SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[X]  Annual Report  pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 for the fiscal year ended December 31, 1998, or

[ ]  Transition  report  pursuant  to  Section  13  or  15(d) of the  Securities
     Exchange Act of 1934 for the transition period from ____________________ to
     ______________________

Commission file number 0-16815
                       -------

              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

DELAWARE                                                         52-1453513
--------------------------------------------------------------------------------
(State or other Jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

14160 Dallas Parkway, Suite 300, Dallas, Texas                      75240
--------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number, including area code:               (972) 770-5600
Securities registered pursuant to Section 12(g) of the Act:       --------------

                                 Title of Class
                                 --------------

                  42,711 Limited Partnership Assignee Interests

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding  twelve months (or for such shorter period that the registrant was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.  Yes  X    No
                                        ---       ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K (ss.  229.405 of this Chapter) 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.  [ ]

         The Registrant's  outstanding  securities consist of assignee interests
in limited  partnership  interests  which have no readily  ascertainable  market
value since there is no public trading  market for these  securities on which to
base a calculation of aggregate market value.

         Documents incorporated by reference.     None  
                                                  ----
                                                                    Page 1 of 25
                                                                    ------------
                                                          Exhibit Index: Page 24


<PAGE>


              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
                        (A Delaware Limited Partnership)
                          1998 Form 10-K Annual Report


<TABLE>
<CAPTION>

                                TABLE OF CONTENTS


                                     PART I
                                     ------

                                                                                                        Page
                                                                                                        ----

<S>          <C>                                                                                        <C>

Item 1.      Business                                                                                    1
Item 2.      Properties                                                                                  2
Item 3.      Legal Proceedings                                                                           3
Item 4.      Submission of Matters to a Vote of Security Holders                                         3


                                     PART II
                                     -------


Item 5.      Market for the Registrant's Pension Notes and Limited
                Partnership Assignee Interests and Related Partnership Matters                           4
Item 6.      Selected Financial Data                                                                     4
Item 7.      Management's Discussion and Analysis of Financial Condition
                and Results of Operations                                                                5
Item 8.      Financial Statements and Supplementary Data                                                 7
Item 9.      Changes in and Disagreements with Accountants on
                Accounting and Financial Disclosure                                                     21


                                    PART III
                                    --------

Item 10.     Directors and Executive Officers of the Registrant                                         22
Item 11.     Executive Compensation                                                                     23
Item 12.     Security Ownership of Certain Beneficial Owners and
                Management                                                                              23
Item 13.     Certain Relationships and Related Transactions                                             23

                                     PART IV
                                     -------

Item 14.     Exhibits, Financial Statement Schedules and Reports on Form 8-K                            24

</TABLE>

<PAGE>






                                     PART I
                                     ------

Item 1.  Business
------   --------

         NHP   Retirement   Housing   Partners   I  Limited   Partnership   (the
"Partnership"),  a Delaware limited  partnership,  was formed under the Delaware
Revised Uniform  Limited  Partnership Act as of March 10, 1986. On September 23,
1986, the Partnership  commenced  offering 25,000 Assignee  Interests and 50,000
Pension  Notes,  both at a price  of  $1,000  per  unit  (the  "Offering").  The
Partnership  subsequently exercised its right to increase the offering to 75,000
Assignee  Interests and 100,000  Pension Notes.  The offering was managed by NHP
Real Estate  Securities,  Inc. and was  terminated on September  22, 1987,  with
subscriptions for 42,711 Assignee Interests and 42,697 Pension Notes.

         The Assignee Interests were sold to taxable individuals or entities and
represent assignments of limited partnership interests in the Partnership issued
to  NHP  RHP-I  Assignor  Corporation  ("Assignor   Corporation"),   a  Delaware
corporation,  the assignor and sole limited partner.  Pension Notes were sold to
qualified  profit-sharing,  pension and other retirement trusts, bank commingled
trust  funds for such  trusts,  Keogh  Plans and IRAs,  government  pension  and
retirement  trusts,  and  other  entities  intended  to be exempt  from  Federal
taxation.  The Pension Notes are obligations of the  Partnership  issued under a
Trust  Indenture  between the  Partnership  and The National  Bank of Washington
("NBW"),  Washington,  D.C., as Trustee, and have a preference over the Assignee
Interests  with  respect  to  payment.  In August  1990,  the assets of NBW were
purchased by Riggs  National Bank,  Washington,  D.C. which became the successor
trustee.  In November 1996, Riggs National Bank transferred its trust operations
to the Bank of New  York,  New  York  City,  which  claims  to be the  successor
trustee.

         The original General Partner of the Partnership was NHP/RHGP-I  Limited
Partnership ("NHP/RHGP-I"),  a Delaware limited partnership, and NHP/RHGP-I held
a 2% interest as general  partner in the  Partnership.  On  December  19,  1991,
NHP/RHGP-I  executed an amended and  restated  purchase  agreement  with Capital
Realty Group Properties, Inc. ("CRG"), a Texas corporation,  for the transfer of
its general partner interests in the Partnership.  CRG assigned its rights under
this purchase  agreement to an affiliate,  Capital Realty Group Senior  Housing,
Inc.  ("CRGSH"),  a Texas  corporation.  Effective  January 1,  1992,  CRGSH was
selected  by  NHP/RHGP-I  to  manage  the five  Properties  of the  Partnership.
Effective June 1, 1993, the  Partnership  entered into a Partnership  Management
Agreement  with  CRGSH to  provide  administrative  services  on  behalf  of the
Partnership. This Partnership management agreement was terminated effective upon
CRGSH becoming the substitute general partner.

         The  substitution  of CRGSH as sole general  partner of the Partnership
required the consent of 50% or more of the outstanding Assignee Interests, which
had been issued by the Partnership  and assigned by Assignor  Corporation to the
Assignee Holders. Under the Partnership Agreement,  holders of the Pension Notes
were not entitled to vote. Pursuant to a Consent  Solicitation dated October 25,
1994,  Assignee  Holders  holding  more than 64% of the equity  interests in the
Partnership  approved the election of CRGSH, as the replacement  general partner
of the  Partnership.  Effective  January  23,  1995,  CRGSH  became the new sole
general  partner of the  Partnership.  CRGSH was a wholly  owned  subsidiary  of
Capital Realty Group Corporation,  a Texas corporation  ("Capital").  Capital is
owned 50% by James A. Stroud (through a trust) and 50% by Jeffrey L. Beck. CRGSH
assigned its contract  rights to manage the  Partnership  properties  to Capital
Senior Living,  Inc. ("CSL"),  a subsidiary of Capital Senior Living Corporation
("CSLC"), effective February 1, 1996.

         On June 10, 1998,  Capital sold all of its shares of CRGSH common stock
to Retirement  Associates,  Inc.  ("Associates") for $855,000. The source of the
funds is a  Promissory  Note for $855,000  with a five-year  term and bearing an
interest rate of 10% per annum.  The interest will accrue on the Promissory Note
and be payable at the maturity of the Promissory  Note.  Associates is the maker
of the Note and Capital is the payee.  Mr.  Robert  Lankford is the President of
Associates  and has had  prior  business  relationships  with  Messrs.  Beck and
Stroud,  the former  principals of CRGSH. From 1988 to 1997, Mr. Lankford was an
independent  broker with Capital  Brokerage,  an affiliate of CSLC. From 1997 to
the present,  however,  Mr.  Lankford has been a principal  with Kamco  Property
Company  Commercial  Real Estate  Brokerage  ("Kamco").  In this  capacity,  Mr.

                                      -1-
<PAGE>

Lankford  provides  independent  commercial real estate  brokerage  services for
various  clients  including  CSLC,  which  accounts  for  less  than  20% of his
compensation.  The address of the principal  executive  offices of CRGSH is 3516
Merrell Road, Dallas, Texas 75229. Phone number: (972) 404-7099.

         The Partnership's  business is to operate residential rental properties
for retirement age occupants (the Properties).  The Partnership presently owns a
99.99%  interest in one property.  See Item 2.  Properties  for a description of
this Property and the business plan for the Property.

         The Partnership did not have any employees as of December 31, 1998.


Regulatory Matters
------------------

         Federal,  state and local  government  regulations  govern  fitness and
adequacy,  equipment,  personnel  and standards of medical care at a health care
facility,  as  well  as  health  and  fire  codes.  Changes  in  the  applicable
regulations  could  adversely  affect the operations of a property,  which could
also affect the financial  results of the Partnership.  Any impact from proposed
health care  legislation is not known at this time;  however,  such impact could
adversely affect the Partnership operations.

Item 2.  Properties
------   ----------

         On September 30, 1998, the Partnership  sold four properties to Capital
Senior Living Properties 2 - NHPCT, Inc., a wholly owned subsidiary of CSLC, for
$40,650,000.  The four properties  sold are the Atrium at Carmichael,  Crosswood
Oaks, The  Heatherwood  and the Veranda Club.  After the sale, The Amberleigh is
the only remaining  property in which the  Partnership  has any interest.  After
payment of closing costs, the Partnership  netted $322,652 in cash proceeds from
the sale after  $22,514,174  was  allocated  for partial  redemption  of Pension
Notes,  $15,703,636  allocated  for  partial  payment of  deferred  interest  on
redeemed  Pension  Notes,  and $413,188  for payment of current  interest due on
redeemed Pension Notes. The Partnership  recognized a $9,249,174 gain on sale of
those  properties  at September  30, 1998.  In October,  1998,  the  Partnership
recognized  approximately  $1,856,485  of  additional  interest  expense paid on
redeemed Pension Notes resulting from the difference between the stated interest
rate of 13% on the Pension Notes and the accrued  interest rate of approximately
9% recorded by the Partnership under the effective  interest rate method. Due to
the partial redemption of Pension Notes, the Partnership  recognized $525,891 of
losses on early extinguishment of debt relating to the write off of issuance and
organization  costs on Pension Notes that were redeemed.  The partial redemption
of Pension Notes will reduce the amount of deferred  interest  which will accrue
on the Pension Notes

         The following is a schedule of the Property owned by the Partnership at
December 31, 1998. The Amberleigh is owned by a limited partnership in which the
Partnership is a 99.99% partner.  The Amberleigh is encumbered by a mortgage for
the benefit of the Pension Note holders.
<TABLE>
<CAPTION>

                                                       Units Occupied                     Units Occupied
                                   Number            as a Percentage of                 as a Percentage of
          Property                   of              Total Units, as of                 Total Units, as of
        Name/Location               Units             December 31, 1998                  December 31, 1997
        -------------               -----             -----------------                  -----------------
<S>                                  <C>                     <C>                                <C>
The Amberleigh                       271                     95%                                97%
  At Woodstream Farms
  Williamsville, New York
</TABLE>

         On November 5, 1997, the Partnership purchased approximately 3.10 acres
of land adjacent to The Amberleigh for expansion (the  "Expansion") for $500,000
plus closing costs. Pending licensure and financing requirements,  the land will
be used in development of an 85 unit assisted living retirement facility.

                                      -2-
<PAGE>
         The cornerstones of the General Partner's  business plan for continuing
to improve the Partnership's  remaining property,  The Amberleigh,  is to expand
the services  offered to residents to include  special  services and home health
care programs,  continued effective use of creative marketing techniques such as
outreach to local  hospitals  and  physicians  continuing  cost  effective  site
operations  and the  development  the  Expansion.  The  introduction  of special
services and home health care is intended to accommodate  the needs of residents
as they age in place.  Special  services  and home  health  care  also  tends to
attract the well  elderly to a community  because  they see the  possibility  of
receiving assistance in their day-to-day living (e.g., bathing, dressing, eating
and taking medication) without having to move to another facility at a difficult
time. Thus, offering special services and home health care tends to attract more
people who know they can stay for a longer period,  with obvious benefits to the
community's  occupancy and resident turnover.  The General Partner believes this
philosophy  provides an  opportunity  for improved  operations  at the remaining
property.  Additionally,  the General Partner is considering the Expansion as an
additional means to add to the residual value of the  Partnership.  There can be
no  assurance  however,  that  licensure  will  be  granted  by  the  regulatory
authorities  in New York to allow this  Expansion  or that a lender will finance
this development and at favorable rates.

         Due to the Partnership's  goal to remain competitive in its real estate
markets,  the General Partner developed an ongoing capital  improvement  program
that was  implemented in 1994. The program  generally  includes  painting of the
building,  replacement  of carpet and  curtains,  purchase of new  furniture and
furniture  refurbishment,  and purchase of new equipment.  Budgeted  operational
capital expenditures for 1999 are approximately $111,200.  There is currently no
firm commitment for the expansion.

Item 3.  Legal Proceedings
------   -----------------

         On or about  October  23,  1998,  an Interest  holder  filed a putative
complaint  on behalf of certain  holders  of  Assignee  Interests  in NHP in the
Delaware Court of Chancery against the Partnership,  CSLC, Capital Senior Living
Properties  2 - NHPCT,  Inc. and CRGSH  (collectively  "the  Defendants").  This
Interest  holder  purchased 90 Interests in the Partnership in February 1993 for
$180. The complaint alleges,  among other things, that the Defendants  breached,
or  aided  and  abetted  a breach  of,  the  express  and  implied  terms of the
Partnership  Agreement in  connection  with the sale of four  properties  by the
Partnership to Capital Senior Living  Properties 2 - NHPCT,  Inc. Capital Senior
Living  Properties 2 - NHPCT,  Inc. is an affiliate  of Capital  Senior  Living,
Inc., the current manager of The Amberleigh.  The complaint  seeks,  among other
relief,  rescission of the sale of these properties and unspecified damages. The
General Partner of the  Partnership  believes the complaint is without merit and
intends vigorously to defend itself in this action.

Item 4.  Submission of Matters to a Vote of Security Holders
------   ---------------------------------------------------

         None.



<PAGE>
                                     PART II
                                     -------

Item 5.  Market  for the  Registrant's  Pension  Notes and  Limited  Partnership
------   -----------------------------------------------------------------------
         Assignee Interests and Related Partnership Matters
         --------------------------------------------------

          (a)  Assignee  Interests  and Pension Notes were sold through a public
               offering managed by NHP Real Estate Securities, Inc. There is not
               currently,  and it is not  anticipated  that  there  will be, any
               established   public   trading  market  for  resale  of  Assignee
               Interests  or Pension  Notes.  Accordingly,  an  investor  may be
               unable  to sell  or  otherwise  dispose  of his  interest  in the
               Partnership.

          (b)  As of March 1,  1999,  there  were  2,348  registered  holders of
               Assignee Interests and 3,159 registered holders of Pension Notes.

               As of March 1, 1999, Capital Senior Living  Properties,  Inc. had
               purchased  approximately  14,131 Pension Notes, or  approximately
               33% of the Partnership's outstanding Pension Notes.

          (c)  Each Pension Note bears stated  interest in an amount equal to 13
               percent  per annum,  9 percent of which was  subject to  deferral
               through  December  31,  1988 and 6 percent of which is subject to
               deferral  thereafter.  Interest is payable  quarterly.  Quarterly
               distributions  of Cash Available for  Distribution (as defined in
               the  Partnership  Agreement)  are  payable to  Assignee  Interest
               Holders within 60 days after the end of each three-month  period,
               subject to the  General  Partner's  right to  restrict or suspend
               such  distributions,  if the  General  Partner,  in its  absolute
               discretion,  determines that such restriction or suspension is in
               the best interests of the Partnership.

               For each of the years ended  December  31,  1998,  1997 and 1996,
               interest  paid to the  Pension  Note  Holders as a group  totaled
               $2,589,891,  $2,987,040, and $2,995,574,  respectively, per year.
               With  respect to the fourth  quarter of 1998,  interest  payments
               paid to  Pension  Note  Holders  on March  1,  1999  amounted  to
               $355,661.

               No cash  distributions were paid to the Assignee Interest Holders
               during 1998, 1997, or 1996. As presented in the Statement of Cash
               Flows (as excerpt  below),  cash and cash  equivalents  increased
               $1,325,567,  $478,552 and  $538,577 for the years ended  December
               31, 1998, 1997 and 1996  respectively.  Future cash  requirements
               have  caused  the  General  Partner to  determine  that it is not
               financially   appropriate  to  make   distributions  to  Assignee
               Interest Holders.

Item 6.  Selected Financial Data
------   -----------------------
<TABLE>
<CAPTION>
                                                                   Years Ended December 31,
                                            1998            1997             1996             1995             1994
                                            ----            ----             ----             ----             ----
<S>                                   <C>             <C>              <C>             <C>               <C> 

Revenue                               $  13,746,088   $  15,548,138    $  14,488,099   $  14,020,626     $  13,445,022
                                      =============   =============    =============   =============     =============

Net Income (Loss)                     $   3,409,569   $  (3,522,917)   $  (3,574,668)  $  (3,690,549)    $  (3,773,975)
                                      =============   =============    =============   =============     =============


Net Income (Loss) per Assignee
Interest                              $          61   $         (81)   $         (82)  $         (85)    $         (87)
                                      =============   =============    =============   =============     =============


Total assets                          $  25,262,800   $  55,585,840    $  56,071,884   $  57,749,496     $  58,967,958
                                      =============   =============    =============   =============     =============

Long-term obligations -
   Pension Notes, and related
   interest payable                   $  33,300,689   $  66,402,407    $  63,353,172   $  60,573,461     $  58,039,450
                                      =============   =============    =============   =============     =============
Cash distributions per
   Assignee Interest                  $           0   $           0    $           0   $           0     $           0
                                      =============   =============    =============   =============     =============
</TABLE>

                                      -5-
<PAGE>
Item 7.  Management's Discussion and Analysis of Financial Condition and Results
------   -----------------------------------------------------------------------
         of Operations
         -------------

       Income from rental operations increased to $3,402,021 from $3,166,234 and
$2,706,587 for the years ended December 31, 1998, 1997, and 1996,  respectively.
Rental revenue  decreased in 1998 to $13,746,088 from $15,548,138 in 1997 due to
the  sale of four  properties  on  September  30,  1998.  Rental  expenses  also
decreased to  $10,344,067  in 1998 from  $12,381,904  in 1997 due to the sale of
four  properties on September 30, 1998. The  Partnership's  net income (loss) is
$3,409,569,  $(3,522,917),  and  $(3,574,668)  for the years ended  December 31,
1998,  1997  and  1996,  respectively.  Due to the  sale of four  properties  on
September  30,  1998,  the  Partnership  recognized  in  1998 a gain  on sale of
$9,249,174,  a loss on early extinguishment of debt of $525,891,  and additional
interest expense on Pension Notes of $1,856,485 on the redeemed Notes.

       Rental revenue increased in 1997 to $15,548,138 from $14,488,099 in 1996,
or an increase of 7.0%,  primarily as a result of increased rental rates. Rental
expenses also increased to  $12,381,904 in 1997 from  $11,781,512 in 1996, or an
increase of 5.1%,  reflecting  increased  costs in  salaries,  management  fees,
administration,  depreciation,  taxes and insurance, utilities,  maintenance and
food services.

Liquidity and Capital Resources
-------------------------------

       Net cash  provided by operating  activities  during 1998 was  $1,727,196,
representing a significant  improvement  over 1997 and 1996 net cash provided by
operating   activities  of  $1,561,977  and   $1,125,278,   respectively.   Rent
collections  decreased in 1998 to $13,401,008 from $15,239,499 in 1997 primarily
due to the sale of four  properties  on September 30, 1998.  Rental  collections
likewise  increased  from  $14,244,537  in 1996 to  $15,239,499  in 1997,  or an
increase of 7.0%, primarily from rental rate increases.  Operating expenses paid
decreased  from  $10,996,792  in 1997 to $9,448,442 in 1998 primarily due to the
sale of four properties on September 30, 1998.  Operating expenses paid slightly
increased  from  $10,370,794  in 1996 to  $10,996,792 in 1997, or an increase of
6.0%, reflecting increased costs in salaries,  management fees,  administration,
depreciation,  taxes and insurance,  utilities,  maintenance  and food services.
Interest paid was $2,589,891 in 1998, $2,987,040 in 1997 and $2,995,574 in 1996.

       For the years  ended  1998,  1997 and 1996,  cash  generated  from rental
operations  was  sufficient to pay the base interest  amount on the  outstanding
Pension Notes of $2,589,891, $2,987,040, and $2,995,574,  respectively. Interest
payments on the Pension Notes are accrued at a 13% rate, but are paid based on a
7% pay rate in 1998,  1997,  and 1996. The remaining 6% unpaid portion for these
years as well as amounts deferred in prior years in accordance with the terms of
the Pension Notes continues to be accrued and are due at maturity,  December 31,
2001. Accrued and unpaid interest at December 31, 1998, amounted to $13,142,863.
At the time of the maturity of the Pension Notes, if the  Partnership  continues
to accrue the  remaining  6%,  total  principal  and accrued  interest  due will
approximate $38 million.

       Cash and cash equivalents at December 31, 1998, amounted to $5,821,300 as
compared to  $4,495,733  at December  31,  1997.  Cash  required by  operations,
including  interest on Pension  Notes,  has been  funded by maturing  short-term
investments   or  available   cash  on  hand.   If  operations  do  not  improve
significantly  in the  long-term,  future  funds  may not be  available  to meet
operating  requirements  and for full  payment of the Pension  Notes and accrued
interest.  This cash need has caused the General Partner to determine that it is
not financially appropriate to make distributions to Assignee Interest Holders.

       The Partnership  Agreement does not specifically prohibit the Partnership
from  incurring  additional  mortgage  indebtedness  related to any  Property by
borrowing  from banks and other  institutional  lenders in order to finance  the
acquisition  and  development  of  Properties.  To the extent that  financing is
available at favorable rates and would be in the best interest of investors, the
Partnership may obtain future financings for the Expansion

       If interest  payments on the Pension Notes continue to be deferred at the
current rate (see Note 6 to the  financial  statements),  the total  accrual for

                                      -5-
<PAGE>
unpaid interest and principal will approximate $38 million at December 31, 2001,
the maturity  date of the Pension  Notes.  This is in excess of  projected  cash
reserves.  Accordingly,  there will need to be  improvements  in cash flows from
operations  and/or  increases in the disposition  and refinancing  values of the
Property  to fund both the  accrued  interest  and the unpaid  principal  of the
Pension Notes upon their maturity.

       Management's  plans are to continue to manage the  Property  prudently to
achieve positive cash flows from operations after interest payments.

Year 2000 Issue
---------------

       The Year 2000  Issue is the result of  computer  programs  being  written
using two digits  rather  than four to define the  applicable  year.  Any of the
Partnership's computer programs or hardware that have date-sensitive software or
embedded  chips may  recognize the year 2000 as a date other than the year 2000.
This could result in a system failure or miscalculations  causing disruptions of
operations,  including,  among other  things,  a temporary  inability to process
transactions,  send invoices,  or engage in similar normal business  activities.
Based on ongoing assessments,  the Partnership has developed a program to modify
or replace significant portions of its software and certain hardware,  which are
generally  PC-based  systems,  so that those systems will properly utilize dates
beyond December 31, 1999. The Partnership has substantially  completed  software
reprogramming  and  software  and hardware  replacement  by mid 1999,  with 100%
completion  targeted for September 30, 1999. The Partnership  presently believes
that these  modifications  and  replacements  of existing  software  and certain
hardware will mitigate the Year 2000 Issue.  However,  if such modifications and
replacements are not completed timely, the Year 2000 Issue could have a material
impact on the operations of the Partnership.

       The  Partnership  has assessed its exposure to operating  equipment,  and
such  exposure  is  not  significant  due  to the  nature  of the  Partnership's
business.

       The Partnership is not aware of any external agent with a Year 2000 Issue
that would materially impact the Partnership's results of operations, liquidity,
or capital  resources.  However,  the  Partnership  has no means of  determining
whether or ensuring that external agents will be Year 2000 ready.  The inability
of external  agents to complete their Year 2000  resolution  process in a timely
fashion could materially impact the Partnership.

       Management  of the  Partnership  believes it has an effective  program in
place to resolve the Year 2000 Issue in a timely  manner.  As noted  above,  the
Partnership  has completed  most but not all  necessary  phases of its Year 2000
program. In the event that the Partnership does not complete the current program
or any  additional  phases,  the  Partnership  could  incur  disruptions  to its
operations.  In addition,  disruptions in the economy  generally  resulting from
Year 2000 Issues could also materially  adversely  affect the  Partnership.  The
Partnership  could be subject to litigation for computer  systems  failure.  The
amount of potential liability and lost revenue cannot be reasonably estimated at
this time.

       The Partnership  currently has no contingency plans in place in the event
it does not complete all phases of its Year 2000 program.  The Partnership plans
to evaluate the status of completion  in mid 1999 and  determine  whether such a
plan is necessary.

Item 7A.  Qualitative and Quantitative Disclosure About Market Risk
-------   ---------------------------------------------------------

The  Partnership  believes  any impact of market risk to the  operations  of the
Partnership are immaterial.

                                      -6-
<PAGE>



Item 8.  Financial Statements and Supplementary Data
------   -------------------------------------------

The financial  statements and supplementary data of the Partnership are included
on pages 8 through 21 of this report.

                                      -7-
<PAGE>





                REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS



The Partners
NHP Retirement Housing Partners I Limited Partnership

We have  audited  the  accompanying  statements  of  financial  position  of NHP
Retirement  Housing  Partners I Limited  Partnership as of December 31, 1998 and
1997, and the related statements of operations,  partners' equity (deficit), and
cash flows for each of the three years in the period  ended  December  31, 1998.
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 NHP Retirement Housing Partners
I Limited  Partnership  at  December  31,  1998 and 1997 and the  results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 1998, in conformity with generally accepted accounting principles.




                                Ernst & Young LLP
Dallas, Texas
February 5, 1999

                                      -8-
<PAGE>

<TABLE>
<CAPTION>

              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP

                        STATEMENTS OF FINANCIAL POSITION

                       See notes to financial statements.


                                                                                    December 31,

                                                                           1998                       1997
                                                                           ----                       ----

                                 ASSETS (Note 6)
                                 ------
<S>                                                                 <C>                         <C>
Cash and cash equivalents (Note 2)                                  $       5,821,300           $       4,495,733

Receivables                                                                    12,451                      31,892

Pension notes issuance costs (Note 1 and 4)                                   357,017                   1,009,842

Pension notes organization costs (Note 1 and 4)                                77,615                     215,326

Prepaid expenses                                                              140,590                     300,654

Rental property (Notes 1, 4 and 10):
   Land                                                                     2,391,705                   6,820,468

   Buildings and improvements, net of
     accumulated depreciation of $5,783,775
     in 1998 and $15,456,154 in 1997                                       16,457,649                  42,670,005

Other assets                                                                    4,473                      41,920
                                                                    -----------------           -----------------

Total assets                                                        $      25,262,800           $      55,585,840
                                                                    =================           =================

                        LIABILITIES AND PARTNERS' DEFICIT
                        ---------------------------------

Liabilities:
   Accounts payable                                                 $         301,673           $         320,796
   Interest payable (Note 6)                                               13,142,863                  23,730,407
   Pension Notes (Note 6)                                                  20,157,826                  42,672,000
   Other liabilities (Note 2)                                                 332,144                     882,625
                                                                    -----------------           -----------------

                                                                           33,934,506                  67,605,828
                                                                    -----------------           -----------------

Contingencies (Note 12)

Partners' deficit (Notes 5 and 7):
   General Partner                                                           (849,832)                 (1,596,670)
   Assignee Limited Partner - 42,691                             
     investment units outstanding                                          (7,821,874)                (10,423,318)
                                                                    ------------------          -----------------

Total partners' deficit                                                    (8,671,706)                (12,019,988)
                                                                    -----------------           -----------------

Total liabilities and partners' deficit                             $      25,262,800           $      55,585,840
                                                                    =================           =================
</TABLE>

                                      -9-

<PAGE>

<TABLE>
<CAPTION>

              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS

                       See notes to financial statements.


                                                                              Year Ended December 31,
                                                                              -----------------------
                                                                      1998               1997              1996
                                                                      ----               ----              ----
<S>                                                              <C>                 <C>               <C>
REVENUES:
   Rental income                                                 $   13,381,567      $   15,243,028    $   14,241,055
   Interest income                                                      149,883              89,872            79,811
   Other income                                                         214,638             215,238           167,233
                                                                 --------------      --------------    --------------

                                                                     13,746,088          15,548,138        14,488,099
                                                                 --------------      --------------    --------------

COSTS AND EXPENSES:
   Salaries, related benefits and overhead reimbursements             3,318,570           3,984,975         3,825,002
(Note 3)
   Management fees, dietary fees and other services (Note 3)          1,235,020           1,432,813         1,350,502
   Administrative and marketing                                         552,944             778,400           754,504
   Utilities                                                            729,706             890,070           874,156
   Maintenance                                                          421,542             521,464           451,412
   Resident services, other than salaries                               230,693             296,468           297,794
   Food services, other than salaries                                 1,350,723           1,591,266         1,511,771
   Depreciation                                                       1,462,362           1,703,233         1,615,089
   Taxes and insurance                                                1,042,507           1,183,215         1,101,282
                                                                 --------------      --------------    --------------

                                                                     10,344,067          12,381,904        11,781,512
                                                                 --------------      --------------    --------------

INCOME FROM RENTAL OPERATIONS                                         3,402,021           3,166,234         2,706,587
                                                                 --------------      --------------    --------------

OTHER (INCOME) EXPENSES:
   Gain on sale (Note 4)                                             (9,249,174)                  0                 0
   Loss on early extinguishment of debt (Note 4)                        525,891                   0                 0
   Interest expense - pension notes (Note 6)                          8,119,171           6,036,275         5,775,285
   Amortization of pension notes issuance costs                         220,845             254,792           254,792
   Amortization of pension notes organization costs                      43,800              49,776            49,776
   Other expenses                                                       331,919             348,308           201,402
                                                                 --------------      --------------    --------------

                                                                         (7,548)          6,689,151         6,281,255
                                                                 --------------      --------------    --------------

NET  INCOME (LOSS)                                               $    3,409,569      $   (3,522,917)   $   (3,574,668)
                                                                 ==============      ==============    ==============

ALLOCATION OF NET  INCOME (LOSS):
General Partner                                                  $      808,125      $      (70,458)   $      (71,493)
Assignor Limited Partner                                              2,601,444          (3,452,459)       (3,503,175)
                                                                 --------------      --------------    --------------

                                                                 $    3,409,569      $   (3,522,917)   $   (3,574,668)
                                                                  =============      ==============    ==============

NET INCOME (LOSS) PER ASSIGNEE INTEREST                          $           61      $          (81)   $          (82)
                                                                  =============      ==============    ==============
</TABLE>






                                      -10-

<PAGE>

<TABLE>
<CAPTION>

              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
              -----------------------------------------------------

                     STATEMENTS OF PARTERS' EQUITY (DEFICIT)
                     ---------------------------------------


                       See notes to financial statements.

                                                                                Assignee
                                                                                 Limited
                                                      General Partner           Partners                Total
                                                      ---------------           --------                -----
<S>                                                   <C>                   <C>                     <C>

Partners' deficit at December 31, 1995                $     (1,332,625)     $    (3,467,684)        $    (4,800,309)

Distributions                                                  (61,134)                   0                 (61,134)

Net Loss                                                       (71,493)          (3,503,175)             (3,574,668)
                                                      ----------------      ---------------         ---------------

Partners' deficit at December 31, 1996                      (1,465,252)          (6,970,859)             (8,436,111)

Distributions                                                  (60,960)                   0                 (60,960)

Net Loss                                                       (70,458)          (3,452,459)             (3,522,917)
                                                      ----------------      ---------------         ---------------

Partners' deficit at December 31, 1997                      (1,596,670)         (10,423,318)            (12,019,988)

Distributions                                                  (61,287)                   0                 (61,287)

Net Income                                                     808,125             2,601,444              3,409,569
                                                      ----------------    ------------------        ---------------

Partners' deficit at December 31, 1998                $       (849,832)     $    (7,821,874)        $    (8,671,706)
                                                      =================     ================        ===============
</TABLE>

                                      -11-
<PAGE>

<TABLE>
<CAPTION>

              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
              -----------------------------------------------------

                            STATEMENTS OF CASH FLOWS
                            ------------------------

                                                                             Year Ended December 31,
                                                                             -----------------------
<S>                                                           <C>                <C>                  <C> 
                                                                   1998                1997               1996
                                                                   ----                ----               ----
<S>                                                           <C>                <C>                  <C>

Cash flows from operating activities:

   Rent collections                                           $    13,401,008    $    15,239,499      $   14,244,537
   Interest received                                                  149,883             91,072              79,876
   Other income                                                       214,638            215,238             167,233
   Management fees, dietary fees and other services                (1,239,970)        (1,429,906)         (1,351,527)
   Salary, related benefits and overhead reimbursements            (3,440,465)        (3,971,789)         (3,816,530)
   Other operating expenses paid                                   (4,768,007)        (5,595,097)         (5,202,737)
   Interest paid                                                   (2,589,891)        (2,987,040)         (2,995,574)
                                                              ---------------    ---------------      --------------

   Net cash provided by operating activities                        1,727,196          1,561,977           1,125,278

Cash flows from investing activities:
   Proceeds from sale of properties                                38,540,462                  0                   0
   Capital expenditures                                              (662,994)        (1,022,465)           (525,567)
                                                              ---------------    ---------------      --------------


   Net cash used in investing activities                           37,877,468         (1,022,465)           (525,567)

Cash flows from financing activities:
    Payments on Pension Notes and deferred interest
payable                                                           (38,217,810)                 0                   0
   Distributions                                                      (61,287)           (60,960)            (61,134)
                                                              ----------------   ---------------      --------------

   Net cash used in financing activities                          (38,279,097)           (60,960)            (61,134)
                                                              ----------------   ---------------      --------------

Net increase in cash and cash equivalents                           1,325,567            478,552             538,577


Cash and cash equivalents at beginning of year                      4,495,733          4,017,181           3,478,604
                                                              ---------------    ---------------      --------------

Cash and cash equivalents at end of year                      $     5,821,300    $     4,495,733      $    4,017,181
                                                              ===============    ===============      ==============

</TABLE>

                       See notes to financial statements.

                                      -12-
<PAGE>


<TABLE>
<CAPTION>

                                                                             Year Ended December 31,

                                                                   1998                1997               1996
                                                                   ----                ----               ----

RECONCILIATION OF NET INCOME (LOSS) TO NET CASH PROVIDED
BY OPERATING ACTIVITIES:
<S>                                                           <C>                <C>                  <C>  

Net Income (loss)                                             $     3,409,569    $    (3,522,917)     $   (3,574,668)
                                                              ---------------    ---------------      --------------

Adjustments to  reconcile  net income  (loss)
   to net cash  provided by operating
   activities:

   Gain on sale of properties                                      (9,249,174)                 0                   0
   Loss on early extinguishment of debt                               525,891                  0                   0
   Depreciation                                                     1,462,362          1,703,233           1,615,089
   Amortization of pension notes organization costs                    43,800             49,776              49,776
   Amortization of pension notes issuance costs                       220,845            254,792             254,792
   Interest payable                                                 5,529,280          3,049,235           2,779,711

   Changes in operating assets and liabilities:
     Interest receivable                                                    0              1,200                  65
     Other assets and receivables                                      56,888             (6,397)            827,993
     Prepaid expenses                                                 138,755            (15,543)             (5,959)
     Accounts payable                                                 (19,123)           (15,650)           (254,782)
     Purchase installments                                                  0                  0            (552,000)
     Other liabilities                                               (391,897)            64,248             (14,739)
                                                              ---------------    ---------------      --------------

Net cash provided by operating activities                     $     1,727,196    $     1,561,977      $    1,125,278
                                                              ===============    ===============      ==============
</TABLE>

                       See notes to financial statements.

                                      -13-
<PAGE>


              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
              -----------------------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

                           December 31, 1998 and 1997

1.       SUMMARY OF PARTNERSHIP ORGANIZATION AND SIGNIFICANT ACCOUNTING
         --------------------------------------------------------------
         POLICIES
         --------

         Organization
         ------------

                  NHP Retirement  Housing  Partners I Limited  Partnership  (the
         Partnership) is a limited  partnership  organized under the laws of the
         State of Delaware on March 10, 1986. The Partnership was formed for the
         purpose of raising  capital by issuing  both Pension  Notes  (Notes) to
         tax-exempt  investors and selling additional  partnership  interests in
         the form of  Assignee  Interests  (Interests)  to taxable  individuals.
         Interests represent assignments of the limited partnership interests of
         the  Partnership  issued to the  Assignor  Limited  Partner,  NHP RHP-I
         Assignor  Corporation.  The  proceeds  from the sale of the  Notes  and
         Interests  have been  invested in  residential  rental  properties  for
         retirement age occupants.

                  A description of the Project owned  indirectly and operated by
         the Partnership at December 31, 1998 is as follows:

                  The Amberleigh.  This project is a 271 unit retirement  living
                  center  located in  Williamsville,  New York. The facility was
                  approximately  95% and 97%  occupied at December  31, 1998 and
                  1997,  respectively.  On  November  5, 1997,  the  Partnership
                  purchased  approximately  3.10 acres of land  adjacent  to The
                  Amberleigh  for the Expansion for $500,000 plus closing costs.
                  Pending licensure and financing requirements, the land will be
                  used in development of an 85 unit assisted  living  retirement
                  facility.

                  A description  of the Projects  owned directly and operated by
         the Partnership at December 31, 1997 and subsequently sold on September
         30, 1998 (see Note 4) is as follows:

                  The  Atrium  of  Carmichael.   This  project  is  a  153  unit
                  retirement  living center located in  Sacramento,  California.
                  This  facility  was  approximately  96%  and 99%  occupied  at
                  September 30, 1998 and December 31, 1997, respectively.

                  Crosswood Oaks.  This project is a 122 unit retirement  living
                  center  located in Sacramento,  California.  This facility was
                  approximately  93% and 91% occupied at September  30, 1998 and
                  December 31, 1997, respectively.

                  The Heatherwood.  This project is a 160 unit retirement living
                  center  located in  Southfield,  Michigan.  This  facility was
                  approximately  93% and 98% occupied at September  30, 1998 and
                  December 31, 1997, respectively.

                  Veranda  Club.  This project is a 189 unit  retirement  living
                  center  located in Boca  Raton,  Florida.  This  facility  was
                  approximately  90% and 96% occupied at September  30, 1998 and
                  December 31, 1997, respectively.

         Significant Accounting Policies
         -------------------------------

                  Organization  costs  related  to the sale of Notes  are  being
         amortized  using the  straight  line method over the term of the Notes.
         Accumulated amortization at December 31, 1998 and 1997 was $635,471 and

                                      -14-
<PAGE>


              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
              -----------------------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

         $497,760, respectively. Offering and issuance costs related to the sale
         of Notes are being  amortized  using the straight  line method over the
         term of the Notes.  Accumulated  amortization  at December 31, 1998 and
         1997 was $3,200,745 and $2,547,920,  respectively.  Selling commissions
         related to the sale of Interests were recorded as a direct reduction to
         the  capital  account of the  holders  of  Interests.  Direct  costs of
         acquisition,  including  acquisition  fees  and  expenses  paid  to the
         General  Partner,  have  been  capitalized  as  part of  buildings  and
         improvements. Other fees and expenses of the Partnership are recognized
         as expenses in the period the related services are performed.

                  Interest  expense on Notes is  calculated  using the effective
         interest method (see Note 6).

                  Buildings and  improvements  are recorded at the lower of cost
         or  net  recoverable   value  (Note  10)  and  depreciated   using  the
         straight-line method,  assuming a 30-year life and a 30% salvage value.
         Furniture and equipment are recorded at cost and depreciated  using the
         straight line method over 5 years.

                  The  cost of  rental  property  and  their  useful  lives  are
         summarized as follows:
<TABLE>
<CAPTION>

                                                        Useful Life            1998                    1997
                                                        -----------            ----                    ----
<S>                                                       <C>              <C>                    <C> 

                  Land                                                     $   2,391,705          $    6,820,468
                                                                           =============          ==============

                  Land improvements                       30 years                36,010                 91,318
                  Building and building improvements                                           
                                                          30 years            21,407,807             55,239,208
                  Furniture and equipment                  5 years               691,587              2,795,633
                  Construction in process                        -               106,020                      0
                                                                           -------------          -------------
                                                                              22,241,424             58,126,159
                  Less-accumulated depreciation                               (5,783,775)           (15,456,154)
                                                                           -------------          -------------
                                                                           $  16,457,649          $  42,670,005
                                                                           =============          =============
</TABLE>

                  Rental  income is  recognized  when earned based on residents'
         signed  rental  agreements.  Rental  payments  received  in advance are
         deferred and recognized when earned.

                  The  preparation  of financial  statements in conformity  with
         generally accepted  accounting  principles  requires management to make
         estimates  and  assumptions  that  effect the  amounts  reported in the
         financial  statements  and  accompanying  notes.  Actual  results could
         differ from those estimates.

         New Accounting Pronouncements
         -----------------------------

                  In April 1998,  the American  Institute  of  Certified  Public
         Accountants issued Statement of Position (SOP) 98-5, Reporting Costs of
         Start-up Activities, which provides guidance on the financial reporting
         of start-up costs and organization costs. It requires costs of start-up
         activities and organization costs to be expensed as incurred.  SOP 98-5
         is effective for financial  statements for fiscal years beginning after
         December 15, 1998. The Company will be adopting SOP 98-5 for the fiscal
         year ending December 31, 1999. The unamortized balance of pension notes
         organization  costs as of December  31, 1998 of $77,615 will be written
         off as a cumulative  effect of a change in  accounting  principle as of
         January 1, 1999. The Company  estimates the impact of adopting this SOP
         will result in a reduction of 1999 earnings of approximately $77,615.


2.       CASH AND CASH EQUIVALENTS
         -------------------------

                  As of December  31, 1998 and 1997,  cash and cash  equivalents
         consisted of demand deposits and repurchase agreements.  All repurchase

                                       15

<PAGE>


              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
              -----------------------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

         agreements  have an  original  maturity  of three  months  or less and,
         therefore, are considered to be cash equivalents.

                  Cash and cash equivalents also includes  $133,566 and $531,056
         of  tenant   security   deposits  at   December   31,  1998  and  1997,
         respectively, which are designated for the purpose of providing refunds
         to tenants upon move-out.

3.       TRANSACTIONS WITH THE GENERAL PARTNER AND ITS AFFILIATES
         --------------------------------------------------------

                  The sole  limited  partner  of the  Partnership  was NHP RHP-I
         Assignor Corporation, a Delaware corporation.

                  Effective  January  23,  1995,  Capital  Realty  Group  Senior
         Housing,   Inc.   (CRGSH)  became  the  sole  general  partner  of  the
         Partnership.  Effective  February 1, 1995,  CRGSH assigned its contract
         rights to manage the Partnership's properties to Capital Senior Living,
         Inc.  ("CSL"),  which,  in 1997,  became a subsidiary of Capital Senior
         Living Corporation. CSL received $1,239,970, $1,429,906, and $1,351,527
         in 1998,  1997 and 1996,  respectively,  for management  fees,  dietary
         services fees and other  operating  expense  reimbursements  related to
         services provided to the Partnership.

                  Through  January 22,  1995,  the sole  general  partner of the
         Partnership was NHP/RHGP-I Limited Partnership (NHP/RHGP-I).

                  Personnel  working  at the  property  sites and  certain  home
         office   personnel  who  perform  services  for  the  Partnership  were
         employees  of CSL,  an  affiliate  of CRGSH  until June 30,  1998.  The
         Partnership  reimburses  CSL for the salaries  and related  benefits of
         such personnel as reflected in the accompanying  financial  statements.
         During 1998, 1997 and 1996, such  reimbursements for salaries,  related
         benefits   and   overhead   reimbursements   amounted  to   $3,440,465,
         $3,971,789, and $3,816,530, respectively.

                  During  1997,  a  former  affiliate  of the  General  Partner,
         Capital Senior Living Communities, L.P., purchased approximately 11,318
         of  Pension  Notes,  or  approximately   30.74%  of  the  Partnership's
         outstanding  Pension  Notes at an  average  price of $822 per Note.  On
         November 3, 1997,  Capital  Senior  Living  Communities,  L.P. sold its
         Pension Notes to Capital Senior Living Properties,  Inc., at that time,
         an affiliate of the General  Partner and a subsidiary of Capital Senior
         Living  Corporation,  at a price of $1,422 per Note.  At  December  31,
         1998,  Capital  Senior Living  Properties,  Inc.  holds 14,131  Pension
         Notes.  Capital  Senior Living  Corporation  is subject to the periodic
         reporting obligations of the Securities and Exchange Commission.

                  On June 10,  1998,  the sole owner of the stock of the General
         Partner,  Capital Realty Group  Corporation,  sold all of its shares of
         CRGSH common stock to Retirement  Associates,  Inc.  ("Associates") for
         $855,000.  The source of the funds is a  Promissory  Note for  $855,000
         with a five-year  term and  bearing an interest  rate of 10% per annum.
         The interest will accrue on the  Promissory  Note and be payable at the
         maturity of the  Promissory  Note.  Associates is the maker of the Note
         and Capital Realty Group  Corporation is the payee. Mr. Robert Lankford
         is the President of Associates and has had prior business relationships
         with Messrs. Beck and Stroud, the former principals of CRGSH. From 1988
         to 1997, Mr. Lankford was an independent broker with Capital Brokerage,
         an affiliate of CSLC. From 1997 to the present,  however,  Mr. Lankford
         has been a principal with Kamco Property Company Commercial Real Estate
         Brokerage   ("Kamco").   In  this  capacity,   Mr.  Lankford   provides
         independent  commercial  real  estate  brokerage  services  for various
         clients  including  CSLC,  which  accounts  for  less  than  20% of his
         compensation.

                  In  connection  with the sale of four  properties in 1998 (see
         Note 4), Capital Realty Group Brokerage,  Inc.  received  $1,219,500 in
         brokerage fees.

                                      -16-
<PAGE>

              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
              -----------------------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

4.       ACQUISITION AND DISPOSITION OF PROPERTY AND REDEMPTION OF PENSION NOTES
         -----------------------------------------------------------------------

                  On September 30, 1998, the Partnership sold four properties to
         Capital  Senior  Living  Properties  2 - NHPCT,  Inc.,  a wholly  owned
         subsidiary of Capital Senior Living Corporation,  for $40,650,000.  The
         four properties sold are the Atrium at Carmichael,  Crosswood Oaks, The
         Heatherwood and the Veranda Club. After the sale, The Amberleigh is the
         only  remaining  property in which the  Partnership  has any  interest.
         After payment of closing costs, the Partnership netted $322,652 in cash
         proceeds  from the sale after  $22,514,174  was  allocated  for partial
         redemption of Pension Notes,  $15,703,636 allocated for partial payment
         of deferred interest,  and $413,188 for payment of current interest due
         on redeemed Pension Notes. The Partnership recognized a $9,249,174 gain
         on sale of those properties at September 30, 1998.

                  In October,  1998, the  Partnership  recognized  approximately
         $1,856,485  of  additional  interest  expense paid on redeemed  Pension
         Notes resulting from the difference between the stated interest rate of
         13% on the Pension Notes and the accrued interest rate of approximately
         9%  recorded  by the  Partnership  under the  effective  interest  rate
         method. Due to the partial redemption of Pension Notes, the Partnership
         recognized $525,891 of losses on early  extinguishment of debt relating
         to the write off of issuance and  organization  costs on Pension  Notes
         that were redeemed.

                  On November 5, 1997, the Partnership  purchased  approximately
         3.10 acres of land  adjacent to The  Amberleigh  property  for $500,000
         plus closing  costs.  The land will be used in development of a 85 unit
         assisted living retirement facility.  Pre-development costs of $106,020
         have been incurred as of December 31, 1998.

5.       CASH DISTRIBUTION POLICIES
         --------------------------

                  The  Partnership  Agreement  allows for quarterly  payments of
         substantially  all Cash Available For  Distribution  (as defined in the
         Partnership Agreement),  subject to the following: (i) distributions to
         Assignee  Holders may be restricted  or suspended  for limited  periods
         when the General Partner determines in its absolute  discretion that it
         is in the best  interests  of the  Partnership;  and (ii) all  Assignee
         Holder   distributions  are  subject  to  the  payment  of  Partnership
         expenses,  payments to Note Holders and  maintenance of working capital
         reserves.

                  Distributions  of Cash Available For  Distribution are made in
         the following order of priority, to the extent available:

                  First,  to the General Partner in an amount equal to 2 percent
                  of Cash Available For  Distribution  Before Interest  Payments
                  for each quarterly cash distribution period.

                  Second,  to the Interest  Holders  until the Interest  Holders
                  have   received  an  amount  equal  to  an  aggregate   annual
                  non-compounded  return of 10 percent on their adjusted capital
                  contributions for each quarterly cash distribution period.

                  Third,  to  the  General  Partner,  a  Partnership  Management
                  Incentive  Fee  in  an  amount  equal  to 8  percent  of  Cash
                  Available For  Distribution  Before Interest  Payments for the
                  fiscal year.

                  Fourth, the balance to the Interest Holders.


                                      -17-

<PAGE>

              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
              -----------------------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

                  No  distributions  were paid to the Assignee  Interest Holders
         during 1998,  1997 or 1996.  Future cash  requirements  have caused the
         General Partner to determine it is not financially  appropriate to make
         distributions to Assignee Interest holders.

                  Cash received from sales or  refinancings  of any  Partnership
         Property,  after retirement of applicable mortgage debt and the payment
         of all  expenses  related to the  transaction  and any payments of debt
         service on the Pension Notes including interest at a noncompounded rate
         of 13% per  annum  less any  prior  payments  (see  Note  6),  is to be
         distributed in the following manner:

                  First,  to the Assignee  Interes  Holders until their adjusted
                  capital  accounts are reduced to zero;

                  Second, to the Assignee Interest Holders until cumulative cash
                  distributions  received equal a 13%  non-compounded  return on
                  their   adjusted   capital   accounts,    reduced   by   prior
                  distributions;

                  Third,  to the General  Partner in the amount of a disposition
                  fee of not more than 3 percent of sales price; and

                  Fourth,  85% to the Assignee  Interest  Holders and 15% to the
                  General Partner.

                  Taxable net income or loss from operations is allocated to the
         Interest Holders as a class and to the General Partner in proportion to
         available  cash  distributed  during  the  fiscal  year.  If no cash is
         distributed during the year, net income or loss is allocated 90% to the
         Assignee  Holders as a class and 10% to the General  Partner.  For book
         purposes in 1998,  the gain on sale of $9,249,174  was allocated 90% to
         the Assignee Holders as a class and 10% to the General  Partner.  Other
         provisions  exist  if there  is net  income  or loss  other  than  from
         operations.  As discussed in Note 7, 2% for 1998,  1997 and 1996 of the
         Cash Available For  Distribution  Before Interest  Payments was paid to
         the General  Partner.  Accordingly,  net income or loss for each of the
         three years in the period ended  December 31, 1998 was allocated in the
         same manner.

                  The deficit  balance in the Assignee  Limited  Partner account
         reflects their percentage interest in the Partnership's  cumulative net
         losses, although there are no restoration requirements for the Assignee
         Limited Partner interest upon termination of the Partnership

6.       PENSION NOTES
         -------------

                  The Notes bear stated  simple  interest at a rate equal to 13%
         per  annum.  Payment  of up to 9% of stated  interest  was  subject  to
         deferral  through  December  31, 1988 and payment of up to 6% of stated
         interest is subject to deferral thereafter.  Deferred interest does not
         bear interest.  Interest not deferred is payable  quarterly.  Using the
         effective  interest method,  interest on principal and accrued interest
         of the Pension Notes has been accrued at the rate of  approximately  9%
         per annum compounded  quarterly.  The approximate 9% effective interest
         rate was  calculated  using  estimates of the amounts of interest  that
         will be  deferred  and the time period in which such  deferred  amounts
         will be paid.  If interest  had been  provided  based on 13% versus the
         effective  rate  of  approximately  9%,  an  additional   liability  of
         approximately  $1,572,350  would be recorded  at December  31, 1998 and
         future  interest   expense  would  be  reduced  by  this  amount.   The
         Partnership  made minimum interest  payments of $2,589,891,  $2,987,040
         and $2,995,574 in 1998,  1997 and 1996,  respectively,  to Pension Note
         Holders.  Relating to the sale of properties on September 30, 1998, the
         Partnership paid $22,514,174 for a partial redemption of Pension Notes,
         and paid $15,703,636 for a partial redemption of deferred interest. The

                                      -18-
<PAGE>

              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
              -----------------------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

         Partnership's  obligation to repay the  principal  amount of the Notes,
         which mature on December  31, 2001,  and stated  interest  thereon,  is
         secured  by a lien  on the  Partnership's  assets  (see  Note  9).  The
         liability of the Partnership  under the Pension Notes is limited to the
         assets of the Partnership.  The Pension Notes are subject to redemption
         in whole or in part upon not less  than 30 nor more than 60 days  prior
         notice, at the election of the Partnership.

                  On September  30, 1998,  NHP deposited  investment  securities
         into an irrevocable trust to complete a partial redemption of NHP's 13%
         Pension Notes.

7.       DISTRIBUTIONS TO PARTNERS
         -------------------------

                  During  1998,  1997 and 1996,  the  General  Partner  received
         distributions,  representing 2% of the Cash Available For  Distribution
         Before Interest  Payments to the Pension Note Holders.  The Partnership
         did not make a distribution to the holders of Assignee Interests during
         1998, 1997 or 1996.

8.       INCOME TAXES
         ------------

                  The  Partnership is not taxed on its income.  The partners are
         taxed in their individual  capacities upon their  distributive share of
         the  Partnership's  taxable  income and are allowed the  benefits to be
         derived from possibly  off-setting their  distributive share of the tax
         loss against  taxable income from other sources  subject to application
         of passive  loss rules and subject to "At Risk" basis  limitation.  The
         taxable  income or loss differs from amounts  included in the statement
         of operations  primarily because of different methods used in computing
         depreciation  and  interest on the Notes and  determining  start-up and
         marketing  expenses  for  financial  reporting  and Federal  income tax
         purposes.

                  In the  event  funds  are not  sufficient  to pay  outstanding
         pension  notes  and  deferred  interest  at  maturity,  income  may  be
         recognized to the Assignee Holders for any forgiven debt.

                  For Federal  income tax  purposes,  the  Partnership  computes
         depreciation   of  buildings  and   improvements   using  the  Modified
         Accelerated  Cost  Recovery  System  (MACRS) and the  Accelerated  Cost
         Recovery  System  (ACRS),   while  for  financial  statement  purposes,
         depreciation is computed using the  straight-line  method.  Interest on
         Pension Notes is computed in accordance  with Internal  Revenue Service
         regulations   for  original  issue  discount  for  Federal  income  tax
         purposes,  while for financial statement purposes,  interest on Pension
         Notes is computed  using the effective  interest  method.  Start-up and
         marketing  costs incurred prior to initial  occupancy were  capitalized
         and amortized over sixty months for Federal income tax purposes,  while
         for financial  statement  purposes,  only those  start-up and marketing
         costs  that  are  expected  to  benefit  future  operations  have  been
         capitalized and amortized over sixty months.

                                      -19-
<PAGE>

              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
              -----------------------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------


         A reconciliation  between financial statement net income (loss) and net
income (loss) for tax purposes follows:
<TABLE>
<CAPTION>

                                                                            Years Ended December 31,
                                                               ----------------------------------------------------

                                                                    1998              1997              1996
                                                                    ----              ----              ----
<S>                                                             <C>              <C>                <C> 

         Net (income) loss per financial statements             $ (3,409,569)    $  3,522,917       $  3,574,668

         Temporary differences in determining (income)
            losses for Federal income tax purposes:
               Gain on sale of properties                         (4,168,952)               -                  -
               Depreciation                                          289,778          617,872            667,874
               Amortization of start-up and marketing costs          (65,660)         (48,116)           (48,116)
               Interest expense - pension notes                    2,932,081       (3,136,298)        (2,903,363)
               Miscellaneous                                          76,426            5,966             37,148
                                                                ------------     ------------       ------------

         Net (income) loss per tax return                       $ (4,345,896)    $    962,341       $  1,328,211
                                                                ============     ============       ============
</TABLE>

          The  basis  of  building   and   improvements,   net  of   accumulated
          depreciation,  for Federal  income tax  purposes was  $16,026,811  and
          $35,166,014 at December 31, 1998 and 1997, respectively.

9.       FUTURE OPERATIONS AND CASH FLOWS
         --------------------------------

                  Given the level of the Partnership's cash reserves at December
         31, 1998, if the  Partnership is unable to increase cash generated from
         operations  over time,  cash  reserves may not be sufficient to satisfy
         future obligations of the Partnership.

                  If  interest  payments  on the  Pension  Notes  continue to be
         deferred at the current rate (see Note 6), the total accrual for unpaid
         interest and  principal  will  approximate  $38 million at December 31,
         2001,  the maturity  date of the Pension  Notes,  which is in excess of
         projected   cash   reserves.   Accordingly,   there  will  need  to  be
         improvements  in cash flows from  operations  and/or  increases  in the
         disposition  and  refinancing  value of the  Property  to fund both the
         accrued  interest  and the face value of the  Pension  Notes upon their
         maturity.

                  Management plans to continue to manage the Property  prudently
         to achieve positive cash flows from operations after interest payments.

10.      VALUATION OF RENTAL PROPERTY
         ----------------------------

                  In accordance with FASB Statement No 121,  "Accounting for the
         Impairment  of  Long-Lived  Assets  and  for  Long-Lived  Assets  to be
         Disposed of", the Partnership  records  impairment losses on long-lived
         assets used in operations when events and  circumstances  indicate that
         the assets might be impaired and the undiscounted  cash flows estimated
         to be generated  by those assets are less than the carrying  amounts of
         those  assets.  If such a  shortfall  exists,  a  write-down  would  be
         warranted  based on the estimated  shortfall of discounted  cash flows.
         The  Partnership  performs  such  evaluations  on an  ongoing  basis by
         comparing each property's net book value to the total estimated  future
         operating  cash flow for years through 2001 (the year the Pension Notes
         mature) plus cash  projected to be received upon an assumed sale of the
         properties on December 31, 2001. Sales proceeds, net of an estimated 3%
         cost of disposal,  are estimated using a 10% capitalization rate of the
         net operating income projected for each property for the year 2001. The

                                      -20-

<PAGE>
              NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
              -----------------------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

         Partnership,  however,  does not intend to sell the  Amberleigh  in the
         near future,  but rather  intends to continue to hold and operate it as
         rental  property.  The  Partnership  does  not  believe  there  are any
         indicators  that would require an  adjustment to the carrying  value of
         its property or the remaining useful lives as of December 31, 1998.

11.      FAIR VALUE OF FINANCIAL INSTRUMENTS:
         -----------------------------------

                  The carrying  amounts and fair values of financial instruments
         at December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>

                                                            1998                                1997
                                                   -----------------------             -----------------------
                                                 Carrying            Fair             Carrying            Fair
                                                  Amount             Value             Amount            Value
<S>                                           <C>                <C>               <C>                <C> 

         Cash and cash equivalents            $  5,821,300       $  5,821,300      $  4,495,733       $  4,495,733
         Pension Notes and accrued interest     20,157,826         25,528,411        42,672,000         60,714,122
</TABLE>

         The following  methods and assumptions were used by the General Partner
         in estimating its fair value disclosures for financial instruments:

                  Cash and cash  equivalents:  The carrying  amounts reported in
                  the balance  sheet for cash and cash  equivalents  approximate
                  fair value.

                  Pension Notes and accrued interest: The fair values of Pension
                  Notes are based on discounted  cash flows at December 31, 1998
                  and 1997.

12:      CONTINGENCIES
         -------------

                  On or about  October  23,  1998,  an Interest  holder  filed a
         putative  complaint on behalf of certain holders of Assignee  Interests
         in NHP in the Delaware Court of Chancery against the Partnership, CSLC,
         Capital   Senior   Living   Properties  2  -  NHPCT,   Inc.  and  CRGSH
         (collectively  "the  Defendants").  This Interest  holder  purchased 90
         Interests in the  Partnership  in February 1993 for $180. The complaint
         alleges, among other things, that the Defendants breached, or aided and
         abetted a breach of, the express and implied  terms of the  Partnership
         Agreement  in  connection  with  the  sale  of four  properties  by the
         Partnership to Capital Senior Living Properties 2 - NHPCT, Inc. Capital
         Senior  Living  Properties  2 - NHPCT,  Inc. is an affiliate of Capital
         Senior  Living,  Inc.,  the  current  manager  of The  Amberleigh.  The
         complaint seeks, among other relief, rescission of the sale of the sale
         of these properties and unspecified  damages.  The Partnership believes
         the complaint is without merit and intends  vigorously to defend itself
         in this action.


Item 9.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
------   -----------------------------------------------------------------------
         Financial Disclosure
         --------------------

                  There  have  been  no  changes   in  or   disagreements   with
         accountants that are required to be reported herein.

                                      -21-

<PAGE>

                                    Part III
                                    --------

Item 10. Directors and Executive Officers of the Registrant
-------  --------------------------------------------------

                  (a).  The Partnership  has no directors, executive officers or
                        significant employees of its own.

                  (b).  On January  23, 1995,  CRGSH  became  the  sole  general
                        partner of the Partnership.

                  CRGSH is a privately owned corporation  initially organized on
         December  1,  1988.  Its  principal  business  activity  has  been  the
         ownership  and  management of real property for its own account and for
         the account of various limited  partnerships of which it is the general
         partner.  Prior to June 10, 1998,  CRGSH was wholly owned subsidiary of
         Capital Realty Group Corporation, a Texas corporation ("Capital"), with
         its corporate  headquarters in Dallas,  Texas.  Capital is owned 50% by
         James A. Stroud  (through a trust) and 50% by Jeffrey L. Beck.  On June
         10, 1998,  Capital Realty Group  Corporation  sold all of its shares of
         CRGSH common stock to Retirement  Associates,  Inc.  ("Associates") for
         $855,000.  The source of the funds is a  Promissory  Note for  $855,000
         with a five-year  term and  bearing an interest  rate of 10% per annum.
         The interest will accrue on the  Promissory  Note and be payable at the
         maturity of the  Promissory  Note.  Associates is the maker of the Note
         and Capital Realty Group  Corporation is the payee. Mr. Robert Lankford
         is the President of Associates and has had prior business relationships
         with Messrs. Beck and Stroud, the former principals of CRGSH.

                  The Partnership properties during 1994 and through February 1,
         1995,  were managed by CRGSH.  On February 1, 1995,  CRGSH assigned its
         contract  rights to manage  the  Partnership's  properties  to  Capital
         Senior  Living   ("CSL"),   a  subsidiary  of  Capital   Senior  Living
         Corporation.

                  The following  are the  directors  and  executive  officers of
         CRGSH, the General Partner of the Partnership.

              Name                    Position
              ----                    --------
              Robert L. Lankford      President,  Retirement  Associates,  Inc.,
                                      sole  stockholder  of  CRGSH,  the General
                                      Partner
              Wayne R. Miller         Secretary, Retirement Associates, Inc.


               Robert L. Lankford,  age 44. Mr. Lankford has served as President
          of Retirement Associates, Inc. since June 1997. From 1988 to 1997, Mr.
          Lankford  was  an  independent  broker  with  Capital  Brokerage,   an
          affiliate of CSLC. From 1997 to the present, however, Mr. Lankford has
          been a principal with Kamco Property  Company  Commercial  Real Estate
          Brokerage   ("Kamco").   In  this  capacity,   Mr.  Lankford  provides
          independent  commercial  real estate  brokerage  services  for various
          clients  including  CSLC,  which  accounts  for  less  than 20% of his
          compensation.

               Wayne R.  Miller,  age 49. Mr.  Miller has served as Secretary of
          Retirement  Associates,  Inc. since June 1997.  From 1980 to 1994, Mr.
          Miller was an officer,  director and shareholder of Miller,  Hiersche,
          Martens and Hayward,  Inc.  From 1994 to the present,  Mr.  Miller has
          been President,  Sole Director and Sole Shareholder of Wayne R. Miller
          P.C.

               (c). Section 16(a)  Beneficial  Ownership  Reporting  Compliance.
          Based  solely  upon a review  of  Forms 3, 4 and 5 and any  amendments
          thereto furnished to the Partnership  pursuant to Rule 16a-3(c) of the
          Securities and Exchange Commission (SEC) rules, the Partnership is not
          aware of any failure of any officer or director of CRGSH or beneficial
          owner of more  than ten  percent  of the  Assignee  Interests  to file
          timely  with the SEC any Forms 3, 4 or 5 relating  to the  Partnership
          for 1998.

                                      -22-

Item 11.  Executive Compensation
-------   ----------------------

                NHP Retirement  Housing  Partners I Limited  Partnership  has no
              officers or directors.  However,  various fees and  reimbursements
              are paid to the General Partner or its  affiliates.  The following
              is a summary  of such fees paid or  accrued  during the year ended
              December 31, 1998:
              Paid or payable from operating cash flow:

                Cash  distributions  of $61,287 to the  General  Partner,  which
              represents 2% of Cash Available for  Distribution  Before Interest
              Payments to the Note Holders.

                Management  fees,  dietary  service  fees,  and other  operating
              expense   reimbursements  of  $1,239,970  and  salaries,   related
              benefits and overhead  reimbursements of $3,440,465,  were paid to
              the General  Partner and CSL, an affiliate of the General  Partner
              until June 10, 1998.

              See Item 8.  Financial Statements and Supplementary Data.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
-------   --------------------------------------------------------------

                No  person  is known by the  Partnership  to own more than 5% of
              Assignee Interests.

                As of March 1, 1999, a former  affiliate of the General Partner,
              has purchased approximately 14,131 Pension Notes, or approximately
              33% of the Partnership's outstanding Pension Notes.

Item 13.  Certain Relationships and Related Transactions.
-------   ----------------------------------------------

                Except  as  described  in  Items  8  (Note  3 in  the  Financial
              Statements),  10, and 11 the Partnership had no other transactions
              or business relationships with NHP, CRGSH, or its affiliates.

                                      -23-
<PAGE>


                                     PART IV
                                     -------

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K
-------   ---------------------------------------------------------------

         (a)   Documents filed as part of this report:

               1. Financial Statements
                  --------------------

                  The financial  statements,  notes and reports listed below are
                  included herein:
                                                                            Page
                                                                            ----
               Report of Ernst & Young LLP, Independent Auditors              8

               Statements of Financial Position,
                December 31, 1998 and 1997                                    9

               Statements of Operations for the Years
                Ended December 31, 1998, 1997 and 1996                       10

               Statements of Partners' Equity (Deficit)
                for the Years Ended December 31, 1998, 1997
                and 1996                                                     11

               Statements of Cash Flows for the
                Years Ended December 31, 1998, 1997 and 1996                 12

               Notes to Financial Statements                                 14


               2.  Financial Statement Schedules
                   -----------------------------

                All schedules  have been omitted as the required  information is
                inapplicable  or the  information  is presented in the financial
                statements or related notes.

               3.  Exhibits
                   --------

                None.

                (b) Reports on Form 8-K
                    -------------------

                    On October 15, 1998,  Form 8-K was filed  regarding the sale
                  of Partnership properties on September 30, 1998

                                      -24-
<PAGE>


                                   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.

                NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP

                By: Capital Realty Group Senior Housing, Inc.
                    General Partner




               By:  /s/ Robert Lankford
                    -------------------------------------------                 
                    Robert Lankford
                    President