<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, 1996

                             Commission File Number
                                     2-82090   

                       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
Lehman Brothers Inc.

The general partners of REAL VI are National Partnership Investments Corp.
("NAPICO"), a California corporation, (the "Corporate General Partner"), and
Coast Housing Investment Associates ("CHIA"). CHIA 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 its general partners as REAL VI has no employees of its own.

Casden Investment Corporation ("CIC") owns 100 percent of NAPICO's stock.  The
current members of NAPICO's Board of Directors are Charles H.  Boxenbaum, Bruce
E. Nelson, Alan I Casden, Henry C. Casden and Brian D. Goldberg.

REAL VI holds limited partnership interests in 27 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 34 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.

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, REAL VI has the right to replace the general partner of the
local limited partnerships.  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.  During 1996, projects in which REAL VI had
invested were substantially rented.  The following is a schedule
<PAGE>   3
During 1996, projects in which REAL VI had invested were substantially rented.
The following is a schedule of the status, as of December 31, 1996, 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, 1996

<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>
Limited Partnerships

Boynton Terrace                       89                     89                         87                 98%
Boynton Beach, FL

Cady Brook Apts.                      40                   None                         38                 95%
Charlton, MA

Cassidy Village                       98                     50                         90                 92%
Columbus, Ohio

Century Plaza                        120                    120                        119                 99%
Hampton, VA

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

Crockett Manor                        38                     38                         37                 97%
Trenton, TN

Denny Place                           17                      4                         14                 82%
Los Angeles, CA

Drexel Park III                       72                      8                         71                 99%
Laurel, MD

Eastridge Apts.                       96                     65                         93                 97%
Briston, VA

Echo Valley Apts.                    100                    100                         95                 95%
Warwick, RI

Filmore I                             32                     32                         32                 100%
Phoenix, AZ

Grant-Ko Enterprises                  40                   None                         36                 90%
Platteville, WI
</TABLE>
<PAGE>   4
                  SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED
                            AND GENERAL PARTNERSHIPS
                       IN WHICH REAL VI HAS AN INVESTMENT
                               DECEMBER 31, 1996
                                   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>
Hudson Gardens                        41                     41                           41               100%
Pasadena, CA

Hummelstown Manor                     51                     50                           50               98%
Hummelstown, PA

Kentucky Manor                        48                   None                           39               81%
Oak Grove, KY

Lonsdale Housing                     131                    131                          131               100%
Providence, RI

Mariner's Cove                       500                    100                          495               99%
San Diego, CA

Marshall Plaza I                      40                     40                           38               95%
Lorain, Ohio

Marshall Plaza II                     50                     48                           50               100%
Lorain, Ohio

Menlo Estates                         80                     80                           80               100%
Riverside County, CA

Mulberry Towers                      206                    205                          206               100%
Scranton, PA

New-Bel-Mo                            34                   None                           31               91%
New Glarus, Bellemont,
Monticello, WI

Oakridge Apts. II                     48                      0                           47               98%
Biloxi, MS

Oakwood Manor                         34                     34                           34               100%
Milan, TN

Park Place                           126                    125                          121               96%
Ewing, NJ
</TABLE>
<PAGE>   5
                  SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED
                            AND GENERAL PARTNERSHIPS
                       IN WHICH REAL VI HAS AN INVESTMENT
                               DECEMBER 31, 1996
                                   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                         61                 80%
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                         49                 98%
Gault, CA

Victory Square                           81                     81                         78                 96%
Canton, Ohio

Villas de Orocovix                       41                     41                         41                100%
Orocovix, PR

Willow Wood                              19                      4                         17                 89%
Los Angeles, CA

Peppertree                              136                   None                        133                 98%
Cypress, CA                                                                                                      
                                  ---------              ---------                  ---------          ----------
TOTALS                                2,832                  1,829                      2,746                 97%
                                  =========              =========                  =========          ==========
</TABLE>
<PAGE>   6
ITEM 2.       PROPERTIES

Through its investment in local limited and general partnerships, REAL VI holds
interests in real estate properties.  See Item 1 and Schedule XI for
information pertaining to these properties.

ITEM 3.       LEGAL PROCEEDINGS

As of December 31, 1996, the Partnership's General Partner was a plaintiff or
defendant in several suits.  None pf 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 Lehman Brothers 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, 1996, 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, 1996.  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,                         
                                ----------------------------------------------------------------------------
                                    1996            1995           1994            1993             1992    
                                ------------    ------------    ------------    ------------    ------------
<S>                            <C>             <C>             <C>             <C>             <C>
(Loss) Income from
   Rental Operations           $   (175,242)   $   (246,036)   $   (238,520)   $   (105,574)   $     37,498

Loss from Partnership
   Operations                    (1,129,499)     (1,307,251)     (1,110,060)     (1,422,906)     (1,037,379)

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

Equity in Income (Loss)
   of Limited Partnerships
   and Amortization of
   Acquisition Costs                603,934         415,526         433,356        (111,547)       (130,549)

Distribution from
   Limited Partnerships
   Recognized as Income             597,425         347,163         500,498         247,782         524,913 
                                ------------    ------------    ------------    ------------    ------------
Net Income (Loss)              $  1,798,640    $   (790,598)   $   (414,726)   $  2,702,865    $   (605,517)
                                ============    ============    ============    ============    ============
Net Income (Loss) per
   Limited Partnership
   Interest                    $        107    $        (47)   $        (24)   $        159    $        (36)
                                ============    ============    ============    ============    ============

Total Assets                   $ 15,286,368    $ 18,337,139    $ 18,725,681    $ 18,810,269    $ 19,980,037 
                                ============    ============    ============    ============    ============

Investments in
   Limited
   Partnerships                $  6,051,522    $  5,619,146    $  5,213,864    $  5,032,639    $  5,415,475 
                                ============    ============    ============    ============    ============

Rental Property                $  3,158,470    $  7,285,002    $  7,638,829    $  7,937,314    $  8,288,223 
                                ============    ============    ============    ============    ============

Mortgage
   Notes Payable               $  4,886,300    $  9,890,564    $  9,993,001    $ 10,086,190    $ 10,170,965 
                                ============    ============    ============    ============    ============

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 has committed, as of December 31, 1996, 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 partnerships in which
REAL VI has invested could produce tax losses for as long as 20 years.  The
Partnership will seek to defer limited partner income taxes from capital gains
by not selling any projects or project interests within 10 years, except to
qualified tenant cooperatives, or when proceeds of the sale would supply
sufficient cash to distribute to limited partners to enable the partners to pay
applicable taxes.

Tax benefits will decline over time as the advantages of accelerated
depreciation are greatest in the earlier years, as deductions for interest
expense decrease as mortgage principal is amortized, and as the Tax Reform Act
of 1986 limits the deductions available.

In 1996, the sale of one property reduced rental operations as compared with
the prior two years.

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 Partnership accounts for its investments in the local limited partnerships
on the equity method, thereby adjusting its investment balance by its
proportionate share of the income or loss of the local limited partnerships.
Losses incurred after the limited partnership investment account is reduced to
zero are not recognized.

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
Except for certificates of deposit and money market funds, the Partnership's
investments are primarily, interests in other limited and general partnerships
owning government assisted projects.  Funds temporarily not required for such
investments in projects are invested providing interest income as reflected in
the statement of operations.  These funds can be converted to cash to meet
obligations as they arise.  The Partnership intends to continue investing
available funds in this manner.

A recurring partnership expense is the annual management fee.  The fee is
payable to the Corporate General Partner of the Partnership and is calculated
as a percentage 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 partnership.

Partnership operating expenses, exclusive of management fees, consist
substantially of professional fees for services rendered to the Partnership.
Such expenses are consistent with the prior year.

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 and
concurrent inflation, could increase vacancy levels, rental payment defaults,
and operating expenses, which in turn, could substantially increase the risk of
operating losses for the projects.

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>   10
               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (A California limited partnership)

                             FINANCIAL STATEMENTS,
                         FINANCIAL STATEMENT SCHEDULES
                   AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
                               DECEMBER 31, 1996
<PAGE>   11
                    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, 1996 and 1995,
and the related statements of operations, partners' deficiency and cash flows
for each of the three years in the period ended December 31, 1996.  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 27 percent and 15 percent
of total assets as of December 31, 1996 and 1995, respectively, and the equity
in income of these limited partnerships represents 12 percent, 13 percent and 9
percent of the total net income of the Partnership for the years ended December
31, 1996, 1995 and 1994, 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, 1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996 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
March 26, 1997
<PAGE>   12
[LOGO]

[SANSIVERI, KIMBALL & MCNAMEE, LLP 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.

January 15, 1997
<PAGE>   13
                                     [LOGO]
                [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 balance sheets of CASSADY VILLAGE APARTMENTS, LTD., FHA
Project Number 043-44028-LDP, as of December 31, 1996 and 1995, and the
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
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 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, 1996 and 1995, and the
results of its operations, changes in partners' equity and cash flows
for the years then ended in conformity with generally accepted
accounting principles.

<PAGE>   14
In accordance with Government Auditing Standards, we have also issued a report
dated January 21, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 21, 1997, on its compliance with
laws and regulations.


Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on pages
14 through 20 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 audits 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 & Glasser, LLP

Chicago, Illinois
January 21, 1997
<PAGE>   15
                                     [LOGO]
                [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
PM-1 Associates, Ltd.

We have audited the accompanying balance sheets of PM-1 ASSOCIATES,
LTD., FHA Project Number 051-35031-LDI-SUP, as of December 31, 1996 and 1995,
and the related statements of operations, changes in partners' deficiency 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 PM-1
Associates, Ltd. as of December 31, 1996 and 1995, and the results of
its operations, changes in its partners' deficiency and 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 17, 1997, on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
<PAGE>   16
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying additional 1996
financial data shown on pages 13 through 20 are presented for purposes of
additional analysis and are not a required part of the financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the 1996 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

Los Angeles, California
February 17, 1997

<PAGE>   17
[LOGO]
[PARENTE RANDOLPH ORLANDO CAREY & ASSOCIATES LETTERHEAD]

To the Partners
City Heights Development Company:

REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

    We have audited the accompanying balance sheets of City Heights Development
Company (a limited partnership), FHA Project No. 034-32029, as of December 31,
1996 and 1995, and the related statements of income, partners' 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 City Heights Development
Company (a limited partnership) as of December 31, 1996 and 1995, and the
results of its operations, changes in partners' 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 City Heights Development Company's (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>   18
  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 City Heights
Development Company (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 & Associate

Wilkes-Barre, Pennsylvania
January 29, 1997

<PAGE>   19
[LOGO]
[LANDSMAN, FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

To the Partners
Crockett Manor Apartments
(A Limited Partnership)

    We have audited the accompanying balance sheets of Crockett Manor
Apartments (A Limited Partnership), FHA Project Number 086-35171-PM-L8, as of
December 31, 1996 and 1995, and the related statements of operations, changes
in partners' deficiency 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 Crockett Manor Apartments
(A Limited Partnership) 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.

<PAGE>   20
  In accordance with Government Auditing Standards, we have also issued a
report dated February 20, 1997 on our consideration of the Partnership's
internal control structure and reports dated February 20, 1997 on its
compliance with specific requirements applicable to major and nonmajor HUD
programs and affirmative fair housing.

    Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information (shown on pages 12 through 21) 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 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.

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California
February 20, 1997

<PAGE>   21
                                     [LOGO]
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]

To the Partners of
Denny Place
                          INDEPENDENT AUDITORS' REPORT

We have audited the accompanying balance sheets of DENNY PLACE (a California
limited partnership), CHFA Project No. 82-63-S (the "Partnership"), as of
December 31, 1996 and 1995, and the related statements of operations, changes
in partners' deficiency 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 Denny Place as of
December 31, 1996 and 1995, and the results of its operations, changes in its
partners' deficiency, 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 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 17, 1997

<PAGE>   22
                                     [LOGO]
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD

            INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
                     ADDITIONAL FINANCIAL DATA REQUIRED BY
          THE MARYLAND DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

To the Partners of
Drexel Park Three Limited Partnership

We have audited the accompanying balance sheets of DREXEL PARK THREE LIMITED
PARTNERSHIP, CDA Project Number ANN-7, (the "Partnership") as of December 31,
1996 and 1995, 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 Drexel Park Three
Limited Partnership at December 31, 1996 and 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 15, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 15, 1997 on its compliance with
laws and regulations.

<PAGE>   23
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The additional 1996 financial data shown
on pages 13 through 23 are presented for the purpose of additional analysis and
are not a required part of the financial statements. Such information, except
for the Monthly Income and Expense Statement (Cash Basis) shown on pages 19 and
20, not audited, on which we expressed no opinion, has been subjected to the
auditing procedures applied in the audit of the 1996 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 15, 1997

<PAGE>   24
[LOGO]
[McCURRY & ASSOCIATES, CPA, PC LETTERHEAD]

Eastridge Associates
Bristol, Virginia

We have audited the accompanying balance sheet of Eastridge Associates,HUD
Project No. 051-55021-LDC (a limited partnership), as of December 31, 1996, and
the related statements of income, changes in partners' equity, 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.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Eastridge
Associates at December 31, 1996, 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 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 21, 1997, on
our consideration of Eastridge Associates' internal control structure, and
reports dated January 21, 1997, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
program transactions.

/s/McCurry & Associates, CPA
<PAGE>   25
[LOGO]
[PAUL DAMIANO LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheet of RIHMFC Project No.
RI-43-H023-021 of Rivarpoint Aasociatea, ask/a Echo Valley Aasociatea (a
limited partnership) as of June 30, 1996, and the related statements of profit
and lose and changes in partners' capital deficiency and cash flows for the
year than ended. These financial stataments 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 Auditina 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 stataments. 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 statments, 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 proceeding paragraph, the financial statements referred to above present
fairly in all material respects, the financial position of RIHMFC Project No.
RI-43-023-021 as of June 30, 1996 and the results of its operations and the
changes in partners' capital deficiency and cash flow for the year then ended
in conformity with generally accepted accounting principles.
<PAGE>   26
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

September 17, 1996
<PAGE>   27
[LOGO]
[Eide Helmeke PLLP LETTERHEAD]

The Partners
Fillmore Investors, Ltd.
Phoenix, Arizona

INDEPENDENT AUDITOR'S REPORT

We have audited the accompanying balance sheets of Fillmore Investors, Ltd. (an
Arizona limited partnership) (Federal Housing Administration Project No.
123-35128) as of December 31, 1996 and 1995, and the related statements of
revenue and expense, partners' deficit, and cash flows for the years then
ended. These financial statements are the responsibility of the 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 Fillmore Investors, Ltd. as of
December 31, 1996 and 1995, and the results of its operations and the changes
in partner's 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 HIJD Programs," we have also issued reports dated January
23, 1997 on our consideration of Fillmore Investors, Ltd.'s internal control
structure and on its compliance with specific requirements applicable to major
HUD programs, affimnative fair housing, and laws and regulations applicable to
the financial statements.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supporting data included in the report (shown
on pages 12 through 18) are presented for the purposes of additional analysis
and are not a required part of the basic financial statements of Fillmore
Investors, Ltd. 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/Eide Helmeke PLLP
Phoenix, Arizona
January 23, 1997
<PAGE>   28
[LOGO]
[NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]

The Partners
Hudson Street Apartments
Culver City, California

INDEPENDENT AUDITORS' REPORT

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 an 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

January 22, 1997
<PAGE>   29
[LOGO]
[MCKONLY & ASBURY LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

The Partners of
Hummelstown Housing Associates
Hummelstown, Pennsylvania

We have audited the accompanying statements of assets, liabilities, and
partners' equity of Hummelstown Housing Associates (a limited partnership), RD
Project No. 44-22-370571782, as of December 31, 1996 and 1995, and the related
statements of revenues and expenses, partners' equity, and cash flows, all
prepared on the income tax reporting basis 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 with 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.

As described in the notes to the financial statements, the Partnership's policy
is to prepare its financial statements on the accounting basis used for income
tax purposes; consequently, depreciation methods have been used which do not
relate to the useful life of the property. In addition, interest paid during
the construction period was expensed.  This differs from generally accepted
accounting principles which require construction period interest to be
capitalized and depreciated over the useful lives of the fixed assets.
Accordingly, the accompanying financial statements are not intended to present
the financial position and results of operations in conformity with generally
accepted accounting principles.
<PAGE>   30
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' equity of
Hummelstown Housing Associates (a limited partnership) at December 31, 1996 and
1995, and its revenues and expenses, changes in partners' equity and its cash
flows for the years then ended on the basis of accounting described in the
notes to the financial statements.

In accordance with Government Auditing Standards, we have also issued a report
dated January 9, 1997 on our consideration of Hummelstown Housing Associates'
internal control structure and a report dated January 9, 1997 on its compliance
with laws and regulations.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on pages
18 through 22 is presented for the purpose 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/ McKonly & Asbury

Harrisburg, Pennsylvania
January 9, 1997

<PAGE>   31
INDEPENDENT AUDITOR'S REPORT

To the Partners
Kentucky Manor Apartments, LTD.
Oak Grove, Kentucky

    We have audited the accompanying balance sheet of Kentucky Manor
Apartments, LTD. (a limited partnership), RHCD Project No. 20-024-611005769,
as of December 31, 1996 and 1995, and the related statements of operations,
changes in partners' equity (deficit) and cash flows for the years then ended.
These financial statements are the responsibility of the 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,and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. 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 Kentucky Manor Apartments,
LTD. (a limited partnership) as of December 31, 1996 and 1995, and the results
of its operations, the changes in partner's equity (deficit) 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 January 27, 1997 on our consideration of Kentucky Manor
Apartments, LTD.'s internal control structure and a report dated January 27,
1997 on it's compliance with laws and regulations.

/s/ Thurman Campbell & Co.

January 27, 1997

<PAGE>   32
[LOGO]
[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
  June 21, 1996
<PAGE>   33
[LOGO]
[WILSON, MCCALL & DAORO LETTERHEAD]

The Partners
Lincoln Mariners Associates Limited
a California limited partnership)

Independent Auditors' Report

    We have audited the accompanying statement of assets, liabilities and
project deficit of Mariners Cove Apartments ("Project"), FHA Project No.
129-35077-PM-LS, owned by Lincoln Mariners Associates Limited (a California
limited partnership), as of December 31, 1996, and the related statements of
project profit and loss, changes in project deficit, and project 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.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Project as of December 31,
1996, and the results of its operations and the changes in project deficit and
project 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 13, 1997 on our consideration of the Project's internal
control structure and reports dated February 13, 1997 on its compliance with
laws and regulations.

    Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information is
presented for the 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/Wilson McCall & Daoro
San Francisco, California
  February 13, 1997
<PAGE>   34
                                     [LOGO]
                [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 Venturers of
Civic Housing Associates I
aka Marshall Plaza Apartments - Phase I

We have audited the balance sheets of CIVIC HOUSING ASSOCIATES I AKA MARSHALL
PLAZA APARTMENTS - PHASE I, FHA Project Number 042-55046-LDP, as of December
31, 1996 and 1995, and the statements of operations, changes in venturers'
equity and cash flows for the years then ended.  These financial statements are
the responsibility of the Venture'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 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 Civic Housing Associates I -
Phase I aka Marshall Plaza Apartments - Phase I as of December 31, 1996 and
1995, and the results of its operations, changes in venturers' equity and 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 January 21, 1997, on our consideration of the Venture's internal control
structure and a report dated January 21, 1997, on its compliance with laws and
regulations.
<PAGE>   35
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on pages
14 through 20 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 audits 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/Alschuler, Melvoin and Glasser LLP

Chicago, Illinois
January 21, 1997

<PAGE>   36
                                     [LOGO]
                [ALSCHULER, 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
Civic Housing Associates II
aka Marshall Plaza Apartments - Phase II

We have audited the balance sheets of CIVIC HOUSING ASSOCIATES II, aka MARSHALL
PLAZA APARTMENTS - PHASE II, FHA Project Number 042-55054-LDP, as of December
31, 1996 and 1995, and the 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
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 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 Civic Housing Associates II,
aka Marshall Plaza Apartments - Phase II, as of December 31, 1996 and 1995, and
the results of its operations, changes in partners' equity and 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 January 21, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 21, 1997, on its compliance with
laws and regulations.
<PAGE>   37
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on pages
14 through 20 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 audits 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

Chicago, Illinois
January 21, 1997
<PAGE>   38
[LOGO]
[NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

The Partners
Hemet Estates
Los Angeles, California

We have audited the accompanying balance sheets of Hemet Estates (a California
partnership), CHFA Project No. 79-104-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
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 Hemet Estates 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 February 6, 1997 on our consideration of Hemet Estates' Internal Control
Structure and its compliance with requirements applicable to the California
Housing Finance Agency's financial assistance programs.

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

February 6, 1997

<PAGE>   39
[LOGO]
[PARENTE.RANDOLPH.ORLANDO.CAREY &ASSOCIATES LETERHEAD]

To the Partners
Mulberry Associates.

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

    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>   40
    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>   41
[LOGO]
[R. BEN YOUNG & ASSOCIATES LETTERHEAD]

Partners
Oak Ridge Park Apartments, Ltd.
Phase II
D'Iberville, Mississippi

INDEPENDENT AUDITORS' REPORT

I have audited the balance sheets of Oak Ridge Park Apartments, Ltd.  (Phase
II) as of December 31, 1996 and 1995, and the related statements of income,
partner's equity, and cash flows for the years then ended.  These financial
statements are the responsibility of the partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.

I conducted my audit in accordance with generally accepted auditing standards
and generally accepted government auditing standards, as set forth in
Government Auditing Standards (1988 Revision) issued by the Comptroller General
of the United States. Those standards require that I 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. I believe that my audit rovides a reasonable basis for
my opinion.

As described in NOTE A to the financial statements, the partnership's policy is
to prepare its financial statements on the basis of accounting used for income
tax purposes. Accordingly, the accompanying financial statements are not
intended to present financial position and results of operation in conformity
with generally accepted accounting principles.

In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oak Ridge Park Apartments,
Ltd. (Phase II) as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended on the basis of
accounting described in NOTE A

/s/R. Ben Young CPA

February 26, 1997

<PAGE>   42
                                     [LOGO]
                [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 sheets of OAKWOOD MANOR ASSOCIATES,
LTD. (a Tennessee limited partnership) THDA Project No.  8.9.02 (the
"Partnership") as of December 31, 1996 and 1995, 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 and 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, 1996 and 1995, and the results of its operations, changes in
its partners' equity, 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 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.

<PAGE>   43
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying additional 1996
financial data shown on pages 13 through 20 are presented for purposes of
additional analysis and are not a required part of the financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the 1996 financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.

/s/Alschuler, Melvoin and Glasser LLP

Los Angeles, California
February 17, 1997
<PAGE>   44
[LOGO]
[FISHBEIN & COMPANY, P.C. LETTERHEAD]

Partners
Park Place Associates

INDEPENDENT AUDITOR'S REPORT

    We have audited the accompanying balance sheets of PARK PLACE ASSOCIATES (A
New Jersey Limited Partnership) as of December 31, 1996, 1995, and 1994, and
the related statements of income, equity (deficiency) 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 statement of operations
is 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, 1996, 1995 and
1994, 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 supplemental information
included in this report (shown on pages 11 through 18) 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 17,
1997, on our consideration of Park Place Associates' internal control structure
and reports dated January 17, 1997, on its compliance with specific
requirements applicable to major HUD programs and affirmative fair housing.

  /s/Fishbein & Company, PC
<PAGE>   45
[LOGO]
[SCOTT & COMPANY LETTERHEAD]

To the Partners of
Park Place Apartments, Ltd.
Cleveland, Texas

Independent Auditor's Report

We have audited the accompanying balance sheet of Park Place Apartments, Ltd.,
FHA Project No. 114-35316-PM-L8 (a limited partnership), as of December 31,
1996, and the related statements of profit and loss, 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, Government Auditing Standards issued by the Comptroller General of
the United States and the July, 1993, Consolidated Audit Guide for Audits of
HUD Programs. 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 above mentioned financial statements present fairly, in all
material respects, the financial position of Park Place Apartments, Ltd. as of
December 31, 1996, and the results of its operations and the 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 and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued a report dated February
13, 1997 on our consideration of the Partnership's internal control structure
and two reports dated February 13, 1997 on its compliance with specific
requirements applicable to major HUD programs and Affirmative Fair Housing.

<PAGE>   46
Park Place Apartments, Ltd
Independent Auditor's Report
Page 2

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data (shown on pages 13 through 18)
are presented for the purposes of additional analysis and are not a required
part of the basic financial statements of Park Place Apartments, Ltd. 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 financial statements taken as a whole.

/s/Scott & Company

February 13, 1997

<PAGE>   47
[LOGO]
[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 respects, 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>   48
                                     [LOGO]
                [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 sheets of PENNECO ASSOCIATES OF JOHNSTOWN
II, FHA Project Number PA-28-0004-025, as of December 31, 1996 and 1995, and
the 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
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 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, 1996 and 1995, and the results of its
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.

<PAGE>   49
In accordance with Government Auditinq Standards, we have also issued a report
dated February 6, 1997, on our consideration of the Project's internal control
structure and a report dated February 6, 1997, on its compliance with laws and
regulations.

Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional 1996 financial data on
pages 13 through 17 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 audits 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 & Glasser LLP

Chicago, Illinois
February 6, 1997

<PAGE>   50
                                     [LOGO]
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]

                          INDEPENDENT AUDITORS' REPORT

To the Partners of
Peppertree Associates

We have audited the accompanying balance sheets of PEPPERTREE ASSOCIATES (a
general partnership) as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' deficiency 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. 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 Peppertree Associates at
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.

/s/Altschuler, Melvoin & Glasser LLP

Los Angeles, California
January 29, 1997

<PAGE>   51
[LOGO]
[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 formation 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>   52
  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
San Juan, Puerto Rico
January 13,1997

<PAGE>   53
                                     [LOGO]
                [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 balance sheets of VICTORY SQUARE APARTMENTS, LIMITED
PARTNERSHIP, FHA Project Number 042-35196-LDP, as of December 31, 1996 and
1995, and the statements of operations, changes in partners' equity and cash
flows for the years then ended.  These financial statements are the
responsibility of the Partnerships management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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 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 at December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and 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 January 21, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 21, 1997, on its compliance with
laws and regulations.

<PAGE>   54
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on pages
13 through 19 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 audits 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/Alschuler, Melvoin and Glasser LLP

Chicago, Illinois
January 21, 1997

<PAGE>   55
[LOGO]
[HORWATH VELEZ SEMPRIT & CO LETTERHEAD]

INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS

Partners
Orocovix Limited Dividend Partnership
(A Limited Partnership)
San Juan, Puerto Rico

We have audited the accompanying balance sheets of Orocovix Limited Dividend
Partnership (a limited partnership), HUD Project No.  RQ46R000031 and FmHA
Project No. 63-02-60660405607, as of December 31, 1996 and 1995, and the
related statements of operations, partners' equity (deficiency), 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 Orocovix Limited Dividend
Partnership 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.

/s/ Horwath Velez Semprit & Co

January 24, 1997

<PAGE>   56
                                     [LOGO]
                [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]

                          INDEPENDENT AUDITORS' REPORT

We have audited the accompanying balance sheets of WILLOW WOOD APARTMENTS (a
California limited partnership), CHFA Project No. 82-70-S (the "Partnership")
as of December 31, 1996 and 1995, and the related statements of operations,
changes in partners' deficiency 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 Willow Wood Apartments as of
December 31, 1996 and 1995, and the results of its operations, changes in its
partners' deficiency, 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 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.

/s/Altschuler, Melvoin and Glasser LLP

Los Angeles, California
February 17, 1997
<PAGE>   57
                       REAL ESTATE ASSOCIATES LIMITED VI
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                 BALANCE SHEETS

                           DECEMBER 31, 1996 AND 1995

                                     ASSETS

<TABLE>
<CAPTION>
                                                                               1996            1995     
                                                                           ------------    -------------
<S>                                                                       <C>             <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2)                              $  6,051,522    $   5,619,146

RENTAL PROPERTY, net of accumulated depreciation (Note 1)                    3,158,470        7,285,002

CASH AND CASH EQUIVALENTS (Note 1)                                           5,849,983        4,895,340

CASH, restricted (Note 3)                                                       35,750           84,338

SHORT TERM INVESTMENTS (Note 1)                                                 -               125,000

RECEIVABLES FROM LIMITED PARTNERSHIPS (Note 2)                                  -                 1,000

OTHER ASSETS                                                                   190,643          327,313 
                                                                           ------------    -------------
          TOTAL ASSETS                                                    $ 15,286,368    $  18,337,139 
                                                                           ============    =============

                                  LIABILITIES AND PARTNERS' DEFICIENCY

LIABILITIES:
    Mortgage notes payable related to properties (Notes 4 and 9)          $  4,886,300    $   9,890,564
    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)                                 5,650,383        5,253,980
    Accounts payable                                                            47,372          193,501
    Other liabilities                                                           35,750          131,171 
                                                                           ------------    -------------
                                                                            16,414,805       21,264,216 
                                                                           ------------    -------------
COMMITMENTS AND CONTINGENCIES (Notes 2, 6 and 7)

PARTNERS' DEFICIENCY:
    General partners                                                          (362,474)        (380,460)
    Limited partners                                                          (765,963)      (2,546,617)
                                                                           ------------    -------------
                                                                            (1,128,437)      (2,927,077)
                                                                           ------------    -------------
           TOTAL LIABILITIES AND PARTNERS' DEFICIENCY                     $ 15,286,368    $  18,337,139 
                                                                           ============    =============
</TABLE>

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



                                       1
<PAGE>   58
                       REAL ESTATE ASSOCIATES LIMITED VI
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                     CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994



<TABLE>
<CAPTION>
                                                       1996             1995             1994    
                                                   ------------     ------------     ------------
<S>                                               <C>              <C>             <C>
RENTAL OPERATIONS:
   Revenues                                       $  1,211,516     $  2,715,123     $  2,680,834
                                                   ------------     ------------     ------------
   Expenses:
     General and administrative                        162,929          429,258          430,353
     Operating                                         395,170        1,040,846          991,264
     Management fees - affiliate (Note 6)               76,862          165,018          169,372
     Depreciation and amortization (Note 1)            210,414          381,897          374,903
     Interest                                          541,383          944,140          953,462 
                                                   ------------     ------------     ------------
                                                     1,386,758        2,961,159        2,919,354 
                                                   ------------     ------------     ------------
LOSS FROM RENTAL OPERATIONS                           (175,242)        (246,036)        (238,520)
                                                   ------------     ------------     ------------
PARTNERSHIP OPERATIONS:
   Interest income                                     165,591          168,911          221,268 
                                                   ------------     ------------     ------------
   Expenses:
     Management fees - general partner (Note 6)        513,393          535,489          624,120
     Mortgage brokerage fees - general partner
        (Note 6)                                        -               131,100           -
     General and administrative                        262,047          289,923          187,558
     Interest                                          519,650          519,650          519,650 
                                                   ------------     ------------     ------------
                                                     1,295,090        1,476,162        1,331,328 
                                                   ------------     ------------     ------------
LOSS FROM PARTNERSHIP OPERATIONS                    (1,129,499)      (1,307,251)      (1,110,060)
                                                   ------------     ------------     ------------
GAIN ON SALE OF RENTAL PROPERTY (Note 1)             1,902,022          -                -

EQUITY IN INCOME OF LIMITED
      PARTNERSHIPS AND AMORTIZATION
      OF ACQUISITION COSTS                             603,934          415,526          433,356

DISTRIBUTIONS FROM LIMITED
      PARTNERSHIPS RECOGNIZED AS
      INCOME (Note 2)                                  597,425          347,163          500,498 
                                                   ------------     ------------     ------------
NET INCOME (LOSS)                                 $  1,798,640     $   (790,598)   $    (414,726)
                                                   ============     ============     ============
NET INCOME (LOSS) PER LIMITED
     PARTNERSHIP INTEREST (Note 1)                $        107     $        (47)   $         (24)
                                                   ============     ============     ============
</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, 1996, 1995 AND 1994


<TABLE>
<CAPTION>
                                          General           Limited
                                          Partners          Partners           Total    
                                       -------------     -------------     -------------
<S>                                        <C>          <C>                  <C>
DEFICIENCY, January 1, 1994            $   (368,407)    $  (1,353,346)     $ (1,721,753)

   Net loss, 1994                            (4,147)         (410,579)         (414,726)
                                       -------------     -------------     -------------
DEFICIENCY, December 31, 1994              (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)
                                       =============     =============     =============
</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, 1996, 1995 AND 1994

<TABLE>
                                                                            1996            1995             1994   
                                                                        ------------    ------------    ------------
<S>                                                                    <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net  income (loss)                                                  $  1,798,640    $   (790,598)   $   (414,726)
   Adjustments to reconcile net income (loss) to net
      cash provided by (used in) operating activities:
         Gain on sale of rental property                                 (1,902,022)         -               -
         Equity in (income) loss of limited partnerships
               and amortization of acquisition costs                       (603,934)       (415,526)       (433,356)
         Depreciation and amortization                                      210,414         353,827         346,832
         Decrease in receivables from limited partnerships                    1,000         256,250         126,500
         Decrease in other assets                                           136,670           5,581          25,164
         Increase in accrued interest payable                               396,403         419,435         359,641
         (Decrease) increase in accounts payable                           (146,129)         87,006          43,161
         (Decrease) increase in other liabilities                           (95,421)         (1,948)         20,525 
                                                                        ------------    ------------    ------------
            Net cash provided by (used in)  operating activities           (204,379)        (85,973)         73,741 
                                                                        ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Distributions to limited partnerships recognized   
      as a return of capital                                                176,852         201,288         257,425
   Decrease in restricted cash                                               48,588             562           2,841
   Decrease (increase) in short term investments                            125,000         -              (125,000)
   Capital contribution to investee limited partnership                      (5,294)       (191,044)         (5,294)
   Addition to rental property                                              -               -               (48,347)
   Proceeds from sale of rental property                                  5,818,140         -               -       
                                                                        ------------    ------------    ------------
           Net cash provided by investing activities                      6,163,286          10,806          81,625 
                                                                        ------------    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payment of mortgages                                                  (5,004,264)       (102,437)        (93,189)
                                                                        ------------    ------------    ------------
NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                                       954,643        (177,604)         62,177 
                                                                        ------------    ------------    ------------
CASH AND CASH EQUIVALENTS,
   BEGINNING OF YEAR                                                      4,895,340       5,072,944       5,010,767 
                                                                        ------------    ------------    ------------
CASH AND CASH EQUIVALENTS,
   END OF YEAR                                                         $  5,849,983    $  4,895,340    $  5,072,944 
                                                                        ============    ============    ============
SUPPLEMENTAL DISCLOSURE OF
   CASH FLOW INFORMATION:
      Cash paid during the year for interest                           $    664,630    $  1,044,356    $    160,009 
                                                                        ============    ============    ============
</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, 1996


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), 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 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, 1996


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                      1996              1995     
                                                 ----------                 -----------       ------------
       <S>                                      <C>                         <C>               <C>
       Land                                                                  $1,557,180        $1,935,839
       Buildings                                25 years                      3,283,659         9,317,202
       Equipment                                3 to 5 years                    824,580           824,580
                                                                            -----------       -----------
                                                                              5,665,419        12,077,621
       Less-Accumulated Depreciation
         and Amortization                                                     2,506,949         4,792,619
                                                                            -----------       -----------

                                                                            $ 3,158,470       $ 7,285,002
                                                                            ===========       ===========
</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.

       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, 1996


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
       one high credit quality financial institution.  Such cash and cash
       equivalents are in excess of the FDIC insurance limit.

       SHORT TERM INVESTMENTS

       Short term investments consist of bank certificates of deposit with
       original maturities ranging from more than three months to twelve
       months.  The fair value of these securities, which have been classified
       as held for sale, approximates their carrying value.

       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 27 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 34 limited partnerships and one general partnership, which
       own residential low income rental projects consisting of 2,832 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, 1996, 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.

       In 1993, a limited partnership (Lincoln Mariner's Associates Limited)
       entered into a Loan Agreement with the City of San Diego to issue
       $15,700,000 of new Mortgage Revenue Funding Bonds to refinance the
       mortgage and refund the bonds.  The annual interest rate on the mortgage
       was reduced from 10.85  percent to 9.36 percent through August 1, 1995,
       and 5.575 percent thereafter through maturity on August 1, 2015.  The
       Partnership and N.C. Lincoln Company (an affiliate of the general
       partner of Lincoln





                                       7
<PAGE>   64
               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1996


2.     INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

       Mariner's Associates Limited) each loaned Lincoln Mariner's Associates
       Limited $382,500, to pay the costs and expenses in connection with the
       refunding and refinancing.  These loans bore interest at 12 percent per
       annum and were fully amortized and paid by August 1, 1995.

       In 1995, two local limited partnerships refinanced their Taxable
       Mortgage Revenue Refunding Bonds.  Fillmore Investors, Ltd. refunded the
       bond issue, consisting of $5,185,000 and $2,515,000 in Tax-Exempt
       Mortgage Revenue Refunding Bonds, Series 1995A and Series 1995A-1,
       respectively, and $160,000 in Taxable Mortgate Revenue Refunding Bonds,
       Series 1995B, for a total of $7,860,000.  By  completing the
       transaction, the local partnership benefits from a reduction of the
       mortgage interest rate, from 11.61% to a rate not to exceed 8.75%.
       Furthermore, all costs associated with the transaction were  born by the
       U.S. Department of Housing and Urban Development ("HUD").  All debt
       service savings will be realized by the City of Phoenix and HUD until
       the expiration of the Housing Assistance Payments ("HAP") Contract in
       2003; thereafter, the local partnership will realize all debt service
       savings from 2003 until the mortgage matures in 2024.  Also, Boynton
       Associates, Ltd. refunded bond issue, consisting of $4,375,000 of
       Multifamily Housing Revenue Refunding Bonds, Series 1995A and $875,000
       in Taxable Multifamily Housing Revenue Refunding Bonds, Series 1995B,
       for a total of $5,250,000.

       By completing this transaction, the local partnership benefits by
       sharing in the debt service savings resulting from a reduction in the
       mortgage interest rate.  Ten percent (10%) of these savings will be
       deposited in the Replacement Reserve account, under the control of HUD,
       for the benefit of the property.

       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 $27,372,000 and
       $24,636,000 as of December 31, 1996 and 1995, respectively.

       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>
                                                               1996                1995   
                                                            ----------          ----------
<S>                                                         <C>                 <C>
Investment balance, beginning of year                       $5,619,146          $5,213,864
Capital contributions to limited partnerships                    5,294             191,044
Cash distributions recognized as a return of capital          (176,852)           (201,288)
Amortization of additional basis and capitalized
  acquisition costs and fees                                  (244,391)           (244,391)
Equity in income of limited partnerships                       848,325             659,917
                                                           -----------         -----------

Investment balance, end of year                             $6,051,522          $5,619,146
                                                            ==========          ==========
</TABLE>





                                        8
<PAGE>   65
               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1996


2.     INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

       The difference between the investment per the accompanying balance
       sheets at December 31, 1996 and 1995, 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, 1996 and 1995 and for each of the three years in the period
       ended December 31, 1996, of the limited partnerships in which the
       Partnership has invested directly or indirectly, is as follows:

                                 Balance Sheets


<TABLE>
<CAPTION>
                                                               1996             1995  
                                                             --------         --------
                                                                 (in thousands)
                                                                               
 <S>                                                        <C>              <C>
 Land and buildings, net                                     $ 54,130         $ 56,724
                                                             ========         ========
 Total assets                                                $ 72,075         $ 72,743
                                                             ========         ========
 Mortgage loans payable                                      $ 71,021         $ 72,765
                                                             ========         ========
 Total liabilities                                           $100,740         $ 98,041
                                                             ========         ========
 Deficiency of the Real Estate Associates Limited VI         $(26,876)        $(23,999)
                                                             ========         ======== 
 Deficiency of other partners                                $ (1,777)        $ (1,299)
                                                             ========         ======== 
</TABLE>

                            Statements of Operations

<TABLE>
<CAPTION>
                                                              1996             1995              1994 
                                                            -------          --------          -------
                                                                          (in thousands)   
                                                                                      
       <S>                                                 <C>               <C>               <C>
       Total revenue                                       $ 21,246          $ 20,571          $20,662
                                                           ========          ========          =======
       Interest expense                                    $  5,561          $  5,720          $ 5,954
                                                           ========          ========          =======
       Depreciation                                        $  3,597          $  3,529          $ 3,521
                                                           ========          ========          =======
       Total expenses                                      $ 23,123          $ 23,034          $22,295
                                                           ========          ========          =======
       Net loss                                            $ (1,877)         $ (2,463)         $(1,633)
                                                           ========          ========          ======= 
       Net loss allocable to the Partnership               $ (1,869)         $ (2,214)         $(1,621)
                                                           ========          ========          ======= 
</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





                                        9
<PAGE>   66
               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1996


2.     INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

       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
       six of these partnerships.  The affiliate received property management
       fees of $179,660, $178,106 and $173,152 in 1996, 1995 and 1994
       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>
                                               1996            1995         1994  
                                             --------        --------     --------
                                                           (in thousands)
                                                                      
<S>                                        <C>             <C>           <C>
Total assets                                  $12,049         $12,225
                                              =======         =======
Total liabilities                             $14,813         $14,616
                                              =======         =======
Deficiency of Real Estate Associates
  Limited VI                                  $(2,674)        $(2,307)
                                              =======         ======= 
Deficiency of other partners                  $   (89)        $   (85)
                                              =======         ======= 
Total revenue                                 $ 3,213         $ 3,136     $ 2,912
                                              =======         =======     =======
Net loss                                      $ (340)         $  (502)    $  (214)
                                              =======         =======     ======= 
</TABLE>

3.     CASH, RESTRICTED

       Restricted cash at December 31, 1996 and 1995 consists of tenants'
       security deposits.




                                       10

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1996


4.     MORTGAGE NOTE PAYABLE RELATED TO PROPERTY

       Mortgage notes payable related to properties consist of the following at
       December 31, 1996 and 1995:

<TABLE>
<CAPTION>
                                                              1996                    1995
                                                              ----                    ----
            
       <S>                                                <C>                       <C>
       Mortgage note bears interest
       at 9.5 percent per annum, with
       monthly principal and interest
       payments of $42,724, due
       January 1, 1997.  The note was
       repaid in 1996 in connection with
       the sale of the property                           $         -              $ 5,052,395

       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                4,838,169
                                                          -----------              -----------

                                                          $ 4,886,300              $ 9,890,564
                                                          ===========              ===========
</TABLE>

             The notes are collateralized by the rental properties.

       The mortgage note payable at December 31, 1996 requires principal
       payments as follows:

<TABLE>
              <S>                                      <C>
              1997                                     $     57,896
              1998                                           63,189
              1999                                           68,966
              2000                                           75,270
              2001                                           82,152
              Thereafter through 2006                     4,538,827
                                                         ----------

                                                         $4,886,300
                                                         ==========
</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
       percent per annum and have principal maturities ranging from December
       1996 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.





                                       11
<PAGE>   68
               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1996


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

       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>
              1997                              $                  $
              1998
              1999                                   940,000         1,060,938
              2000
              2001                                 2,810,000         2,677,979
          Thereafter                               1,720,000         1,911,466
                                                 -----------       -----------
                                                 $ 5,470,000       $ 5,650,383
                                                 ===========       ===========
</TABLE>



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, $107,000 and $106,000 in
       1996, 1995 and 1994, 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
       $65,000, $58,000 and $63,000 in 1996, 1995 and 1994, 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 $47,231, $43,729 and $42,142 in 1996, 1995
       and 1994, respectively, and is included in operating expenses.

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.





                                       12
<PAGE>   69
               REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
                       (a California limited partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1996


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, approximately $85,000, between the estimated nine-month equity
       in income and the actual 1996 year end equity in income has been
       recorded in the fourth quarter.





                                       13
<PAGE>   70
                                                                        SCHEDULE

                       REAL ESTATE ASSOCIATES LIMITED VI
                      INVESTMENTS IN LIMITED PARTNERSHIPS
                 FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994




<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>   71
                                                                       SCHEDULE
                                                                     (CONTINUED)


                       REAL ESTATE ASSOCIATES LIMITED VI
                      INVESTMENTS IN LIMITED PARTNERSHIPS
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
                                                             Year Ended December 31, 1995                                           
                                   -------------------------------------------------------------------------------------------------
                                                                          Cash
                                        Balance                          Distri-                          Balance        Future
                                       January 1,       Capital          butions        Equity in       December 31,     Capital
Limited Partnerships                     1995        Contributions       Received     Income (Loss)        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>   72
                                                                        SCHEDULE
                                                                     (CONTINUED)

                       REAL ESTATE ASSOCIATES LIMITED VI
                      INVESTMENTS IN LIMITED PARTNERSHIPS
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
                                                                           Year Ended December 31, 1994
                                        --------------------------------------------------------------------------------------------
                                                                          Cash
                                        Balance                          Distri-                          Balance        Future
                                       January 1,       Capital          butions        Equity in       December 31,     Capital
Limited Partnerships                     1994        Contributions      Received      Income (Loss)        1994       Contributions 
--------------------                    -------      --------------     --------      -------------      --------     --------------
<S>                                   <C>            <C>              <C>             <C>                <C>             <C>       
Boynton Terrace                        $             $                $               $                  $               $         
Cady Brook Apts.                          249,053                         (4,778)         15,171            259,446              
Cassidy Village                           401,239                        (20,131)        (45,039)           336,069              
City Heights                               77,039                        (70,800)         (6,239)                                
Crockett Manor                                                                                                                   
Denny Place                                                                                                                      
Drexel Park III                           562,274                        (32,070)         33,129            563,333              
Eastridge Apts.                                                                                                                  
Echo Valley Apts.                                                                                                                
Filmore I                                                                                                                        
Grant-Ko Enterprises                                                                                                             
Hudson Gardens                             52,709                                        243,784            296,493              
Hummelstown Manor                                                                                                                
Kentucky Manor                                                                                                                   
Lakewind East Apts.                                                                                                              
Lonsdale Elderly                          783,611                                       (114,436)           669,175              
Mariner's Cove                                                                                                                   
Marshall Plaza I                                                                                                                 
Marshall Plaza II                                                                                                                
Menlo Estates                                                                                                                    
Mulberry Towers                         2,395,953                        (55,252)        182,008          2,522,709              
New-Bel-Mo Enterprises                    (25,500)                                                          (25,500)       25,500
Oakridge Apts. II                                                                                                                
Oakwood Manor                             147,621                         (5,444)         18,557            160,734              
Park Place Apts., TX                                                                                                             
Park Place Apts., NJ                                                     (40,301)        144,602            104,301              
Parkesedge Elderly Apts.                  153,437                                        (14,036)           139,401        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                            282,203                        (23,355)        (24,145)           234,703              
Villas de Orocovix                                                                                                               
Willow Wood                                                                                                                      
                                      -----------      ---------      ----------      ----------         ----------     ---------
                                                                                                                                 
                                      $ 5,032,639      $   5,294      $ (257,425)     $  433,356         $5,213,864     $  90,500
                                      ===========      =========      ==========      ==========         ==========     =========
</TABLE>
<PAGE>   73
                                                                        SCHEDULE
                                                                     (Continued)

                       REAL ESTATE ASSOCIATES LIMITED VI
                      INVESTMENTS IN LIMITED PARTNERSHIPS
                              FOR THE YEARS ENDED
                        DECEMBER 31, 1996, 1995 AND 1994



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
                                                                    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, 1995


<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          Period        & Equipment  Depreciation     Period
------------------------  --------- ---------------- ----------- ----------------- ------------- -------------  ------------
<S>                         <C>         <C>          <C>             <C>           <C>            <C>            <C>
Boynton Terrace             89          $5,150,000    $208,001        $4,124,458    $4,332,457     $1,848,686     1983-1984
  Boyton Beach, FL
Cadybrook                   40           1,088,670      89,225         1,771,838     1,861,103        535,471        (A)
  Charlton, MA
City Heights               151           3,891,383           0         5,182,544     5,182,544      3,511,927        (A)
  Wilkes-Barre, PA
Crockett Manor              38           1,049,836      10,000         1,259,214     1,269,214        589,528        (A)
  Trenton, TN
Eastridge Apts.             96             540,904     101,500         1,526,277     1,627,777      1,257,059        (A)
  Bristol, VA
Echo Valley                100           1,199,574     103,011         3,854,928     3,957,939      3,386,543        (A)
  Warwick, RI
Filmore I                   32           1,207,779     115,000         1,312,495     1,427,495        825,977        (A)
  Phoenix, AZ
Grant-Ko Enterprises        40           1,238,220     100,000         1,395,975     1,495,975        630,800        (A)
  Platteville, WS
Hudson Gardens              41           1,522,520     252,855         2,011,719     2,264,574        972,861        (A)
  Pasadena, CA
Hummelstown Manor           51           1,749,434      96,839         1,743,738     1,840,577      1,555,858       1983
  Hummelstown, PA
Kentucky Manor              48           1,402,311     100,888         1,403,559     1,504,255        819,238        (A)
  Oak Grove, KY
Lonsdale Housing           131           3,245,874     214,833         6,362,322     6,577,155      3,506,009        (A)
  Providence, RI
Mariner's Cove             500          13,888,101           0        15,920,233    15,920,233      7,869,855     1983-1984
  San Diego, CA
Menlo Estates               80           2,832,582     492,061         3,696,060     4,188,121      1,909,599        (A)
  Riverside, CA
Mullberry Towers           206           5,939,506     199,754         7,549,738     7,749,492      2,872,180        (A)
  Scranton, PA
New-Bel-Mo Enterprises      34           1,005,894      76,000         1,142,836     1,218,836        496,504        (A)
  New Glarus, Belleville,
  Monticello, WS
Oakridge Apts.              48           1,206,700      55,000         1,471,041     1,520,041      1,241,719        (A)
  Biloxi, MS
Oakwood                     34             667,041      61,538           777,542       839,080        279,307        (A)
  Milan, TN
Park Place                 126           5,953,875     304,100         7,274,747     7,578,913      2,506,032     1983-1984
  Ewing, NJ
Park Place Apts.            60           1,921,041     146,305         2,225,581     2,371,866      1,249,940        (A)
  Cleveland, TX
Parkesedge Elderly Apts.    45           1,490,767     180,000         1,785,320     1,945,326        651,426        (A)
  Parkesedge, PA
Penneco II                  76           1,996,450      79,627         2,792,000     2,871,627      1,384,800        (A)
  Johnstown, PA
Sauk-Ko Enterprises         30             833,875      60,000         1,180,973     1,220,973        504,341        (A)
  Baraboo, WS
SOL - 413                   12             368,668      50,000           354,982       404,982        192,911        (A)
  Old San Juan, PR
Valley Oaks Senior          50           1,771,000     121,464         1,888,640     2,010,104        938,870        (A)
  Galt, CA
Villas de Orocovix          41           1,433,182      59,550         1,714,747     1,774,297        854,588        (A)
  Orocovix, PR
Cassidy Village             98           1,137,391     156,850         2,095,121     2,251,971        910,222        (A)
  Columbus, OH
Denny Place                 17             419,028     290,000         1,070,594     1,360,594        483,276        (A)
  Los Angeles, CA
Drexel Park III             72           1,589,408      79,520         2,228,343     2,307,863        838,883        (A)
  Partnership
  Laurel, MD
Marshall Plaza I            40             235,265      68,414           739,014       807,428        323,455        (A)
  Loraine, OH
Marshall Plaza II           50             330,365      78,901           957,354     1,038,255        418,220        (A)
  Loraine, OH
Paula Maria I              120           1,125,442     215,730         2,852,574     3,068,304      1,490,281        (A)
  Hampton, VA
Victory Square              81           1,030,554      36,630         1,855,595     1,892,225        803,815        (A)
  Canton, OH
Willow Wood                 19             483,008     290,000         1,097,181     1,387,181        478,445        (A)
  Los Angeles, CA
Additional basis of 
  real estate due to 
  REAL VI's captital 
  contribution to 
  limited partnership
  not recorded by 
  investee limited 
  partnership                                          107,796         6,537,625     6,645,421      3,879,626
                      ----------- ---------------- ----------- -----------------  ------------     ----------
                         2,696          71,020,503   4,581,268       101,136,992   105,718,258     51,588,132
                      ----------- ---------------- ----------- -----------------  ------------     ----------
</TABLE>


(A)  This project was completed when REAL VI entered the Partnership.
<PAGE>   75
                                                                    SCHEDULE III
                                                                     (CONTINUED)

                       REAL ESTATE ASSOCIATES LIMITED VI
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                 OF PROPERTY HELD BY CONSOLIDATED LOCAL GENERAL
                 PARTNERSHIP IN WHICH REAL VI HAS AN INVESTMENT
                               DECEMBER 31, 1996


<TABLE>
<CAPTION>
                                                                             Total Land,
                                                           Buildings,         Buildings,
 Partnership -   Number of    Oustanding                 Furnishings and   Furnishings and    Accumulated   Construction
   Location        Units       Mortgage        Land         Equipment         Equipment       Depreciation     Period   
---------------  ----------   -----------   ----------   ---------------   ----------------   ------------  ------------
<S>                   <C>    <C>           <C>          <C>               <C>                <C>                <C>
Peppertree
   Cypress, CA         136     4,886,300    1,557,180         4,108,239          5,665,419      2,506,949       (A)
                 ----------   -----------   ----------   ---------------   ----------------   ------------         
     TOTAL            2832   $75,906,803   $6,138,446   $   105,245,231   $    111,383,677   $ 54,095,081 
                 ----------   -----------   ----------   ---------------   ----------------   ------------
</TABLE>


(A). This project was completed when REAL VI entered the Partnership.
<PAGE>   76
                                                                    SCHEDULE III
                                                                     (CONTINUED)

              REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
                       HELD BY LOCAL LIMITED PARTNERSHIPS
                        IN WHICH REAL VI HAS INVESTMENTS
                               DECEMBER 31, 1996


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, 1994         $4,553,258       $ 98,704,925     $103,258,183
Net additions, 1994                  (2,078)           837,154          835,076
                                 ----------       ------------     ------------
Balance, December 31, 1994        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
                                 ==========       ============     ============
</TABLE>
<PAGE>   77
                                                                    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, 1996



<TABLE>
<CAPTION>
                                                              Buildings,
                                                             Furnishings
                                                                 And
                                                              Equipment 
                                                             ------------
<S>                                                          <C>
ACCUMULATED  DEPRECIATION:
------------------------- 

Balance at January 1, 1994                                   $41,361,758

Net additions for 1994                                         3,407,125
                                                             -----------

Balance at December 31, 1994                                  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
                                                             ===========
</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, 1996


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

The total cost of land, buildings, and equipment for federal income tax
purposes at December 31, 1996 is approximately $5,665,419.



<TABLE>
<CAPTION>
                                                  Buildings
                                                 Furnishings,
                                                     And
                                    Land          Equipment         Total    
                                 ----------      ------------    -----------
<S>                              <C>             <C>             <C>
Balance, January 1, 1994         $1,935,839      $10,121,505     $12,057,344
Additions during 1994                 -               20,277          20,277 
                                 ----------      -----------     -----------
Balance, December 31, 1994        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 
                                 ==========      ===========     ===========
</TABLE>
<PAGE>   79
                                                                    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, 1996


<TABLE>
<CAPTION>
                                    Buildings,
                                   Furnishings,
                                       And
                                    Equipment  
                                   ------------
<S>                                <C>
Accumulated Depreciation:
Balance at January 1, 1994         $ 4,120,030 
Net additions for 1994                 318,762 
                                   ------------
Balance at December 31, 1994         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 
                                   ============
</TABLE>
<PAGE>   80
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, 67, 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, 45, 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, 51, 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>   81
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, 53, 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.

BRIAN D. GOLDBERG, 33, Chief Financial Officer of The Casden Company and a
director of NAPICO.

Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and
became Chief Financial Officer in March 1991.  Prior to joining The Casden
Company, Mr. Goldberg was with Arthur Andersen & Co., an international public
accounting firm, from August 1985 until July 1990 in their Los Angeles office.
He received his bachelor of science degree in Accounting from the University of
Denver.  Mr. Goldberg is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.

SHAWN HORWITZ, 37, Executive Vice President and Chief Financial Officer.

Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs
of NAPICO and the limited partnerships sponsored by NAPICO.  Prior to joining
NAPICO, Mr. Horwitz was President for approximately one year of Star Sub Shops,
Inc., a corporation engaged in the business of selling fast food franchises,
for approximately one year, was an audit manager in the real estate industry
group for Altschuler, Melvin & Glasser for six years, and was an auditor with
Arthur Young & Co. for 3 years.

Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes
University in South Africa and is a member of the Illinois Society of Certified
Public Accountants, the American Institute of Certified Public Accountants and
the South African Institute of Chartered Accountants.

BOB SCHAFER, 55, Senior Vice President and Corporate Controller.

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.
<PAGE>   82
PATRICIA W. TOY, 67, 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, 36, 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.
<PAGE>   83
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.  The transactions with the Corporate General Partner are
primarily in the form of fees paid by the Partnership to the general partner
for services rendered to the Partnership, as discussed in Item 11 and in the
notes to the accompanying financial statements.
<PAGE>   84
ITEM 14.  FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORT ON
              FORM 8-K

FINANCIAL STATEMENTS

Report of Independent Public Accountants.

Consolidated Balance Sheets as of December 31, 1996 and 1995.

Consolidated Statements of Operations for the years ended December 31, 1996,
1995 and 1994

Consolidated Statements of Partners' Equity (Deficiency) for the years ended
December 31, 1996, 1995 and 1994.

Consolidated Statements of Cash Flows for the years ended December 31, 1996,
1995 and 1994.

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, 1996, 1995 and
1994.

Schedule III - Real Estate and Accumulated Depreciation, December 31, 1996.

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.

(13)     Annual report to security holders:  Pages ____ to ____.

REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the year ended December 31, 1996.
<PAGE>   85
                                   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.
          The General Partner


                                             
---------------------------------------------
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer


                                             
---------------------------------------------
Bruce E. Nelson
Director and President


                                             
---------------------------------------------
Alan I. Casden
Director


                                             
---------------------------------------------
Henry C. Casden
Director


                                             
---------------------------------------------
Brian D. Goldberg
Director


                                             
---------------------------------------------
Shawn D. Horwitz
Executive Vice President and
Chief Financial Officer


                                             
---------------------------------------------
Bob E. Schafer
Senior Vice President and Corporate Controller