Exhibit
Number         Exhibit Description

EX-21.1  Financial  Statements  of Mecca  Apartments  II,  for the  years  ended
         December  31,  1998 and 1997  together  with  auditors  report thereon;
         a significant subsidiary of the Partnership.




















                                       36

<PAGE>


                               Mecca Apartments II

                                Table of Contents

Independent Auditors' Report                                        Page

Financial Statements

        Balance Sheet                                                 40
        Statement of Revenues and Expenses                            42
        Statement of Changes in Partners Deficit                      43
        Statement of Cash Flows                                       44
        Notes to Financial Statements                                 46


                                       37

<PAGE>


















                               Mecca Apartments II
                       (A California Limited Partnership)









                              Financial Statements
                 For The Years Ended December 31, 1998 and 1997




















                                       38


<PAGE>







                          INDEPENDENT AUDITOR'S REPORT


To the Partners of
Mecca Apartments II


We have audited the  accompanying  balance sheets of Mecca  Apartments II, as of
December 31, 1998, and 1997, and the related statements of income and changes in
partners'  capital  and cash flows for the years  then  ended.  These  financial
statements   are  the   responsibility   of  the   project's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We  conducted  our  audit  in  accordance  with  generally  accepted.   auditing
standards,  Government  Auditing Standards issued by the Comptroller  General of
'the United States.  Those standards  require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement An audit includes examining,  on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation,  We believe  that our audit  provides a  reasonable  basis for our
opinion.  In our opinion,  the  financial  statements  referred to above present
fairly, in all material respects, the financial position of Mecca Apartments II,
as of December 31, 1998,  and 1997,  and the results of its  operations  and its
cash  flows for the years  then  ended in  conformity  with  generally  accepted
accounting principles.

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


                                                  ROBERT G. CLAPHAM
                                                  ACCOUTANCY CORPORATION




February 12, 1999













                                       39

<PAGE>


                               MECCA APARTMENTS II

                                 BALANCE SHEETS

                          At December 31, 1998 and 1997

                 See accompanying notes to financial statements

                               1998                       1997
                               ----                       ----

ASSETS

Cash-on hand                  $    100                  $    100
    -revenue accounts          107,107      107,207       63,367        63,467
                              --------                  --------

Accounts receivable
    -tenants (net of
    allowance for
    uncollectible rent
    -$331-12/31/97                              723                      2,649

Prepaid expenses
and deposits                                  3,378                      1,635

Deposits for taxes
and insurance                                20,435                     35,166

Tenants' security
deposits                                     20,318                     19,388
                                         ----------                -----------

Total current assets                        152,061                    122,305

Replacement reserve                          49,562                     34,303

Operating reserve                            68,142                     58,981

Land                            259,698                   259,698
Buildings and improvements    3,961,851                 3,961,851
Furniture and equipment         139,749                   139,749
                             ----------                ----------

                              4,361,298                 4,361,298

Less accumulated
depreciation                    436,134   3,925,164       319,459    4,041,839
                             ----------                ----------

Deferred organization
 and  financing                             225,616                    259,948
 costs, less accumulated                 ----------                -----------
 amortization


                                        $ 4,420,545               $  4,517,376
                                         ==========                ===========



                 See accompanying notes to financial statements
                                       40
<PAGE>


                               MECCA APARTMENTS II

                            BALANCE SHEETS-CONTINUED

                          At December 31, 1998 and 1997

                                     1998                       1997
                                     ----                       ----
LIABILITIES

Accounts payable, trade                 $     5,622               $      5,966

Accrued interest                              5,426                      5,469

Tenants' security deposits                   21,522                     18,046

Prepaid rents                                   634                      1,453

Portion of notes  payable
due within one year                           6,106                      5,568
                                         ----------                -----------
Total current liabilities                    39,310                     36,502

Deferred laundry income                       3,420                      5,340

Notes payable, secured by
real property                  2,518,529                 2,524,097

Less current portion due
within one year                    6,106  2,512,423          5,568   2,518,529
                              ----------                ----------

Deferred interest                           235,876                    163,939

Partners' capital                         1,629,516                  1,793,066
                                         ----------                 ----------

                                        $ 4,420,545                $ 4,517,376
                                         ==========                 ==========


                 See accompanying notes to financial statements
                                       41


<PAGE>


                               MECCA APARTMENTS II

                       STATEMENT OF REVENUES AND EXPENSES

                 For The Years Ended December 31, 1998 and 1997

                                      1998                       1997
                                      ----                       ----

Tenants' rent, gross
 potential                 $    263,784               $   262,286
Less vacancy loss                12,181      251,603       21,719       240,567
                             -----------                ----------

Laundry concession                8,933                     9,430
Interest income                   6,725                     2,922
Other income                      4,187       19,845        4,810        17,162
                             -----------   ----------   ----------   -----------

                                             271,448                    257,729
                                           ----------                -----------

Administrative
   Salaries                      18,793                    23,947
   Office expenses                1,769                     1,544
   Management fee                24,780                    23,330
   Telephone                        600                       536
   Legal                          1,625                         -
   Auditing                       5,750                     6,300
   Bad debts                        836                         -
   Other                          2,523       56,676        4,138        59,795
                             -----------                ----------

Utilities
   Electricity                    5,596                     5,678
   Water and sewer               10,912                    10,078
   Gas                            1,962       18,470        2,111        17,867
                            -----------                ----------

Operating and
 Maintenance
   Exterminating                  1,031                     1,667
   Rubbish                        9,999                     7,309
   Grounds                       12,062                    12,373
   Materials and supplies         5,430                     2,457
   Repairs contract
    and payroll                  11,931                    12,859
   Painting and decorating        2,943       43,396        1,411        38,076
                            -----------                ----------

Depreciation                                 116,675                    118,007

Taxes and Insurance
   Real property taxes           13,659                    21,976
   Other taxes                    3,434                     3,338
   Insurance                     11,063       28,156        9,653        34,967
                            -----------                ----------

Interest, less
  reimbursement                              137,293                    137,787

Amortization                                  34,332                     34,235
                                          ----------                -----------

                                             434,998                    440,734
                                          ----------                -----------

Net income (loss)
 for the year                            $  (163,550)              $   (183,005)
                                          ==========                ===========

                 See accompanying notes to financial statements
                                       42
<PAGE>


                               MECCA APARTMENTS II

                    STATEMENT OF CHANGES IN PARTNERS' DEFICIT

                 For The Years Ended December 31, 1998 and 1997


Capital, December 31, 1996                                 $   1,976,071

Net loss for the year ended December 31, 1997                   (183,005)
                                                            ------------

Capital, December 31, 1997                                     1,793,066

Net loss for the year ended December 31, 1998                   (163,550)
                                                            ------------

Capital, December 31, 1998                                 $   1,629,516
                                                            ============


















                 See accompanying notes to financial statements
                                       43
<PAGE>
<TABLE>
<CAPTION>

                               MECCA APARTMENTS II

                             STATEMENT OF CASH FLOWS

                 For The Years Ended December 31, 1998 and 1997


                                                1998                      1997
                                                ----                      ----

<S>                                     <C>            <C>          <C>             <C>
Cash Flows provided by (Used for)
  Operating Activities
    Cash collected from tenants and      $    263,466               $   244,249
      concessionaires
    Cash paid to suppliers and               (144,865)                 (160,114)
      employees
    Interest paid - mortgage                  (65,399)                  (65,888)
    Interest collected                          6,725                     2,922
    Withdrawals from (deposits to)             13,801                    26,204
      restricted cash, net                -----------                ----------


Net cash flows provided by (used for)
  operating activities                                      73,728                       47,373

Cash Flows Provided by (Used for)
  Financing Activities
  Payments on loans                            (5,568)                   (5,078)
                                          -----------                ----------

Net cash flows provided by (used for)
  financing activities                                      (5,568)                      (5,078)

Cash Flows Provided by (Used for)
  Investing Activities

    Release of deposit by lender                    -                     7,075
    Payments for additions to property
      and deferred costs                            -                    (7,075)
    Deposits to restricted cash               (24,420)                  (22,604)
                                          -----------                ----------

Net cash flows provided by (used for)                      (24,420)                     (22,604)
  investing activities                                      ------                      -------


Increase (decrease) in cash                                 43,740                       19,691

Unrestricted cash, beginning of year                        63,467                       43,776
                                                        ----------                    ---------

Unrestricted cash, end of year                         $   107,207                  $    63,467
                                                        ==========                  ===========
</TABLE>

                 See accompanying notes to financial statements
                                       44


<PAGE>


                               MECCA APARTMENTS II

                       STATEMENT OF CASH FLOWS - CONTINUED

                 For The Years Ended December 31, 1998 and 1997


                                           1998                       1997
                                           ----                       ----
Reconciliation of Net Income
 with Cash
Provided by (Used for) Operating
  Activities

  Net income (loss) for the year    $  (163,550)          $ (183,005)
  Add depreciation and amortization     151,007              152,242
  Deferred interest                      71,937               71,938
  Deferred income                        (1,920)   57,474     (1,920)    39,255
                                     ----------           ----------

  (Increase) decrease in assets:          1,926                 (510)
    Accounts receivable                  (1,743)               9,998
    Prepaid expenses and deposits        13,801               26,204
    Restricted cash

  Increase (decrease) in liabilities:
    Accounts payable and accrued           (387)             (26,968)
      liabilities
    Other liabilities                     2,657    16,254       (606)    8,118
                                      ---------  --------  --------  ---------

Cash flows provided by (used for)               $  73,728            $  47,373
  operating activities                           ========             ========
















                 See accompanying notes to financial statements
                                       45

<PAGE>


                               MECCA APARTMENTS II

                          NOTES TO FINANCIAL STATEMENTS

                 For The Years Ended December 31, 1998 and 1997



NOTE 1 - ORGANIZATION

The partnership was organized to develop and operate  low-income  housing in the
City of Mecca,  California.  The property  included in the financial  statements
consists of sixty units of rental  housing.  The partnership has entered into an
agreement with the State of California Tax Credit Allowance Committee; under the
terms of which the  partnership  will be allocated  federal  low-income  housing
credits  which will be passed  through to the  partners  for the ten year period
following initial  occupancy of the housing.  The credits are to be 8.72% of the
eligible basis up to a maximum credit of $387,873 per year.  Agreements with the
Tax Credit Allocation Committee and the lender place substantial restrictions on
the  use  and  operation  of  the  housing,  including  restrictions  on  rents,
expenditures  and  withdrawals  and  requirements  that various  restricted cash
deposits be maintained.

NOTE 2 - ACCOUNTING PRINCIPLES

The partnership uses the accrual basis, in that income is recorded as earned and
expenses as they are incurred.

Income from rents is recorded at the gross potential amount,  with losses due to
vacancy of bad debts  shown as  reductions  of income  and free or  reduced-rate
occupancy by on-site employees is shown as an expense. Losses from bad debts are
recorded  at the time a tenant  vacates a unit owing more than the amount of the
security deposit.

Expenses  incurred that expire over a period of time are pro-rated over the time
period.

Property and equipment is recorded at cost;  depreciation  is provided using the
straight-line  method over estimated lives of 40 years for the building and 5 to
7 years for  furnishings.  Repairs  and  routine  replacement  of assets will be
recorded  as  a  current  expense.   Major  renovations  or  replacements  of  a
significant  part of a group of assets are recorded as additions to property and
disposal of the assets being replaced.

Estimates are used to determine amounts in financial statements.  Actual results
may vary from those estimates.

Expenses  being  incurred  during  the   construction   period  related  to  the
organization  or to financing have been deferred.  These costs will be amortized
over a thirty-year period on the straight-line  method for $219,053 of financing
costs, and a five-year period for $135,099 of organization costs.

During  1996 the  developer,  formerly a general  partner,  was  required to pay
certain  costs and expenses  under the terms of a completion  guarantee.  Of the
amount so paid,  $494,597,  $144,920  has been  applied as a  reduction  of 1996
interest expense, $137,291 as reimbursement of 1995 interest expense, $91,378 as
reimbursement of financing costs,  and the balance  $121,006,  as a reduction of
the developer's fee.


                                       46

<PAGE>
                              MECCA APARTMENTS II

                          NOTES TO FINANCIAL STATEMENTS

                 For The Years Ended December 31, 1998 and 1997


NOTE 3 - ACCOUNTS RECEIVABLE

The details of accounts  receivable  are  presented  in the  supplementary  data
following the financial statements.

NOTE 4 - PREPAID EXPENSES AND DEPOSITS

At December 31, 1998, prepaid expenses consisted of the following:

     Insurance                                          $      3,378
                                                         ===========

NOTE 5 - REPLACEMENT RESERVE DEPOSITS

The  partnership  is required to make  deposits of $1,193 per month to a savings
account at Southern  California Bank to accumulate  funds for the replacement of
assets,  and $454 to another account as an operating  reserve. A schedule of the
activity in these reserve accounts is included in the supplementary data.

NOTE 6 - NOTES PAYABLE

The notes payable consist of a loan with an original balance of $715,000 payable
in monthly  installments of $5,914,  including  interest at 9.25% per annum, due
January 1, 2026, a loan with a balance of $500,000  from the County of Riverside
Home Funds, payable together with accumulated simple interest of 6.5% per annum,
over a fifteen-year  period  beginning May, 2010, in monthly  payments of $8,469
including  interest at 6.5% per annum,  and a loan with a balance of  $1,314,577
from  the  Rental  Housing  construction  program  of the  State  of  California
Department of Housing and Community  Development,  bearing simple interest at 3%
per annum, on which payments of interest and principal will be deferred,  unless
the  operation  of the  property  generates  surplus cash in excess of allowable
distributions.

The amounts of principal due in each of the five years after  December 31, 1998,
except for payments that might be required from surplus cash, and the amount due
after five years are as follows:

            1999                                          $      6,106
            2000                                                 6,694
            2001                                                 7,341
            2002                                                 8,050
            2003                                                 8,827
      Thereafter                                             2,481,511
                                                          ------------

                                                          $  2,518,529
                                                          ============

NOTE 7 - PROPERTY TAXES

The  managing  general  partner is Indio  Housing  Development  Corporation,  an
organization  exempt from income taxes under the provisions of Internal  Revenue
Code Section 501(c)(3). As a provider of rental housing to qualifying low income
families,  the partnership  qualifies for a welfare  exemption from a portion of
the property taxes assessed by the County of Riverside

                                       47