<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

                Annual Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                   For the Fiscal Year Ended DECEMBER 31, 1997

                             Commission File Number

                                     0-13112

                        REAL ESTATE ASSOCIATES LIMITED VI

                        A CALIFORNIA LIMITED PARTNERSHIP

                  I.R.S. Employer Identification No. 95-3778627

         9090 WILSHIRE BLVD., SUITE 201, BEVERLY HILLS, CALIFORNIA 90211

        Registrant's Telephone Number, Including Area Code (310) 278-2191

      Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:

                                      NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed with the Commission by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding twelve months (or such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.

                                    Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]


<PAGE>   2
PART I.

ITEM 1. BUSINESS

Real Estate Associates Limited VI ("REAL VI" or the "Partnership") is a limited
partnership which was formed under the laws of the State of California on
October 12, 1982. On April 22, 1983, REAL VI offered 4,200 units consisting of
8,400 limited partnership interests and warrants to purchase a maximum of 8,400
additional limited partnership interests through a public offering managed by
E.F. Hutton Inc.

The general partners of REAL VI are National Partnership Investments Corp.
("NAPICO"), a California corporation, (the "Corporate General Partner"), and
National Partnership Investment Associates ("NAPIA"). NAPIA is a limited
partnership formed under the California Limited Partnership Act and consists of
Messrs. Nicholas G. Ciriello, an unrelated individual, as general partner, and
Mr. Charles H. Boxenbaum as limited partner. The business of REAL VI is
conducted primarily by NAPICO.

NAPICO is a wholly owned subsidiary of Casden Investment Corporation ("CIC"),
which is wholly owned by Alan I. Casden. The current members of NAPICO's Board
of Directors are Charles H. Boxenbaum, Bruce E. Nelson, Alan I. Casden and Henry
C. Casden.

REAL VI holds limited partnership interests in 26 local limited partnerships and
a general partner interest in one general partnership. REAL VI also holds a
general partner interest in Real Estate Associates III ("REA III") which, in
turn, holds limited partner interests in seven local limited partnerships. The
other general partner of REA III is NAPICO. Therefore, REAL VI currently holds
interests either directly or indirectly in 33 local limited partnership and one
local general partnership, which own a low income housing project which is
subsidized and/or has a mortgage note payable to or insured by agencies of the
federal or local government.

In order to stimulate private investment in low income housing, the federal
government and certain state and local agencies have provided significant
ownership incentives, including among others, interest subsidies, rent
supplements, and mortgage insurance, with the intent of reducing certain market
risks and providing investors with certain tax benefits, plus limited cash
distributions and the possibility of long-term capital gains. There remain,
however, significant risks. The long-term nature of investments in government
assisted housing limits the ability of REAL VI to vary its portfolio in
response to changing economic, financial and investment conditions; such
investments are also subject to changes in local economic circumstances and
housing patterns, as well as rising operating costs, vacancies, rent collection
difficulties, energy shortages and other factors which have an impact on real
estate values. These projects also require greater management expertise and may
have higher operating expenses than conventional housing projects.

Under recent adopted law and policy, HUD has determined not to renew HAP
Contracts on a long term basis on the existing terms. In connection with
renewals of the HAP Contracts under such new law and policy, the amount of
rental assistance payments under renewed HAP Contracts will be based on market
rentals instead of above market rentals, which was generally the case under
existing HAP Contracts. As a result, existing HAP Contracts that are renewed in
the future on projects insured by the FHA will not provide sufficient cash flow
to permit owners of properties to meet the debt service requirements of these
existing FHA-insured mortgages. In order to address the reduction in payments
under HAP Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 (the "MAHRAA"), which was adopted
in October 1997, provides for the restructuring of mortgage loans insured by
the FHA with respect to properties subject to HAP Contracts that have been
renewed under the new policy. The restructured loans will be held by the
current lender or another lender. Under MAHRAA, an FHA-insured mortgage loan
can be restructured to reduce the annual debt service on such loan. There can
be no assurance that the Partnership will be permitted to restructure its
mortgage indebtedness pursuant to the new HUD rules implementing MAHRAA or that
the Partnership would choose to restructure such mortgage indebtedness if it
were eligible to participate in the MAHRAA program. It should be noted that
there are uncertainties as to the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA.
Accordingly, the General Partners are unable to predict with certainty their
impact on the Partnership's future cash flow.


<PAGE>   3

The local partnerships in which REAL VI has invested were, at least initially,
organized by private developers who acquired the sites, or options thereon, and
applied for applicable mortgage insurance and subsidies. REAL VI became the
principal limited or general partner in these local partnerships pursuant to
arm's-length negotiations with these developers, or others, who normally act as
general partners. As a limited partner, REAL VI's liability for obligations of
the local limited partnership is limited to its investment. The local general
partner of the local limited partnership retains responsibility for developing,
constructing, maintaining, operating and managing the project. Under certain
circumstances of default, REAL VI has the right to replace the general partner
of the local limited partnerships but otherwise does not have control of sale or
refinancing, etc. As discussed above, REAL VI is a general partner in certain of
the local partnerships.

Although each of the partnerships in which REAL VI has invested will generally
own a project which must compete in the market place for tenants, interest
subsidies and rent supplements from governmental agencies make it possible to
offer these dwelling units to eligible "low income" tenants at a cost
significantly below the market rate for comparable conventionally financed
dwelling units in the area.

<PAGE>   4
During 1997, projects in which REAL VI had invested were substantially rented.
The following is a schedule of the status, as of December 31, 1997, of the
projects owned by local partnerships in which REAL VI, either directly or
indirectly through REA III, has invested.

                   SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED
                            AND GENERAL PARTNERSHIPS
                       IN WHICH REAL VI HAS AN INVESTMENT
                                DECEMBER 31, 1997

<TABLE>
<CAPTION>
                                                     Units Authorized
                                                        For Rental
                                      No. of         Assistance Under           Units         Percentage of
Name & Location                        Units             Section 8             Occupied        Total Units
---------------                       -------        -----------------       -----------      -------------
<S>                                   <C>            <C>                     <C>              <C> 
Local Partnerships

Boynton Terrace                         89                  89                    89              100%
Boynton Beach, FL

Cady Brook Apts.                        40                 None                   39               98%
Charlton, MA

Cassidy Village                         98                  50                    92               94%
Columbus, Ohio

Century Plaza                           120                 120                  120              100%
Hampton, VA

City Heights
 Senior Citizens                        151                 150                  151              100%
Wilkes-Bar, PA

Crockett Manor                          38                  38                    38              100%
Trenton, TN

Denny Place                             17                   4                    16               94%
Los Angeles, CA

Eastridge Apts.                         96                  65                    92               96%
Briston, VA

Echo Valley Apts.                       100                 100                   90               90%
Warwick, RI

Filmore I                               32                  32                    31               97%
Phoenix, AZ

Grant-Ko Enterprises                    40                 None                   38               95%
Platteville, WI

Hudson Gardens                          41                  41                     41             100%
Pasadena, CA

Hummelstown Manor                       51                  50                     51             100%
Hummelstown, PA

Kentucky Manor                          48                 None                    46              96%
Oak Grove, KY

Lonsdale Housing                        131                 131                   131             100%
Providence, RI

Mariner's Cove                          500                 100                   480              96%
San Diego, CA

Marshall Plaza I                        40                  40                     40             100%
Lorain, Ohio

Marshall Plaza II                       50                  48                     49              98%
Lorain, Ohio

Menlo Estates                           80                  80                     78              98%
Riverside County, CA

Mulberry Towers                         206                 205                   206             100%
Scranton, PA

New-Bel-Mo                              34                 None                    28              82%
New Glarus, Bellemont,
Monticello, WI

Oakridge Apts. II                       48                 None                    48             100%
Biloxi, MS

Oakwood Manor                           34                  34                     31              91%
Milan, TN

Park Place                              126                 125                   125              99%
Ewing, NJ
</TABLE>


<PAGE>   5

                   SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED
                            AND GENERAL PARTNERSHIPS
                       IN WHICH REAL VI HAS AN INVESTMENT
                                DECEMBER 31, 1997
                                    CONTINUED

<TABLE>
<CAPTION>
                                                     Units Authorized
                                                        For Rental
                                      No. of         Assistance Under             Units       Percentage of
Name & Location                        Units             Section 8               Occupied      Total Units
---------------                       ------         -----------------         -----------    -------------
<S>                                   <C>            <C>                       <C>            <C>
Park Place Apts.                          60                 60                      58             97%
Cleveland, TX

Parkesedge Elderly Apts.                  45                 45                      45            100%
Parkesedge, PA

Penneco II                                76                 76                      65             86%
Johnstown, PA

Sauk-Ko Enterprises                       30               None                      26             87%
Baraboo, WI

Sol 413                                   12                 12                      12            100%
Old San Juan, PR

Valley Oaks Senior                        50               None                      50            100%
Gault, CA

Victory Square                            81                 81                      81            100%
Canton, Ohio

Villas de Orocovix                        41                 41                      41            100%
Orocovix, PR

Willow Wood                               19                  4                      19            100%
Los Angeles, CA

Peppertree                               136               None                     132             97%
Cypress, CA
                                       -----              -----                   -----             -- 

TOTALS                                 2,760              1,829                   2,679             95%
                                       =====              =====                   =====
</TABLE>


<PAGE>   6


ITEM 2. PROPERTIES

The local limited and general partnerships in which REAL VI holds interests own
various multi family properties. See Item 1 for information pertaining to these
properties.

ITEM 3. LEGAL PROCEEDINGS

As of December 31, 1997, the Partnership's General Partner was a plaintiff or
defendant in several suits. None of these lawsuits were related to the
Partnership.



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

PART II.

ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED SECURITY
        HOLDER MATTERS

The Limited Partnership Interests are not traded on a public exchange but were
sold through a public offering managed by E. F. Hutton Inc. It is not
anticipated that any public market will develop for the purchase and sale of any
partnership interests. Limited Partnership Interests may be transferred only if
certain requirements are satisfied. At December 31, 1997, there were 3,613
registered holders of units in REAL VI. Distributions have not been made from
the inception of the Partnership to December 31, 1997. The Partnership has
invested in certain government assisted projects under programs which in many
instances restrict the cash return available to project owners. The Partnership
was not designed to provide cash distributions to investors in circumstances
other than refinancing or disposition of its investments in limited
partnerships.


<PAGE>   7

ITEM 6. SELECTED FINANCIAL DATA


<TABLE>
<CAPTION>
                                                     Year Ended December 31,
                            ------------------------------------------------------------------------
                                1997           1996           1995           1994           1993
                            ------------   ------------   ------------   ------------   ------------
<S>                         <C>            <C>            <C>            <C>            <C>          
Loss from Rental 
   Operations               $    (20,075)  $   (175,242)  $   (246,036)  $   (238,520)  $   (105,574)

Loss from Partnership
   Operations                 (1,132,951)    (1,129,499)    (1,307,251)    (1,110,060)    (1,422,906)

Gain on Foreclosure                   --      1,902,022             --             --      4,095,110

Equity in Income (Loss)
   of Limited Partnerships
   and Amortization of
   Acquisition Costs             625,029        603,934        415,526        433,356       (111,547)

Distribution from
   Limited Partnerships
   Recognized as Income          499,540        597,425        347,163        500,498        247,782
                            ------------   ------------   ------------   ------------   ------------

Net Income (Loss)           $    (28,457)  $  1,798,640   $   (790,598)  $   (414,726)  $  2,702,865
                            ============   ============   ============   ============   ============

Net Income (Loss) per
   Limited Partnership
   Interest                 $         (1)  $        107   $        (47)  $        (24)  $        159
                            ============   ============   ============   ============   ============




Total Assets                $ 15,743,687   $ 15,286,368   $ 18,337,139   $ 18,725,681   $ 18,810,269
                            ============   ============   ============   ============   ============

Investments in
   Limited
   Partnerships             $  5,885,699   $  6,051,522   $  5,619,146   $  5,213,864   $  5,032,639
                            ============   ============   ============   ============   ============

Rental Property             $  3,016,049   $  3,158,470   $  7,285,002   $  7,638,829   $  7,937,314
                            ============   ============   ============   ============   ============

Mortgage
   Notes Payable            $  4,828,404   $  4,886,300   $  9,890,564   $  9,993,001   $ 10,086,190
                            ============   ============   ============   ============   ============

Notes Payable and
   Amounts Due for
   Partnership
   Interests                $  5,795,000   $  5,795,000   $  5,795,000   $  5,795,000   $  5,795,000
                            ============   ============   ============   ============   ============

</TABLE>


<PAGE>   8

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

LIQUIDITY

The Partnership's primary sources of funds include interest income on money
market funds and certificates of deposit and distributions from local
partnership in which the Partnership has invested. It is not expected that any
of the local partnerships in which the Partnership has invested will generate
cash flow sufficient to provide for distributions to the Partnership's limited
partners in any material amount.

The financial statements of the two general partnerships in which REAL VI is the
majority general partner, have been consolidated in the accompanying financial
statements. One of these partnerships is a local operating partnership which
owns and operates an apartment building. The units are leased primarily on a
month-to-month basis. These partnerships' primary source of funds are the rental
payments from tenants. Expenditures primarily include normal operating expenses
and debt service.

CAPITAL RESOURCES

REAL VI received $42,000,000 in subscriptions for units of limited partnership
interests (at $5,000 per unit) during the period April 22, l983, to March 31,
1984, pursuant to a registration statement on Form S-11.

The Partnership is committed to make additional capital contributions of $90,500
to its investee limited partnerships, if certain conditions are met. This amount
has not been reflected as a liability in the accompany financial statements. The
Partnership has no significant commitments for additional capital expenditures
to the general partnership which has been consolidated.

RESULTS OF OPERATIONS

The Partnership was formed to provide various benefits to its partners as
discussed in Item 1. It is anticipated that the local limited partnerships in
which REAL VI has invested could produce tax losses for as long as 20 years. Tax
benefits will decline over time as the advantages of accelerated depreciation
are greatest in the earlier years, as deductions for interest expense will
decrease as mortgage principal is amortized and as the Tax Reform Act of 1986
limits the deductions available.

On February 2, 1996, one of the consolidated general partnerships (Drexel Park)
sold its property for $6,300,000. After payment of closings costs, the
Partnership realized a gain of approximately $1,902,000 and received cash of
$830,000. The sale of this property reduced rental operations in 1997 and 1996
as compared to 1995.

At December 31, 1997, the Partnership has investments in 33 limited
partnerships, all of which own housing projects that were substantially all
rented. The Partnership, as a limited partner, is entitled to 90% to 99% of the
profits and losses of the local limited partnerships. The Partnership accounts
for its investments in the local limited partnerships on the equity method,
thereby adjusting its investment balance by its proportionate share of the
income or loss of the local limited partnerships. Equity in losses of limited
partnerships is recognized in the financial statements until the limited
partnership investment account is reduced to a zero balance. Losses incurred
after the limited partnership investment account is reduced to zero are not
recognized. Limited partners are not liable for losses beyond their contributed
capital.

Distributions received from limited partnerships are recognized as return of
capital until the investment balance has been reduced to zero or to a negative
amount equal to future capital contributions required. Subsequent distributions
received are recognized as income.


<PAGE>   9

The total losses from the 33 local limited partnerships that were allocated to
the Partnership were $1,.932,000, $1,869,000 and $2,214,000 for the years ended
December 31, 1997, 1996 and 1995, respectively. However, because losses incurred
after the investment account is reduced to a zero balance are not recognized,
the Partnership recognized equity in income of limited partnerships of $642,529,
$603,934 and $415,526 for the years ended December 31, 1997, 1996 and 1995,
respectively. During the year ended December 31, 1995, the Partnership
contributed $191,044 to local limited partnerships, thereby allowing the
Partnership to recognize a loss from those partnerships in that amount, which
reduced the income recognized from the partnerships with positive investment
balances. The capital contributions for 1997 and 1996 were $15,412 and $5,294,
respectively, for each year. The cumulative amount of the unrecognized equity in
losses of certain limited partnerships was approximately $29,631,000 and
$27,372,000 as of December 31, 1997 and 1996, respectively.

Distributions from the local limited partnerships in which the Partnership did
not have a positive investment balance were $499,540, $597,425 and $347,163 for
the years ended December 31, 1997, 1996 and 1995, respectively. These amounts
were recognized as income on the accompanying statements of operations, in
accordance with the equity method of accounting.

As of December 31, 1997, 1996 and 1995, the Partnership has cash and cash
equivalents of $6,611,690, $5,849,983 and $4,895,340, respectively. These
amounts are on deposit primarily with two high credit quality financial
institutions, earning interest. In addition to increasing deposits, as a result
of changing financial institutions where the cash and cash equivalents are on
deposit, the interest rate earned on such deposits in 1997 was significantly
greater than in prior years. This resulted in the Partnership earning $299,009,
$165,591 and $168,911 in interest income for the years ended December 31, 1997,
1996 and 1995, respectively. The amount of interest income varies with market
rates available and with the amount of funds available for investment. Cash
equivalents can be converted to cash to meet obligations of the Partnership as
they arise. The Partnership intends to continue investing available funds in
this manner. Should the Partnership complete the sale of interests, its
obligations may be reduced and a distribution of cash may be disbursed to the
partners.

A recurring partnership expense is the annual management fee. The fee is payable
to the Corporate General Partner of the Partnership and is calculated at .4
percent of the Partnership's invested assets. The management fee is paid to the
Corporate General Partner for its continuing management of partnership affairs.
The fee is payable beginning with the month following the Partnership's initial
investment in a local limited partnership. Management fees were $501,660,
$513,393 and $535,489 for the years ended December 31, 1997, 1996 and 1995,
respectively. The fees have decreased due to the sales of properties owned by
local partnerships, which reduced the invested assets.

Under recent adopted law and policy, HUD has determined not to renew HAP
Contracts on a long term basis on the existing terms. In connection with
renewals of the HAP Contracts under such new law and policy, the amount of
rental assistance payments under renewed HAP Contracts will be based on market
rentals instead of above market rentals, which was generally the case under
existing HAP Contracts. As a result, existing HAP Contracts that are renewed in
the future on projects insured by the FHA will not provide sufficient cash flow
to permit owners of properties to meet the debt service requirements of these
existing FHA-insured mortgages. In order to address the reduction in payments
under HAP Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 (the "MAHRAA"), which was adopted
in October 1997, provides for the restructuring of mortgage loans insured by
the FHA with respect to properties subject to HAP Contracts that have been
renewed under the new policy. The restructured loans will be held by the
current lender or another lender. Under MAHRAA, an FHA-insured mortgage loan
can be restructured to reduce the annual debt service on such loan. There can
be no assurance that the Partnership will be permitted to restructure its
mortgage indebtedness pursuant to the new HUD rules implementing MAHRAA or that
the Partnership would choose to restructure such mortgage indebtedness if it
were eligible to participate in the MAHRAA program. It should be noted that
there are uncertainties as to the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA.
Accordingly, the General Partners are unable to predict with certainty their
impact on the Partnership's future cash flow.

As a result of the foregoing, the Partnership is undergoing an extensive review
of disposition, refinancing or re-engineering alternatives for the properties
in which the limited partnerships have invested and are subject to HUD mortgage
and rental subsidy programs. The Partnership has incurred expenses in
connection with this review by various third party professionals, including
accounting, legal, valuation, structural and engineering costs, which amounted
to $127,514 for the year ended December 31, 1997.





<PAGE>   10

A real estate investment trust ("REIT") organized by an affiliate of NAPICO
has advised the Partnership that it intends to make a proposal to purchase from
the Partnership certain of the limited partnership interests held for
investment by the Partnership.

The REIT proposes to purchase such limited partner interests for cash, which it
plans to raise in connection with a private placement of its equity securities.
The purchase is subject to, among other things, (i) consummation of such
private placement by the REIT; (ii) the purchase of the general partner
interests in the local limited partnerships by the REIT; (iii) the approval of
HUD and certain state housing finance agencies; (iv) the consent of the limited
partners to the sale of the local limited partnership interests held for
investment by REAL VI; and (v) the consummation of a minimum number of
purchase transactions with other Casden affiliated partnerships. As of March
31, 1998, the REIT had completed buy-out negotiations with a majority of the
general partners of the local limited partnerships.

A proxy is contemplated to be sent to the limited partners setting forth the
terms and conditions of the purchase of the limited partners' interests held for
investment by the Partnership, together with certain amendments to the
Partnership Agreement and other disclosures of various conflicts of interest in
connection with the transaction.

General and administrative expenses were generally consistent for the three
years presented. General and administrative expenses were $396,600, $262,047 and
$289,923 for the years ended December 31, 1997, 1996 and 1995, respectively.
Included in general and administrative expenses are reimbursements to NAPICO for
certain expenses, which totalled $51,487, $47,231 and $43,729 for the years
ended December 31, 1997, 1996 and 1995, respectively. Also included in
partnership general and administrative expenses for 1997 is $127,514 in
expenses, approximately $89,000 of which is included in accounts payable at
December 31, 1997, related to the aforementioned third party review of the
properties owned by the local partnership.

In 1995, NAPICO received mortgage brokerage fees of $131,000 for its involvement
with the refinancing of limited partnerships' mortgages. The Partnership is
obligated on non-recourse notes payable of $5,470,000 which bear interest at 9.5
or 10.0 percent per annum and have principal maturities ranging from December
1999 to December 2012. The notes and related interest are payable from cash flow
generated from operations of the related rental properties as defined in the
notes. These obligations are collateralized by the Partnership's investments in
the limited partnerships. Unpaid interest is due at maturity of the notes. Since
no payments have been made on these notes, interest expense has remained fairly
constant and was $533,700, $519,650 and $519,650 for each of the three years in
the period ended December 31, 1997.

The results of operations of the local limited partnerships were fairly constant
during the years ended December 31, 1997, 1996 and 1995. Contributing to the
relative stability of operations at the local partnerships is the fact that
substantially all of the local partnerships are operating apartment projects
which are subsidized and have mortgage notes payable to or insured by agencies
of the federal or local government.

Total revenue for the 33 local partnerships has remained fairly constant, and
was $20,921,000, $21,246,000 and $20,571,000 for the years ended December 31,
1997, 1996 and 1995, respectively.

Total expenses for the 33 local partnerships remained fairly consistent, and
were $22,866,000, $23,123,000 and $23,034,000 for the years ended December 31,
1997, 1996 and 1995, respectively.



<PAGE>   11

The total net loss for the 33 local partnerships for 1997, 1996 and 1995
aggregated $1,945,000, $1,877,000 and $2,463,000, respectively. The losses
allocable to the Partnership were $1,933,000, $1,869,000 and $2,214,000 for
1997, 1996 and 1995, respectively.

During the year ended December 31, 1997, the local limited partnership that
owns Drexel III consummated the sale of the apartment complex.  The Partnership
received distributions of $670,245 of which $597,601 was recognized as a return
of capital and $72,644 was recognized as distributions to income.  The
Partnership financial statements reflect no investment in the Drexel III local
Partnership.

The Partnership, as a limited or general partner in the local partnerships in
which it has invested, is subject to the risks incident to the construction,
management, and ownership of improved real estate. The Partnership investments
are also subject to adverse general economic conditions and accordingly, the
status of the national economy, including substantial unemployment, concurrent
inflation, and changing legislation could increase vacancy levels, rental
payment defaults, and operating expenses, which in turn, could substantially
increase the risk of operating losses for the projects.

The Partnership has assessed the potential impact of the Year 2000 computer
systems issue on its operations. The Partnership believes that no significant
actions are required to be taken by the Partnership to address the issue and
that the impact of the Year 2000 computer systems issue will not materially
affect the Partnership's future operating results or financial condition.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements and Supplementary Data are listed under Item 14.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

None.
<PAGE>   12


               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (A California limited partnership)

                              FINANCIAL STATEMENTS,
                          FINANCIAL STATEMENT SCHEDULES
                   AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
                                DECEMBER 31, 1997


<PAGE>   13

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
Real Estate Associates Limited VI
(A California limited partnership)

We have audited the accompanying balance sheets of Real Estate Associates
Limited VI (a California limited partnership) as of December 31, 1997 and 1996,
and the related statements of operations, partners' deficiency and cash flows
for each of the three years in the period ended December 31, 1997. Our audits
also included the financial statement schedules listed in the index on item 14.
These financial statements and financial statement schedules are the
responsibility of the management of the Partnership. Our responsibility is to
express an opinion on these financial statements and financial statement
schedules based on our audits. We did not audit the financial statements of
certain limited partnerships, the investments in which are reflected in the
accompanying financial statements using the equity method of accounting. The
investments in these limited partnerships represent 35 percent and 27 percent of
total assets as of December 31, 1997 and 1996, respectively, and the equity in
income of these limited partnerships represents 12 percent, 12 percent and 13
percent of the total net income of the Partnership for the years ended December
31, 1997, 1996 and 1995, respectively, and represent a substantial portion of
the investee information in Note 2 and the financial statement schedules. The
financial statements of these limited partnerships are audited by other
auditors. Their reports have been furnished to us and our opinion, insofar as it
relates to the amounts included for these limited partnerships, is based solely
on the reports of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audits and the reports of other auditors provide a reasonable
basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Real Estate Associates Limited VI as of December 31,
1997 and 1996, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1997 in conformity with
generally accepted accounting principles. Also, in our opinion, based on our
audits and the reports of other auditors, such financial statement schedules,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.




DELOITTE & TOUCHE LLP

Los Angeles, California
April 6, 1998


<PAGE>   14
               [SANSIVERI, KIMBALL & MCNAMEE, L.L.P. LETTERHEAD]



                          INDEPENDENT AUDITORS' REPORT


To the Partners of
 Charlton Housing Associates
 (A Limited Partnership):

We have audited the accompanying balance sheet of Charlton Housing Associates
(A Limited Partnership) (the Partnership) as of December 31, 1996, 1995 and
1994, and the related statements of revenue and expenses, cash flows, and
changes in partners' capital (deficit) for each of the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Charlton Housing Associates
as of December 31, 1996, 1995 and 1994, and the results of its operations, its
cash flows, and its changes in partners' capital (deficit) for each of the
years then ended in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental
information is presented for the purpose of additional analysis, as required
by USDA Rural Development, and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.


                    /s/ SANSIVERI, KIMBALL & MCNAMEE, L.L.P.


Providence, Rhode Island
January 15, 1997



<PAGE>   15


                    [REZNICK FEDDER & SILVERMAN LETTERHEAD]


                          INDEPENDENT AUDITORS' REPORT


To the Partners
Charlton Housing Associates Limited Partnership

We have audited the accompanying balance sheets of Charlton Housing Associates
Limited Partnership as of December 31, 1997, and the related statements of
operations, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Charlton Housing Associates Limited
Partnership as of and for the year ended December 31, 1996, were audited by
other auditors whose report, dated January 15, 1997, expressed an unqualified
opinion on those statements.

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

In our opinion, the 1997 financial statements referred to above present fairly,
in all material respects, the financial position of Charlton Housing Associates
Limited Partnership as of December 31, 1997, and the results of its operations,
the changes in partners' equity and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued reports
dated January 31, 1998, on our consideration of Charlton Housing Associates
Limited Partnership's internal control and on its compliance with laws and
regulations applicable to the financial statements.


                                                  /s/ REZNICK FEDDER & SILVERMAN

Baltimore, Maryland
January 31, 1998



                                     - 3 -
<PAGE>   16
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]




              INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
                    AND ADDITIONAL FINANCIAL DATA REQUIRED BY
              THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT




To the Partners of
Cassady Village Apartments, Ltd.

We have audited the accompanying balance sheets of CASSADY VILLAGE APARTMENTS,
LTD., FHA Project No. 043-44028-LDP (Partnership), as of December 31, 1997 and
1996, and the related statements of operations, changes in partners' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cassady Village Apartments,
Ltd. as of December 31, 1997 and 1996, and its results of operations, changes in
partners' equity and cash flows for the years then ended in conformity with
generally accepted accounting principles.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying 1997 additional
financial data (shown on pages 14 through 19) are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements of the Partnership. Such information has been subjected to the
auditing procedures applied in the audit of the 1997 basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.



                                                                               2
<PAGE>   17
In accordance with Government Auditing Standards, we have also issued a report
dated January 26, 1998 on our consideration of the Partnership's internal
control and a report dated January 26, 1998, on its compliance with laws and
regulations.


/s/ ALTSCHULER, MELVOIN AND GLASSER LLP


Chicago, Illinois
January 26, 1998



                                                                               
<PAGE>   18
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]



            INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
                      ADDITIONAL FINANCIAL DATA REQUIRED BY
              THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT




To the Partners of
Cassady Village Apartments, Ltd.


We have audited the accompanying balance sheet of CASSADY VILLAGE APARTMENTS,
LTD. (an Ohio limited partnership), FHA Project Number 043-44028-LDP, (the
"Partnership") as of December 31, 1995, and the related statements of
operations, changes in partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of the Partnership as of
and for the year ended December 31, 1994 were audited by other auditors whose
report dated January 19, 1995, expressed an unqualified opinion on those
statements.

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

In our opinion, the 1995 financial statements referred to above present fairly,
in all material respects, the financial position of Cassady Village Apartments,
Ltd. as of December 31, 1995, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated February 2, 1996, on our consideration of the Partnership's internal
control structure and a report dated February 2, 1996, on its compliance with
laws and regulations.



               
<PAGE>   19
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The additional financial data required by the U.S.
Department of Housing and Urban Development shown on pages 13 through 19 are
presented for purposes of additional analysis and are not a required part of the
financial statements. Such information has been subjected to the procedures
applied in the audit of the financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.


                              /s/ ALTSCHULER, MELVOIN AND GLASSER LLP

Chicago, Illinois
February 2, 1996


<PAGE>   20
                    [REZNICK FEDDER & SILVERMAN LETTERHEAD]


                          INDEPENDENT AUDITORS' REPORT


To the Partners
Charlton Housing Associates Limited Partnership

     We have audited the accompanying balance sheet of Charlton Housing 
Associates Limited Partnership as of December 31, 1997, and the related
statements of operations, partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of Charlton Housing
Associates Limited Partnership as of and for the year ended December 31, 1996,
were audited by other auditors whose report, dated January 15, 1997, expressed
an unqualified opinion on those statements.

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

     In our opinion, the 1997 financial statements referred to above present
fairly, in all material respects, the financial position of Charlton Housing
Associates Limited Partnership as of December 31, 1997, and the results of its
operations, the changes in partners' equity and its cash flows for the year
then ended in conformity with generally accepted accounting principles.

     In accordance with Government Auditing Standards, we have also issued
reports dated January 31, 1998, on our consideration of Charlton Housing
Associates Limited Partnership's internal control and on its compliance with
laws and regulations applicable to the financial statements.


                                        /s/ REZNICK FEDDER & SILVERMAN


Baltimore, Maryland
January 31, 1998
<PAGE>   21
                           [PAUL DAMIANO LETTERHEAD]



                          INDEPENDENT AUDITORS' REPORT

The Partners
Riverpoint Associates
a/k/a Echo Valley Associates
(A Limited Partnership)
W. Warwick, RI

We have audited the accompanying balance sheet of RIHMFC Project No.
RI-43-HO23-021 of Riverpoint Associates, a/k/a Echo Valley Associates (a limited
partnership) as of June 30, 1997, and the related statements of profit and loss
and changes in partners' capital deficiency and cash flows for the year then
ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

As more fully described in Note 1 to the financial statements, the partnership
has computed depreciation on several major assets in accordance with accelerated
cost recovery system (ACRS) required for federal income tax purposes, which does
not allocate depreciation to expense over the estimated useful lives to conform
with generally accepted accounting principles. If the financial statements were
corrected for that departure from generally accepted accounting principles,
based on a straight-line depreciation method, accumulated depreciation would be
decreased by $2,147,340 as of June 30, 1997 and net income would be increased by
$68,965 for the year then ended.

In our opinion, except for the effects of computing depreciation as discussed in
the preceeding paragraph, the financial statements referred to above present
fairly in all material respects, the financial position of RIHMFC Project No.
RI-43-HO23-021 as of June 30, 1997 and the results of Its operations and the
changes in partners' capital deficiency and cash flows for the year then ended
in conformity with generally accepted accounting principles.



<PAGE>   22
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report shown on pages 11-16 are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of RIHMFC
Project No. RI-43-HO23-021. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued a report
dated September 23, 1997 on our consideration of Riverpoint Associates' internal
control structure and a report dated September 23, 1997 on its compliance with
specific requirements applicable to RIHMFC-programs.


                                   /s/ PAUL DAMIANO, CPA, PC
                                   Lincoln, RI 02865


September 23, 1997



<PAGE>   23
                           [PAUL DAMIANO LETTERHEAD]


                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


The Partners
Riverpoint Associates
a/k/a Echo Valley Associates
(A Limited Partnership)
W. Warwick, RI


We have audited the accompanying balance sheet of RIHMFC Project No.
RI-43-H023-021 of Riverpoint Associates, a/k/a Echo Valley Associates (a limited
partnership) as of June 30, 1996, and the related statements of profit and loss
and changes in partners' capital deficiency and cash flows for the year then
ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

As more fully described in Note 1 to the financial statements, the partnership
has computed depreciation on several major assets in accordance with accelerated
cost recovery system (ACRS) required for federal income tax purposes, which does
not allocate depreciation to expense over the estimated useful lives to conform
with generally accepted accounting principles. If the financial statements were
corrected for that departure from generally accepted accounting principles,
based on a straight-line depreciation method, accumulated depreciation would be
decreased by $2,078,375 as of June 30, 1996 and net income would be increased by
$67,629 for the year then ended.

In our opinion, except for the effects of computing depreciation as discussed in
the preceding paragraph, the financial statements referred to above present
fairly in all material respects, the financial position of RIHMFC Project No.
RI-43-H023-021 as of June 30, 1996 and the results of its operations and the
changes in partners' capital deficiency and cash flows for the year then ended
in conformity with generally accepted accounting principles.
<PAGE>   24
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report shown on pages 11-16 are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of RIHMFC
Project No. RI-43-H023-021. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued a report
dated September 17, 1996 on our consideration of Riverpoint Associates' internal
control structure and a report dated September 17, 1996 on its compliance with
specific requirements applicable to RIHMFC-programs.


                                             /s/ PAUL DAMIANO CPA, PC
                                             ------------------------


Lincoln, Rhode Island
September 17, 1996
<PAGE>   25
            [NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]



                          INDEPENDENT AUDITORS' REPORT


The Partners
Hudson Street Apartments
Culver City, California


We have audited the accompanying balance sheets of Hudson Street Apartments (a
California partnership), CHFA Project No. 79-19-S, as of December 31, 1997 and
1996 and the related statements of operations, partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hudson Street Apartments as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards we have also issued reports
dated January 23, 1998 on our consideration of Hudson Street Apartments'
internal controls and on its compliance with laws and regulations applicable to
the California Housing Financing Agency's financial assistance programs.




                                     /s/ NANAS, STERN, BIERS, NEINSTEIN AND CO.
                                     ------------------------------------------
                                     NANAS, STERN, BIERS, NEINSTEIN AND CO.


January 23, 1998                     Beverly Hills, California
<PAGE>   26
            [NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]



                          INDEPENDENT AUDITORS' REPORT


The Partners
Hudson Street Apartments
Culver City, California


We have audited the accompanying balance sheets of Hudson Street Apartments (a
California partnership). CHFA Project No. 79-19-S, as of December 31, 1996 and
1995 and the related statements of operations, partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Hudson Street Apartments as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards we have also issued reports
dated January 22, 1997 on our consideration of Hudson Street Apartments'
Internal Control Structure and on its compliance with laws and regulations
applicable to the California Housing Financing Agency's financial assistance
programs.





                               /s/   NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
                              --------------------------------------------------
                                     NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP


January 22, 1997                     Beverly Hills, California
<PAGE>   27
                       [KPMG PEAT MARWICK LLP LETTERHEAD]




                     REPORT ON AUDITED FINANCIAL STATEMENTS
                          AND SUPPLEMENTARY INFORMATION

                          INDEPENDENT AUDITORS' REPORT


The Partners
Lonsdale Housing Associates:


We have audited the accompanying balance sheet of Lonsdale Housing Associates
(the "Partnership"), HUD Project RI-43-HO23-087, as of May 31, 1997, and the
related statements of profit and loss (on HUD Form 92410), changes in
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership as of May 31,
1997, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued reports
dated June 19, 1997 on: our consideration of the Partnership's internal control
structure, the Partnership's compliance with specific requirements applicable to
major HUD programs, and the Partnership's compliance with specific requirements
applicable to affirmative fair housing.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information included
in Schedules I through 7 is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.



                                 /s/ KPMG PEAT MARWICK LLP


June 19, 1997                        Providence, Rhode Island



<PAGE>   28
                       [KPMG PEAT MARWICK LLP LETTERHEAD]




                     REPORT ON AUDITED FINANCIAL STATEMENTS
                          AND SUPPLEMENTARY INFORMATION


                          INDEPENDENT AUDITORS' REPORT


The Partners
Lonsdale Housing Associates
(A Limited Partnership):


We have audited the accompanying balance sheet of Lonsdale Housing Associates (A
Limited Partnership) (the "Partnership"), HUD Project No. RI-43-HO23-087, as of
May 31, 1996, and the related statements of profit and loss (on HUD Form 92410),
changes in partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership as of May 31,
1996 and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued reports
dated June 21, 1996 on: our consideration of the Partnership's internal control
structure, the Partnership's compliance with specific requirements applicable to
major HUD programs, and the Partnership's compliance with specific requirements
applicable to affirmative fair housing.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information included in Schedules 1 through 7 is presented for purposes of
additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.



                           /s/ KPMG PEAT MARWICK LLP


Providence, Rhode Island
June 21, 1996



<PAGE>   29
                       [KPMG PEAT MARWICK LLP LETTERHEAD]




                          INDEPENDENT AUDITORS' REPORT


The Partners
Lonsdale Housing Associates
(A Limited Partnership):

We have audited the accompanying balance sheet of Lonsdale Housing Associates (A
Limited Partnership) Project No. RI-43-HO23-087 as of May 31, 1995, and the
related statements of profit and loss (on HUD Form 92410), changes in partners'
equity and cash flows for the year then ended. These financial statements are
the responsibility of management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lonsdale Housing Associates (A
Limited Partnership) Project No. RI-43-HO23-087 at May 31, 1995 and the results
of its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information included in Schedules
1 through 7 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly presented in all material respects in
relation to the basic financial statements taken as a whole.



                           /s/ KPMG PEAT MARWICK LLP


Providence, Rhode Island
June 29, 1995



<PAGE>   30
         [PARENTE o RANDOLPH o ORLANDO o CAREY & ASSOCIATES LETTERHEAD]




                           INDEPENDENT AUDITOR'S REPORT


To the Partners
Mulberry Associates:

        We have audited the accompanying balance sheets of Mulberry Associates
(a limited partnership), FHA Project No. 034-35146-LD, as of December 31, 1997
and 1996, and the related statements of income, partners' equity (deficit) and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

        In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Mulberry Associates
(a limited partnership) as of December 31, 1997 and 1996, and the results of its
operations, changes in partners' equity (deficit) and cash flows for the years
then ended in conformity with generally accepted accounting principles.

        In accordance with Government Auditing Standards and the 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 dated January 30, 1998, on
our consideration of Mulberry Associates' (a limited partnership) internal
control, and reports dated January 30, 1998, on its compliance with specific
requirements applicable to major HUD programs and specific requirements
applicable to Fair Housing and Non-Discrimination.



                                      
<PAGE>   31
        Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information on pages 15 to 22 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of Mulberry
Associates (a limited partnership). Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.



                              /s/ PARENTE, RANDOLPH, ORLANDO, CAREY & ASSOCIATES


Wilkes-Barre, Pennsylvania
January 30, 1998



                                    
<PAGE>   32
         [PARENTE o RANDOLPH o ORLANDO o CAREY & ASSOCIATES LETTERHEAD]




                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS

To the Partners
Mulberry Associates:

      We have audited the accompanying balance sheets of Mulberry Associates (a
limited partnership), FHA Project No. 034-35146-LD, as of December 31, 1996 and
1995, and the related statements of income, partners' equity (deficit) and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Mulberry Associates (a
limited partnership) as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity (deficit) and its cash flows for the
years then ended in conformity with generally accepted accounting principles.

      In accordance with Government Auditing Standards and the 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 dated January 29, 1997, on
our consideration of Mulberry Associates' (a limited partnership) internal
control structure, and reports dated January 29, 1997, on its compliance with
specific requirements applicable to major HUD programs and specific requirements
applicable to Affirmative Fair Housing.



                                     
<PAGE>   33
        Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information on pages 14 to 22 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of Mulberry
Associates (a limited partnership). Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.




                              /s/ PARENTE, RANDOLPH, ORLANDO, CAREY & ASSOCIATES


Wilkes-Barre, Pennsylvania
January 29, 1997



                                      
<PAGE>   34
                            [WEGNER LLP LETTERHEAD]




ACCOUNTANT'S REVIEW REPORT




To the Partners
New-Bel-Mo Enterprises
(A Limited Partnership)
Fennimore, Wisconsin



We have reviewed the accompanying balance sheets of New-Bel-Mo Enterprises (a
limited partnership) RECDS Case No. 58-023-0391456911, as of December 31, 1997,
1996 and 1995 and the related statements of operations and partners deficit and
cash flows for the years then ended in accordance with Statements on Standards
for Accounting and Review Services issued by the American Institute of Certified
Public Accountants. All information included in these financial statements is
the representation of the project's owners. 

A review consists principally of inquiries of Project personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.

Our reviews were made for the purpose of expressing limited assurance that there
are no material modifications that should be made to the financial statements in
order for them to be in conformity with generally accepted accounting
principles. The supplementary information listed in the table of contents is
presented only for supplementary analysis purposes. Such information has been
subjected to the inquiry and analytical procedures applied in the reviews of the
basic financial statements, and we are not aware of any material modifications
that should be made thereto.



/s/ WEGNER LLP

Wegner LLP

Madison, Wisconsin
January 16, 1998


                                      
<PAGE>   35
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]




              INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
                    AND ADDITIONAL FINANCIAL DATA REQUIRED BY
                  THE TENNESSEE HOUSING DEVELOPMENT AGENCY AND
              THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT




To the Partners
Oakwood Manor Associates, Ltd.

We have audited the accompanying balance sheets of OAKWOOD MANOR ASSOCIATES,
LTD. (a Tennessee limited partnership), THDA Project No. 8.9.02 (the
"Partnership"), as of December 31, 1997 and 1996 and the related statements of
income, changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oakwood Manor Associates, Ltd.
as of December 31, 1997 and 1996 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying 1997 additional
financial data (shown on pages 13 through 20) are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements of the Partnership. Such information has been subjected to the
auditing procedures applied in the audit of the 1997 basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.



                                                                         
<PAGE>   36
In accordance with Government Auditing Standards, we have also issued a report
dated March 2, 1998 on our consideration of the Partnership's internal control
and a report dated March 2, 1998 on its compliance with laws and regulations.


/s/ ALTSCHULER, MELVOIN AND GLASSER LLP


Los Angeles, California
March 2, 1998



                                                                              
<PAGE>   37
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]



            INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
                      ADDITIONAL FINANCIAL DATA REQUIRED BY
                THE TENNESSEE HOUSING DEVELOPMENT AGENCY AND THE
                U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT




To the Partners of
Oakwood Manor Associates, Ltd.


We have audited the accompanying balance sheet of OAKWOOD MANOR ASSOCIATES, LTD.
(a Tennessee limited partnership), THDA Project Number 8.9.02 (the
"Partnership") as of December 31, 1995, and the related statements of
operations, changes in partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of the Partnership as of
and for the year ended December 31, 1994 were audited by other auditors whose
report dated February 15, 1995, expressed an unqualified opinion on those
statements.

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

In our opinion, the 1995 financial statements referred to above present fairly,
in all material respects, the financial position of Oakwood Manor Associates,
Ltd. as of December 31, 1995, and the results of its operations, changes in its
partners' equity, and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated February 19, 1996 on our consideration of the Partnership's internal
control structure and a report dated February 19, 1996 on its compliance with
laws and regulations.



                                                                         
<PAGE>   38
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying additional financial data shown on
pages 14 through 20 is presented for purposes of additional analysis and is not
a required part of the financial statements. Such information has been subjected
to the auditing procedures applied in the audit of the financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.



/s/ ALTSCHULER, MELVOIN AND GLASSER LLP


Los Angeles, California
February 19, 1996



                                                                              
<PAGE>   39
                      [FISHBEIN & COMPANY, P.C. LETTERHEAD]




                          INDEPENDENT AUDITOR'S REPORT



                                                          January 15, 1998

Partners
Park Place Associates


        We have audited the accompanying balance sheets of PARK PLACE ASSOCIATES
(A New Jersey Limited Partnership) as of December 31, 1997, 1996, and 1995, and
the related statements of operations, equity and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

        We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards" issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

        The Partnership's policy is to prepare its financial statements on the
basis of accounting practices prescribed or permitted by the New Jersey Housing
& Mortgage Finance Agency. These practices differ in some respects from
generally accepted accounting principles as more fully described in Note 1-b to
the financial statements. Accordingly, the accompanying statements of operations
are not intended to present the results of operations in conformity with
generally accepted accounting principles.

        In our opinion, except as noted in the preceding paragraph, the
financial statements referred to above present fairly, in all material respects,
the financial position of Park Place Associates as of December 31, 1997, 1996
and 1995, and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting principles.



<PAGE>   40
[FISHBEIN & COMPANY, P.C. LETTERHEAD]                                     Page 2
                                                                                




      Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental information
included in this report (shown on pages 12 through 19) is presented for purposes
of additional analysis and is not a required part of the basic financial
statements of the Partnership. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.

      In accordance with Government Auditing Standards and the 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 dated January 15, 1998, on
our consideration of Park Place Associates' internal control structure and
reports dated January 15, 1998, on its compliance with specific requirements
applicable to major HUD programs and fair housing and nondiscrimination.



                                                    /s/ FISHBEIN & COMPANY, P.C.


Elkins Park, Pennsylvania
<PAGE>   41
                      [LEONIAK, BAIR & COMPANY LETTERHEAD]




                          INDEPENDENT AUDITORS' REPORT

Partners
Parkesedge Associates
State College, Pennsylvania


        We have audited the accompanying balance sheets of Parkesedge Associates
as of December 31, 1997 and 1996, and the related statements of income and
partnership equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

        In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Parkesedge
Associates as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

        In accordance with Government Auditing Standards, we have also issued
our report dated February 4, 1998 on our consideration of Parkesedge Associates'
internal control over financial reporting and our tests of its compliance with
certain provisions of laws, regulations, contracts and grants.



                                                     /s/ LEONIAK, BAIR & COMPANY


State College, Pennsylvania
February 4, 1998



<PAGE>   42

                      [LEONIAK, BAIR & COMPANY LETTERHEAD]

                          INDEPENDENT AUDITORS' REPORT

Partners
Parkesedge Associates
State College, Pennsylvania

     We have audited the accompanying balance sheets of Parkesedge Associates
as of December 31, 1996 and 1995, and the related statements of income and
partnership equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

     In our opinion, the financial statements referred to above present fairly,
in all material aspects, the financial position of Parkesedge Associates as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

     In accordance with Government Auditing Standards, we have also issued a
report dated February 1, 1997 on our consideration of Parkesedge Associates'
internal control structure and a report dated February 1, 1997 on its
compliance with laws and regulations.

                         /s/ LEONIAK, BAIR & COMPANY

State College, Pennsylvania
February 1, 1997


<PAGE>   43
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]




              INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
                    AND ADDITIONAL FINANCIAL DATA REQUIRED BY
              THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT




To the Owners of
Penneco Associates of Johnstown II

We have audited the accompanying balance sheets of PENNECO ASSOCIATES OF
JOHNSTOWN II, (the "Project") FHA Project No. PA-28-0004-025, as of December 31,
1997 and 1996, and the related statements of operations, changes in project
deficit and cash flows for the years then ended. These financial statements are
the responsibility of the Project's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Penneco Associates of Johnstown
II, as of December 31, 1997 and 1996, and its results of operations, changes in
project deficit and cash flows for the years then ended in conformity with
generally accepted accounting principles.

The financial statements have been prepared assuming the Project will continue
as a going concern. As discussed in Notes 3 and 6 to the financial statements,
the Project's capital deficit, unpaid property taxes and legal judgment raise
substantial doubt about the Project's ability to continue as a going concern.
Management's plans regarding these matters are described in Note 6. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

In accordance with Government Auditing Standards, we have also issued a report
dated February 12, 1998 on our consideration of the Project's internal control
and a report dated February 12, 1998, on its compliance with laws and
regulations.



        
<PAGE>   44
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying 1997 additional
financial data (shown on pages 14 through 18) are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements. This information has been subjected to the procedures applied in the
audit of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.



                            /s/ ALTSCHULER, MELVOIN AND GLASSER LLP



Chicago, Illinois
February 12, 1998



<PAGE>   45
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]



            INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
                      ADDITIONAL FINANCIAL DATA REQUIRED BY
              THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT



To the Owners of
Penneco Associates of Johnstown II


We have audited the balance sheet of PENNECO ASSOCIATES OF JOHNSTOWN II, FHA
Project Number PA-28-0004-009, as of December 31, 1995, and the statements of
operations, changes in project deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Project's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Penneco Associates of Johnstown
II as of December 31, 1995, and the results of its operations, changes in
project deficit and cash flows for the year then ended in conformity with
generally accepted accounting principles.

The financial statements have been prepared assuming the Project will continue
as a going concern. As discussed in Notes 3 and 4 to the financial statements,
the Project's capital deficit, unpaid property taxes and legal judgment raise
substantial doubt about the Project's ability to continue an a going concern.
Management's plans regarding these matters are described in Note 4. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

In accordance with Government Auditing Standards, we have also issued a report
dated February 7, 1996, on our consideration of the Project's internal control
structure and a report dated February 7, 1996, on its compliance with laws and
regulations.

<PAGE>   46
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The additional financial data shown on pages 14
through 18 are presented for purposes of additional analysis and are not a
required part of the financial statements. This information has been subjected
to the procedures applied in the audit of the financial statements and, in our
opinion, is stated fairly in all material respects in relation to the financial
statements taken as a whole.


                                         /s/ ALTSCHULER, MELVOIN AND GLASSER LLP


Chicago, Illinois
February 7, 1996
<PAGE>   47
                          INDEPENDENT AUDITORS' REPORT



To the Partners
Sol 413 Limited Dividend Partnership

        We have audited the accompanying balance sheet of Sol 413 Limited
Dividend Partnership as of December 31, 1997, and the related statements of
profit and loss (on HUD Form No. 92410), partners' deficit and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

        In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Sol 413 Limited
Dividend Partnership, as of December 31, 1997, and the results of its
operations, the changes in partners' deficit and its cash flows for the year
then ended in conformity with generally accepted accounting principles.

        Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 21
through 25 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, such information is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

<PAGE>   48
        In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs, we have also issued reports dated
January 12, 1998, on our consideration of Sol 413 Limited Dividend Partnership's
internal control and on its compliance with specific requirements applicable to
major and nonmajor HUD programs, fair housing and non-discrimination, and laws
and regulations applicable to the financial statements.




San Juan, Puerto Rico                   Federal Employer Identification 
January 12, 1998, except Note F           Number: 66-0432941
  which is as of March 3, 1998




Audit Principal: William T. Riley, Jr.

<PAGE>   49
                     [SANTIAGO, RILEY & REZNICK LETTERHEAD]




                          INDEPENDENT AUDITORS' REPORT

To the Partners
Sol 413 Limited Dividend Partnership

        We have audited the accompanying balance sheet of Sol 413 Limited
Dividend Partnership as of December 31, 1996, and the related statements of
profit and loss (on HUD Form No. 92410), partners' deficit and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

        In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Sol 413 Limited
Dividend Partnership, as of December 31, 1996, and the results of its
operations, changes in partners' deficit and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

        Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 20
through 25 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, except for the effects, if any, of the items
discussed in the third paragraph, such information is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

<PAGE>   50
        In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs, we have also issued reports dated
January 13, 1997, on our consideration of Sol 413 Limited Dividend Partnership's
internal control structure and on its compliance with specific requirements
applicable to major and nonmajor HUD Programs, affirmative fair housing, and
laws and regulations applicable to the financial statements.





                                                   /s/ SANTIAGO, RILEY & REZNICK


[SEAL]

San Juan, Puerto Rico                       Federal Employer
January 13, 1997                             Identification Number: 
                                             66-0432841


Audit Principal: William T. Riley, Jr.

<PAGE>   51
                     [SANTIAGO, RILEY & REZNICK LETTERHEAD]



                          INDEPENDENT AUDITORS' REPORT



To the Partners
Sol 413 Limited Dividend Partnership

      We have audited the accompanying balance sheet of Sol 413 Limited Dividend
Partnership as of December 31, 1995, and the related statements of profit and
loss (on HUD Form No. 92410), partners' deficit, and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

      Except as discussed in the following paragraph, we conducted our audit in
accordance with generally accepted auditing standards and Government Auditing
Standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

      The Partnership has not maintained certain customary accounting records
and supporting documents relating to transactions with a general partner as
discussed in Note E. We were unable to satisfy ourselves by other auditing
procedures as to the possible effects of transactions with the general partner.

      In our opinion, except for the effects, if any, of the items discussed in
the preceding paragraph, the financial statements referred to above present
fairly, in all material respects, the financial position of Sol 413 Limited
Dividend Partnership, as of December 31, 1995, and the results of its
operations, changes in partners' deficit, and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

<PAGE>   52
        Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 19
through 24 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, except for the effects, if any, of the items
discussed in the third paragraph, such information is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

        In accordance with Government Auditing Standards, we have also issued
reports dated January 25, 1996, on our consideration of Sol 413 Limited Dividend
Partnership's internal control structure and on its compliance with specific
requirements applicable to major and nonmajor HUD programs, affirmative fair
housing, and laws and regulations applicable to the financial statements.




                                                   /s/ SANTIAGO, RILEY & REZNICK




[SEAL]


San Juan, Puerto Rico                  Federal Employer
January 25, 1996                         Identification Number: 
                                         66-0432841


Audit Principal: William T. Riley, Jr.

<PAGE>   53
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]



              INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
                    AND ADDITIONAL FINANCIAL DATA REQUIRED BY
              THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT




To the Partners of
Victory Square Apartments,
Limited Partnership

We have audited the accompanying balance sheets of VICTORY SQUARE APARTMENTS,
LIMITED PARTNERSHIP, FHA Project No. 042-35196-LDP, as of December 31, 1997 and
1996, and the related statements of operations, changes in partners' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Victory Square Apartments,
Limited Partnership as of December 31, 1997 and 1996, and its results of
operations, changes in partners' equity and cash flows for the years then ended
in conformity with generally accepted accounting principles.


<PAGE>   54
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying 1997 additional
financial data (shown on pages 13 through 19) are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements of the Partnership. Such information has been subjected to the
auditing procedures applied in the audit of the 1997 basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued a report
dated February 9, 1998 on our consideration of the Partnership's internal
control and a report dated February 9, 1998, on its compliance with laws and
regulations.




                                  /s/ ALTSCHULER, MELVOIN AND GLASSER LLP


Chicago, Illinois
February 9, 1998



                                                                               
<PAGE>   55
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]




            INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
                      ADDITIONAL FINANCIAL DATA REQUIRED BY
              THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT




To the Partners of
Victory Square Apartments, Ltd.


We have audited the accompanying balance sheet of VICTORY SQUARE APARTMENTS,
LTD. (an Ohio limited partnership), FHA Project Number 042-35196-LDP, as of
December 31, 1995, and the related statements of operations, changes in
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Victory Square Apartments, Ltd. as of and
for the year ended December 31, 1994 were audited by other auditors whose report
dated January 19, 1995, expressed an unqualified opinion on those statements.

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

In our opinion, the 1995 financial statements referred to above present fairly,
in all material respects, the financial position of Victory Square Apartments,
Ltd. at December 31, 1995, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated February 2, 1996, on our consideration of the Partnership's internal
control structure and a report dated February 2, 1996, on its compliance with
laws and regulations.


<PAGE>   56
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The additional financial data shown on pages 13
through 18 are presented for purposes of additional analysis and are not a
required part of the financial statements. Such information has been subjected
to the procedures applied in the audit of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.


                                   /s/ ALTSCHULER, MELVOIN AND GLASSER LLP


Chicago, Illinois
February 2, 1996


<PAGE>   57

                        REAL ESTATE ASSOCIATES LIMITED VI
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                 BALANCE SHEETS

                           DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
                                                                                  1997              1996
                                                                              -------------      ------------
<S>                                                                         <C>                <C>          
                                     ASSETS

         INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2)                       $    5,885,699     $   6,051,522

         RENTAL PROPERTY, net of accumulated depreciation (Note 1)               3,016,049         3,158,470

         CASH AND CASH EQUIVALENTS (Note 1)                                      6,611,690         5,849,983

         CASH, restricted (Note 3)                                                  38,465            35,750

         OTHER ASSETS                                                              174,284           190,643
                                                                              -------------      ------------

         TOTAL ASSETS                                                       $   15,726,187     $  15,286,368
                                                                              =============      ============

                      LIABILITIES AND PARTNERS' DEFICIENCY

         LIABILITIES:
           Mortgage notes payable related to properties (Notes 4 and 9)     $    4,828,404     $   4,886,300
           Notes payable and amounts due for partnership
             interests (Notes 5 and 9)                                           5,795,000         5,795,000
           Accrued interest payable (Notes 5 and 9)                              6,103,244         5,650,383
           Accounts payable                                                        117,968            47,372
           Other liabilities                                                        38,465            35,750
                                                                              -------------      ------------

                                                                                16,883,081        16,414,805
                                                                              -------------      ------------

         COMMITMENTS AND CONTINGENCIES (Notes 2, 6 and 7)

         PARTNERS' DEFICIENCY:
           General partners                                                       (362,758)         (362,474)
           Limited partners                                                       (794,136)         (765,963)
                                                                              -------------      ------------

                                                                                (1,156,894)       (1,128,437)
                                                                              -------------      ------------

         TOTAL LIABILITIES AND PARTNERS' DEFICIENCY                         $   15,726,187     $  15,286,368
                                                                              =============      ============
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.


<PAGE>   58

                        REAL ESTATE ASSOCIATES LIMITED VI
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


<TABLE>
<CAPTION>
                                                          1997              1996               1995
                                                       -----------       ------------       ------------
<S>                                                  <C>               <C>                <C>          
RENTAL OPERATIONS:
     Revenues                                        $  1,070,895      $   1,211,516      $   2,715,123
                                                       -----------       ------------       ------------

      Expenses:
         General and administrative                        84,870            162,929            429,258
         Operating                                        369,779            395,170          1,040,846
         Management fees - affiliate (Note 6)              53,500             76,862            165,018
         Depreciation and amortization (Note 1)           156,480            210,414            381,897
         Interest                                         426,337            541,383            944,140
                                                       -----------       ------------       ------------

                                                        1,090,970          1,386,758          2,961,159
                                                       -----------       ------------       ------------

LOSS FROM RENTAL OPERATIONS                               (20,075)          (175,242)          (246,036)
                                                       -----------       ------------       ------------

PARTNERSHIP OPERATIONS:
    Interest income                                       299,009            165,591            168,911
                                                       -----------       ------------       ------------

    Expenses:
         Management fees - general partner (Note 6)       501,660            513,393            535,489
         Mortgage brokerage fees - general partner
         (Note 6)                                          -                  -                 131,100
         General and administrative                       396,600            262,047            289,923
         Interest                                         533,700            519,650            519,650
                                                       -----------       ------------       ------------
                                                        1,431,960          1,295,090          1,476,162
                                                       -----------       ------------       ------------

LOSS FROM PARTNERSHIP OPERATIONS                       (1,132,951)        (1,129,499)        (1,307,251)
                                                       -----------       ------------       ------------

GAIN ON SALE OF RENTAL PROPERTY (Note 1)                   -               1,902,022                  -

EQUITY IN INCOME OF LIMITED
      PARTNERSHIPS AND AMORTIZATION
      OF ACQUISITION COSTS                                625,029            603,934            415,526

DISTRIBUTIONS FROM LIMITED
      PARTNERSHIPS RECOGNIZED AS
      INCOME (Note 2)                                     499,540            597,425            347,163
                                                       -----------       ------------       ------------

NET INCOME (LOSS)                                    $    (28,457)     $   1,798,640      $    (790,598)
                                                       ===========       ============       ============

NET INCOME (LOSS) PER LIMITED
     PARTNERSHIP INTEREST (Note 1)                   $         (1)     $         107      $         (47)
                                                       ===========       ============       ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                        2

<PAGE>   59

               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                 CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIENCY
              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


<TABLE>
<CAPTION>
                                 General       Limited
                                 Partners      Partners      Total
                               -----------   -----------   -----------
<S>                            <C>           <C>           <C>         
DEFICIENCY, January 1, 1995    $  (372,554)  $(1,763,925)  $(2,136,479)

    Net loss, 1995                  (7,906)     (782,692)     (790,598)
                               -----------   -----------   -----------

DEFICIENCY, December 31, 1995     (380,460)   (2,546,617)   (2,927,077)

    Net income, 1996                17,986     1,780,654     1,798,640
                               -----------   -----------   -----------

DEFICIENCY, December 31, 1996     (362,474)     (765,963)   (1,128,437)

    Net income, 1997                  (285)      (28,172)      (28,457)
                               -----------   -----------   -----------

DEFICIENCY, December 31, 1997  $  (362,758)  $  (794,136)  $(1,156,894)
                               ===========   ===========   ===========

</TABLE>



The accompanying notes are an integral part of these consolidated financial
statements.

                                        3

<PAGE>   60

               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
                                                                    1997         1996          1995
                                                                -----------   -----------   -----------
<S>                                                             <C>           <C>           <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net  income (loss)                                        $   (28,457)  $ 1,798,640   $  (790,598)
      Adjustments to reconcile net income (loss) to net
        cash provided by (used in) operating activities:
          Gain on sale of rental property                                 0    (1,902,022)           --
          Equity in income of limited partnerships
            and amortization of acquisition costs                  (642,529)     (603,934)     (415,526)
          Depreciation and amortization                             156,480       210,414       353,827
          (Increase) decrease in receivables from                                   
            limited partnerships                                         --         1,000       256,250
          Decrease in other assets                                    2,300       136,670         5,581
          Increase in accrued interest payable                      452,861       396,403       419,435
          (Decrease) increase in accounts payable                    70,596      (146,129)       87,006
          (Decrease) increase in other liabilities                    2,715       (95,421)       (1,948)
                                                                -----------   -----------   -----------
          Net cash provided by (used in) operating activities        31,466      (204,379)      (85,973)
                                                                -----------   -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Distributions to limited partnerships recognized   
        as a return of capital                                      823,764       176,852       201,288
          Decrease in restricted cash                                (2,715)       48,588           562
          Decrease in short term investments                             --       125,000            --
          Capital contribution to investee limited partnership      (32,912)       (5,294)     (191,044)
          Addition to rental property                                    --            --            --
          Proceeds from sale of rental property                                 5,818,140            --
                                                                -----------   -----------   -----------

          Net cash provided by investing activities                 788,137     6,163,286        10,806
                                                                -----------   -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Payment of mortgages                                           (57,896)   (5,004,264)     (102,437)
                                                                -----------   -----------   -----------

NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                               761,707       954,643      (177,604)

CASH AND CASH EQUIVALENTS,
      BEGINNING OF YEAR                                           5,849,983     4,895,340     5,072,944
                                                                -----------   -----------   -----------

CASH AND CASH EQUIVALENTS,
     END OF YEAR                                                $ 6,611,690   $ 5,849,983   $ 4,895,340
                                                                ===========   ===========   ===========

SUPPLEMENTAL DISCLOSURE OF
     CASH FLOW INFORMATION:
       Cash paid during the year for interest                   $   507,176   $   664,630   $ 1,044,356
                                                                ===========   ===========   ===========
</TABLE>


      The accompanying notes are an integral part of these consolidated
financial statements.

                                        4

<PAGE>   61

               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1997


1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        ORGANIZATION

        Real Estate Associates Limited VI (the "Partnership"), was formed under
        the California Limited Partnership Act on October 12, 1982. The
        Partnership was formed to invest primarily in other limited partnerships
        or joint ventures which own and operate primarily federal, state or
        local government-assisted housing projects and to acquire, lease, sell
        or mortgage real or personal property. The general partners are Coast
        Housing Investments Associates (CHIA), a limited partnership, and
        National Partnership Investments Corp. (NAPICO) a wholly owned
        subsidiary of Casden Investment Corporation, the corporate general
        partner. Casden Investment Corporation owns 100 percent of NAPICO's
        stock. The limited partner of CHIA is an officer of NAPICO. The business
        of Real VI is conducted primarily by NAPICO.

        The consolidated financial statements include the accounts of Real
        Estate Associates Limited VI and its majority-owned general
        partnerships. All significant intercompany accounts and transactions
        have been eliminated in consolidation. Losses in excess of the minority
        interest in equity that would otherwise be attributed to the minority
        interest are being allocated to the Partnership.

        The Partnership offered and issued 4,200 units of limited partner
        interests through a public offering. Each unit was comprised of two
        limited partner interests and a warrant granting the investor the right
        to purchase two additional limited partner interests. An additional
        8,410 interests were issued from the exercise of warrants and the sale
        of interests associated with warrants not exercised. The general
        partners have a 1 percent interest in operating profits and losses of
        the Partnership. The limited partners have the remaining 99 percent
        interest in proportion to their respective investments.

        The Partnership shall be dissolved only upon the expiration of 50
        complete calendar years (December 31, 2032) from the date of the
        formation of the partnership or the occurrence of various other events
        as specified in the Partnership agreement.

        Upon total or partial liquidation of the Partnership or the disposition
        or partial disposition of a project or project interest and distribution
        of the proceeds, the general partners will be entitled to a liquidation
        fee as stipulated in the Partnership agreement. The limited partners
        will have a priority return equal to their invested capital attributable
        to the project(s) or project interest(s) sold and shall receive from the
        sale of the project(s) or project interest(s) an amount sufficient to
        pay state and federal income taxes, if any, calculated at the maximum
        rate then in effect. The general partner's liquidation fee may accrue
        but shall not be paid until the limited partners have received
        distributions equal to 100 percent of their capital contributions.

        USE OF ESTIMATES

        The preparation of financial statements in conformity with generally
        accepted accounting principles requires management to make estimates and
        assumptions that affect the reported amounts of assets and liabilities
        and disclosure of contingent assets and liabilities at the date of the
        financial statements and reported amounts of revenues and expenses
        during the reporting period. Actual results could differ from those
        estimates.




                                       5.
<PAGE>   62

               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1997

1.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        METHOD OF ACCOUNTING FOR INVESTMENTS IN LIMITED PARTNERSHIPS

        The investments in limited partnerships are accounted for on the equity
        method. Acquisition, selection and other costs related to the
        acquisition of the projects have been capitalized as part of the
        investment account and are being amortized on a straight line basis over
        the estimated lives of the underlying assets, which is generally 30
        years.

        RENTAL PROPERTY AND DEPRECIATION

        Rental property is stated at cost. Depreciation is provided on the
        straight-line and accelerated methods over the estimated useful lives of
        the buildings and equipment. Pursuant to a purchase agreement in which
        the Partnership acquired its interest from independent withdrawing
        general partners, certain rental property was revalued to reflect the
        purchase price.

        Substantially all of the apartment units are leased on a month-to-month
        basis.

        The costs of rental property and estimated useful lives for depreciation
        are as follows:

<TABLE>
<CAPTION>
                                            Estimated
                                              Useful
                                              Lives                 1997           1996
                                          -------------         -----------    -----------
<S>                                       <C>                     <C>            <C>      
        Land                                                    $ 1,557,180     $1,557,180
        Buildings                          25 years               3,283,659      3,283,659
        Equipment                          3 to 5 years             824,580        824,580
                                                                -----------    -----------
                                                                  5,665,419     5,665,419
        Less-Accumulated Depreciation
         and Amortization                                         2,649,370      2,506,949
                                                                -----------    -----------

                                                                $ 3,016,049    $ 3,158,470
                                                                ===========    ===========
</TABLE>

        On February 2, 1996, one of the consolidated general partnerships
        (Drexel Park) sold its property for $6,300,000. After payment of
        closings costs, the Partnership realized a gain of approximately
        $1,902,000 in 1996



        NET INCOME (LOSS) PER LIMITED PARTNERSHIP INTEREST

        Net income (loss) per limited partnership interest was computed by
        dividing the limited partners' share of net income (loss) by the number
        of limited partnership interests outstanding during the year. The number
        of limited partnership interests was 16,810 for all years presented.

                                        6

<PAGE>   63

               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1997


1.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        CASH AND CASH EQUIVALENTS

        Cash and cash equivalents consist of unrestricted cash and bank
        certificates of deposit with maturities of three months or less. The
        Partnership has its cash and cash equivalents on deposit primarily with
        two high credit quality financial institutions Such cash and cash
        equivalents are in excess of the FDIC insurance limit.

        IMPAIRMENT OF LONG-LIVED ASSETS

        The Partnership reviews long-lived assets to determine if there has been
        any permanent impairment whenever events or changes in circumstances
        indicate that the carrying amount of the asset may not be recoverable.
        If the sum of the expected future cash flows is less than the carrying
        amount of the assets, the Partnership recognizes an impairment loss.

2.     INVESTMENTS IN LIMITED PARTNERSHIPS

        The Partnership holds limited partnership interests in 26 limited
        partnerships and a general partner interest in one general partnership.
        In addition, REAL VI holds a general partner interest in Real Estate
        Associates III ("REA III"), a California general partnership. NAPICO is
        also a general partner in REA III. REA III, in turn, holds limited
        partner interests in seven limited partnerships. In total, therefore,
        the Partnership holds interests, either directly or indirectly through
        REA III, in 33 limited partnerships and one general partnership, which
        own residential low income rental projects consisting of 2,624 apartment
        units. The mortgage loans of these projects are payable to or insured by
        various governmental agencies.

        The Partnership, as a limited partner, is entitled to between 90 percent
        and 99 percent of the profits and losses of the limited partnerships it
        has invested in directly. The Partnership is also entitled to 99.9
        percent of the profits and losses of REA III. REA III holds a 99 percent
        interest in each of the limited partnerships in which it has invested.

        As of December 31, 1997, the Partnership is obligated, if certain
        conditions are met, to invest an additional $90,500 in its investee
        partnerships at various times in the future. This amount has not been
        recorded as a liability in the accompanying financial statements.

        Equity in losses of unconsolidated limited partnerships are recognized
        in the financial statements until the limited partnership investment
        account is reduced to a zero balance or to a negative amount equal to
        further capital contributions required. Losses incurred after the
        limited partnership investment account is reduced to zero are not
        recognized. The cumulative amount of the unrecognized equity in losses
        of unconsolidated limited partnerships was approximately $29,631,000 and
        $27,372,000 as of December 31, 1997 and 1996, respectively.


                                       7

<PAGE>   64

               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1997


2.     INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

        Distributions from the unconsolidated limited partnerships are accounted
        for as a return of capital until the investment balance is reduced to
        zero. Subsequent distributions received are recognized as income.

        The following is a summary of the investments in unconsolidated limited
        partnerships and reconciliation to the limited partnership accounts:

<TABLE>
<CAPTION>
                                                                  1997          1996
                                                              -----------   -----------
<S>                                                           <C>           <C>        
        Investment balance, beginning of year                 $ 6,051,522   $ 5,619,146
        Capital contributions to limited partnerships              15,412         5,294
        Cash distributions recognized as a return of capital     (823,764)     (176,852)
        Amortization of additional basis and capitalized
          acquisition costs and fees                             (117,951)     (244,391)
        Equity in income of limited partnerships                  760,480       848,325
                                                              -----------   -----------

        Investment balance, end of year                       $ 5,885,699   $ 6,051,522
                                                              ===========   ===========
</TABLE>

        The difference between the investment per the accompanying balance
        sheets at December 31, 1997 and 1996, and the deficiency per the limited
        partnerships' combined financial statements is due primarily to
        cumulative unrecognized equity in losses of limited partnerships,
        additional basis and costs capitalized to the investment account and
        cumulative distributions recognized as income.

        Selected financial information from the combined financial statements at
        December 31, 1997 and 1996 and for each of the three years in the period
        ended December 31, 1997, of the limited partnerships in which the
        Partnership has invested directly or indirectly, is as follows:

<TABLE>
<CAPTION>
                                 Balance Sheets
                                 --------------
                                                                1997       1996
                                                             ---------   ---------
                                                                (in thousands)
<S>                                                          <C>         <C>      
        Land and buildings, net                              $  49,936   $  54,130
                                                             =========   =========

        Total assets                                         $  67,970   $  72,075
                                                             =========   =========

        Mortgage loans payable                               $  67,569   $  71,021
                                                             =========   =========

        Total liabilities                                    $  98,879   $ 100,740
                                                             =========   =========

        Deficiency of the Real Estate Associates Limited VI  $ (29,604)  $ (26,876)
                                                             =========   =========

        Deficiency of other partners                         $  (1,306)  $  (1,777)
                                                             =========   =========
</TABLE>

                                        8


<PAGE>   65

               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1997


2.      INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

<TABLE>
<CAPTION>
                            Statements of Operations
                            ------------------------

                                                 1997       1996       1995
                                               --------   --------   --------
                                                       (in thousands)
<S>                                            <C>        <C>        <C>     
        Total revenue                          $ 20,921   $ 21,246   $ 20,571
                                               ========   ========   ========

        Interest expense                       $  5,155   $  5,561   $  5,720
                                               ========   ========   ========

        Depreciation                           $  3,592   $  3,597   $  3,529
                                               ========   ========   ========

        Total expenses                         $ 22,866   $ 23,123   $ 23,034
                                               ========   ========   ========

        Net loss                               $ (1,945)  $ (1,877)  $ (2,463)
                                               ========   ========   ========

        Net loss allocable to the Partnership  $ (1,933)  $ (1,869)  $ (2,214)
                                               ========   ========   ========
</TABLE>

        Land and buildings above have been adjusted for the amount by which the
        investments in the limited partnerships exceed the Partnership's share
        of the net book value of the underlying net assets of the investee which
        are recorded at historical costs. Depreciation on the adjustment is
        provided for over the estimated remaining useful lives of the
        properties.

        An affiliate of NAPICO is the general partner in 10 of the limited
        partnerships included above, and another affiliate receives property
        management fees ranging from 5 percent to 7 percent of the revenue from
        seven of these partnerships. The affiliate received property management
        fees of $164,908, $179,660 and $178,106 in 1997, 1996 and 1995
        respectively. The following sets forth the significant data for the
        partnerships in which an affiliate of NAPICO was the general partner,
        reflected in the accompanying financial statements using the equity
        method of accounting:

<TABLE>
<CAPTION>
                                                            1997       1996       1995
                                                          --------   --------   --------
                                                               (in thousands)

<S>                                                       <C>        <C>        <C>      
        Total assets                                      $  9,443   $ 12,049
                                                          ========   ========

        Total liabilities                                 $ 13,178   $ 14,813
                                                          ========   ========

        Deficiency of Real Estate Associates  Limited VI  $ (3,633)  $ (2,674)
                                                          ========   ========

        Deficiency of other partners                      $   (102)  $    (89)
                                                          ========   ========

        Total revenue                                     $  2,629   $  3,213   $  3,136
                                                          ========   ========   ========

        Net loss                                          $   (383)  $   (340)  $   (502)
                                                          ========   ========   ========

</TABLE>


                                       9
<PAGE>   66

               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1997

2.      INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

        During the year ended December 31, 1997, the local limited partnership
        that owns Drexel III consumated the sale of the apartment complex.  The
        Partnership received distributions of $670,245 of which $597,601 was
        recognized as a return of capital and $72,644 was recognized as
        distributions to income.  The Partnership financial statements reflect
        no investment in the Drexel III local Partnership.

3.      CASH, RESTRICTED

        Restricted cash at December 31, 1997 and 1996 consists of tenants'
        security deposits.

4.      MORTGAGE NOTE PAYABLE RELATED TO PROPERTY

        Mortgage notes payable related to properties consist of the following at
        December 31, 1997 and 1996:

<TABLE>
<CAPTION>
                                                                    1997           1996
                                                                 ------------   -----------
<S>                                                              <C>            <C>        
        Mortgage note bears interest at 8.78 percent (9.5 
        percent in 1995) per annum, with monthly principal 
        and interest payments of $40,385, due September 
        10, 2006.


                                                                 $  4,886,300   $ 4,886,300
                                                                 ============   ===========
</TABLE>


       The notes are collateralized by the rental properties.

        The mortgage note payable at December 31, 1997 requires principal
        payments as follows:

<TABLE>
<CAPTION>
<S>                                                             <C>         
             1998                                                   63,189
             1999                                                   68,966
             2000                                                   75,270
             2001                                                   82,152
             2002                                                   89,662
             Thereafter through 2006                             4,449,165
                                                                ----------
                                                                $4,828,404
                                                                ==========
</TABLE>

5.     NOTES PAYABLE AND AMOUNTS DUE FOR PARTNERSHIP INTERESTS

        Certain of the Partnership's investments involved purchases of
        partnership interests from partners who subsequently withdrew from the
        operating partnership. The purchase of these interests provides for
        additional cash payments of approximately $325,000, based upon specified
        events as outlined in the purchase agreements. Such amounts have been
        recorded as liabilities. In addition, the Partnership is obligated on
        non-recourse notes payable of $5,470,000 which bear interest at 9.5 or
        10.0 percent per annum and have principal maturities ranging from
        December 1998 to December 2012. Effective January 1, 1997, the interest
        rates for two notes totalling $2,810,000 changed to 10 percent per terms
        of the note.



                                       10
<PAGE>   67
               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1997


5.      NOTES PAYABLE AND AMOUNTS DUE FOR PARTNERSHIP INTERESTS (CONTINUED)

        The notes and related interest are payable from cash flow generated from
        operations of the related rental properties as defined in the notes.
        These obligations are collateralized by the Partnership's investments in
        the limited partnerships. Unpaid interest is due at maturity of the
        notes.

        Maturity dates of the notes payable and related accrued interest are as
        follows:

<TABLE>
<CAPTION>
                                                                                Accrued
             Years Ending December 31,                        Notes             Interest
             -------------------------                      ----------         ----------
<S>                                                         <C>                <C>
                    1998                                    $                  $
                    1999                                       940,000          1,149,634
                    2000
                    2001                                     2,810,000          2,896,590
                    2002                                       920,000            989,792
                 Thereafter                                    800,000          1,100,077  
                                                            -----------        -----------
                                                            $5,470,000         $6,103,244
                                                            ==========         ==========
</TABLE>


Under recent adopted law and policy, HUD has determined not to renew HAP
Contracts on a long term basis on the existing terms. In connection with
renewals of the HAP Contracts under such new law and policy, the amount of
rental assistance payments under renewed HAP Contracts will be based on market
rentals instead of above market rentals, which was generally the case under
existing HAP Contracts. As a result, existing HAP Contracts that are renewed in
the future on projects insured by the FHA will not provide sufficient cash flow
to permit owners of properties to meet the debt service requirements of these
existing FHA-insured mortgages. In order to address the reduction in payments
under HAP Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 (the "MAHRAA"), which was adopted
in October 1997, provides for the restructuring of mortgage loans insured by
the FHA with respect to properties subject to HAP Contracts that have been
renewed under the new policy. The restructured loans will be held by the
current lender or another lender. Under MAHRAA, an FHA-insured mortgage loan
can be restructured to reduce the annual debt service on such loan. There can
be no assurance that the Partnership will be permitted to restructure its
mortgage indebtedness pursuant to the new HUD rules implementing MAHRAA or that
the Partnership would choose to restructure such mortgage indebtedness if it
were eligible to participate in the MAHRAA program. It should be noted that
there are uncertainties as to the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA.
Accordingly, the General Partners are unable to predict with certainty their
impact on the Partnership's future cash flow.

As a result of the foregoing, the Partnership is undergoing an extensive review
of disposition, refinancing or re-engineering alternatives for the properties
in which the limited partnerships have invested and are subject to HUD mortgage
and rental subsidy programs. The Partnership has incurred expenses in
connection with this review by various third party professionals, including
accounting, legal, valuation, structural and engineering costs, which amounted
to $127,514 for the year ended December 31, 1997.

A real estate investment trust ("REIT") organized by an affiliate of NAPICO
has advised the Partnership that it intends to make a proposal to purchase from
the Partnership certain of the limited partnership interests held for
investment by the Partnership.



                                       11
<PAGE>   68

               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1997

5.      NOTES PAYABLE AND AMOUNTS DUE FOR PARTNERSHIP INTERESTS (CONTINUED)

        The REIT proposes to purchase such limited partner interests for cash,
        which it plans to raise in connection with a private placement of its
        equity securities. The purchase is subject to, among other things, (i)
        consummation of such private placement by the REIT; (ii) the purchase of
        the general partner interests in the local limited partnerships by the
        REIT; (iii) the approval of HUD and certain state housing finance
        agencies; (iv) the consent of the limited partners to the sale of the
        local limited partnership interests held for investment by REAL VI; and
        (v) the consummation of a minimum number of purchase transactions with
        other Casden affiliated partnerships. As of March 31, 1998, the REIT had
        completed buy-out negotiations with a majority of the general partners
        of the local limited partnerships.

        A proxy is contemplated to be sent to the limited partners setting forth
        the terms and conditions of the purchase of the limited partners'
        interests held for investment by the Partnership, together with certain
        amendments to the Partnership Agreement and other disclosures of various
        conflicts of interest in connection with the transaction.

6.      FEES AND EXPENSES DUE TO GENERAL PARTNER AND AFFILIATE

        Under the terms of the Restated Certificate and Agreement of Limited
        Partnership, the Partnership is obligated to NAPICO for an annual
        management fee equal to .4 percent of the original invested assets of
        the partnerships. Invested assets is defined as the costs of acquiring
        project interests, including the proportionate amount of the mortgage
        loans related to the Partnership's interests in the capital accounts of
        the respective partnerships.

        For one of the properties owned by the Partnership, an affiliate of
        NAPICO receives a management fee of 5 percent of its gross revenues plus
        reimbursement of certain expenses. The Partnership paid management fees
        to the affiliate of approximately $12,000 and $107,000 in 1996 and 1995,
        respectively. An affiliate of the minority general partner of a general
        partnership that is consolidated, manages the property owned by that
        partnership. The fee is calculated based on five percent of gross
        collections plus reimbursement of certain expenses. The Partnership paid
        management fees to the affiliate of approximately $60,000, $65,000 and
        $58,000 in 1997, 1996 and 1995, respectively. In 1995, NAPICO received
        mortgage brokerage fees of $131,000 for its involvement with the
        refinancing of limited partnerships' mortgages (Note 2).

        The Partnership reimburses NAPICO for certain expenses. The
        reimbursement to NAPICO was $51,487, $47,231 and $43,729 in 1997, 1996
        and 1995, respectively, and is included in operating expenses.



                                       12
<PAGE>   69

7.      CONTINGENCIES

        The corporate general partner of the Partnership is a plaintiff in
        various lawsuits and has also been named a defendant in other lawsuits
        arising from transactions in the ordinary course of business. In
        addition, the Partnership is involved in several lawsuits. In the
        opinion of management and the corporate general partner, the claims will
        not result in any material liability to the Partnership.

        The Partnership has assessed the potential impact of the Year 2000
        computer systems issue on its operations. The Partnership believes that
        no significant actions are required to be taken by the Partnership to
        address the issue and that the impact of the Year 2000 computer systems
        issue will not materially affect the Partnership's future operating
        results or financial condition.

8.      INCOME TAXES

        No provision has been made for income taxes in the accompanying
        financial statements since such taxes, if any, are the liability of the
        individual partners. The major differences in tax and financial
        reporting result from the use of different bases and depreciation
        methods for the properties held by the limited partnerships. Differences
        in tax and financial reporting also arise as losses are not recognized
        for financial reporting purposes when the investment balance has been
        reduced to zero or to a negative amount equal to further capital
        contributions required.

9.      FAIR VALUE OF FINANCIAL INSTRUMENTS

        Statement of Financial Accounting Standards No. 107, "Disclosure about
        Fair Value of Financial Instruments," requires disclosure of fair value
        information about financial instruments, when it is practicable to
        estimate that value. The mortgage notes payable are insured by HUD and
        are collateralized by the rental properties. The operations generated by
        the properties and investee limited partnerships are subject to various
        government rules, regulations and restrictions which make it
        impracticable to estimate the fair value of the mortgage notes payable
        and related accrued interest. The carrying amount of other assets and
        liabilities reported on the balance sheets that require such disclosure
        approximates fair value due to their short-term maturity.

10.     FOURTH-QUARTER ADJUSTMENT

        The Partnership's policy is to record its equity in the loss of limited
        partnerships on a quarterly basis using estimated financial information
        furnished by the various local operating general partners. The equity in
        income (loss) of limited partnerships reflected in the accompanying
        annual consolidated financial statements is based primarily upon audited
        financial statements of the investee limited partnerships. The increase
        of approximately $196,000, between the estimated nine-month equity in
        income and the actual 1997 year end equity in income, has been recorded
        in the fourth quarter.



<PAGE>   70

                                                                        SCHEDULE

                        REAL ESTATE ASSOCIATES LIMITED VI
                       INVESTMENTS IN LIMITED PARTNERSHIPS
              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
                                                              Year Ended December 31, 1997
                               -----------------------------------------------------------------------------------------------
                                                                   Cash
                                 Balance                          Distri-                         Balance          Future
                                 January          Capital         butions        Equity in        December         Capital
Limited Partnerships             1, 1997       Contributions     Received      Income/(Loss)      31, 1997      Contributions
----------------------------   -------------   ---------------  ------------   --------------   -------------   --------------
<S>                            <C>             <C>              <C>            <C>              <C>             <C>          
Boynton Terrace                $               $                $              $                $
Cady Brook Apts.                    335,451                          (4,777)         58,590          389,264
Cassidy Village                     264,704                            (957)         (13,128)        250,619
City Heights
Crockett Manor                                          7,000                         (7,000)
Denny Place                                            15,000
Drexel Park III                     597,601             3,118      (600,719)
Eastridge Apts.
EchoValley Apts.                     22,392                          (9,490)          53,085          65,987
Filmore I
Grant-Ko Enterprises
Hudson Gardens                      350,946                         (19,855)          71,636         402,727
Hummelstown Manor
Kentucky Manor
Lakewind East Apts.
Lonsdale Elderly                    883,427                         (70,635)         199,309       1,012,101
Mariner's Cove
Marshall Plaza I
Marshall Plaza II
Menlo Estates
Mulberry Towers                   2,800,336                         (55,252)         160,271       2,905,355
New-Bel-Mo Enterprises              (25,500)                                                         (25,500)          25,500
Oakridge Apts.
Oakwood Manor                       173,689                         (15,697)          15,713         173,705
Park Place Apts., TX
Park Place Apts., NJ                305,027                         (40,825)         111,000         375,202
Parkesedge Elderly Apts.            214,016                                           20,369         234,385           18,000
Paula Maria Apts. 
(Century Plaza)                                         5,294        (5,294)
Penneco II                          (25,000)                                                         (25,000)          25,000
Sauk-Ko Enterprises
SOL 413                             (22,000)            2,500                                        (22,000)          22,000
Valley Oak Apts.
Victory Square                      176,433                            (263)         (27,316)        148,854
Villas de Orocovix
Willow Wood
                               -------------   ---------------  ------------   --------------   -------------   --------------

                               $   6,051,522   $       32,912   $  (823,764)   $     625,029    $  5,885,699    $      90,500
                               =============   ===============  ============   ==============   =============   ==============

</TABLE>
<PAGE>   71

                                                                        SCHEDULE
                                                                     (CONTINUED)

                        REAL ESTATE ASSOCIATES LIMITED VI
                       INVESTMENTS IN LIMITED PARTNERSHIPS
              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
                                                             Year Ended December 31, 1996
                             ------------------------------------------------------------------------------------------------
                                                                  Cash
                               Balance                           Distri-                         Balance          Future
                               January          Capital          butions        Equity in        December         Capital
Limited Partnerships           1, 1996       Contributions      Received      Income/(Loss)      31, 1996      Contributions
---------------------------  -------------   ---------------   ------------   --------------   -------------   --------------
<S>                          <C>             <C>               <C>            <C>              <C>             <C>          
Boynton Terrace              $               $                 $              $                $
Cady Brook Apts.                  298,129                           (4,778)          42,100         335,451
Cassidy Village                   308,841                           (2,397)         (41,740)        264,704
City Heights
Crockett Manor
Denny Place
Drexel Park III                   572,502                          (16,035)          41,134         597,601
Eastridge Apts.
EchoValley Apts.                                                                     22,392          22,392
Filmore I
Grant-Ko Enterprises
Hudson Gardens                    293,015                          (19,747)          77,678         350,946
Hummelstown Manor
Kentucky Manor
Lakewind East Apts.
Lonsdale Elderly                  769,348                          (34,597)         148,676         883,427
Mariner's Cove
Marshall Plaza I
Marshall Plaza II
Menlo Estates
Mulberry Towers                 2,662,471                          (55,252)         193,117       2,800,336
New-Bel-Mo Enterprises            (25,500)                                                          (25,500)          25,500
Oakridge Apts.
Oakwood Manor                     166,065                           (5,390)          13,014         173,689
Park Place Apts., TX
Park Place Apts., NJ              230,507                          (33,362)         107,882         305,027
Parkesedge Elderly Apts.          196,044                                            17,972         214,016           18,000
Paula Maria Apts.                                     5,294         (5,294)
Penneco II                        (25,000)                                                          (25,000)          25,000
Sauk-Ko Enterprises
SOL 413                           (22,000)                                                          (22,000)          22,000
Valley Oak Apts.
Victory Square                    194,724                                           (18,291)        176,433
Villas de Orocovix
Willow Wood
                             -------------   ---------------   ------------   --------------   -------------   --------------

                             $  5,619,146    $        5,294    $  (176,852)   $     603,934    $  6,051,522    $      90,500
                             =============   ===============   ============   ==============   =============   ==============

</TABLE>


<PAGE>   72

                                                                        SCHEDULE
                                                                     (CONTINUED)
                        REAL ESTATE ASSOCIATES LIMITED VI
                       INVESTMENTS IN LIMITED PARTNERSHIPS
              FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
                                                       Year Ended December 31, 1995
                                ----------------------------------------------------------------------------
                                                          Cash
                                Balance                  Distri-                   Balance       Future
                                January       Capital    butions     Equity in     December       Capital
Limited Partnerships            1, 1995  Contributions   Received   Income (Loss)  31, 1995    Contributions
--------------------            -------  -------------   --------   -------------  --------    -------------
<S>                           <C>         <C>           <C>         <C>            <C>         <C>      
Boynton Terrace               $              $          $             $            $                $
Cady Brook Apts.                 259,446                                 38,683       298,129
Cassidy Village                  336,069                                (27,228)      308,841
City Heights
Crockett Manor                                 20,000                   (20,000)
Denny Place                                    95,000                   (95,000)
Drexel Park III                  563,333                   (16,035)      25,204       572,502
Eastridge Apts.
Echo Valley Apts.
Filmore I
Grant-Ko Enterprises
Hudson Gardens                   296,493                   (76,161)      72,683       293,015
Hummelstown Manor
Kentucky Manor
Lakewind East Apts.
Lonsdale Elderly                 669,175                   (34,888)     135,061       769,348
Mariner's Cove
Marshall Plaza I
Marshall Plaza II
Menlo Estates
Mulberry Towers                2,522,709                   (55,252)     195,014     2,662,471
New-Bel-Mo Enterprises           (25,500)                                             (25,500)         25,500
Oakridge Apts. II
Oakwood Manor                    160,734          250       (5,444)      10,525      166,065
Park Place Apts., TX
Park Place Apts., NJ             104,301                    (3,196)     129,402      230,507
Parkesedge Elderly Apts.         139,401                                 56,643      196,044           18,000
Paula Maria Apts.                               5,294       (5,294)
Penneco II                       (25,000)                                             (25,000)         25,000
Sauk-Ko Enterprises
SOL 413                          (22,000)                                             (22,000)         22,000
Valley Oak Apts.
Victory Square                   234,703                    (5,018)     (34,961)      194,724
Villas de Orocovix
Willow Wood                                    70,500                   (70,500)
                              ----------     --------   ----------    ---------    ----------       ---------

                              $5,213,864     $191,044   $ (201,288)   $ 415,526    $5,619,146       $  90,500
                              ==========     ========   ==========    =========    ==========       =========

</TABLE>

<PAGE>   73

                                                                        SCHEDULE
                                                                     (Continued)

                        REAL ESTATE ASSOCIATES LIMITED VI
                       INVESTMENTS IN LIMITED PARTNERSHIPS
                               FOR THE YEARS ENDED
                        DECEMBER 31, 1997, 1996 AND 1995



NOTES:  1.      Equity in losses represents the Partnership's allocable share
                of the net loss from the limited partnerships for the year.
                Equity in losses of the limited partnerships will be recognized
                until the investment balance is reduced to zero or below zero to
                an amount equal to future capital contributions to be made by
                the Partnership.

        2.      Cash distributions from the limited partnerships will be treated
                as a return of the investment and will reduce the investment
                balance until such time as the investment is reduced to an
                amount equal to additional contributions. Distributions
                subsequently received will be recognized as income.



<PAGE>   74

                        REAL ESTATE ASSOCIATES LIMITED VI           SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                 OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
                        IN WHICH REAL VI HAS INVESTMENTS
                               DECEMBER 31, 1997

<TABLE>
<CAPTION>
                                                                   Buildings, Furnishings    Total
                                                                        & Equipment          Land   
                             Number     Outstanding                    Amount Carried      Buildings,
                               of        Mortgage                       at Close of       Furnishings   Accumulated    Construction
Partnership/Location         Units         Loan           Land              Year          & Equipment   Depreciation      Period
--------------------         -----      -----------   ----------   ---------------------  ------------  ------------   ------------
<S>                           <C>       <C>              <C>         <C>                    <C>         <C>            <C>
Boynton Terrace                 89     $ 5,040,000    $  208,001       $ 4,124,446        $  4,332,447   $ 1,983,264      1983-1984
 Boyton Beach, FL 
Cadybrook                       40       1,044,337        89,225         1,812,932           1,902,157       584,134         (A)
 Charlton, MA
City Heights                   151       3,821,287             0         5,219,777           5,219,777     3,615,716         (A)
  Wilkes-Barre, PA                        
Crockett Manor                  38       1,036,649        10,000         1,259,214           1,269,214       639,424         (A)
 Trenton, TN
Eastridge Apts.                 96         609,960       101,500         1,561,103           1,662,603     1,357,935         (A)
 Bristol, VA
Echo Valley                    100       1,191,666       103,011         3,924,545           4,027,556     3,551,211         (A)
 Warwick, RI
Filmore I                       32       1,195,181       115,000         1,312,495           1,427,495       673,170         (A)
 Phoenix, AZ
Grant-Ko Enterprises            40       1,233,460       100,000         1,408,873           1,508,873       678,907         (A)
 Platteville, WS
Hudson Gardens                  41       1,479,363       252,855         2,011,719           2,264,574     1,039,449         (A)
 Pasadena, CA
Hummelstown Manor               51       1,743,485        98,839         1,745,476           1,842,315     1,622,098        1983
 Hummelstown, PA
Kentucky Manor                  48       1,399,089       100,696         1,428,380           1,529,076       880,955         (A)
 Oak Grove, KY
Lonsdale Housing               131       3,046,650       214,833         6,362,322           6,577,155     3,804,286         (A)
 Providence, RI
Mariner's Cove                 500      13,452,668             0        16,131,324          16,131,324     8,248,949      1983-1984
 San Diego, CA
Menlo Estates                   80       2,754,581       492,061         3,679,693           4,171,754     2,018,152         (A)
 Riverside, CA
Mullberry Towers               206       5,553,525       199,754         7,668,230           7,867,984     3,123,460         (A)
 Scranton, PA
New-Bel-Mo Enterprises          34         997,500        78,078         1,147,760           1,225,838       537,438         (A)
 New Glarus, Bellevile,
 Monticello, WS
Oakridge Apts.                  48       1,200,901        55,000         1,500,221           1,555,221     1,318,591         (A)
 Biloxi, MS
Oakwood                         34         652,873        61,538           777,542             839,080       297,395         (A)
 Milan, TN
Park Place                     128       5,812,027       304,166         7,347,967           7,652,133     2,696,031      1983-1984
 Ewing, NJ
Park Place Apts.                60       1,897,974       146,305         2,267,692           2,413,997     1,335,771         (A)
 Cleveland, TX
Parkesedge Elderly Apts.        45       1,482,445       160,000         1,091,891           1,251,891             0         (A)
 Parkesedge, PA
Penneco II                      76       1,931,934        79,627         2,792,000           2,871,627     1,474,150         (A)
 Johnstown, PA
Sauk-Ko Enterprises             30         813,276        60,000         1,166,773           1,226,773       547,096         (A)
 Baraboo, WS
SOL-413                         12         365,928        50,000           389,858             419,858       197,426         (A)
 Old San Juan, PR
Valley Oaks Senior              50       1,771,000       121,464         1,906,110           2,027,574     1,019,676         (A)
 Galt, CA
Villas de Orocovix              41       1,425,043        59,550         1,717,435           1,776,985       911,674         (A)
 Orocovix, PR
Cassidy Village                 98       1,099,059       156,850         2,021,621           2,178,471       904,109         (A)
 Columbus, OH
Denny Place                     17         415,608       290,000         1,070,594           1,360,594       497,167         (A)
 Los Angeles, CA
Marshall Plaza I                40         220,469        68,414           709,014             777,428       317,089         (A)
 Loraine, OH
Marshall Plaza II               50         310,499        78,901           919,854             998,755       411,382         (A)
 Loraine, OH
Paula Maria I                  120       1,085,850       215,730         2,852,574           3,068,304     1,509,024         (A)
 Hampton, VA
Victory Square                  81       1,006,226        36,630         1,794,845           1,831,475       802,693         (A)
 Canton, OH
Willow Wood                     19         479,066       290,000         1,097,181           1,387,181       513,147         (A)
 Los Angeles, CA
Additional basis of real
 estate due to REAL VI's
 capital contribution to
 limited partnership not
 recorded by Investee
 limited partnership                                     107,796         6,537,625           6,645,421     4,115,124    
                             -----     -----------    ----------       -----------        ------------   ----------- 
TOTAL                        2,624      67,569,379     4,503,824        98,739,086         103,242,910    53,307,093
                             =====     ===========    ==========       ===========        ============   =========== 
</TABLE>

        (A) This project was complete when REAL VI entered the Partnership.
<PAGE>   75

                                                                    SCHEDULE III


                        REAL ESTATE ASSOCIATES LIMITED VI
              REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
                       HELD BY LOCAL LIMITED PARTNERSHIPS
                        IN WHICH REAL VI HAS INVESTMENTS
                                DECEMBER 31, 1997


NOTES:  1.      Each local partnership has developed, owns and operates the
                housing project. Substantially all project costs, including
                construction period interest expense, were capitalized by the
                local partnerships.

        2.      Depreciation is provided for by various methods over the
                estimated useful lives of the projects. The estimated composite
                useful lives of the buildings are generally from 25 to 40 years.

        3.      Investments in property and equipment-limited partnerships:

<TABLE>
<CAPTION>
                                                     Buildings,
                                                     Furnishings,
                                                       And
                                        Land         Equipment        Total
                                    -------------  -------------  -------------
<S>                                 <C>            <C>            <C>          
        Balance, January 1, 1995    $   4,551,180  $  99,542,079  $ 104,093,259

        Net additions, 1995                10,365        748,766        759,131
                                    -------------  -------------  -------------

        Balance, December 31, 1995      4,561,545    100,290,845    104,852,390

        Net additions, 1996                19,721        846,147        865,868
                                    -------------  -------------  -------------

        Balance, December 31, 1996      4,581,266    101,136,992    105,718,258

        Net additions, 1997               (77,442)    (2,397,906)    (2,475,348)
                                    -------------  -------------  -------------

        Balance, December 31, 1997  $   4,503,824  $  98,739,086  $ 103,242,910
                                    =============  =============  =============

</TABLE>

<PAGE>   76

                                                                    SCHEDULE III
                                                                     (Continued)

                        REAL ESTATE ASSOCIATES LIMITED VI
              REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
                       HELD BY LOCAL LIMITED PARTNERSHIPS
                        IN WHICH REAL VI HAS INVESTMENTS
                                DECEMBER 31, 1997



<TABLE>
<CAPTION>
                                       Buildings,
                                       Furnishings
                                          And
                                       Equipment
                                      -----------
<S>                                   <C>        
        Accumulated  Depreciation:

        Balance at January 1, 1995    $44,768,883

        Net additions for 1995          3,359,377
                                      -----------

        Balance at December 31, 1995   48,128,260

        Net additions for 1996          3,459,872
                                      -----------

        Balance at December 31, 1996   51,588,132

        Net deletions for 1997          1,718,961
                                      -----------

        Balance at December 31, 1997  $53,307,093
                                      ===========
</TABLE>


<PAGE>   77

                                                                    SCHEDULE III
                                                                     (CONTINUED)


                        REAL ESTATE ASSOCIATES LIMITED VI
              REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
                     HELD BY CONSOLIDATED LOCAL PARTNERSHIPS
                        IN WHICH REAL VI HAS INVESTMENTS
                                DECEMBER 31, 1997



        Investments in property and equipment-general partnerships
        (continued):

        The total cost of land, buildings, and equipment for federal income tax
        purposes at December 31, 1997 is approximately $5,665,419.


<TABLE>
<CAPTION>
                                                   Buildings
                                                   Furnishings,
                                                     And
                                       Land         Equipment        Total
                                    ------------   ------------   ------------
<S>                                 <C>            <C>            <C>         
        Balance, January 1, 1995    $  1,935,839   $ 10,141,782   $ 12,077,621

        Additions during 1995                 --             --             --
                                    ------------   ------------   ------------

        Balance, December 31, 1995     1,935,839     10,141,782     12,077,621

        Deletions during 1996           (378,659)    (6,033,543)    (6,412,202)
                                    ------------   ------------   ------------

        Balance, December 31, 1996     1,557,180      4,108,239      5,665,419

        Activity during 1997                  --             --             --
                                    ------------   ------------   ------------

        Balance, December 31, 1997  $  1,557,180   $  4,108,239   $  5,665,419
                                    ============   ============   ============

</TABLE>


<PAGE>   78

                                                                    SCHEDULE III
                                                                     (CONTINUED)


                        REAL ESTATE ASSOCIATES LIMITED VI
              REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
                     HELD BY CONSOLIDATED LOCAL PARTNERSHIPS
                        IN WHICH REAL VI HAS INVESTMENTS
                                DECEMBER 31, 1997


<TABLE>
<CAPTION>
                                       Buildings,
                                      Furnishings,
                                         And
                                       Equipment
                                      -----------
         ACCUMULATED DEPRECIATION:
         -------------------------
<S>                                   <C>        
        Balance at January 1, 1995    $ 4,438,792

        Net additions for 1995            353,827
                                      -----------

        Balance at December 31, 1995    4,792,619

        Net additions for 1996            198,237

        Net deletions for 1996         (2,483,907)
                                      -----------

        Balance at December 31, 1996    2,506,949

        Net additions for 1997            142,421
                                      -----------

        Balance at December 31, 1997  $ 2,649,370
                                      ===========

</TABLE>


<PAGE>   79

PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:

REAL ESTATE ASSOCIATES LIMITED VI (the "Partnership") has no directors or
executive officers of its own.

National Partnership Investment Corp. ("NAPICO" or "the Managing General
Partner") is a wholly-owned subsidiary of Casden Investment Corporation, an
affiliate of The Casden Company. The following biographical information is
presented for the directors and executive officers of NAPICO with principal
responsibility for the Partnership's affairs.

CHARLES H. BOXENBAUM, 68, Chairman of the Board of Directors and Chief Executive
Officer of NAPICO.

Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was a
real estate broker with the Beverly Hills firm of Carl Rhodes Company.

Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate Association,
National Institute of Real Estate Brokers, Appraisal Institute, various mortgage
banking seminars, and the North American Property Forum held in London, England.
In 1963, he was the winner of the Snyder Award, the highest annual award offered
by the National Association of Real Estate Boards for Best Exchange. He is one
of the founders and a past director of the First Los Angeles Bank, organized in
November 1974. Mr. Boxenbaum was a member of the Board of Directors of the
National Housing Council. Mr. Boxenbaum received his Bachelor of Arts degree
from the University of Chicago.

BRUCE E. NELSON, 46, President and a director of NAPICO.

Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved in
the identification, analysis, and negotiation of real estate investments.

From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time, Mr. Nelson was engaged
in the private practice of law in Los Angeles. Mr. Nelson received his Bachelor
of Arts degree from the University of Wisconsin and is a graduate of the
University of Colorado School of Law. He is a member of the State Bar of
California and is a licensed real estate broker in California and Texas.

ALAN I. CASDEN, 52, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.

Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Company. Prior to that,
he was the president and chairman of Mayer Group, Inc., which he joined in 1975.
He is also chairman of Mayer Management, Inc., a real estate management firm.
Mr. Casden has been involved in approximately $3 billion of real estate
financings and sales and has been responsible for the development and
construction of more than 12,000 apartment units and 5,000 single-family homes
and condominiums.



<PAGE>   80

Mr. Casden is a member of the American Institute of Certified Public Accountants
and of the California Society of Certified Public Accountants. Mr. Casden is a
member of the advisory board of the National Multi-Family Housing Conference,
the Multi-Family Housing Council, and the President's Council of the California
Building Industry Association. He also serves on the advisory board to the
School of Accounting of the University of Southern California. He holds a
Bachelor of Science degree and a Masters in Business Administration degree from
the University of Southern California.

HENRY C. CASDEN, 54, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.

Mr. Casden has been President and Chief Operating Officer of The Casden Company,
as well as a director of NAPICO since February 1988. He became secretary of both
companies in late 1994. From 1982 to 1988, Mr. Casden was of counsel and a
partner in the Los Angeles law firm of Troy, Casden & Gould. From 1978 to 1981,
he was of counsel and a partner in the Los Angeles law firm of Loeb & Loeb. From
1972 to 1978, Mr. Casden was a member of the Beverly Hills law firm of Fink &
Casden, Professional Corporation.

Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.

BOB SCHAFER, 56, Senior Vice President of Finance.

Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the Company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years. Mr.
Schafer is a member of the California Society of Certified Public Accountants.
He holds a Bachelor of Science degree in accounting from Woodbury University,
Los Angeles.

PATRICIA W. TOY, 68, Senior Vice President - Communications and Assistant
Secretary.

Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.

MARK L. WALTHER, 37, Executive Vice President, General Counsel and Assistant
Secretary.

Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr. Walther
worked in the San Francisco law firm of Browne and Kahn which specialized in
construction litigation. Mr. Walther received his Bachelor of Arts Degree in
Political Science from the University of California, Santa Barbara and is a
graduate of the University of California, Davis, School of Law. He is a member
of the State Bar of Hawaii.

NAPICO and several of its officers, directors and affiliates, including Charles
H. Boxenbaum, Bruce E. Nelson and Alan I. Casden, consented to the entry, on
June 25, 1997, of an administrative cease and desist order by the U.S.
Securities and Exchange Commission (the "Commission"), without admitting or
denying any of the findings made by the Commission. The Commission found that
NAPICO and others had violated certain federal securities laws in connection
with transactions unrelated to the Partnership. The Commission's order did not
impose any cost, burden or penalty on any partnership managed by NAPICO and
does not impact NAPICO's ability to serve as the Partnership's Managing General
Partner.


<PAGE>   81

ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS

Real Estate Associates Limited VI has no officers, employees, or directors.
However, under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to pay the Corporate General Partner
an annual management fee. The annual management fee is approximately equal to .5
percent of the invested assets, including the Partnership's allocable share of
the mortgages related to real estate properties held by local limited
partnerships. The fee is earned beginning in the month the Partnership makes its
initial contribution to the local partnership. In addition, the Partnership
reimburses the Corporate General Partner for certain expenses.

The Corporate General Partner received mortgage brokerage fees in connection
with the refinancing of certain limited partnerships' mortgages. In addition, an
affiliate of the Corporate General Partner is responsible for the on-site
property management for a property owned by the Partnership and for certain
properties owned by the limited partnerships in which the Partnership has
invested.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)     Security Ownership of Certain Beneficial Owners

        The general partners own all of the outstanding general partnership
        interests of REAL VI; no person is known to own beneficially in excess
        of 5% of the outstanding limited partnership interests.

(b)     With the exception of the initial limited partner, Bruce Nelson, who is
        an officer of the corporate general partner, none of the officers or
        directors of the corporate general partner own directly or beneficially
        any limited partnership interests in REAL VI.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Partnership has no officers, directors or employees of its own. All of its
affairs are managed by the Corporate General Partner, National Partnership
Investments Corp. ("NAPICO"). The Partnership is obligated to NAPICO for an
annual management fee equal to .4 percent of the original invested assets of the
limited partnerships. Invested assets is defined as the costs of acquiring
project interests, including the proportionate amount of the mortgage loans
related to the Partnership's interest in the capital accounts of the respective
partnerships. Management fees were $501,660, $513,393 and $535,489 for the years
ended December 31, 1997, 1996 and 1995, respectively.

In 1995, NAPICO received mortgage brokerage fees of $131,000 for its involvement
with the refinancing of limited partnerships' mortgages.

The Partnership reimburses NAPICO for certain expenses. The reimbursement to
NAPICO was $51,487, $47,231 and $43,729 in 1997, 1996 and 1995, respectively,
and is included in operating expenses.

For one of the properties owned by the Partnership, an affiliate of NAPICO
receives a management fee of 5 percent of its gross revenues plus reimbursement
of certain expenses. The Partnership paid management fees to the affiliate of
approximately $12,000 and $107,000 in 1996 and 1995, respectively. An affiliate
of the minority general partner of a general partnership that is consolidated,
manages the property owned by that partnership. The fee is calculated based on
five percent of gross collections plus reimbursement of certain expenses. The
Partnership paid management fees to the affiliate of approximately $60,000,
$65,000 and $58,000 in 1997, 1996 and 1995, respectively.


<PAGE>   82


A real estate investment trust ("REIT") organized by an affiliate of NAPICO 
has advised the Partnership that it intends to make a proposal to purchase 
from the Partnership certain of the limited partnership interests held for
investment by the Partnership.

The REIT proposes to purchase such limited partner interests for cash, which it
plans to raise in connection with a private placement of its equity securities.
The purchase is subject to, among other things, (i) consummation of such
private placement by the REIT; (ii) the purchase of the general partner
interests in the local limited partnerships by the REIT; (iii) the approval of
HUD and certain state housing finance agencies; (iv) the consent of the limited
partners to the sale of the local limited partnership interests held for
investment by REAL VI; and (v) the consummation of a minimum number of purchase
transactions with other Casden affiliated partnerships. As of March 31, 1998,
the REIT had completed buy-out negotiations with a majority of the general
partners of the local limited partnerships.

A proxy is contemplated to be sent to the limited partners setting forth the
terms and conditions of the purchase of the limited partners' interests held
for investment by the Partnership, together with certain amendments to the
Partnership Agreement and other disclosures of various conflicts of interest in
connection with the transaction.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K:

FINANCIAL STATEMENTS

Report of Independent Public Accountants.

Consolidated Balance Sheets as of December 31, 1997 and 1996.

Consolidated Statements of Operations for the years ended December 31, 1997,
1996 and 1995

Consolidated Statements of Partners' Equity (Deficiency) for the years ended
December 31, 1997, 1996 and 1995.

Consolidated Statements of Cash Flows for the years ended December 31, 1997,
1996 and 1995.

Notes to Consolidated Financial Statements.

FINANCIAL STATEMENT SCHEDULES

APPLICABLE TO REAL ESTATE ASSOCIATES LIMITED VI REAL ESTATE III AND THE LIMITED
PARTNERSHIPS:

Schedule - Investments in Limited Partnerships, December 31, 1997, 1996 and
1995.

Schedule III - Real Estate and Accumulated Depreciation, December 31, 1997.

The remaining schedules are omitted because any required information is included
in the financial statements and notes thereto.

EXHIBITS

(3)   Articles of incorporation and bylaws: The registrant is not incorporated.
      The Partnership Agreement was filed with Form S-11 #2-82090 incorporated
      herein by reference.

(10)  Material contracts: The registrant is not party to any material contracts,
      other than the Restated Certificate and Agreement of Limited Partnership
      dated October 12, l982, and the forty contracts representing the
      partnership investment in local limited and general partnerships as
      previously filed at the Securities Exchange Commission, File #2-282090
      which is hereby incorporated by reference.

REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the year ended December 31, 1997.


<PAGE>   83

                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Los Angeles,
State of California.


REAL ESTATE ASSOCIATES LIMITED VI

By:       NATIONAL PARTNERSHIP INVESTMENTS CORP.
          General Partner


/s/ CHARLES H. BOXENBAUM
--------------------------------------
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer


/s/ BRUCE E. NELSON
--------------------------------------
Bruce E. Nelson
Director and President


/s/ ALAN I. CASDEN
--------------------------------------
Alan I. Casden
Director


/s/ HENRY C. CASDEN
--------------------------------------
Henry C. Casden
Director


/s/ BOB E. SCHAFER
--------------------------------------
Bob E. Schafer
Senior Vice President of Finance