and the results of its operations and its cash flows for the years thenended in conformity with accounting principles generally accepted in the UnitedStates of America.

 

In accordance with *Government Auditing Standards,*we havealso issued a report dated February 7, 2001, on our consideration of thePartnership’s internal control and a report dated February 7, 2001, on itscompliance with specific requirements applicable to major FmHA programs.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The accompanying financial informationincluded on pages 13 through 20 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation, except for the current budget and proposed budget columns in PartI and II and the information in Part IV included on pages 13 through 17, onwhich we express no opinion, has been subjected to the auditing proceduresapplied in the audits of the basic financial statements, and in our opinion, isfairly stated in all material respects in relation to the basic financialstatements taken as a whole.

 

300

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INDEPENDENT AUDITORS’ REPORT

 

ThePartners

CantonHousing Three, L.P.

Jackson,Mississippi

 

We have audited the accompanying balance sheets of Canton HousingThree, L.P., a Mississippi limited partnership, FmHA Project No.28-045-0640886063 04-2, as of December 31, 2000 and 1999, and the relatedstatements of income (loss), panners’ capital, and cash flows for the yearsthen ended. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

 

We conducted our audit in accordance with generally accepted auditingstandards and *Government Auditing Standards*issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Canton HousingThree, L.P., FmHA Project No. 28-045-0640886063 04-2, as of December 31, 2000and 1999, and the results of its operations and its cash flows for the yearsthen ended in conformity with accounting principles generally accepted in theUnited States of America.

 

In accordance with *Government Auditing Standards,*we havealso issued a report dated February 9, 2001 on our consideration of thePartnership’s internal control and a report dated February 9, 2001, on itscompliance with specific requirements applicable to major FmHA programs.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The accompanying financial informationincluded on pages 12 through 19 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation, except for the current budget and proposed budget columns in PartI and II and the information in part IV included on pages 12 through 16, onwhich we express no opinion, has been subjected to the auditing proceduresapplied in the audits of the basic financial statements, and in our opinion, isfairly stated in all material respects in relation to the basic financialstatements taken as a whole.

 

301

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INDEPENDENT AUDITORS’ REPORT

 

ThePartners

CantonHousing Four, L.P.

Jackson,Mississippi

 

We have audited the accompanying balance sheets of Canton Housing Four,L.P., a Mississippi limited partnership, FmHA Project No. 28-045-064088606402-0, as of December 31, 2000 and 1999, and the related statements of income(loss), partners’ capital, and cash flows for the years then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.

 

We conducted our audits in accordance with generally accepted auditingstandards and *Government Auditing Standards*issued by the ComptrollerGeneral of the United States. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statementsare free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Canton HousingFour, L.P., FmHA Project No. 28-045-0640886064-02-0, as of December 31, 2000and 1999, and the results of its operations and its cash flows for the yearsthen ended in conformity with accounting principles generally accepted in theUnited States of America.

 

In accordance with *Government Auditing Standards,*we havealso issued a report dated February 9, 2001, on our consideration of thePartnership’s internal control and a report dated February 9, 2001, on itscompliance with specific requirements applicable to major FmHA programs.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The accompanying financial informationincluded on pages 12 through 19 is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. Suchinformation, except for the current budget and proposed budget columns in PartI and II and the information in Part IV included on pages 12 through 19, onwhich we express no opinion, has been subjected to the auditing proceduresapplied in the audits of the basic financial statements, and in our opinion, isfairly stated in all material respects in relation to the basic financialstatements taken as a whole.

 

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### INDEPENDENTAUDITOR’S REPORT

 

To thePartners

EllisvilleHousing, L.P.

WestPoint, Mississippi

 

We have auditedthe accompanying balance sheets of Ellisville Housing, L.P. (a Mississippilimited partnership), RHS Project No. 28-034-0640864667 as of December 31, 2000and 1999, and the related statements of operations, partners’ capital (deficit)and cash flows for the years then ended. These financial statements are theresponsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in ailmaterial respects, the financial position of Ellisville Housing, L.P., and theresults of its operations and its cash flows for the years then ended inconformity with generally accepted accounting principles.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. We have prepared the Multiple Family Housing BorrowerBalance Sheet (RHS Form RD 1930-8) and the Multiple Family Housing ProjectBudget (RHS Form RD 1930-7). Such information has been subjected to the auditprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

303

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Independent Auditor’s Report

 

To thePartners of

Eagles Ridge Terrace, L. P.

Decatur,Texas

 

I have audited the accompanying balance sheets of Eagles Ridge Terrace,L. P. as of December 31, 2000 and 1999, and the related statements ofoperations, partners’ capital and cash flows for the years then ended. Thesefinancial statements are the responsibility of the partnership’s management. Myresponsibility is to express an opinion on these financial statements based onmy audits.

 

I conducted my audits in accordance with generally accepted auditingstandards. Those standards require that I plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. I believe that my audits provide a reasonable basis formy opinion.

 

In my opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Eagles RidgeTerrace, L. P. as of December 31, 2000 and 1999 and the results of itsoperations, changes in partners’ capital and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

My audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on pages1-16 and 1-17 is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in my opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

304

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INDEPENDENTAUDITOR’S REPORT

 

To thePartners

HattiesburgHousing, LP

Jackson,Mississippi

 

We haveaudited the accompanying balance sheets of Hattiesburg Housing, LP (aMississippi limited partnership), RHS Project No. 28-018-640864668 as ofDecember 31, 2000 and 1999, and the related statements of operations, partners’capital and cash flows for the years then ended. These financial statements arethe responsibility of the partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Hattiesburg Housing, LP, and theresults of its operations and its cash flows for the years then ended inconformity with generally accepted accounting principles.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. We have prepared the Multiple Family Housing BorrowerBalance Sheet (RHS FORM RD 1930-8) and the Multiple Family Housing ProjectBudget (RHS FORM RD 1930-7). Such information has been subjected to the auditprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

305

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Independent Auditor’s Report

 

To tilePartners of

HendersonTerrace, L. P.

Bridgeport,Texas

 

I have audited the accompanying balance sheets of Henderson Terrace, L.P. as of December 31, 2000 and 1999, and the related statements of operations,partners’ capital and cash flows for the years then ended. These financialstatements are the responsibility o[‘the partnership’s management. Myresponsibility is to express an opinion on these financial statements based onmy audits.

 

I conducted my audits in accordance with generally accepted auditingstandards. Those standards require that I plan and perform the audits to obtainreasonable assurance about Whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. I believe that my audits provide a reasonable basis formy opinion.

 

In my opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of’ Henderson Terrace,L. P. as of December 3 l. 2000 and 1999 and the results of its operations,changes in partners’ capital and cash flows for the years then ended inconformity with generally accepted accounting principles.

 

My audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on pagesI-16 and 1-17 is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audits of the basicfinancial statements and, in my opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

306

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INDEPENDENT AUDITORS’ REPORT

 

To thepartners

HurricaneHills II LC

 

I haveaudited the accompanying balance sheets of Hurricane Hills II LC as of December31, 2000, and the related partners’ equity for the year then ended. These financialstatements are the responsibility of the partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

Iconducted my audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examination, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management as well as evaluating the overall financialstatement presentation. We believe that our audits provided a reasonable basisfor our opinion.

 

In myopinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Hurricane Hills II LC as ofDecember 31, 2000, and the results cf its operations, changes in Partners’equity and cash flows for the years then ended in conformity with generallyaccepted accounting principles.

 

307

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Independent Auditor’s Report

 

To thePartners of

LakeviewLittle Elm, L. P.

LittleElm. Texas

 

I have audited the accompanying balance sheets of Lakeview Little Elm,L. P. as of December 31, 2000 and 1999, and the related statements ofoperations, partners’ capital and cash flows for the years then ended. Thesefinancial statements are the responsibility’ of the partnership’s management.My responsibility is to express an opinion on these financial statements basedon my audits.

 

I conducted my audits in accordance with generally accepted auditingstandards. Those standards require that I plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements, gal auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. I believe that my audits provide a reasonable basis tbrmy opinion.

 

In my opinion, the financial statements referred to above presentfairly, in ail material respects, the financial position of Lakeview LittleElm, L. P as of December 3 l, 2000 and 1999 and the results of its operations,changes in partners’ capital and cash flow’s for the years then ended inconformity with generally accepted accounting principles

 

My audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on pagesI-16 and I-17 is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in my opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as whole.

 

308

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Independent Auditor’s Report

 

To thePartners of

Mesquite Trails, L. P.

Jacksboro,Texas

 

I have audited the accompanying balance sheets of Mesquite Trails. L.P.as of December 31, 2000 and 1999. and the related statements of operations,partners’ capital and cash flows for the years then ended. These financialstatements are the responsibility of the partnership’s management. Myresponsibility is to express an opinion on these financial statements based on my audit.

 

I conducted my audits in accordance with generally accepted auditingstandards. Those standards require that I plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. I believe that my audits provide a reasonable basis formy opinion.

 

In my opinion, the financial statements referred to above presentfairly’, in all material respects, the financial position of Mesquite Trails,L. P. as of December 3l, 2000 and 1999 and the results of its operations,changes in partners’ capital and casti flows for the years then ended inconformity with generally accepted accounting principles.

 

My audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on pagesI-16 and I-17 is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in my opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole.

 

309

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# **Independent Auditor’s Report**

 

To thePartners

N. M. V.A. Limited Partnership

Charlotte,North Carolina

 

We haveaudited the accompanying balance sheets of N. M. V. A. Limited Partnership (aVirginia limited partnership) as of December 31, 2000 and 1999, and the relatedstatements of operations, partners’ equity, and cash flows for the years thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standardsand the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of N. M. V. A. LimitedPartnership as of December 31, 2000 and 1999, and the results of its operationsand its cash flows for the years then ended in conformity with generallyaccepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated January 31, 2001, on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants.

 

Our audits were made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplementary information listed inthe table of contents is presented for purposes of additional analysis and isnot a required part of the basic financial statements of the Partnership. Suchinformation has been subjected to the auditing procedures applied in the auditsof the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as awhole.

 

310

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Independent Auditor’s Report

 

To thePartners of

PilotPoint Apartments, L. P.

PilotPoint, Texas

 

I have audited the accompanying balance sheets of Pilot PointApartments. L. P as of’ December 31, 2000 and 1999 and the related statementsof operations, partners’ capital and cash flows for the years then ended. Thesefinancial statements are the responsibility of the partnership’s management. Myresponsibility is to express an opinion on these financial statements based onmy audits.

 

I conducted my audits in accordance with generally accepted auditingstandards Those standards require that l plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation.  I believe thatmy audits provide a reasonable basis for my opinion.

 

In my opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of Pilot PointApartments, L.P. as of December 31, 2000 and 1999 and the results of itsoperations, changes in partners’ capital and cash flows for the years thenended in conformity with generally accepted accounting principles.

 

My audits were made for the purpose of forming an opinion on the basic financial statements taken as awhole. The supplemental information on pages l-16 and l-17 is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and, in myopinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

311

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##### Independent Auditor’s Report

 

To thePartners of

SeagravesApartments, L.P.

Ferris,Texas

 

I have audited the accompanying balance sheet of Seagraves Apartments,L.P. as of December 31, 2000, and the accompanying statements of operations,partners’ capital and cash flows for the year then ended. Those statements arethe responsibility of the partnership’s management. My responsibility is toexpress an opinion on the financial statements based on my audit.

 

I conducted my audit in accordance with generally accepted auditingstandards. Those standards require that I and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence,supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. I believe that my audit provides a reasonable basis for myopinion.

 

In my opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of SeagravesApmartments, L.P. as of December 31, 2000 and the results of its operations,changes in partners’ capital and cash flows for the year then ended inconformity with generally accepted accounting principles.

 

My audit was made for the purpose of forming an opinion on the basicfinancial statements taken as a whole. The supplemental information on pagesI-16 and I-17 is presented for purposes of additional analysis and is not arequired part of basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basicfinancial statements and, in my opinion, is fairly stated in all materialrespects in relation to the basic financial statements taken as a whole,

 

312

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INDEPENDENT AUDITOR’S REPORT

 

Partners

SencitHampden Associates, L.P.

 

 

We have audited the accompanying balance sheets of SENCIT HAMPDENASSOCIATES, L.P., ROTH VILLAGE TOWNHOMES, PHFA Project No. 0-546, as ofDecember 31, 2000 and 1999, and the related statements of profit and loss,partners’ equity and cash flows for the years then ended. These financialstatements are the responsibility of the Partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

We conducted ouraudits in accordance with generally accepted auditing standards. Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Sencit Hampden Associates, L.P. asof December 31, 2000 and 1999, and the results of its operations and its cashflows for the years then ended in conformity with generally accepted accountingprinciples.

 

313

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

SilverCreek/MHT Limited Dividend Housing

AssociationLimited Partnership

 

We haveaudited the accompanying balance sheet of Silver Creek/MHT Limited DividendHousing Association Limited Partnership (a Michigan limited partnership) as ofDecember 31, 2000, and the related statements of income, partners’ equity andcash flows for the year then ended. These financial statements are theresponsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

 

Weconducted our audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Silver Creek/MHT Limited DividendHousing Association Limited Partnership as of December 31, 2000, and theresults of its operations and its cash flows for the year then ended, inconformity with generally accepted accounting principles.

 

Our auditwas made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on pages 11 and 12 ispresented for’ purposes of additional analysis and is not a required part ofthe basic financial statements. Such information has been subjected to theauditing procedures applied in the audit of the basic financial statements and,in our opinion, is fairly stated, in all material respects, in relation to thebasic financial statements taken as a whole.

 

314

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Independent Auditor’s Report

 

 

To thePartners

IndianaDevelopment Limited Partnership

Novi,Michigan

 

We haveaudited the accompanying balance sheets of Indiana Development LimitedPartnership as of December 31, 2000 and 1999 and the related statements ofoperation, partner capital and cash flows for the years then ended. Thesefinancial statements are the responsibility of Indiana Development LimitedPartnership’s management. Our responsibility is to express an opinion on thefinancial statement based upon our audit.

 

Weconducted our audits in accordance with generally accepted auditing standards.These standards require that we plan and perform the audit to obtain reasonableassurance whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statements presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Indiana Development LimitedPartnership as of December 31, 2000 and 1999 and the results of its operationsand its cash flow for the years then ended in conformity with generallyaccepted accounting principles.

 

Our auditswere made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on pages 12, 13 and14 is presented for purposes of additional analysis and is not a required partof the basic financial statements. Such information has been subjected to theauditing procedures applied in the audits of the basic financial statementsand, in our opinion, is fairly stated in all material respects in relation tothe basic financial statements taken as whole.

 

315

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners of Martinsville-I, Ltd.

 

I haveaudited the accompanying balance sheet of Martinsville-I, Ltd. (a Kentuckylimited partnership) as of December 31, 2000 and the related statements ofoperations, changes in partners’ capital and cash flows for the year thenended. The financial statements are the responsibility of the Partnership’smanagement. My responsibility is to express an opinion on these financialstatements based on my audit.

 

Iconducted my audit in accordance with generally accepted auditing standards.Those standards require that I plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by thePartnership’s general partner and contracted management agent, as well asevaluating the overall financial statement presentation. I believe that myaudit provides a reasonable basis for my opinion.

 

In myopinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Martinsville-I, Ltd. at December31, 2000, and its operations, changes in partners’ capital and cash flows forthe year then ended in conformity with generally accepted accountingprinciples.

 

316

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Auditors’ report

 

To thePartners

ParksidePlaza Associates, L. P.

New York,New York

 

We haveaudited the accompanying balance sheet of Parkside Plaza Associates, L. P. (aNew York State limited partnership) as of December 31, 2000. This financialstatement is the responsibility of the Company’s management. Our responsibilityis to express an opinion on this financial statements based on our audit. Thebalance sheet of  Parkside PlazaAssociates, L.P. was audited by other auditors whose report dated February 3,2000, expressed an unqualified opinion on that balance sheet.

 

Weconducted our audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the balance sheet is free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the balance sheet. An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall balance sheet presentation. We believe that ouraudit provides a reasonable basis for our opinion.

 

In ouropinion, the balance sheet referred to above presents fairly, in all materialrespects, the financial position of Parkside Plaza Associates, L. P. as ofDecember 31, 2000 and is in conformity with generally accepted accountingprinciples.

 

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# **INDEPENDENT AUDITOR’S REPORT**

 

 

To thePartners

PyramidFour Limited Partnership

 

We haveaudited the accompanying balance sheet of Pyramid Four Limited Partnership,(the Partnership), as of December 31, 2000 and the related statements of profit(loss), changes in partners’ equity (deficit) and cash flows for the year thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

Weconducted our audit in accordance with U.S. generally accepted auditingstandards and the standards applicable to financial audits contained in *GovernmentAuditing Standards*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement, an audit includes examining on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Pyramid Four Limited Partnershipas of December 31, 2000, and its results of operations, changes in partners’equity (deficit), and cash flows for the year then ended in conformity withU.S. generally accepted accounting principles.

 

Inaccordance with *Government Auditing Standards,*we have also issued ourreport dated February 19, 2001 on our consideration of the Partnership’sinternal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts and grants. That report isan integral part of an audit performed in accordance with *Government Auditing Standards*andshould be read in conjunction with this report in considering the results ofour audit.

 

318

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INDEPENDENT AUDITOR’S REPORT

 

To thePartners

BradfordGroup Partners of Jefferson County, L.P.

 

We haveaudited the accompanying balance sheet of Bradford Group Partners of JeffersonCounty, L.P. (a limited partnership) as of December 31, 2000, and the relatedstatements of income (loss), partners’ equity and cash flows for the year thenended. These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audit.

 

Weconducted our audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for ouropinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Bradford Group Partners ofJefferson County, L.P. as of December 31, 2000, and the results of itsoperations, changes in partners’ equity and cash flows for the year then ended,in conformity with generally accepted accounting principles.

 

Our auditwas made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information is presented forpurposes of additional analysis and is not a required part of the basicfinancial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as a whole.

 

319

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Independent Auditors’ Report

 

To thePartners of

NHCPartnership 5, L.P.

(AVirginia Limited Partnership)

 

We have audited the accompanying balance sheet of NHC Partnership 5,L.P. as of December 31, 2000, and the related statements of operations, changesin partners’ equity (deficit) and cash flows for the year then ended. Thesefinancial statements are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements basedon our audit.

 

We conducted our audit in accordance with generally accepted auditingstandards. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In our opinion, the financial statements referred to above presentfairly, in all material respects, the financial position of NHC Partnership 5,L.P. as of December 31, 2000, and the results of its operations and its cashflows for the year then ended in conformity with generally accepted accountingprinciples.

 

320

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# **INDEPENDENT AUDITORS’ REPORT**

 

 

To thePartners

BelmontAffordable Housing II, L.P.

Springfield,Pennsylvania

 

We haveaudited the accompanying balance sheets of Belmont Affordable Housing II, L.P.(a Pennsylvania Limited Partnership) as of December 31, 2000 and 1999, and therelated statements of operations and other comprehensive loss, changes inpartners’ capital and cash flows for the years then ended. These financialstatements are the responsibility of the partnership’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe our audits provide a reasonable basis forour opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Belmont Affordable Housing II,L.P. as of December 31, 2000 and 1999, and the results of its operations andits cash flows for the years then ended in conformity with generally acceptedaccounting principles.

 

321

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Independent Auditor’s Report

 

Partners

RHP 96-1Limited Partnership

Novi,Michigan

 

We haveaudited the accompanying balance sheets of RHP 96-1 Limited Partnership as ofDecember 31, 2000 and 1999 and the related statements of operations, partnercapital and cash flows for the years then ended. These financial statements arethe responsibility of RHP 96-1 Limited Partnership’s management. Ourresponsibility is to express an opinion on the financial statement based uponour audit.

 

Weconducted our audits in accordance with generally accepted auditing standards.These standards require that we plan and perform the audit to obtain reasonableassurance whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in tile financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statements presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of RHP 96-1 Limited Partnership as ofDecember 31, 2000 and 1999 and the results of its operations and its cash flowfor the years then ended in conformity with generally accepted accountingprinciples.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on pages 12 and 13 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basic financialstatements taken as whole.

 

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## **INDEPENDENT AUDITOR’S REPORT**

 

 

To thePartners

New CaneyHousing II, Ltd.

 

We haveaudited the accompanying balance sheet of New Caney Housing II, Ltd. as ofDecember 31, 2000 and 1999, and the related statements of operations, partners’equity (deficit), and cash flow for the years ended December 31, 2000 and 1999.These financial statements are the responsibility of the Partnership’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

 

In ouropinion, the accompanying financial statements referred to above presentfairly, in all material respects, the financial position of New Caney HousingII, Ltd. as of December 31, 2000 and 1999, and the results of its operation andits cash flows for the year ending December 31, 2000 and 1999, in conformitywith generally-accepted accounting principles.

 

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Ladiesand Gentlemen:

 

We haveaudited and reported on the financial statements of Aloha Housing LimitedPartnership in which Boston Capital Tax Credit Fund IV, L.P. (Series 36) is aninvestor limited partner, for the year ended December 31, 2000 and have issuedour report thereon. Ill connection therewith, we represent the following:

 

 
| 1.     | That we are aware that the financial statements of Aloha Housing  Limited Partnership which we have audited will be included in the financial  statements on which you will report, and that our report therewith will be  referred to in your report; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                   |
| 2.     | That we are independent of each partnership under the requirements of  the Securities Exchange Commission; and                                                                                                                                         |
|   |                                                                                                                                                                                                                                                   |
| 3.     | That we are independent of each partnership under the requirements of  the American Institute of Certified Public Accountants.                                                                                                                         |

 

Thank youfor your time. Please contact me if you have any questions.

 

324

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Independent Auditors’ Report

 

 

To ThePartners

RiverviewBend Limited Partnership

CrystalCity, Missouri

 

We haveaudited the accompanying balance sheet of Riverview Bend Limited Partnership(Riverview Bend Apartments, Project No. 085-35329-PM-L8) as of December 31,2000, and the related statements of profit and loss, partners’ equity and cashflows for the year then ended. These financial statements are theresponsibility of the Partnership’s management. Our responsibility is to expressan opinion on these financial statements based on our audit.

 

Weconducted our audit in accordance with generally accepted auditing standardsand *GovernmentAuditing Standards,*issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basisfor our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Riverview Bend Limited Partnershipas of December 31, 2000, and the results of its operations and its cash flowsfor the year then ended in conformity with generally accepted accountingprinciples.

 

Our auditwas conducted for the purpose of forming an opinion on the basic financialstatements taken as a whole. The accompanying supplementary information shownon pages 17 to 20 is presented for purposes of additional analysis and is not arequired part of the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the financialstatements and, in our opinion, is fairly stated in all material respects inrelation to the financial statements taken as a whole.

 

Inaccordance with *Government Auditing Standards*and the *Consolidated Audit Guide for Audits ofHUD Programs*issued by the U.S. Department of Housing and UrbanDevelopment, we have also issued a report dated January 23, 2001 on ourconsideration of Riverview Bend Limited Partnership’s internal control andreports dated January 23, 2001 on its compliance with specific requirementsapplicable to major HUD programs and specific requirements applicable to FairHousing and Non­-Discrimination. Those reports are an integral part of an auditperformed in accordance with *Government Auditing Standards*and shouldbe read in conjunction with this report in considering the results of ouraudit.

 

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Independent Auditors’ Report

 

Partners

SeniorSuites Chicago Washington Heights

Limited Partnership

Chicago,Illinois

 

We haveaudited the accompanying balance sheet of Senior Suites Chicago WashingtonHeights Limited Partnership (an Illinois Limited Partnership) as of December31, 2000, and the related statements of operations, changes in partners’capital and cash flows for the year then ended. These financial statements arethe responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

 

Weconducted our audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Senior Suites Chicago WashingtonHeights Limited Partnership as of December 31, 2000, and the results of itsoperations and its cash flows for the year then ended, in conformity withgenerally accepted accounting principles.

 

Our auditwas conducted for the purpose of forming an opinion on the basic financialstatements taken as a whole. The schedule of other operating expenses on page 9is presented for the purpose of additional analysis and is not a required partof the basic financial statements. Such information has been subjected to theauditing procedures applied in the audit of the basic financial statements and,in our opinion, is fairly stated in all material respects in relation to thebasic financial statements taken as a whole.

 

Weconducted our audits in accordance with generally accepted auditing standards.These standards require that we plan and perform the audit to obtain reasonableassurance whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statements presentation. We believethat our audit provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Baldwin Villas Limited DividendHousing Association Limited Partnership as of December 31, 2000 and 1999 andthe results of its operations and its cash flow for the years then ended in conformitywith generally accepted accounting principles.

 

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Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on pagcl3 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as whole.

 

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Independent Auditor’s Report

 

February1, 2001

 

Partners

BaldwinVillas Limited Dividend

Housing AssociationLimited Partnership

Novi,Michigan

 

We haveaudited the accompanying balance sheets of Baldwin Villas Limited DividendHousing Association Limited Partnership as of December 31, 2000 and 1999 andthe related statements of operations, partner capital and cash flows for theyears then ended. These financial statements are the responsibility of BaldwinVillas Limited Dividend Housing Association Limited Partnership’s management.Our responsibility is to express an opinion on the financial statement basedupon our audits.

 

Weconducted our audits in accordance with generally accepted auditing standards.These standards require that we plan and perform the audit to obtain reasonableassurance whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statements presentation. We believethat our audit provide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Baldwin Villas Limited DividendHousing Association Limited Partnership as of December 31, 2000 and 1999 andthe results of its operations and its cash flow for the years then ended inconformity with generally accepted accounting principles.

 

Ouraudits were made for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplemental information on page l3 ispresented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information has been subjected to the auditingprocedures applied in the audits of the basic financial statements and, in ouropinion, is fairly stated in all material respects in relation to the basicfinancial statements taken as whole.

 

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