UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION

                              Washington, D.C. 20549

                                     FORM 10-K

(Mark One)

_X_   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
       

For the fiscal year ended March 31, 1998
                                        OR

___   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                         Commission File Number 0-20476

                        INDEPENDENCE TAX CREDIT PLUS L.P.
                        ---------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                             13-3589920
-------------------------------                           -------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification No.)

625 Madison Avenue, New York, New York                           10022
--------------------------------------                           -----
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code (212) 421-5333

Securities registered pursuant to Section 12(b) of the Act:

       None

Securities registered pursuant to Section 12(g) of the Act:

      Beneficial Assignment Certificates (including underlying Limited
      Partnership Interests)

      (Title of Class)

      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 12 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 is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

                       DOCUMENTS INCORPORATED BY REFERENCE

       None
Index to exhibits may be found on page 105
Page 1 of 117

<PAGE>


                                      PART I

Item 1.  Business.

General

Independence Tax Credit Plus L.P. (the "Partnership") is a limited partnership
which was formed under the laws of the State of Delaware on November 7, 1990.
The general partner of the Partnership is Related Independence Associates L.P.,
a Delaware limited partnership (the "General Partner"). The general partner of
the General Partner is Related Independence Associates Inc., a Delaware
corporation.

On July 1, 1991, the Partnership commenced a public offering (the "Offering") of
Beneficial Assignment Certificates ("BACs") representing assignments of limited
partnership interests in the Partnership ("Limited Partnership Interests"),
managed by Related Equities Corporation (the "Dealer Manager"), pursuant to a
prospectus dated July 1, 1991, as supplemented by Master Supplement No. 1a
thereto dated April 28, 1992 and Master Supplement No. 2a thereto dated November
3, 1992 (as so supplemented, the "Prospectus").

As of March 31, 1998, the Partnership has received $76,786,000 of Gross Proceeds
of the Offering from 5,351 investors and no further issuance of BACs is
anticipated.

The Partnership's was formed to invest in other partnerships ("Local
Partnerships") owning apartment complexes ("Apartment Complexes" or
"Properties") that are eligible for the low-income housing tax credit ("Housing
Tax Credit") enacted in the Tax Reform Act of 1986, some of which may also be
eligible for the historic rehabilitation tax credit ("Historic Tax Credit" and
together with Housing Tax Credits, "Tax Credits"). The Partnership's investment
in each Local Partnership represents from 98% to 98.99% of the Partnership's
interests in the Local Partnership. As of March 31, 1998, the Partnership had
acquired interests in twenty-eight Local Partnerships. As of March 31, 1998,
approximately $59,700,000 (not including acquisition fees of approximately
$4,500,000) of net proceeds have been invested in Local Partnerships of which
approximately $360,000 remains to be paid to the Local Partnerships, as certain
benchmarks such as occupancy levels must be attained prior to the release of the
funds. The Partnership does not intend to acquire additional properties. See
Item 2, Properties, below.

The investment objectives of the Partnership are to:

1. Entitle qualified BACs holders to Tax Credits over the period of the
Partnership's entitlement to claim Tax Credits (for each Property, generally ten
years from the date of investment or, if later, the date the Property is placed
in service; referred to herein as the "Credit Period") with respect to each
Apartment Complex.

2. Preserve and protect the Partnership's capital.

3. Participate in any capital appreciation in the value of the Properties and
provide distributions of Sale or Refinancing Proceeds upon the disposition of
the Properties.

4. Allocate passive losses to individual BACs holders to offset passive income
that they may realize from rental real estate investments and other passive
activities, and allocate passive losses to corporate BACs holders to offset
business income.

One of the Partnership's objectives is to entitle qualified BACs holders to Tax
Credits over the Credit Period. Each of the Local Partnerships in which the
Partnership has acquired an interest has been allocated by the relevant state
credit agencies the authority to recognize Tax


                                      -2-
<PAGE>


Credits during the Credit Period provided that the Local Partnership satisfies
the rent restriction, minimum set-aside and other requirements for recognition
of the Tax Credits at all times during such period. Once a Local Partnership has
become eligible to recognize Tax Credits, it may lose such eligibility and
suffer an event of "recapture" if its Property fails to remain in compliance
with the Tax Credit requirements. None of the Local Partnerships in which the
Partnership has acquired an interest has suffered an event of recapture.

There can be no assurance that the Partnership will achieve its investment
objectives as described above.

The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however no more than 21%
of the properties are located in any single state. There are also substantial
risks associated with owning properties receiving government assistance, for
example the possibility that Congress may not appropriate funds to enable HUD to
make rental assistance payments. HUD also restricts annual cash distributions to
partners based on operating results and a percentage of the owner's equity
contribution. The Partnership cannot sell or substantially liquidate its
investments in subsidiary partnerships during the period that the subsidy
agreements are in existence, without HUD's approval. Furthermore, there may not
be market demand for apartments at full market rents when the rental assistance
contracts expire.

Competition

The real estate business is highly competitive and substantially all of the
properties acquired by the Partnership are subject to active competition from
similar properties in their respective vicinities. In addition, various other
limited partnerships may, in the future, be formed by the General Partner and/or
its affiliates to engage in businesses which may be competitive with the
Partnership.

Employees

The Partnership does not have any direct employees. All services are performed
for the Partnership by its General Partner and its affiliates. The General
Partner receives compensation in the connection with such activities as set
forth in Items 11 and 13. In addition, the Partnership reimburses the General
Partner and certain of its affiliates for expenses incurred in connection with
the performance by their employees of services for the Partnership in accordance
with the Partnership's Amended and Restated Agreement of Limited Partnership
(the "Partnership Agreement").


                                      -3-
<PAGE>


Item 2.  Properties.

The Partnership holds a 98.99% limited partnership interest in twenty-seven and
a 98% limited partnership interest in one Local Partnership as of March 31,
1998. Set forth below is a schedule of the Local Partnerships including certain
information concerning their respective Apartment Complexes (the "Local
Partnership Schedule"). Further information concerning these Local Partnerships
and their properties, including any encumbrances affecting the properties, may
be found in Item 14, Schedule III.


                           Local Partnership Schedule
<TABLE>
<CAPTION>
Name and Location                                                              % of Units Occupied  at  May 1,
(Number of Units)                               Date Acquired              1998     1997     1996     1995     1994
-----------------                               -------------              ----     ----     ----     ----     ----
<S>                                             <C>                        <C>      <C>     <C>       <C>      <C>
Harbor Court Limited Partnership                December 1991              93%      98%     100%      88%      88%
  Staten Island, NY (40)
Old Public Limited Partnership                  December 1991              80%      76%      77%      93%      87%
  Lawrenceburg, TN (30)
Lancaster Terrace Limited Partnership           February 1992              97%      98%      99%      99%      96%
  Salem, OR (104)
655 North Street Limited Partnership            March 1992                 81%      84%      83%      89%      92%
  Baton Rouge, LA (195)
Landreth Venture                                March 1992                 94%      94%      96%      95%     100%
  Philadelphia, PA (47)
Homestead Apartments Associates Ltd.            March 1992                 91%      94%      93%      95%      96%
  Homestead, FL (123)
Bethel Villa Associates, L.P.                   April 1992                100%     100%     100%     100%      99%
  Wilmington, DE (150)
West Diamond Street Associates                  May 1992                  100%      89%      96%      96%      93%
  Philadelphia, PA (28)
Susquehanna Partners                            May 1992                   94%      96%     100%      96%     100%
  Philadelphia, PA (47)
Boston Bay Limited Partnership                  August 1992                98%      99%     100%      99%      99%
  Boston, MA (130)
Morrant Bay Limited Partnership                 August 1992                97%     100%      97%     100%     100%
  Boston, MA (130)
Hope Bay Limited Partnership                    August 1992               100%      98%      98%     100%     100%
  Boston, MA (45)
Lares Apartments Limited Partnership            August 1992               100%     100%     100%     100%     100%
  Lares, PR (102)
Lajas Apartments Limited Partnership            August 1992               100%     100%     100%     100%     100%
  Lajas, PR (99)
Arlington-Rodeo Properties                      August 1992               100%     100%     100%      93%     100%
  Los Angeles, CA (29)
Conifer Bateman Associates                      August 1992                88%     100%     100%     100%      96%
  Lowville, NY (24)
Hampden Hall Associates, L.P.                   September 1992             97%     100%      99%      89%      96%
  St. Louis, MO (75)
Chester Renaissance Associates                  September 1992            100%     100%     100%      96%     100%
  Chester, PA (20)
Homestead Apts. II LTD.                         October 1992               94%      95%      92%      95%      98%
  Homestead, FL (112)
P.S. 157 Associates, L.P.                       November 1992              99%     100%      96%      98%     100%
  New York, NY (73)


                                      -4-
<PAGE>


                     Local Partnership Schedule (continued)

<CAPTION>
Name and Location                                                              % of Units Occupied  at  May 1,
(Number of Units)                               Date Acquired              1998     1997     1996     1995     1994
-----------------                               -------------              ----     ----     ----     ----     ----
<S>                                             <C>                        <C>     <C>       <C>     <C>      <C>
Cloisters Limited Partnership II                November 1992              94%     100%      94%      97%      98%
  Philadelphia, PA (65)
Creative Choice Homes II, LTD.                  December 1992              98%      99%      99%     100%      99%
  Opa-Locka, FL (328)
Milford Crossing Associates L.P.                December 1992              95%      99%      96%      96%     100%
  Milford, DE (73)
BX-7F Associates, L.P.                          January 1993               94%      95%      98%      98%      99%
  Bronx, NY (85)
Los Angeles Limited Partnership                 May 1993                  100%     100%      98%      99%       0% *
  Rio Piedras, PR (124)
Christine Apartments, L.P.                      June 1993                  97%      97%     100%     100%     100%
  Buffalo, NY (32)
Plainsboro Housing Partners, L.P.               July 1993                  99%     100%      98%      99%      13% (1)
  Plainsboro, NJ (126)
Rolling Green Associates, L.P.                  October 1993               96%      91%      97%      90%      91%
  Syracuse, NY (395)
</TABLE>

*Property still in construction phase.

(1)  Property was in rent-up phase.


All leases are generally for periods not exceeding one to two years and no
tenant occupies more than 10% of the rentable square footage.

Rents from commercial tenants (to which average rental per square foot applies)
comprise less than 5% of the rental revenues of the Partnership. Rents for the
residential units are determined annually by HUD and reflect increases in
consumer price indices in various geographic areas.

Management continuously reviews the physical state of the properties and budgets
improvements, when required, which are generally funded from cash flow from
operations or release of replacement reserve escrows.

Management continuously reviews the insurance coverage of the properties and
believes such coverage is adequate.

See Item 1, Business, above, for the general competitive conditions to which the
properties described above are subject.

Real estate taxes are calculated using rates and assessed valuations determined
by the township or city in which the property is located. Such taxes have
approximated 1% of the aggregate cost of the properties as shown in Schedule III
to the financial statements included herein.

In connection with investments in development-stage Apartment Complexes, the
General Partner generally required that the general partners of the Local
Partnerships ("Local General Partners") provide completion guarantees and/or
undertake to repurchase the Partnership's interest in the Local Partnership if
construction or rehabilitation was not completed substantially on time or on
budget ("Development Deficit Guarantees"). The Development Deficit Guarantees
generally also required the Local General Partner to provide any funds necessary


                                      -5-
<PAGE>

to cover net operating deficits of the Local Partnership until such time as the
Apartment Complex had achieved break-even operations. The General Partner also
generally required that the Local General Partners undertake an obligation to
fund operating deficits of the Local Partnership (up to a stated maximum amount)
during a limited period of time (typically three to five years) following the
achievement of break-even operations ("Operating Deficit Guarantees"). Under the
terms of the Development and Operating Deficit Guarantees, amounts funded have
been treated as Operating Loans which have not borne interest and which will be
repaid only out of 50% of available cash flow or out of available net sale or
refinancing proceeds. In some instances, the Local General Partners were also
required to undertake an obligation to comply with a Rent-Up Guaranty Agreement,
whereby the Local General Partner agreed to pay liquidated damages if
predetermined occupancy rates were not achieved. These payments have been made
without right of repayment. In cases where the General Partner deemed it
appropriate, the obligations of a Local General Partner under the Development
Deficit, Operating Deficit and/or Rent-Up Guarantees are secured by letters of
credit and/or cash escrow deposits. All Operating Deficit Guarantees expire
within the next two years.

Tax Credits with respect to a given Apartment Complex are available for a
ten-year period that commences when the property is placed into service.
However, the annual Tax Credits available in the year in which the Apartment
Complex is placed in service must be prorated based upon the months remaining in
the year. The amount of the annual Tax Credit not available in the first year
will be available in the eleventh year. In certain cases, the Partnership
acquired its interest in a Local Partnership after the Local Partnership had
placed its Apartment Complex in service. In these cases, the Partnership may be
allocated Tax Credits only beginning in the month following the month in which
it acquired its interest and Tax Credits allocated in any prior period are not
available to the Partnership.

Item 3.  Legal Proceedings.

None.

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

None.

                                     PART II

Item 5.  Market for the Registrant's Common Equity and Related Security Holder
         Matters.

As of March 31, 1998, the Partnership had issued and outstanding 76,786 Limited
Partnership Interests, each representing a $1,000 capital contribution to the
Partnership, or an aggregate capital contribution of $76,786,000. All of the
issued and outstanding Limited Partnership Interests have been issued to
Independence Assignor Inc. (the "Assignor Limited Partner"), which has in turn
issued 76,786 BACs to the purchasers thereof for an aggregate purchase price of
$76,786,000. Each BAC represents all of the economic and virtually all of the
ownership rights attributable to a Limited Partnership Interest held by the
Assignor Limited Partner. BACs may be converted into Limited Partnership
Interests at no cost to the holder (other than the payment of transfer costs not
to exceed $100), but Limited Partnership Interests so acquired are not
thereafter convertible into BACs.

Neither the BACs nor the Limited Partnership Interests are traded on any
established trading market. The Partnership does not intend to include the BACs
for quotation on NASDAQ or

                                      -6-
<PAGE>


for listing on any national or regional stock exchange or any other established
securities market. The Revenue Act of 1987 contained provisions which have an
adverse impact on investors in "publicly traded partnerships." Accordingly, the
General Partner has imposed limited restrictions on the transferability of the
BACs and the Limited Partnership Interests in secondary market transactions.
These restrictions should prevent a public trading market from developing but
may adversely affect the ability of an investor to liquidate his or her
investment quickly. It is expected that such procedures will remain in effect
until such time, if ever, as further revision of the Revenue Act of 1987 may
permit the Partnership to lessen the scope of the restrictions.

There has recently been an increasing number of requests for the list of BACs
holders of limited partnerships such as the Partnership. Often these requests
are made by a person who, only a short time before making the request, acquired
merely a small number of BACs in the partnership and seeks the list for an
improper purpose, a purpose that is not in the best interest of the partnership
or is harmful to the partnership. In order to best serve and protect the
interests of the Partnership and all of its investors, the General Partner of
the Partnership has adopted a policy with respect to requests for the
Partnership's list of BACs holders. This policy is intended to protect investors
from unsolicited and coercive offers to acquire BACs holders' interests and does
not limit any other rights the General Partner may have under the Partnership
Agreement or applicable law.

As of May 7, 1998, the Partnership has approximately 4,662 registered holders of
an aggregate of 76,786 BACs.

All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $1,000, are held by the General Partner.

There are no material legal restrictions in the Partnership Agreement on the
ability of the Partnership to make distributions. The Partnership has made no
distributions to the BACs holders as of March 31, 1998. The Partnership does not
anticipate providing cash distributions to its BACs holders other than from net
refinancing or sales proceeds.


                                      -7-
<PAGE>


Item 6.  Selected Financial Data.

The information set forth below presents selected financial data of the
Partnership. Additional financial information is set forth in the audited
consolidated financial statements in Item 8 hereof.

<TABLE>
<CAPTION>
                                                               Year ended March 31,
                                 -----------------------------------------------------------------------------------------
OPERATIONS                           1998               1997               1996               1995                1994
------------------               -------------      -------------      -------------      -------------      -------------

<S>                              <C>                <C>                <C>                <C>                <C>          
Revenues                         $  20,132,593      $  19,592,514      $  19,169,610      $  18,061,137      $  14,024,220

Operating expenses                  24,872,845         24,855,977         24,084,097         21,848,948         16,549,054
                                 -------------      -------------      -------------      -------------      -------------
Loss before minority                (4,740,252)        (5,263,463)        (4,914,487)        (3,787,811)        (2,524,834)
  interest

Minority interest in loss
  of subsidiary partnerships            35,144             33,343             32,193             32,583             24,646
                                 -------------      -------------      -------------      -------------      -------------
Net loss                         $  (4,705,108)     $  (5,230,120)     $  (4,882,294)     $  (3,755,228)     $  (2,500,188)
                                 =============      =============      =============      =============      =============

Net loss per weighted
   average BAC                   $      (60.66)     $      (67.43)     $      (62.95)     $      (48.42)     $      (32.23)
                                 =============      =============      =============      =============      =============

<CAPTION>
                                                                      March 31,
                                 -----------------------------------------------------------------------------------------
FINANCIAL POSITION                   1998               1997               1996               1995                1994
------------------               -------------      -------------      -------------      -------------      -------------

<S>                              <C>                <C>                <C>                <C>                <C>          
Total assets                     $ 170,786,367      $ 177,448,837      $ 183,788,219      $ 189,946,896      $ 202,231,410
                                 =============      =============      =============      =============      =============

Total liabilities                $ 118,016,288      $ 119,748,949      $ 120,702,900      $ 121,484,923      $ 131,248,328
                                 =============      =============      =============      =============      =============

Minority interest                $   6,470,579      $   6,695,280      $   6,850,591      $   7,344,951      $   6,110,832
                                 =============      =============      =============      =============      =============

Total partners' capital          $  46,299,500      $  51,004,608      $  56,234,728      $  61,117,022      $  64,872,250
                                 =============      =============      =============      =============      =============
</TABLE>


During the year ended March 31, 1998, total assets decreased primarily due to
depreciation and a loss on impairment of assets. During the years ended March
31, 1997 and 1996, total assets decreased primarily due to depreciation. During
the year ended March 31, 1995, total assets and total liabilities decreased
primarily due to the payment of accounts payable and other liabilities and
development fees and other amounts due to local general partners and affiliates.
During the year ended March 31, 1994, total assets and liabilities increased
primarily due to the continued acquisition of Local Partnerships.

Cash Distributions

The Partnership has made no distributions to the BACs holders as of March 31,
1998.


                                      -8-
<PAGE>


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

Liquidity and Capital Resources

The Partnership's primary source of funds include (i) working capital reserves
raised and interest earned thereon, and (ii) cash distributions from the
operations of the Local Partnerships. All these sources of funds are available
to meet obligations of the Partnership.

As of March 31, 1998, the Partnership has invested all of the net proceeds in
twenty-eight Local Partnerships. Approximately $360,000 of the purchase price
remains to be paid (all of which is held in escrow). During the year ended March
31, 1998, approximately $627,000 was paid from escrow.

Cash and cash equivalents of the Partnership and its twenty-eight consolidated
subsidiary partnerships increased approximately $63,000 during the year ended
March 31, 1998, due to cash provided by operating activities ($2,745,000) and
proceeds from the sale of land ($210,000) which exceeded repayments of mortgage
notes ($1,982,000), acquisitions of property and equipment ($316,000), an
increase in cash held in escrow for investing activities ($56,000), a net
decrease in due to local general partners and affiliates relating to investing
and financing activities ($340,000) and a decrease in capitalization of
consolidated subsidiaries attributable to minority interest ($190,000). Included
in the adjustments to reconcile the net loss to cash flow provided by operations
is depreciation and amortization of approximately $6,367,000 and a loss on
impairment of assets of approximately $500,000.

The working capital reserve at March 31, 1998 and 1997 was approximately
$119,000 and $181,000, respectively.

Cash distributions received from the Local Partnerships remain relatively
immaterial. Distributions of approximately $143,000, $52,000 and $59,000 were
received during the years ended March 31, 1998, 1997, and 1996, respectively.
However, management expects that the distributions received from the Local
Partnerships will increase, although not to a level sufficient to permit
providing cash distributions to BACs holders. These distributions as well as the
working capital reserves referred to in the above paragraph will be used to meet
the operating expenses of the Partnership.

The Partnership has negotiated Operating Deficit Guaranty Agreements with all
Local Partnerships by which the general partners of the Local Partnerships have
agreed to fund operating deficits for a specified period of time. The terms of
the Operating Deficit Guaranty Agreements vary for each Local Partnership, with
maximum dollar amounts to be funded for a specified period of time, generally
three years, commencing on the break-even date. The gross amount of the
Operating Deficit Guarantees aggregates approximately $9,799,000, of which
approximately $8,090,000, $3,240,000 and $200,000, had expired as of March 31,
1998, 1997, and 1996, respectively. As of March 31, 1998, 1997, and 1996,
approximately $1,505,000, $1,212,000 and $1,112,000, respectively, had been
funded by the Local General Partners to meet such obligations, which includes
amounts held in escrow by the Local Partnerships. All operating deficit
guarantees expire within the next two years. Management does not expect their
expiration to have a material impact on liquidity, based on prior years'
fundings.

The Operating Deficit Guaranty Agreements were negotiated to protect the
Partnership's interest in the Local Partnerships and to provide incentive to the
Local General Partners to generate positive cash flow.

                                      -9-
<PAGE>

Partnership management fees owed to the General Partner amounting to
approximately $539,000 and $489,000 were accrued and unpaid as of March 31, 1998
and 1997, respectively. Unpaid partnership management fees for any year have
been, and will continue to be, accrued without interest and will be payable only
to the extent of available funds after the Partnership has made distributions to
the limited partners of sale or refinancing proceeds equal to their original
capital contributions plus a 10% priority return thereon (to the extent not
theretofore paid out of cash flow).

Management is not aware of any trends or events, commitments or uncertainties,
which have not otherwise been disclosed, that will or are likely to impact
liquidity in a material way. Management believes the only impact would be from
laws that have not yet been adopted. The portfolio is diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However, the geographic
diversification of the portfolio may not protect against a general downturn in
the national economy. The Partnership has fully invested the proceeds of its
offering in 28 local partnerships, all of which fully have their tax credits in
place. The tax credits are attached to the project for a period of ten years,
and are transferable with the property during the remainder of the ten-year
period. If trends in the real estate market warranted the sale of a property,
the remaining tax credits would transfer to the new owner; thereby adding
significant value to the property on the market, which are not included in the
financial statement carrying amount.

Results of Operations

Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated.

Through March 31, 1998, the Partnership has recorded approximately $500,000 as a
loss on impairment of assets.

The following is a summary of the results of operations of the Partnership for
the years ended March 31, 1998, 1997, and 1996 (the 1997, 1996, and 1995 Fiscal
Years, respectively.)

The Partnership's results of operations for the 1997, 1996 and 1995 Fiscal Years
consisted primarily of the results of the Partnership's investment in the
twenty-eight Local Partnerships. The majority of Local Partnership income
continues to be in the form of rental income with the corresponding expenses
being divided among operations, depreciation and mortgage interest.

                                      -10-
<PAGE>

The net loss for the 1997, 1996, and 1995 Fiscal Years totaled $4,705,108,
$5,230,120 and $4,882,294, respectively.

The Partnership and BACs holders began to recognize Housing Tax Credits with
respect to a Property when the Credit Period for such Property commenced.
Because of the time required for the acquisition, completion and rent-up of
Properties, the amount of Tax Credits per BAC gradually increased over the first
three years of the Partnership. Housing Tax Credits not recognized in the first
three years will be recognized in the 11th through 13th years. The Partnership
generated $11,977,461, $11,971,306 and $11,969,116 Housing Tax Credits during
the 1997, 1996 and 1995 tax years, respectively.

1997 vs. 1996

Rental income remained fairly consistent with an increase of approximately 1%
for the 1997 Fiscal Year as compared to the 1996 Fiscal Year primarily due to
rental rate increases.

Other income increased approximately $194,000 for the 1997 Fiscal Year as
compared to the 1996 Fiscal Year primarily due to the receipt of insurance
proceeds and an increase in interest on the operating deficit reserve escrow at
one Local Partnership, as well as small increases at three other Local
Partnerships.

A gain on sale of land was recorded in the 1997 Fiscal Year with respect to the
sale of a parcel of unimproved land (see Note 4 in Item 8. Financial Statements
and Supplementary Data).

Total expenses excluding taxes and a loss on impairment of assets, remained
fairly consistent with an increase of less than 1% for the 1997 Fiscal Year as
compared to the 1996 Fiscal Year.

Taxes decreased approximately $483,000 for the 1997 Fiscal Year as compared to
the 1996 Fiscal Year primarily due to payment of underaccrued real estate taxes
from prior years in 1996.

A loss on impairment of assets was recorded in the 1997 Fiscal Year (see Note 4
in Item 8. Financial Statements and Supplementary Data).

1996 vs. 1995

Rental income remained fairly consistent with an increase of approximately 2%
for the 1996 Fiscal Year as compared to the 1995 Fiscal Year primarily due to
rental rate increases.

Total expenses excluding general and administrative, general and
administrative-related parties, repairs and maintenance and taxes remained
fairly consistent with a decrease of approximately 2% for the 1996 Fiscal Year
as compared to the 1995 Fiscal Year.

General and administrative expenses increased approximately $661,000 for the
1996 Fiscal Year as compared to the 1995 Fiscal Year. This was primarily due to
an increase in security at two Local Partnerships, an increase in bad debt
expense at two other Local Partnerships, an increase in payroll and bad debt
expense at a fifth Local Partnership and small increases at three other Local
Partnerships.

General and administrative-related parties decreased approximately $591,000 for
the 1996 Fiscal Year as compared to the 1995 Fiscal Year primarily due to a
decrease in partnership management fees payable to the General Partner.

Repairs and maintenance increased approximately $393,000 for the 1996 Fiscal
Year as compared to the 1995 Fiscal Year. This was primarily due to increases at
six Local Partnerships. A new security system was installed at one Local
Partnership. Two other Local Partnerships

                                      -11-
<PAGE>

replaced the carpeting in the apartments. Increases at a fourth Local
Partnership were the result of repainting apartments, heating and plumbing
repairs and the installation of new lighting. A fifth Local Partnership
repainted the building. A sixth Local Partnership redecorated some apartments
and had an increase in snow removal due to the harsh winter.

Taxes increased approximately $314,000 for the 1996 Fiscal Year as compared to
the 1995 Fiscal Year primarily due to an underaccrual of real estate taxes at
three Local Partnerships in 1995.

Year 2000 Compliance

As the year 2000 approaches, an issue has emerged regarding how existing
application software programs and operating systems can accommodate this date
value. Failure to adequately address this issue could have potentially serious
repercussions. The General Partner is in the process of working with the
Partnership's service providers to prepare for the year 2000. Based on
information currently available, the Partnership does not expect that it will
incur significant operating expenses or be required to incur material costs to
be year 2000 compliant.

Other

The Partnership's investment as a limited partner in the Local Partnerships is
subject to the risks incident to the potential losses arising from management
and ownership of improved real estate. The Partnership's investments also could
be adversely affected by poor economic conditions, generally, which could
increase vacancy levels and rental payment defaults and by increased operating
expenses, any or all of which could threaten the financial viability of one or
more of the Local Partnerships.

There also are substantial risks associated with the operations of Apartment
Complexes receiving government assistance. These include governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes; difficulties in obtaining government approval
for rent increases; limitations on the percentage of income which low and
moderate-income tenants may pay as rent; the possibility that Congress may not
appropriate funds to enable the Department of Housing and Urban Development to
make the rental assistance payments it has contracted to make; and that when the
rental assistance contracts expire there may not be market demand for apartments
at full market rents in a Local Partnership's Apartment Complex.

The Local Partnerships are impacted by inflation in several ways. Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Inflation also affects the Local Partnerships
adversely by increasing operating costs, such as fuel, utilities and labor.

There has recently been an increasing number of requests for the list of BACs
holders of limited partnerships such as the Partnership. Often these requests
are made by a person who, only a short time before making the request, acquired
merely a small number of BACs in the Partnership and seeks the list for an
improper purpose, a purpose that is not in the best interest of the Partnership
or is harmful to the Partnership. In order to best serve and protect the
interests of the Partnership and all of its investors, the General Partner of
the Partnership has adopted a policy with respect to requests for the
Partnership's list of BACs holders. This policy is intended to protect investors
from unsolicited and coercive offers to acquire BACs holders' interests and does
not limit any other rights the General Partner may have under the Partnership
Agreement or applicable law.

                                      -12-
<PAGE>

Item 8.  Financial Statements and Supplementary Data.


<TABLE>
<CAPTION>
                                                                                Sequential
                                                                                   Page

<S>      <C>                                                                        <C>
(a) 1.   Consolidated Financial Statements

         Independent Auditors' Report                                               14

         Consolidated Balance Sheets at March 31, 1998 and 1997                     84

         Consolidated  Statements  of  Operations  for the Years  Ended
         March 31, 1998, 1997 and 1996                                              85

         Consolidated Statements of Changes in Partners' Capital for the Years
         Ended March 31, 1998, 1997 and 1996                                        86

         Consolidated  Statements  of Cash  Flows for the  Years  Ended
         March 31, 1998, 1997 and 1996                                              87

         Notes to Consolidated Financial Statements                                 89
</TABLE>


                                      -13-
<PAGE>


                           INDEPENDENT AUDITORS' REPORT

To the Partners of
Independence Tax Credit Plus L.P. and Subsidiaries
(A Delaware Limited Partnership)

We have audited the consolidated balance sheets of Independence Tax Credit Plus
L.P. and Subsidiaries (a Delaware Limited Partnership) as of March 31, 1998 and
1997, and the related consolidated statements of operations, changes in
partners' capital, and cash flows for the years ended March 31, 1998, 1997 and
1996 (the 1997, 1996 and 1995 Fiscal Years). 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 did not audit
the financial statements for twenty-eight (1997, 1996 and 1995 Fiscal Years)
subsidiary partnerships whose losses aggregated $4,442,094 , $4,657,401 and
$4,001,728 for the 1997, 1996 and 1995 Fiscal Years, respectively, and whose
assets constituted 99% of the Partnership's assets at March 31, 1998 and 1997,
presented in the accompanying consolidated financial statements. The financial
statements for twenty-seven (1997 Fiscal Year) and twenty-eight (1996 and 1995
Fiscal Years) of these subsidiary partnerships were audited by other auditors
whose reports thereon have been furnished to us and our opinion expressed
herein, insofar as it related to the amounts included for these subsidiary
partnerships is based solely upon the reports of the other auditors. The
financial statements for one (1997 Fiscal Year) of these subsidiary partnerships
were unaudited.

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

In our opinion, based upon our audits, and the reports of the other auditors
referred to above, the consolidated financial statements referred to in the
first paragraph present fairly, in all material respects, the financial position
of Independence Tax Credit Plus L.P. and Subsidiaries at March 31, 1998 and 1997
and the results of their operations and their cash flows for the years ended
March 31, 1998, 1997 and 1996 in conformity with generally accepted accounting
principles.

/s/ Trien Rosenberg Rosenberg
    Weinberg Ciullo & Fazzari LLP

Trien Rosenberg Rosenberg
Weinberg Ciullo & Fazzari LLP

New York, New York
June 4, 1998


                                      -14-
<PAGE>

                     [Letterhead of KPMG Peat Marwick LLP]


                          Independent Auditors' Report

The Partners 
Harbor Court Limited Partnership:

We have audited the accompanying balance sheets of Harbor Court Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
operations, changes in partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

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

                                                       /s/ KPMG Peat Marwick LLP

New York, New York
January 29, 1998

<PAGE>

                       [KMPG Peat Marwick LLP Letterhead]



                          Independent Auditors' Report




The Partners
Harbor Court Limited Partnership:

We have audited the accompanying balance sheets of Harbor Court Limited
Partnership as of December 31, 1996 and 1995, and the related statements of
operations, changes in partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

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



                                            /s/ KPMG Peat Marwick LLP
                                            -------------------------

New York, New York
January 31, 1997



<PAGE>


                      [Crews and Company Letterhead]
    
                              Sheffield, Alabama


                                 May l2, 1997



To the Partners
Old Public Limited Partnership
512 Hood Lakes Road
Lawrenceburg, Tennessee 38464

We have audited the accompanying balance sheet of Old Public Limited
Partnership, (a partnership) as of December 31, 1996, and the related statements
of operations, partners capital and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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 Old Public Limited Partnership,
as of December 31, 1996, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.



/s/ Crews and Company
---------------------



<PAGE>


            [Letterhead of Crews and Company - Sheffield, Alabama]


                                  May 30, 1996


To the Partners
Old Public Limited Partnership
512 Hood Lakes Road
Lawrenceberg, Tennessee 38464

We have audited the accompanying balance sheet of Old Public Limited
Partnership, (a partnership) as of December 31, 1995, and the related statements
of operations, partners capital and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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 Old Public Limited Partnership,
as of December 31, 1995, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.


                                         /s/ Crews and Company


<PAGE>

       [Letterhead of MACK, ROBERTS & COMPANY, L.L.C.- Portland, Oregon]

                          INDEPENDENT AUDITOR'S REPORT

The Partners
Lancaster Terrace Limited Partnership
Salem, Oregon

We have audited the balance sheets of Lancaster Terrace Limited Partnership as
of December 31, 1997 and 1996, and the related statements of operations, changes
in partners' capital, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

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

/s/ Mack, Roberts & Co., L.L.C.

Mack, Roberts & Co., L.L.C.

February 23, 1998

<PAGE>

                            [MACK ROBERTS Letterhead]



                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------



The Partners
Lancaster Terrace Limited Partnership
Salem, Oregon

We have audited the balance sheets of Lancaster Terrace Limited Partnership as
of December 31, 1996 and 1995, and the related statements of operations, changes
in partners' capital, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

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



/s/ Mack, Roberts & Co., L.L.C.
-------------------------------
MACK, ROBERTS & CO., L.L.C.
Portland, Oregon

February 18, 1997



<PAGE>

               [Letterhead of Pailet, Meunier & LeBlanc, L.L.P.]

                          INDEPENDENT AUDITOR'S REPORT

To the Partners 
of 655 North Street Limited Partnership 
New Orleans, Louisiana

We have audited the accompanying balance sheets of 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 1997 and 1996, and
the related statements of income, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 1997 and 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 21, 1998, on our
consideration of 655 North Street Limited Partnership's internal control, and
reports dated January 21, 1998, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing.

                                           /s/ Pailet, Meunier & LeBlanc, L.L.P.

Metairie, Louisiana
January 21, 1998

<PAGE>

                [Pailet, Meunier and LeBlanc, L.L.P. Letterhead]



                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------



To the Partners 
of 655 North Street Limited Partnership 
New Orleans, Louisiana:

We have audited the accompanying balance sheets of HUD Project No. 064-12001 of
the 655 North Street Limited Partnership, as of December 31, 1996 and 1995, and
the related statements of income, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 655 North Street Limited
Partnership, HUD Project No. 064-12001, as of December 31, 1996 and 1995, and
the results of its operations, changes in partners' equity, and cash flows for
the years then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 22, 1997, on our
consideration of 655 North Street Limited Partnership's internal control
structure and reports dated January 22, 1997, on its compliance with specific
requirements applicable to major HUD programs and specific requirements
applicable to Affirmative Fair Housing.




Metairie, Louisiana                    /s/ Pailet, Meunier & LeBlanc, LLP
January 22, 1997                       ----------------------------------



<PAGE>

                      [Letterhead of Ziner & Company P.C.]


                          INDEPENDENT AUDITORS' REPORT

To the Partners of
Landreth Venture

       We have audited the accompanying balance sheet of Landreth Venture (a
Pennsylvania limited partnership) as of December 31, 1997 and the related
statements of operations, changes in partners' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Landreth Venture as of December 31, 1996
were audited by other auditors, whose report dated February 12, 1997, expressed
an unqualified opinion on those financial statements.

       We conducted our audit 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 the
Partnership's general partners and contracted management agent, 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 Landreth Venture as
of December 31, 1997, and the results of its operations, changes in partners'
equity and its cash flows for the year then ended in conformity with generally
accepted accounting principles.

                                       /s/ Ziner & Company P.C.


February 12, 1998
Boston, Massachusetts

<PAGE>

                     [J. H. WILLIAMS & CO., LLP Letterhead]



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



To the Partners of
Landreth Venture (a Limited Partnership)
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Landreth Venture (a Limited
Partnership) as of December 31, 1996 and 1995 and the related statements of
(loss), changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partners and contracted management agent. 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 the
Partnership's general partners and contracted management agent, 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 Landreth Venture (a Limited
Partnership) at December 31, 1996 and 1995, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.




/s/ J.H. Williams & Co., LLP
----------------------------

Kingston, Pennsylvania
February 12, 1997



<PAGE>

                   [Letterhead of Reznick Fedder & Silverman]
                     

                          INDEPENDENT AUDITORS' REPORT

To the Partners 
Homestead Apartments Associates, Ltd.

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

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

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

       Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 17
and 18 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.


                                           /s/ Reznick Fedder & Silverman

Atlanta, Georgia
February 10, 1998

<PAGE>


                     [Reznick Fedder & Silverman Letterhead]



                          INDEPENDENT AUDITORS' REPORT



To the Partners 
Homestead Apartments Associates, Ltd.

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

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

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


                                            /s/ Reznick Fedder & Silverman
                                            ------------------------------

Charlotte, North Carolina
January 20, 1997


                                        3


<PAGE>

                    [Letterhead of Reznick Fedder & Silverman]

                          INDEPENDENT AUDITORS' REPORT

To the Partners
Bethel Villa Associates, L.P.

       We have audited the accompanying balance sheets of Bethel Villa
Associates, L.P. as of December 31, 1997 and 1996, and the related statements of
profit and loss (on HUD Form No. 92410), partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

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

       Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 27
through 32 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in a1l material
respects in relation to the basic financial statements taken as a whole.

<PAGE>

      In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
January 22, 1998 on our consideration of Bethel Villa Associates, L.P.'s
internal control and on its compliance with specific requirements applicable to
DSHA programs, fair housing and non-discrimination, and laws and regulations
applicable to the financial statements.

                                         /s/ Reznick Fedder & Silverman

Bethesda, Maryland                       Federal Employer
January 22, 1998                         Identification Number:
                                         52-1088612


Audit Prncipal: Lester A. Kanis
<PAGE>



                     [Reznick Fedder & Silverman Letterhead]



                          INDEPENDENT AUDITORS' REPORT



To the Partners 
Bethel Villa Associates, L.P.

     We have audited the accompanying balance sheets of Bethel Villa Associates,
L.P. as of December 31, 1996 and 1995, and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity and cash flows for the years then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

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

     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 26
through 31 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.


                                      -6-


<PAGE>




     In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
January 22, 1997 on our consideration of Bethel Villa Associates, L.P.'s
internal control structure and on its compliance with specific requirements
applicable to major DSHA programs, affirmative fair housing, and laws and
regulations applicable to the financial statements.





                                            /s/ Reznick Fedder & Silverman
                                            ------------------------------

Bethesda, Maryland                          Federal Employer
January 22, 1997                             Identification Number:
                                             52-1088612


Audit Principal: Lester A. Kanis


                                       -7-



<PAGE>

                          Independent Auditors' Report

The Partners
West Diamond Street Associates
   T/A Sedgley Park Apartments
Marlton, New Jersey

       We have audited the accompanying balance sheets of West Diamond Street
Associates T/A Sedgley Park Apartments (A Limited Partnership), PHFA Project No.
O-0198, as of December 31, 1997 and 1996 and the related statements of profit
and loss, Partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

       In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of West Diamond Street
Associates T/A Sedgley Park Apartments (A Limited Partnership), PHFA Project No.
O-0198, as of December 31, 1997 and 1996, and the results of its operations,
changes in its Partners' capital and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

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

<PAGE>

Page Two
The Partners
West Diamond Street Associates
   T/A Sedgley Park Apartments

      In accordance with Government Auditing Standards, we have also issued a
report dated March 25, 1998 on our consideration of West Diamond Street
Associates' T/A Sedgley Park Apartments (A Limited Partnership), PHFA Project
No. O-0198, internal control and a report dated March 25, 1998 on its
compliance with applicable laws and regulations.

                                                      /s/ Asher & Company, Ltd.
                                                          ASHER & COMPANY, Ltd.

Philadelphia, Pennsylvania
March 25, 1998

<PAGE>


   [SHORE, AVRACH & COMPANY, P.C. - PHILADELPHIA, PENNSYLVANIA - LETTERHEAD]


                 Independent Auditor's Report on Basic Financial
                        Statements and Supplemental Data


To the Partners
West Diamond Street Associates
Marlton, New Jersey

     We have audited the accompanying balance sheets of West Diamond Street
Associates T/A Sedgley Park Apartments (A Pennsylvania Limited Partnership), as
of December 31, 1995 and 1994, and the related statements of profit and loss,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of West Diamond Street
Associates T/A Sedgley Park Apartments as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles. The supplemental data
included in this report (reflected on pages 18 through 24) has been subjected to
the same auditing procedures applied in the audits of the basic financial
statements and, in our opinion, is presented fairly in all material respects in
relation to the basic financial statements taken as a whole.

     In accordance with Government Auditing Standards, we have also issued the
following reports dated January 29, 1996 concerning West Diamond Street
Associates T/A Sedgley Park Apartments (1) on the internal control structure and
(2) on compliance with applicable laws and regulations.


                                             /s/ SHORE, AVRACH & COMPANY, P.C.
                                             Certified Public Accountants

January 29, 1996

<PAGE>
                    [Letterhead of J.H. Williams & Co., LLP]

                          INDEPENDENT AUDITORS' REPORT

To the Partners 
Susquehanna Partners (a Limited Partnership) 
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Susquehanna Partners (a
Limited Partnership) as of December 31, 1997 and 1996 and the related statements
of (loss), changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's general
partner and contracted management agent. 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 the
Partnership's general partner and contracted management agent, 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 Susquehanna Partners (a Limited
Partnership) at December 31, 1997 and 1996, and its results of operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.

/s/ J.H. Williams & Co., LLP

Kingston, Pennsylvania
February 6, 1998

<PAGE>

                     [J. H. WILLIAMS & CO., LLP Letterhead]



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



To the Partners 
Susquehanna Partners (a Limited Partnership) 
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Susquehanna Partners (a
Limited Partnership) as of December 31, 1996 and 1995 and the related statements
of (loss) , changes in partners' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership 'a general
partner and contracted management agent. 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 the
Partnership's general partner and contracted management agent, 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 Susquehanna Partners (a Limited
Partnership) at December 31, 1996 and 1995, and its results of operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.



/s/ J.H. Williams & Co., LLP
----------------------------

Kingston, Pennsylvania
February 7, 1997



<PAGE>
                 [Letterhead of Robert Ercolini & Company LLP]


                          INDEPENDENT AUDITOR'S REPORT

To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R, as of December
31, 1997, and the related statements of operations, partners' capital, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

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

In accordance with Government Auditing Standards, we have also issued a report
dated January 17, 1998 on our consideration of Boston Bay Limited Partnership's
internal control, a report dated January 17, 1998 on its compliance with laws
and regulations, and reports dated January 17, 1998 on its compliance with
specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency (MHFA) and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ Robert Ercolini & Company LLP

Boston, Massachusetts
January 17, 1998


<PAGE>




                   [Robert Ercolini & Company LLP Letterhead]




                          INDEPENDENT AUDITOR'S REPORT

To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R as of December
31, 1996, and the related statements of operations, partners' capital, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

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

In accordance with Government Auditing Standards, we have also issued a report
dated January 28, 1997 on our consideration of Boston Bay Limited Partnership's
internal control structure, a report dated January 28, 1997 on its compliance
with laws and regulations, and reports dated January 28, 1997 on its compliance
with specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 13 through 26) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.




/s/ Robert Ercolini & Company LLP
---------------------------------


January 28, 1997
Boston, Massachusetts

<PAGE>


       [ROBERT ERCOLINI & COMPANY - BOSTON, MASSACHUSETTS - LETTERHEAD]


                          INDEPENDENT AUDITOR'S REPORT


To the Partners of
Boston Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Boston Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-071-R as of December
31, 1995, and the related statements of operations, partners' capital, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

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

In accordance with Government Auditing Standards, we have also issued a report
dated January 26, 1996 on our consideration of Boston Bay Limited Partnership's
internal control structure, a report dated January 26, 1996 on its compliance
with laws and regulations, and reports dated January 26, 1996 on its compliance
with specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 13 through 26) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.


/s/ ROBERT ERCOLINI & COMPANY

January 26, 1996


<PAGE>

                 [Letterhead of Robert Ercolini & Company LLP]


                          INDEPENDENT AUDITOR'S REPORT

To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R, as
of December 31, 1997, and the related statements of operations, partners'
capital, and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

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

In accordance with Government Auditing Standards, we have also issued a report
dated January 20, 1998 on our consideration of Morrant Bay Limited Partnership's
internal control, a report dated January 20, 1998 on its compliance with laws
and regulations, and reports dated January 20, 1998 on its compliance with
specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency (MHFA) and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ Robert Ercolini & Company LLP

Boston, Massachusetts
January 20, 1998

<PAGE>

                   [Robert Ercolini & Company LLP Letterhead]



                          INDEPENDENT AUDITOR'S REPORT



To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R as
of December 31, 1996, and the related statements of operations, partners'
capital, and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

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

In accordance with Government Auditing Standards, we have also issued a report
dated January 27, 1997 on our consideration of Morrant Bay Limited Partnership's
internal control structure, a report dated January 27, 1997 on its compliance
with laws and regulations, and reports dated January 27, 1997 on its compliance
with specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 13 through 26) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.



/s/ Robert Ercolini & Company LLP
---------------------------------


January 27, 1997
Boston, Massachusetts

<PAGE>

       [ROBERT ERCOLINI & COMPANY - BOSTON, MASSACHUSETTS - LETTERHEAD]


                          INDEPENDENT AUDITOR'S REPORT


To the Partners of
Morrant Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Morrant Bay Limited
Partnership (a Massachusetts Limited Partnership), MHFA Project No. 70-095-R as
of December 31, 1995, and the related statements of operations, partners'
capital, and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

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

In accordance with Government Auditing Standards, we have also issued a report
dated January 29, 1996 on our consideration of Morrant Bay Limited Partnership's
internal control structure, a report dated January 29, 1996 on its compliance
with laws and regulations, and reports dated January 29, 1996 on its compliance
with specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 14 through 27) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.


/s/ ROBERT ERCOLINI & COMPANY

January 29, 1996
  (February 26, 1996
    as to Note 14)


<PAGE>


                  [Letterhead of Robert Ercolini & Company LLP]

                          INDEPENDENT AUDITOR'S REPORT
To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R, as of December
31, 1997, and the related statements of operations, partners' capital, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

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

In accordance with Government Auditing Standards, we have also issued a report
dated January 22, 1998 on our consideration of Hope Bay Limited Partnership's
internal control, a report dated January 22, 1998 on its compliance with laws
and regulations, and reports dated January 22, 1998 on its compliance with
specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 15 through 28) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.

/s/ Robert Ercolini & Company LLP

Boston, Massachusetts
January 22, 1998

<PAGE>




                   [Robert Ercolini & Company LLP Letterhead]



                          INDEPENDENT AUDITOR'S REPORT

To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts

We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R as of December
31, 1996, and the related statements of operations, partners' capital, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

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

In accordance with Government Auditing Standards, we have also issued a report
dated January 21, 1997 on our consideration of Hope Bay Limited Partnership's
internal control structure, a report dated January 21, 1997 on its compliance
with laws and regulations, and reports dated January 21, 1997 on its compliance
with specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 13 through 26) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.




/s/ Robert Ercolini & Company LLP
---------------------------------



January 21, 1997
Boston, Massachusetts


<PAGE>


       [ROBERT ERCOLINI & COMPANY - BOSTON, MASSACHUSETTS - LETTERHEAD]


                          INDEPENDENT AUDITOR'S REPORT


To the Partners of
Hope Bay Limited Partnership
Boston, Massachusetts


We have audited the accompanying balance sheet of Hope Bay Limited Partnership
(a Massachusetts Limited Partnership), MHFA Project No. 70-168-R as of December
31, 1995, and the related statements of operations, partners' capital, and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

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

In accordance with Government Auditing Standards, we have also issued a report
dated January 27, 1996 on our consideration of Hope Bay Limited Partnership's
internal control structure, a report dated January 27, 1996 on its compliance
with laws and regulations, and reports dated January 27, 1996 on its compliance
with specific requirements applicable to HUD programs.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The additional information included in this report
(shown on pages 14 through 27) is presented for the purpose of additional
analysis and to comply with reporting requirements of the Massachusetts Housing
Finance Agency and is not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as a
whole.


/s/ ROBERT ERCOLINI & COMPANY

January 27, 1996
  (February 26, 1996
     as to Note 13)

<PAGE>

                     [Letterhead of Armando A. Suarez, CPA]

                          INDEPENDENT AUDITOR'S REPORT

To the Partners
Lares Apartments Limited Partnership

      I have audited the accompanying balance sheets of Lares Apartments Limited
Partnership, Rural Development Project No.: 63-034-660467896, as of December 31,
1997 and 1996, and the related statements of operations, partners' equity
(deficit), and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. My responsibility is to
express an opinion on these financial statements based on my audits.

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

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

      My audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 20
to 31 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in my opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

                                      /s/ Armando A. Suarez, CPA

Armando A. Suarez, CPA
February 2, 1998
San Juan, Puerto Rico

The stamp #1478426 of the CPA's College of PR
was affixed to the original of this report.

<PAGE>



                       [ARMANDO A. SUAREZ, CPA Letterhead]



                          INDEPENDENT AUDITOR'S REPORT



To the Partners
Lares Apartments Limited Partnership

     I have audited the accompanying balance sheets of Lares Apartments Limited
Partnership (FmHA Project No.: 63-034-660467896) as of December 31, 1996 and
1995, and the related statements of operations, partners' equity (deficit), and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. My responsibility is to express
an opinion on these financial statements based on my audits.

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

     In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Lares Apartments Limited
Partnership, FmHA Project No.: 63-034-660467896, as of December 31, 1996 and
1995, and the results of its operations, changes in partners' equity (deficit)
and cash flows for the years then ended in conformity with generally accepted
accounting principles.

     My audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 21
and 29 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in my opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole


                                            /s/ Armando A. Suarez, CPA 
                                            -------------------------- 
                                            Armando A. Suarez, CPA 
February 4, 1997 
San Juan, Puerto Rico



The stamp #1379918 of the CPA's College of 
PR was affixed to the original of this report.




<PAGE>

                     [Letterhead of Armando A. Suarez, CPA]


                          INDEPENDENT AUDITOR'S REPORT

To the Partners
Lajas Apartments Limited Partnership

       I have audited the accompanying balance sheets of Lajas Apartments
Limited Partnership, Rural Development Project No.: 63-017-660422313, as of
December 31, 1997 and 1996, and the related statements of operations, partners'
equity (deficit), and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.

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

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

       My audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 20
to 31 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in my opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole. 

                                      /s/ Armando A. Suarez, CPA

Armando A. Suarez, CPA
February 2, 1998
San Juan, Puerto Rico

The stamp #1478423 of the CPA's College of PR
was affixed to the original of this report.



<PAGE>




                       [ARMANDO A. SUAREZ, CPA Letterhead]



                          INDEPENDENT AUDITOR'S REPORT



To the Partners
Lajas Apartments Limited Partnership

     I have audited the accompanying balance sheets of Lajas Apartments Limited
Partnership as of December 31, 1996 and 1995, and the related statements of
operations, partners' equity (deficit), and cash flows for the years then ended.
These financial statements (FmHA Project No.: 63-017660422313) are the
responsibility of the Partnership's management. My responsibility is to express
an opinion on these financial statements based on my audits.

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

     In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Lajas Apartments Limited
Partnership, FmHA Project No.: 63-017660422313, as of December 31, 1996 and
1995, and the results of its operations, changes in partners' equity (deficit)
and cash flows for the years then ended in conformity with generally accepted
accounting principles.

     My audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 19
and 30 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in my opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.




                                            /s/ Armando A. Suarez, CPA 
                                            -------------------------- 
                                            Armando A.. Suarez,CPA

January 15, 1997 /
San Juan, Puerto Rico

The stamp #1379921 of the CPA's College of 
PR was affixed to the original of this report.


<PAGE>

                           [Letterhead of Ree & Kim]

To the Partners
Arlington - Rodeo Properties
(A California Limited Partnership)

We have audited the accompanying balance sheet of Arlington - Rodeo Properties
(A California Limited Partnership) as of December 31, 1997 and the related
statements of income, partners' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We have conducted our audit 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 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 Arlington - Rodeo Properties as
of December 31, 1997, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.

/s/ Ree & Kim

Los Angeles, California
February 25, 1998



<PAGE>


                             [REE & KIM Letterhead]



To the Partners
Arlington - Rodeo Properties
(A California Limited Partnership)

We have audited the accompanying balance sheet of Arlington - Rodeo Properties
(A California Limited Partnership) as of December 31, 1996 and the related
statements of income, partners' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We have conducted our audit 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 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 Arlington - Rodeo Properties as
of December 31, 1996, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.



/s/Ree and Kim
--------------

Los Angeles, California
February 25, 1997



<PAGE>



                             [REE & KIM-LETTERHEAD]


To the Partners
Arlington - Rodeo Properties
(A California Limited Partnership)

We have audited the accompanying balance sheet of Arlington - Rodeo Properties
(A California Limited Partnership) as of December 31, 1995 and the related
statements of income, partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We have conducted our audit 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 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 Arlington - Rodeo Properties as
of December 31, 1995, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.


/s/ REE & KIM

Los Angeles, California
February 26, 1996



<PAGE>

             [Letterhead of Brovitz, Insero, Kasperski & Co., P.C.]

                          INDEPENDENT AUDITORS' REPORT

To the Partners of
Conifer Bateman Associates
(A Limited Partnership)
Lowville, New York

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

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

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

                                          Respectfully Submitted,

                                      /s/ Brovitz, Insero, Kasperski & Co., P.C.

                                          Brovitz, Insero, Kasperski & Co., P.C.
                                          Certified Public Accountants

Rochester, New York
January 28, 1998

<PAGE>



                  [CORTLAND L. BROVITZ & CO., P.C. Letterhead]



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



To the Partners' of
Conifer Bateman Associates
(A Limited Partnership)
Lowville, New York

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

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

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


                                            Respectfully Submitted,
                                            
                                            /s/Cortland L. Brovitz & Co., P.C.
                                            ----------------------------------
                                            Cortland L. Brovitz & Co., P.C.
                                            Certified Public Accountants

Rochester, New York
January 27, 1997


                                       1



<PAGE>

                      [Letterhead of Mortland & Co. P.C.]

                          Independent Auditors' Report

To the Partners
Hampden Hall Associates, L.P.
St. Louis, Missouri

We have audited the accompanying balance sheet of Hampden Hall Associates, L.P.,
as of December 31, 1997 and the related statements of income, partners' capital,
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require 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 balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet 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 Hampden Hall Associates, L.P.,
as of December 31, 1997 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.

                                                         /s/ Mortland & Co. P.C.

St. Louis, Missouri
February 13, 1998


<PAGE>



                        [Mortland & Co. P.C. Letterhead]



                          Independent Auditors' Report
                          ----------------------------

To the Partners'
Hampden Hall Associates, L.P.
St. Louis, Missouri

We have audited the accompanying balance sheet of Hampden Hall Associates, L.P.,
as of December 31, 1996 and the related statements of income, partners' capital,
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require 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 balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet 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 Hampden Hall Associates, L.P.,
as of December 31, 1996 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.



/s/ Mortland & Co. P.C.
-----------------------


St. Louis, Missouri 
February 25, 1997




<PAGE>



           [MORTLAND & CO., P.C. - ST. LOUIS, MISSOURI - LETTERHEAD]


                          Independent Auditors' Report


To the Partners of
Hampden Hall Associates, L.P.
St. Louis, Missouri

We have audited the accompanying balance sheet of Hampden Hall Associates, L.P.,
as of December 31, 1995 and the related statements of income, partners' capital,
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on this financial statement based on our audit.

We conducted our audit 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 balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet 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 Hampden Hall Associates, L.P.,
as of December 31, 1995 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.


                                        /s/ MORTLAND & CO., P.C.

February 26, 1996


<PAGE>



                      [Letterhead of Ziner & Company, P.C.]


                          INDEPENDENT AUDITORS' REPORT

To the Partners of
Chester Renaissance Associates

      We have audited the accompanying balance sheet of Chester Renaissance
Associates (a Pennsylvania limited partnership) as of December 31, 1997 and the
related statements of operations, changes in partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Chester Renaissance Associates as of
December 31, 1996, were audited by other auditors, whose report dated February
9, 1997, expressed an unqualified opinion on those financial statements.

      We conducted our audit 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 the
Partnership's general partners and contracted management agent, 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 Chester Renaissance
Associates as of December 31, 1997, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended in conformity
with generally accepted accounting principles.

                                          /s/ Ziner & Company, P.C.

February 9, 1998 
Boston, Massachusetts



<PAGE>




                     [J. H. WILLIAMS & CO., LLP Letterhead]



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



To the Partners of 
Chester Renaissance Associates (a Limited Partnership) 
Chester, Pennsylvania

We have audited the accompanying balance sheets of Chester Renaissance
Associates (a Limited Partnership) as of December 31, 1996 and 1995, and the
related statements of (loss), changes in partners' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. 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 the
Partnership's general partners and contracted management agent, 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 Chester Renaissance Associates
(a Limited Partnership) at December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.



/s/ J.H. Williams & Co. LLP
---------------------------


Kingston, Pennsylvania 
February 9, 1997




<PAGE>

                   [Letterhead of Reznick Fedder & Silverman]


                            INDEPENDENT AUDITORS' REPORT

To the Partners 
Homestead Apartments Associates II, Ltd.

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

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

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

       Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 15
and 16 is presented for the purpose of additional analysis and is not a required
part of the basic financial statements. Such supplemental information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

                                                  /s/ Reznick Fedder & Silverman

                                                  /s/ Reznick Fedder & Silverman

Atlanta, Georgia
February 9, 1998

<PAGE>



                     [Reznick Fedder & Silverman Letterhead]



                          INDEPENDENT AUDITORS' REPORT



To the Partners 
Homestead Apartments Associates II, Ltd.

     We have audited the accompanying balance sheet of Homestead Apartments
Associates II, Ltd., as of December 31, 1996 and 1995, and the related statement
of operations, partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

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



                                            /s/ Reznick Fedder & Silverman
                                            ------------------------------

Charlotte, North Carolina
January 20, 1997


<PAGE>

       [Letterhead of Vengrove, Zapolsky, McCourt, Klein & Petitto, LLP]



                          INDEPENDENT AUDITORS' REPORT

To the Partners
P.S. 157 Associates, L.P.
Brooklyn, NY

We have audited the accompanying balance sheets of P.S. 157 Associates, L.P. (a
limited partnership), as of December 31, 1997 and 1996 and the related
statements of operations, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of P.S. 157 Associates, L.P. (a
limited partnership) as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.


/s/ Vengrove, Zapolsky, McCourt, Klein & Petitto, LLP

January 22, 1998
Great Neck, NY

<PAGE>

         [Vengrove, Zapolsky, McCourt, Klein & Petitto, LLP Letterhead]



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

To the Partners
P.S. 157 Associates, L.P.
Brooklyn, NY

We have audited the accompanying balance sheets of P.S. 157 Associates, L.P. (a
limited partnership), as of December 31, 1996 and 1995 and the related
statements of operations, partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of P.S. 157 Associates, L.P. (a
limited partnership) as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.



/s/ Vengrove, Zapolsky, McCourt, Klein & Petitto, LLP
-----------------------------------------------------


January 14, 1997
Great Neck, NY


                                      -1-


<PAGE>

                        [Letterhead of Ziner & Company, P.C.]


                          INDEPENDENT AUDITORS' REPORT

To the Partners of
Cloisters Limited Partnership II

       We have audited the accompanying balance sheet of Cloisters Limited
Partnership II (a Pennsylvania limited partnership) as of December 31, 1997, and
the related statements of operations, changes in partners' equity and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's general partner and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Cloisters Limited Partnership II as of
December 31, 1996 were audited by other auditors whose report, dated February
11, 1997, expressed an unqualified opinion on those financial statements.

       We conducted our audit 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 the
Partnership's general partner and contracted management agent, 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 Cloisters Limited
Partnership II at December 31, 1997, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended in conformity
with generally accepted accounting principles.

                                                       /s/ Ziner & Company, P.C.

February 6, 1998
Boston, Massachusefts

<PAGE>




                     [J. H. WILLIAMS & CO., LLP Letterhead]



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



To the Partners of
Cloisters Limited Partnership II
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Cloisters Limited Partnership
II as of December 31, 1996 and 1995 and the related statements of (loss),
changes in partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's general partner
and contracted management agent. 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 audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partner and contracted management agent, 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 Cloisters Limited Partnership
II at December 31, 1996 and 1995, and its results of operations, changes in
partners' equity and cash flows for the years then ended in conformity with
generally accepted accounting principles.




/s/ J.H. Williams & Co., LLP
----------------------------



Kingston, Pennsylvania
February 11, 1997




<PAGE>

                   [Letterhead of Reznick Fedder & Silverman]


                         INDEPENDENT AUDITORS' REPORT

To the Partners
Creative Choice Homes II, Ltd.
  (A Limited Partnership)
  d/b/a The Gardens Apartments

       We have audited the accompanying balance sheet of Creative Choice Homes
II, Ltd. (A Limited Partnership), d/b/a The Gardens Apartments as of December
31, 1997, and the related statements of profit and loss (on HUD Form No. 92410),
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

       In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Creative Choice
Homes II, Ltd. (A Limited Partnership), d/b/a The Gardens Apartments as of
December 31, 1997, and the results of its operations, the changes in partners'
equity and cash flows for the year then ended, in conformity with generally
accepted accounting principles.

       Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page 22
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

<PAGE>

       In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
February 4, 1998 on our consideration of Creative Choice Homes II, Ltd. (A
Limited Partnership), d/b/a The Gardens Apartments' internal control and on its
compliance with specific requirements applicable to major HUD programs, fair
housing and non-discrimination, and laws and regulations applicable to the
financial statements.

                                       /s/ Reznick Fedder & Silverman

Bethesda, Maryland                         Federal Employer
February 4, 1998                             Identification Number:
                                             52-1088612

Audit Principal: Craig Birmingham

<PAGE>


                     [Reznick Fedder & Silverman Letterhead]



                          INDEPENDENT AUDITORS' REPORT

To the Partners 
Creative Choice Homes II, Ltd.
 (A Limited Partnership) 
 d/b/a The Gardens Apartments

     We have audited the accompanying balance sheet of Creative Choice Homes II,
Ltd. (A Limited Partnership), d/b/a The Gardens Apartments as of December
31,1996, and the related statements of profit and loss (on HUD Form No. 92410),
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Creative Choice Homes II,
Ltd. (A Limited Partnership), d/b/a The Gardens Apartments as of December
31,1996, and the results of its operations, the changes in partners' equity and
cash flows for the year then ended, in conformity with generally accepted
accounting principles.

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


                                      -5-


<PAGE>




     In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
February 7, 1997 on our consideration of Creative Choice Homes II, Ltd. (A
Limited Partnership), d/b/a The Gardens Apartments' internal control structure
and on its compliance with specific requirements applicable to major HUD
programs, affirmative fair housing, and laws and regulations applicable to the
financial statements.


                                                /s/ Reznick Fedder & Silverman
                                                ------------------------------
Bethesda, Maryland                              Federal Employer
February 7, 1997                                 Identification Number:
                                                 52-1088612

Audit Principal: Craig Birmingham


                                      - 6 -



<PAGE>


                     [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                          INDEPENDENT AUDITORS' REPORT


To the Partners
Creative Choice Homes II, Ltd.
(A Limited Partnership)
d/b/a The Gardens Apartments

     We have audited the accompanying balance sheet of Creative Choice Homes II,
Ltd. (A Limited Partnership) d/b/a The Gardens Apartments as of December 31,
1995, and the related statements of profit and loss (on HUD Form No. 92410),
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Creative Choice Homes II,
Ltd. (A Limited Partnership) d/b/a The Gardens Apartments as of December 31,
1995, and the results of its operations, the changes in partners' equity and
cash flows for the year then ended, in conformity with generally accepted
accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 22
through 27 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.


<PAGE>


     In accordance with Government Auditing Standards, we have also issued
reports dated February 13, 1996 on our consideration of Creative Choice Homes
II, Ltd. (A Limited Partnership) d/b/a The Gardens Apartments' internal control
structure and on its compliance with specific requirements applicable to major
HUD programs, affirmative fair housing, and laws and regulations applicable to
the financial statements.


                                        /s/ REZNICK FEDDER & SILVERMAN

Bethesda, Maryland                      Federal Employer
February 13, 1996                         Identification Number:
                                          52-1088612

Audit Principal: Craig Birmingham

<PAGE>

                   [Letterhead of Halbert, Katz & Co., P.C.]

                          INDEPENDENT AUDITORS' REPORT

To the Partners
Milford Crossing Associates, L.P.
Wilmington, Delaware

We have audited the accompanying balance sheets of Milford Crossing Associates,
L.P. as of December 31, 1997 and 1996 and the related statements of income
(loss), partners' capital (capital deficiency) and cash flows for the years then
ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 Milford Crossing Associates,
L.P., at December 31, 1997 and December 31, 1996, and the results of its
operations changes in partners' capital (capital deficiency) and cash flows for
the years then ended in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 13 to 14) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of Milford
Crossing Associates, L.P. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.

/s/ Halbert, Katz & Co., P.C.

Philadelphia, Pennsylvania
January 30, 1998


<PAGE>



                    [HALBERT, KATZ & CO., P. C.-Letterhead]



                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------



To the Partners
Milford Crossing Associates, L.P
Wilmington, Delaware

We have audited the accompanying balance sheets of Milford Crossing Associates,
L.P. as of December 31, 1996 and 1995 and the related statements of income
partners' capital (capital deficiency) and cash flows for the years then ended.
These financial statements are the responsibility of the project's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 Milford Crossing Associates,
L.P., at December 31, 1996 and December 31, 1995 and the results of its
operations changes in partners' capital (capital deficiency) and cash flows for
the years then ended in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 11 to 12) is presented for the purpose of additional
analysis and is not a required part of the basic financial statements of Milford
Crossing Associates, L.P. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.




/s/ Halbert, Katz & Co., P.C.
-----------------------------


Philadelphia, Pennsylvania
January 30, 1997

                                                                               1

<PAGE>

            [Letterhead of Bernhardt, Karlitz, Hayden & DeCruze LLP]


                          INDEPENDENT AUDITORS' REPORT

To the Partners
BX-7F ASSOCIATES, L.P.
New York, New York

We have audited the accompanying balance sheets of BX-7F Associates, L.P. as of
December 31, 1997 and 1996 and the related statements of operations, partners'
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 BX-7F Associates, L.P. as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.

/s/ Bernhardt, Karlitz, Hayden & DeCruze LLP

Bernhardt, Karlitz, Hayden & DeCruze LLP
White Plains, New York
January 27, 1998

<PAGE>



              BERNHARDT, KARLITZ, HAYDEN & DECRUZE LLP lETTERHEAD]



                          INDEPENDENT AUDITORS' REPORT



To the Partners
BX-7F ASSOCIATES, L.P.
New York, New York

We have audited the accompanying balance sheets of BX-7F Associates, L.P. as of
December 31, 1996 and 1995 and the related statements of income, partners'
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits

We conducted our audits in accordance with generally accepted auditing
standards. 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 BX-7F Associates, L.P. as of
December 31, 1996 and 1995, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.



/s/ Bernhardt, Karlitz, Hayden & DeCruze LLP
--------------------------------------------
White Plains, NY
February 13, 1997



<PAGE>

                     [Letterhead of Amilcar Torres Rivera]


                          INDEPENDENT AUDITOR'S REPORT

To the Partners
Los Angeles Limited Partnership

I have audited the accompanying balance sheets of Los Angeles Limited
Partnership as of December 31, 1997 and 1996, and the related statements of
loss, changes in Partners' equity, and cash flows for the years then ended.
These financial statements are the responsibility of the partnership's
management. My responsibility is to express an opinion on these financial
statements based on my audit.

I conducted my audit in accordance with generally accepted standards which
require that I plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statements presentation. I believe that my
audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Los Angeles Limited Partnership as
of December 31, 1997 and 1996, and the result of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
                                        /s/ Amilcar Torres Rivera, CPA
                                            Amilcar Torres Rivera, CPA

Stamp #1482818 of the 
Puerto Rico Society of 
CPA's has been affixed
to the original.

January 29, 1998
San Juan, Puerto Rico

<PAGE>



                     [AMILCAR TORRES RIVERA, CPA-LETTERHEAD]


                          INDEPENDENT AUDITOR'S REPORT


To the Partners
Los Angeles Limited Partnership

     I have audited the accompanying balance sheet of Los Angeles Limited
Partnership as of December 31, 1995, and the related statement of loss, changes
in Partner's equity and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.

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

     In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Los Angeles Limited
Partnership as of December 31, 1995, and the results of its operations, cash
flows and changes in partner's equity for the year then ended in conformity with
generally accepted accounting principles.


                                        /s/ AMILCAR TORRES RIVERA, CPA

                                        Amilcar Torres Rivera, CPA

Stamp #1320018 of the 
Puerto Rico Society of 
CPAs has been affixed 
to the original.

San Juan, Puerto Rico
January 29, 1996


<PAGE>

                  [Letterhead of Toski, Schaefer & Co., P.C.]

                          INDEPENDENT AUDITOR'S REPORT

The Partners
Christine Apartments, L.P.:

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

We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the 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 Christine Apartments, L.P. as
of December 31, 1997 and 1996 and the results of its operations, changes in
partners' equity and cash flows for the years then ended, in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued reports
dated January 29, 1998 on our consideration of the Partnership's internal
control and on its compliance with laws and regulations applicable to the
financial statements.

                              /s/ Toski, Schaefer & Co., P.C.

Williamsville, New York
January 29, 1998

<PAGE>


                    [TOSKI, SCHAEFER & CO., P.C. Letterhead]



                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------



The Partners
Christine Apartments, L.P.:

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

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

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

In accordance with Government Auditing Standards, we have also issued reports
dated January 30, 1997 on our consideration of the Partnership's internal
control structure and on its compliance with laws and regulations.



                                       /s/ Toski, Schaefer & Co., P.C.
                                       -------------------------------

Williamsville, New York
January 30, 1997


                                       1



<PAGE>
                   [Letterhead of Reznick Fedder & Silverman]

                          INDEPENDENT AUDITOR'S REPORT

To the Partners
Plainsboro Housing Partners Limited Partnership

       We have audited the accompanying balance sheets of Plainsboro Housing
Partners Limited Partnership as of December 31, 1997 and 1996, and the related
statements of revenue and expenses, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

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

                                                  /s/ Reznick Fedder & Silverman

Baltimore, Maryland
January 6, 1998

<PAGE>



                     [Reznick Fedder & Silverman Letterhead]



                          INDEPENDENT AUDITORS' REPORT



To the Partners
Plainsboro Housing Partners
 Limited Partnership

     We have audited the accompanying balance sheets of Plainsboro Housing
Partners Limited Partnership as of December 31, 1996 and 1995, and the related
statements of revenue and expenses, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits 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 Plainsboro Housing Partners
Limited Partnership as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.




                                       /s/ Reznick Fedder & Silverman
                                       ------------------------------


Baltimore, Maryland
January 24, 1997


                                      -3-


<PAGE>

                          Independent Auditors' Report

The Partners
Rolling Green Associates, L.P.
Marlton, New Jersey

       We have audited the accompanying balance sheets of Rolling Green
Associates, L.P. (A Limited Partnership) as of December 31, 1997 and 1996 and
the related statements of profit and loss, Partners' capital and cash flows for
the year ended December 31, 1997. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

       In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Rolling Green
Associates, L.P. (A Limited Partnership) as of December 31, 1997 and 1996 and
the results of its operations, changes in its Partners' capital, and its cash
flows for the year ended December 31, 1997 in conformity with generally accepted
accounting principles.

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

<PAGE>

Page Two 
The Partners
Rolling Green Associates, L.P.

       In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs, issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 21, 1998 on
our consideration of Rolling Green Associates, L.P.'s (A Limited Partnership)
internal control and reports dated January 21, 1998 on its compliance with
specific requirements applicable to major HUD programs and specific requirements
applicable to fair housing and non-discrimination.

                                                       /s/ Asher & Company Ltd.
                                                           ASHER & COMPANY LTD.


Philadelphia, Pennsylvania 
January 21, 1998
<PAGE>

   [SHORE, AVRACH & COMPANY, P.C. - PHILADELPHIA, PENNSYLVANIA - LETTERHEAD]


                      Independent Auditor's Report on Basic
                  Financial Statements and Supplemental Data


To the Partners
Rolling Green Associates, L.P.
Marlton, New Jersey

     We have audited the accompanying balance sheets of Rolling Green
Associates, L.P. (A New York Limited Partnership), as of December 31, 1995 and
1994, and the related statements of profit and loss, partners' capital (deficit)
and cash flows for the year ended December 31, 1995. 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.

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

     We were unable to confirm accounts receivable - government in the amounts
of $339,795 and $287,202 as of December 31, 1995 and 1994, respectively, due to
circumstances described in Note 9.

     In our opinion, except for the effects of such adjustments, if any, as
might have been determined necessary had we been able to confirm the accounts
receivable - government, the financial statements referred to above present
fairly, in all material respects, the financial position of Rolling Green
Associates, L.P. as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the year ended December 31, 1995, in
conformity with generally accepted accounting principles.

     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in the
report (shown on pages 16 through 22) 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 audits of the basic financial statements and, in our opinion, is
fairly presented in all material respects in relation to the basic financial
statements taken as a whole.

     In accordance with Government Auditing Standards, we have also issued the
follow1ng reports dated January 18, 1996 concerning Rolling Green Associates,
L.P. (1) on the internal control structure, (2) on compliance with specific
requirements applicable to major HUD programs, (3) on compliance with specific
requirements applicable to affirmative fair housing, and (4) on compliance with
applicable laws and regulations.


                                        /s/ SHORE, AVRACH & COMPANY, P.C.

                                        Certified Public Accountants

January 18, 1996

<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                      ASSETS
                                                                              March 31,
                                                                  --------------------------------
                                                                       1998               1997
                                                                  -------------      -------------
<S>                                                               <C>                <C>
Property and equipment - net of accumulated depreciation
  (Notes 2 and 4)                                                 $ 155,531,285      $ 161,897,905
Cash and cash equivalents (Notes 2 and 10)                            2,149,895          2,087,057
Cash held in escrow (Note 5)                                          8,589,271          8,777,109
Deferred costs, less accumulated amortization (Notes 2 and 6)         2,672,730          2,943,927
Other assets                                                          1,843,186          1,742,839
                                                                  -------------      -------------
                                                                  $ 170,786,367      $ 177,448,837
                                                                  =============      =============
<CAPTION>
                         LIABILITIES AND PARTNERS' CAPITAL

Liabilities
  Mortgage notes payable (Note 7)                                 $  97,153,977      $  99,092,259
  Construction notes payable (Note 7)                                 6,740,018          6,740,018
  Accounts payable and other liabilities                              7,220,887          6,814,714
  Due to local general partners and affiliates (Note 8)               5,972,205          6,341,448
  Due to general partner and affiliates                                 929,201            760,510
                                                                  -------------      -------------
                                                                    118,016,288        119,748,949
                                                                  -------------      -------------
Minority interest                                                     6,470,579          6,695,280
                                                                  -------------      -------------
Commitments and contingencies (Notes 8 and 10)

Partners' capital
  Limited partners (76,786 BACs issued and outstanding)              46,519,379         51,177,436
  General partner                                                      (219,879)          (172,828)
                                                                  -------------      -------------
                                                                     46,299,500         51,004,608
                                                                  -------------      -------------
                                                                  $ 170,786,367      $ 177,448,837
                                                                  =============      =============
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -15-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                          Year Ended March 31,
                                            ------------------------------------------------
                                               1998               1997             1996*
                                            ------------      ------------      ------------
<S>                                         <C>               <C>               <C>         
Revenues
  Rental income                             $ 19,155,670      $ 18,924,741      $ 18,552,471
  Other income                                   861,995           667,773           617,139
  Gain on sale of land (Note 4)                  114,928                 0                 0
                                            ------------      ------------      ------------
                                              20,132,593        19,592,514        19,169,610
                                            ------------      ------------      ------------
Expenses
  General and administrative                   3,546,101         3,828,769         3,168,207
  General and administrative-
   related parties (Note 8)                    1,173,780         1,165,168         1,756,654
  Repairs and maintenance                      3,407,084         3,252,181         2,859,589
  Operating and other                          2,006,347         1,989,111         1,916,038
  Taxes                                        1,279,922         1,763,193         1,210,046
  Insurance                                      952,274           951,050           979,238
  Financial, principally interest              5,640,082         5,765,176         6,010,397
  Depreciation and amortization                6,367,255         6,141,329         6,183,928
  Loss on impairment of assets (Note 4)          500,000                 0                 0
                                            ------------      ------------      ------------
                                              24,872,845        24,855,977        24,084,097
                                            ------------      ------------      ------------
Loss before minority interest                 (4,740,252)       (5,263,463)       (4,914,487)
Minority interest in loss of
  subsidiary partnerships                         35,144            33,343            32,193
                                            ------------      ------------      ------------
Net loss                                    $ (4,705,108)     $ (5,230,120)     $ (4,882,294)
                                            ============      ============      ============
Net loss-limited partnership interests      $ (4,658,057)     $ (5,177,819)     $ (4,833,471)
                                            ============      ============      ============
Number of BACs outstanding                        76,786            76,786            76,786
                                            ============      ============      ============
Net loss per BAC                            $     (60.66)     $     (67.43)     $     (62.95)
                                            ============      ============      ============
</TABLE>


*Reclassified for comparative purposes.

See accompanying notes to consolidated financial statements.


                                      -16-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

<TABLE>
<CAPTION>
                                           Total        Limited        General
                                         Partners      Partners        Partners
                                        -----------   -----------     ---------
<S>                                     <C>           <C>             <C>       
Partners' capital - April 1, 1995       $61,117,022   $61,188,726     $ (71,704)

Net loss                                 (4,882,294)   (4,833,471)      (48,823)
                                        -----------   -----------     ---------

Partners' capital - March 31, 1996       56,234,728    56,355,255      (120,527)

Net loss                                 (5,230,120)   (5,177,819)      (52,301)
                                         ----------    ----------       -------

Partners' capital - March 31, 1997       51,004,608    51,177,436      (172,828)

Net loss                                 (4,705,108)   (4,658,057)      (47,051)
                                       ------------- -------------    ----------

Partners' capital - March 31, 1998      $46,299,500   $46,519,379     $(219,879)
                                         ==========    ==========      =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -17-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>
                                                                         Year Ended March 31,
                                                             ---------------------------------------------
                                                                1998             1997              1996*
                                                             -----------      -----------      -----------
<S>                                                          <C>              <C>              <C>
Cash flows from operating activities:
  Net loss                                                   $(4,705,108)     $(5,230,120)     $(4,882,294)
                                                             -----------      -----------      -----------
  Adjustments to reconcile net loss to net cash
   provided by operating activities:
   Depreciation and amortization                               6,367,255        6,141,329        6,183,928
   Gain on sale of land                                         (114,928)               0                0
   Loss on impairment (Note 4)                                   500,000                0                0
   Minority interest in loss of subsidiaries                     (35,144)         (33,343)         (32,193)
   (Increase) decrease in assets:
    Cash held in escrow                                          243,633          321,640       (2,153,861)
    Deferred costs                                                     0            3,150                0
    Due from local general partners and affiliates                     0               0            17,069
    Other assets                                                (100,347)         187,649          433,216
   Increase (decrease) in liabilities:
    Accounts payable and other liabilities                       449,888          384,693          927,143
    Due to local general partners and affiliates                 (28,959)         133,916         (138,924)
    Due to general partner and affiliates                        168,691          194,511          789,823
                                                             -----------      -----------      -----------
   Total adjustments                                           7,450,089        7,333,545        6,026,201
                                                             -----------      -----------      -----------
Net cash provided by operating activities                      2,744,981        2,103,425        1,143,907
                                                             -----------      -----------      -----------
Cash flows from investing activities:
  Acquisition of property and equipment                         (316,410)        (254,027)        (902,196)
  Increase in cash held in escrow                                (55,795)        (368,346)        (121,719)
  Proceeds from the sale of land                                 210,000                0                0
  Decrease in due from local general
   partners and affiliates                                             0                0           42,964
  Increase in due to local general partners and
   affiliates                                                          0                0        1,002,468
  Decrease in due to local general partners
   and affiliates                                               (190,818)        (196,795)      (1,602,159)
                                                             -----------      -----------      -----------
Net cash used in investing activities                           (353,023)        (819,168)      (1,580,642)
                                                             -----------      -----------      -----------
</TABLE>

*Reclassified for comparative purposes.

See accompanying notes to consolidated financial statements.


                                      -18-
<PAGE>

                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                    (CONTINUED)

<TABLE>
<CAPTION>
                                                                                   Year Ended March 31,
                                                                     ---------------------------------------------
                                                                        1998             1997              1996*
                                                                     -----------      -----------      -----------
<S>                                                                  <C>              <C>              <C>        
Cash flows from financing activities:
  Increase in deferred costs                                              (8,100)               0          (56,700)
  Proceeds from mortgage notes                                                 0                0           58,120
  Repayment of mortgage notes                                         (1,981,997)      (1,865,078)      (1,791,820)
  Increase in due to local general partners
   and affiliates                                                              0          394,802          312,441
  Decrease in due to local general partners
   and affiliates                                                       (149,466)               0          (55,744)
  Decrease in capitalization of
   consolidated subsidiaries attributable
   to minority interest                                                 (189,557)        (121,968)        (462,167)
                                                                     -----------      -----------      -----------
Net cash used in financing activities                                 (2,329,120)      (1,592,244)      (1,995,870)
                                                                     -----------      -----------      -----------
Net increase (decrease) in cash and cash equivalents                      62,838         (307,987)      (2,432,605)
Cash and cash equivalents at beginning of year                         2,087,057        2,395,044        4,827,649
                                                                     -----------      -----------      -----------
Cash and cash equivalents at end of year                             $ 2,149,895      $ 2,087,057      $ 2,395,044
                                                                     ===========      ===========      ===========

Supplemental disclosure of cash flows information:
  Cash paid during the year for interest                             $ 4,811,327      $ 4,807,010      $ 5,286,969
Supplemental disclosure of noncash investing
  and financing activities:
  Property and equipment reclassified to
   deferred costs                                                    $         0      $         0      $   451,335
  Decrease in due from general partner and
   affiliates offset by due to general partner
   and affiliates                                                              0                0          283,371
  Increase in mortgage notes payable reclassified
   from accounts payable and other liabilities                            43,715           40,505           40,528
Summarized below are the components of the gain on sale of land:
  Decrease in property and equipment                                      95,072                0                0
</TABLE>

*Reclassified for comparative purposes.

See accompanying notes to consolidated financial statements.


                                      -19-
<PAGE>
                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  MARCH 31, 1998

NOTE 1 - General

Independence Tax Credit Plus L.P., a Delaware limited partnership (the
"Partnership"), was organized on November 7, 1990, but had no activity until May
31, 1991 (which date is considered to be inception for financial accounting
purposes) and commenced the public offering on July 1, 1991. The general partner
of the Partnership is Related Independence Associates L.P., a Delaware limited
partnership (the "General Partner").

The Partnership's business is to invest in other partnerships ("Local
Partnerships," "subsidiaries" or "subsidiary partnerships") owning leveraged
Apartment Complexes that are eligible for the low-income housing tax credit
("Tax Credit") enacted in the Tax Reform Act of 1986, some of which complexes
may also be eligible for the historic rehabilitation tax credit.

The Partnership has interests in twenty-eight Local Partnerships as of March 31,
1998.

The Partnership was authorized to issue a total of 200,000 Beneficial Assignment
Certificates ("BACs") which have been registered with the Securities and
Exchange Commission for sale to the public. Each BAC represents all of the
economic and virtually all of the ownership rights attributable to a limited
partnership interest. As of March 31, 1998, the Partnership has raised a total
of $76,786,000 representing 76,786 BACs and no further issuance of BACs is
anticipated.

The terms of the Partnership's Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement") provide, among other things, that net
profits or losses and distributions of cash flow are, in general, allocated 99%
to the limited partners and BACs holders and 1% to the General Partner.

NOTE 2 - Summary of Significant Accounting Policies

a)  Basis of Accounting

The Partnership's fiscal year ends on March 31. All subsidiaries have fiscal
years ending December 31. Accounts of the subsidiaries have been adjusted for
intercompany transactions from January 1 through March 31. The Partnership's
fiscal year ends March 31 in order to allow adequate time for the subsidiaries
financial statements to be prepared and consolidated. The books and records of
the Partnership are maintained on the accrual basis of accounting, in accordance
with generally accepted accounting principles ("GAAP").

b)  Basis of Consolidation

The consolidated financial statements include the accounts of the Partnership
and twenty-eight subsidiary partnerships in which the Partnership is a limited
partner. Through the rights of the Partnership and/or an affiliate of the
General Partner, which affiliate has a contractual obligation to act on behalf
of the Partnership, to remove the general partner of the subsidiary local
partnerships and to approve certain major operating and financial decisions, the
Partnership has a controlling financial interest in the subsidiary local
partnerships. All intercompany accounts and transactions with the subsidiary
partnerships have been eliminated in consolidation.


                                      -20-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  MARCH 31, 1998

For financial reporting purposes, the Partnership's fiscal year ends on March
31. All subsidiaries have fiscal years ending December 31. Accounts of the
subsidiaries have been adjusted for intercompany transactions from January 1
through March 31. The Partnership's fiscal year ends March 31 in order to allow
adequate time for the subsidiaries financial statements to be prepared and
consolidated.

Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise from cash contributions and cash
distributions to the minority interest partners.

Losses attributable to minority interest which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated approximately $21,000, $34,000, and $69,000 for the years ended March
31, 1998, 1997 and 1996, respectively (the 1997, 1996 and 1995 Fiscal Years,
respectively). The Partnership's investment in each subsidiary is equal to the
respective subsidiary's partners' equity less minority interest capital, if any.
In consolidation, all subsidiary partnership losses are included in the
Partnership's capital account except for losses allocated to minority interest
capital.

c)  Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash in banks, and investments
in short-term highly liquid instruments purchased with original maturities of
three months or less.

d)  Property and Equipment

Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated.

Through March 31, 1998, the Partnership has recorded approximately $500,000 as a
loss on impairment of assets.


                                      -21-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  MARCH 31, 1998

e)  Income Taxes

The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31.

f)  Organization and Offering Costs

Costs incurred to organize the Partnership, including but not limited to legal,
accounting and registration fees, are considered organization expenses. These
costs are capitalized and amortized over a 60-month period. Costs incurred to
sell BACs, including brokerage and the nonaccountable expense allowance, are
considered selling and offering expenses. These costs are charged directly to
limited partners' capital.

g)  Loss Contingencies

The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated.

h)  Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

i)  Reclassification of Financial Statement Presentation

Certain reclassifications have been made to the Fiscal 1995 financial statements
to conform with the Fiscal 1997 financial statement presentation. Such
reclassifications had no effect on net loss as previously reported.

NOTE 3 - Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments (all of which are held for nontrading
purposes) for which it is practicable to estimate that value:

Cash and Cash Equivalents and Cash Held in Escrow 

The carrying amount approximates fair value.


                                      -22-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  MARCH 31, 1998

Mortgage Notes Payable

The fair value of mortgage notes payable is estimated, where practicable, based
on the borrowing rate currently available for similar loans.

The estimated fair values of the Partnership's mortgage notes payable are as
follows:

<TABLE>
<CAPTION>
                                                    March 31, 1998                  March 31, 1997**
                                              -------------------------       -------------------------
                                              Carrying                        Carrying
                                               Amount        Fair Value        Amount        Fair Value
                                             -----------     -----------     -----------     -----------
<S>                                          <C>             <C>             <C>             <C>
Mortgage notes payable for which it is:
Practicable to estimate fair value           $37,856,219     $37,315,794     $38,596,669     $37,963,327
Not practicable                              $59,297,758               *     $60,495,590               *
</TABLE>


*Management believes it is not practical to estimate the fair value of the
mortgage notes payable because mortgage programs with similar characteristics
are not currently available to the partnerships.

**Reclassified for comparative purposes.

The carrying amount of other financial instruments that require such disclosure
approximates fair value.

NOTE 4 - Property and Equipment

The components of property and equipment are as follows:

<TABLE>
<CAPTION>
                                            March 31,                Estimated
                                 ------------------------------     Useful Lives
                                       1998            1997           (Years)
                                 -------------    -------------     ------------
<S>                              <C>              <C>                  <C>    
Land                             $   5,682,116    $   5,777,188         --
Building and improvements          174,531,656      175,432,328        15-40
Furniture and fixtures               2,078,686        1,960,457        3-10
                                  ------------     ------------
                                   182,292,458      183,169,973

Less:  Accumulated depreciation    (26,761,173)     (21,272,068)
                                  ------------     ------------
                                  $155,531,285     $161,897,905
                                  ------------     ------------
</TABLE>

Included in property and equipment is approximately $4,500,000 of acquisition
fees paid to the general partner and $1,057,104 of acquisition expenses as of
March 31, 1998 and 1997. In addition, as of March 31, 1998 and 1997, building
and improvements include approximately $4,378,000 of capitalized interest.

In connection with the rehabilitation of the properties, the subsidiary
partnerships have incurred developer's fees of approximately $14,500,000 to the
local general partners and affili-

                                      -23-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  MARCH 31, 1998

ates, net of approximately $979,000 earned by the Partnership. Such fees have
been included in the cost of property and equipment.

Depreciation expense for the years ended March 31, 1998, 1997 and 1996 amounted
to $6,087,958, $5,834,353 and $5,858,536, respectively.

West Diamond Street Associates ("West Diamond") analyzes the carrying value of
its fixed assets on an ongoing basis to determine that the recorded amounts are
reasonable and are not impaired. During 1997, the buildings were deemed to be
impaired and were written down to their fair value. Fair value, which was
determined by reference to the present value of the estimated future cash
inflows of such fixed assets, inclusive of the low income housing tax credits,
exceeding the carrying value by approximately $500,000. This impairment loss has
been charged to operations for 1997. As a result of the impairment loss on the
fixed assets, buildings and the related accumulated depreciation have been
reduced by $1,098,853 and $598,853, respectively.

During the year ended December 31, 1997, Milford Crossing Associates, L.P.
("Milford") sold a parcel of unimproved land for $210,000 to an entity with a
member who is also a general partner of Milford.

NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:

<TABLE>
<CAPTION>
                                                                March 31,
                                                       -------------------------
                                                           1998          1997
                                                        ----------    ----------
<S>                                                    <C>           <C>        
Purchase price payments*                               $   359,700   $   987,136
Real estate taxes, insurance and other                   4,724,760     5,028,968
Reserve for replacements                                 2,859,132     2,175,901
Tenant security deposits                                   645,679       585,104
                                                        ----------    ----------
                                                        $8,589,271    $8,777,109
                                                        ==========    ==========
</TABLE>

*Represents amounts to be paid to seller after completion of properties under
construction and upon meeting specified rental achievement criteria.


                                      -24-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  MARCH 31, 1998

NOTE 6 - Deferred Costs

The components of deferred costs and their periods of amortization are as
follows:

<TABLE>
<CAPTION>
                                                March 31,
                                       ---------------------------
                                           1998            1997        Period
                                       ----------       ----------   -----------
<S>                                    <C>              <C>          <C>     
Financing expenses                     $3,476,910       $3,468,810       *
Organization expenses                     643,142          664,154    60 months
                                       ----------       ----------              
                                        4,120,052        4,132,964
Less:  Accumulated amortization        (1,447,322)      (1,189,037)
                                       ----------       ----------              
                                       $2,672,730       $2,943,927
                                       ==========       ==========
</TABLE>

*Over the life of the related mortgages.

Amortization expense for the years ended March 31, 1998, 1997 and 1996 amounted
to $279,297, $306,976, and $325,392, respectively.

During the year ended March 31, 1998, deferred costs and accumulated
amortization of $21,012 was written off.

NOTE 7 - Mortgage and Construction Notes Payable

The mortgage and construction notes are payable in aggregate monthly
installments of approximately $686,000, including principal and interest at
rates varying from 0% to 10.29% per annum, through the year 2048. Each
subsidiary partnership's mortgage or construction note payable is collateralized
by the land and buildings of the respective subsidiary partnership, the
assignment of certain subsidiary partnership's rents and leases, and is without
further recourse.

Certain mortgage notes with balances aggregating $11,097,615 and $11,159,590 at
December 31, 1997 and 1996, respectively, which bear interest at rates ranging
from 8.5% to 9% per annum, were eligible for interest rate subsidies.
Accordingly, the subsidiary partnerships paid only that portion of the monthly
payments that would be required if the interest rate was 1% and the balance was
subsidized under Sections 236 and 551(b) of the National Housing Act.


                                      -25-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  MARCH 31, 1998


Annual principal payment requirements, as of March 31, 1998, for each of the
next five fiscal years and thereafter, are as follows:

Fiscal Year Ending                    Amount
------------------                 ------------

1998                                $ 2,052,276
1999                                  2,179,424
2000                                  2,319,001
2001                                  2,469,970
2002                                  2,625,169
Thereafter                           85,508,137
                                    -----------
                                    $97,153,977
                                    ===========

As of December 31, 1997 and 1996, one subsidiary partnership has a construction
loan commitment totaling $6,890,000. As of December 31, 1997 and 1996, such loan
has an outstanding balance of $6,740,018.

The mortgage agreements require monthly deposits to replacement reserves of
approximately $55,000 and monthly deposits to escrow accounts for real estate
taxes, hazard and mortgage insurance and other (Note 5).

NOTE 8 - Related Party Transactions

An affiliate of the General Partner, Independence SLP L.P., has either a 0.1% or
1% interest as a special limited partner in each of the Local Partnerships. An
affiliate of the General Partner also has a minority interest in certain Local
Partnerships.

A)  Guarantees

The Partnership has negotiated Operating Deficit Guaranty Agreements with all
Local Partnerships by which the general partners of the Local Partnerships have
agreed to fund operating deficits for a specified period of time. The terms of
the Operating Deficit Guaranty Agreements vary for each Local Partnership, with
maximum dollar amounts to be funded for a specified period of time, generally
three years, commencing on the break-even date. The gross amount of the
Operating Deficit Guarantees aggregates approximately $9,799,000 of which
approximately $8,090,000, $3,240,000 and $200,000 had expired as of March 31,
1998, 1997 and 1996, respectively. As of March 31, 1998, 1997, and 1996,
approximately $1,505,000, $1,212,000 and $1,112,000, respectively, has been
funded by the Local General Partners to meet such obligations, which includes
amounts held in escrow by the Local Partnerships. Amounts @@funded under such
agreements are treated as noninterest bearing loans, which will be repaid only
out of 50% of available cash flow or out of available net sale or refinancing
proceeds.


                                      -26-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  MARCH 31, 1998


B)  Other Related Party Expenses

The General Partner and its affiliates perform services for the Partnership. The
costs incurred for the years ended March 31, 1998, 1997 and 1996 were as
follows:

<TABLE>
<CAPTION>
                                                     Year Ended March 31,
                                          --------------------------------------
                                             1998           1997        1996
                                          ----------    ----------   -----------
<S>                                      <C>          <C>            <C>        
Partnership management fees (i)          $    50,000  $     87,500   $   685,165
Expense reimbursement (ii)                   145,804        84,913        84,912
Property management fees (iii)               904,376       905,401       914,499
Local administrative fee (iv)                 73,600        87,354        72,078
                                          ----------    ----------   -----------

                                          $1,173,780    $1,165,168    $1,756,654
                                           =========     =========     =========
</TABLE>

(i) The General Partner is entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the local annual
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. Subject to the foregoing limitation, the partnership
management fee will be determined by the General Partner in its sole discretion
based upon its review of the Partnership's investments. Unpaid partnership
management fees for any year have been, and will continue to be, accrued without
interest and will be payable only to the extent of available funds after the
Partnership has made distributions to the limited partners of sale or
refinancing proceeds equal to their original capital contributions plus a 10%
priority return thereon (to the extent not theretofore paid out of cash flow).
Partnership management fees owed to the General Partner amounting to
approximately $539,000 and $489,000 were accrued and unpaid as of March 31, 1998
and 1997, respectively.

(ii) The Partnership reimburses the General Partner and its affiliates for
actual Partnership operating expenses incurred by the General Partner and its
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partner performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance.

(iii) Property management fees incurred to affiliates of the subsidiary
partnerships amounted to $904,376, $905,401, and $914,499 for the 1997, 1996 and
1995 Fiscal Years, respectively. Included in amounts incurred to affiliates of
the subsidiary partnerships were $34,680, $63,289, and $65,121, for the 1997,
1996 and 1995 Fiscal Years, respectively, which were also incurred to an
affiliate of the General Partner.

(iv) Independence SLP L.P. is entitled to receive a local administrative fee of
up to $2,500 per year from each subsidiary partnership.


                                      -27-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  MARCH 31, 1998


C)  Due to Local General Partners and Affiliates

Due to local general partners and affiliates consists of the following:

<TABLE>
<CAPTION>
                                                                    March 31,
                                                           -------------------------
                                                              1998           1997*
                                                           ----------     ----------
<S>                                                        <C>            <C>       
Development deficit advances                               $  352,453     $  337,516
Operating advances (i)                                        720,457        869,923
Development fee payable                                     3,223,332      3,081,984
Due to contractor                                                   0        347,103
Long-term notes payable (ii)                                1,272,848      1,272,848
Management and other fees                                     403,115        432,074
                                                           ----------     ----------

                                                           $5,972,205     $6,341,448
                                                           ==========     ==========

*Reclassified for comparative purposes 

(i)  Operating advances include the following loans:

Creative Choice Homes II, LTD                                       0     $  234,665

This  loan  is  noninterest  bearing  and is  payable
from cash flow of the  project  with the  approval of
HUD 

This loan is noninterest bearing and is payable from       $  138,443     $  212,387
cash flow of the project with the approval of HUD 

Christine Apartments, L.P.                                 $  116,100     $  166,800

This  loan  is  noninterest  bearing  and  has no set
repayment terms 

(ii) Long term notes payable consist of the following:

Creative Choice Homes II, LTD                              $  500,000     $  500,000

This note  bears  interest  at 12%  payable  monthly 
Principal on the loan is due and payable in full on
December 31, 2008 

Plainsboro Housing Partners, L.P.                          $  772,848     $  772,848

This loan, dated December 11, 1992, accrues interest at
a rate of 7.34% per annum on the outstanding principal 
balance for 20 years. Repayment of the principal and   
interest shall be made from net cash flow to the extent
available pursuant to the promissory note. All accrued 
interest and principal are due in a balloon payment in 
December 2012.                                         

Interest expense incurred on such long-term notes       
payable amounted to $116,727, $118,773, and $118,879 for
the 1997, 1996 and 1995 Fiscal Years, respectively.     
</TABLE>

                                      -28-
<PAGE>


                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  MARCH 31, 1998

D)  Other

Pursuant to the Partnership Agreement and the Local Partnership Agreements, the
General Partner and Independence SLP L.P. received their pro rata share of
profits, losses and tax credits.

NOTE 9 - Income Taxes

A reconciliation of the financial statements net loss to the income tax loss for
the Partnership and its consolidated subsidiaries follows:

<TABLE>
<CAPTION>
                                                 Year Ended December 31,
                                        ---------------------------------------
                                            1997          1996          1995
                                        -----------   -----------   -----------
<S>                                     <C>           <C>           <C>         
Financial statement net loss            $(4,705,108)  $(5,230,120)  $(4,882,294)

Differences between depreciation and
amortization expense recorded for
financial reporting purposes and the
accelerated cost recovery system
utilized for income tax purposes         (1,149,478)   (1,312,428)   (1,301,987)

Differences resulting from parent
company having a different fiscal year
for income tax and financial reporting
purposes                                     15,857       (24,937)     (216,848)

Loss on impairment of assets                500,000             0             0

Other                                       (73,249)      299,237      (116,476)
                                        -----------   -----------   -----------
Net loss as shown on the income  tax
return for the calendar year ended      $(5,411,978)  $(6,268,248)  $(6,517,605)
                                         ==========    ==========    ==========
</TABLE>


NOTE 10 - Commitments and Contingencies

a)  Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various banks.
Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation up to $100,000. As of March 31, 1998, uninsured cash and cash
equivalents approximated $767,000.


                                      -29-
<PAGE>

                         INDEPENDENCE TAX CREDIT PLUS L.P.
                                 AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  MARCH 31, 1998


b)  Letters of Credit

As of December 31, 1997, the subsidiary partnerships were contingently liable on
open letters of credit as follows:

<TABLE>
<CAPTION>
Description                           Amount
-----------------------             --------
<S>                                 <C>     
Development contingency             $ 79,000
Operating deficit                    971,593
</TABLE>

c)  Other

The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however no more than 21%
of the properties are located in any single state. There are also substantial
risks associated with owning properties receiving government assistance; for
example the possibility that Congress may not appropriate funds to enable the
U.S. Department of Housing and Urban Development ("HUD") to make rental
assistance payments. HUD also restricts annual cash distributions to partners
based on operating results and a percentage of the owner's equity contribution.
The Partnership cannot sell or substantially liquidate its investments in
subsidiary partnerships during the period that the subsidy agreements are in
existence, without HUD's approval. Furthermore, there may not be market demand
for apartments at full market rents when the rental assistance contracts expire.

The Partnership and BACs holders began to recognize Housing Tax Credits with
respect to a Property when the Credit Period for such Property commenced.
Because of the time required for the acquisition, completion and rent-up of
Properties, the amount of Tax Credits per BAC gradually increased over the first
three years of the Partnership. Housing Tax Credits not recognized in the first
three years will be recognized in the 11th through 13th years. The Partnership
generated $11,977,461, $11,971,306 and $11,969,116 Housing Tax Credits during
the 1997, 1996 and 1995 tax years, respectively.


                                      -30-
<PAGE>


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

None

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.

The Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by the General Partner. Certain information
concerning the directors and executive officers of Related Independence
Associates Inc. ("RIAI"), the sole general partner of Related Independence
Associates L.P., the General Partner, is set forth below.

<TABLE>
<CAPTION>
Name                             Position
<S>                              <C>

Stephen M. Ross                  Director

J. Michael Fried                 President, Chief Executive Officer and Director

Alan P. Hirmes                   Senior Vice President

Stuart J. Boesky                 Vice President

Marc D. Schnitzer                Vice President

Glenn F. Hopps                   Treasurer

Lynn A. McMahon                  Secretary
</TABLE>

STEPHEN M. ROSS, 58, is also President, Director and shareholder of The Related
Realty Group, Inc., the General Partner of The Related Companies, L.P. He
graduated from the University of Michigan School of Business Administration with
a Bachelor of Science degree and from Wayne State University School of Law with
a Juris Doctor degree. Mr. Ross than received a Master of Laws degree in
taxation from New York University School of Law. He joined the accounting firm
of Coopers & Lybrand in Detroit as a tax specialist and later moved to New York,
where he worked for two large Wall Street investment banking firms in their real
estate and corporate finance departments. Mr. Ross formed the predecessor of The
Related Companies, L.P. in 1972 to develop, manage, finance and acquire
subsidized and conventional apartment developments.

J. MICHAEL FRIED, 54, is the sole shareholder of one of the general partners of
Related Capital Corporation ("Capital"), a real estate finance and acquisition
affiliate of the General Partner. In that capacity, he is responsible for all of
Capital's syndication, finance, acquisition and investor reporting activities.
Mr. Fried practiced corporate law in New York City with the law firm of
Proskauer Rose Goetz & Mendelsohn from 1974 until he joined Capital in 1979. Mr.
Fried graduated from Brooklyn Law School with a Juris Doctor degree, magna cum
laude; from Long Island University Graduate School with a Master of Science
degree in Psychology; and from Michigan State University with a Bachelor of Arts
degree in History.

ALAN P. HIRMES, 43, has been a Certified Public Accountant in New York since
1978. Prior to joining Capital in October 1983, Mr. Hirmes was employed by
Weiner & Co., Certified Pub-

                                      -31-
<PAGE>


lic Accountants. Mr. Hirmes is also a Vice President of Capital. Mr. Hirmes
graduated from Hofstra University with a Bachelor of Arts degree.

STUART J. BOESKY, 42, practiced real estate and tax law in New York City with
the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined
Capital. From 1983 to 1984, Mr. Boesky practiced law with the Boston law firm of
Kaye Fialkow Richard & Rothstein (which subsequently merged with Strook & Strook
& Lavan) and from 1978 to 1980 was a consultant specializing in real estate at
the accounting firm of Laventhol & Horwath. Mr. Boesky graduated from Michigan
State University with a Bachelor of Arts degree and from Wayne State School of
Law with a Juris Doctor degree. He then received a Master of Laws degree in
Taxation from Boston University School of Law.

MARC D. SCHNITZER, 37, is responsible both for financial restructurings of real
estate properties and directing Capital's acquisitions of properties generating
Housing Tax Credits. Mr. Schnitzer received a Masters of Business Administration
from The Wharton School of the University of Pennsylvania in December 1987
before joining Related in January 1988. From 1983 to January 1986, he was a
financial analyst for the First Boston Corporation in New York. Mr. Schnitzer
graduated summa cum laude with a Bachelor of Science in Business Administration
from the School of Management at Boston University in May 1983.

GLENN F. HOPPS, 35, was employed, prior to joining Related in December 1, 1990,
by Mark Shron & Company and Weissbarth, Altman and Michaelson certified public
accountants. Mr. Hopps graduated from New York State University at Albany with a
Bachelor of Science Degree in Accounting

LYNN A. McMAHON, 42, has since 1983, served as Assistant to the President of
Capital. From 1978 to 1983 she was employed at Sony Corporation of America in
the Government Relations Department.


                                      -32-
<PAGE>


Item 11.  Executive Compensation.

The Partnership has no officers or directors. The Partnership does not pay or
accrue any fees, salaries or other forms of compensation to directors or
officers of the general partner of the General Partner for their services. Under
the terms of the Partnership Agreement, the General Partner and its affiliates
are entitled to receive compensation from the Partnership in consideration of
certain services rendered to the Partnership by such parties. In addition, the
General Partner is entitled to 1% of all cash distributions and Tax Credit
allocations and a subordinated 15% interest in Net Sales or Refinancings
Proceeds. See Note 8 to the Financial Statements in Item 8 above for a
presentation of the types and amounts of compensation paid to the General
Partner and its affiliates, which is incorporated herein by reference thereto.

Tabular information concerning salaries, bonuses and other types of compensation
payable to executive officers has not been included in this annual report. As
noted above, the Partnership has no executive officers. The levels of
compensation payable to the General Partner and/or its affiliates is limited by
the terms of the Partnership Agreement and may not be increased therefrom on a
discretionary basis.

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

<TABLE>
<CAPTION>
                      Name and Address of     Amount and Nature of         Percentage
Title of Class        Beneficial Ownership    Beneficial Ownership          of Class 
--------------        --------------------    --------------------          -------- 
<S>                   <C>                     <C>                            <C>   
General Partnership   Related Independence    $1,000 capital contribution    100%  
Interest in the       Associates L.P.         -directly owned                      
Partnership           625 Madison Avenue                                           
                      New York, NY 10022                                           
</TABLE>
                         
Independence SLP L.P., a limited partnership whose general partner is the
General Partner of the Partnership and which acts as the special limited partner
of each Local Partnership, holds either a 0.1% or 1% limited partnership
interest in each Local Partnership. See Note 8 to the Financial Statements in
Item 8 above, which information is incorporated herein by reference thereto.

No person is known by the Partnership to be the beneficial owner of more than 5%
of the Limited Partnership Interests and neither the Related General Partner nor
any director or executive officer of the Related General Partner owns any
Limited Partnership Interests. The following table sets forth the number of BACs
beneficially owned, as of June 23, 1998, by (i) each BACs holder known to the
Partnership to be a beneficial owner of more than 5% of the BACs, (ii) each
director and executive officer of the general partner of the Related General
Partner and (iii) the directors and executive officers of the general partner of
the Related General Partner as a group. Unless otherwise noted, all BACs are
owned directly with sole voting and dispositive powers.

                                       33
<PAGE>

<TABLE>
<CAPTION>

                                           Amount and Nature of
Name of Beneficial Owner (1)               Beneficial Ownership         Percent of Class
----------------------------               --------------------         ----------------
<S>                                        <C>                                     <C> 
Lehigh Tax Credit Partners, Inc.           6,846.30 (2) (3)                        8.9%
J. Michael Fried                           6,846.30 (2) (3) (4)                    8.9%
Alan P. Hirmes                             6,846.30 (2) (3) (4)                    8.9%
Stuart J. Boesky                           6,846.30 (2) (3) (4)                    8.9%
Stephen M. Ross                                  --                                 --
Marc D. Schnitzer                                --                                 --
Glenn F. Hopps                                   --                                 --
Lynn A. McMahon                                  --                                 --
All directors and executive officers       6,846.30 (2) (3) (4)                    8.9%
of the general partner of the
Related General Partner as a group
(seven persons)
</TABLE>

(1) The address for each of the persons in the table is 625 Madison Avenue, New
York, New York 10022.

(2) As set forth in Schedule 13D filed by Lehigh Tax Credit Partners L.L.C.
("Lehigh I") and Lehigh Tax Credit Partners, Inc., (the "Managing Member") on
June 10, 1997 with the Securities and Exchange Commission (the "Commission") and
pursuant to a letter agreement dated May 28, 1997 among the Partnership, Lehigh
I and the Related General Partner (the "Standstill Agreement"), Lehigh I agreed
that, prior to May 28, 2007 (the "Standstill Expiration Date"), it will not and
it will cause certain affiliates not to (i) acquire, attempt to acquire or make
a proposal to acquire, directly or indirectly, more than 45% (including BACs
acquired through all other means) of the outstanding BACs, (ii) seek to propose
to enter into, directly or indirectly, any merger, consolidation, business
combination, sale or acquisition of assets, liquidation, dissolution or other
similar transaction involving the Partnership, (iii) make, or in any way
participate, directly or indirectly, in any "solicitation" of "proxies" or
"consents" (as such terms are used in the proxy rules of the Commission) to vote
any voting securities of the Partnership, (iv) form, join or otherwise
participate in a "group" (within the meaning of Section 13 (d)(3) of the
Securities and Exchange Act of 1934) with respect to any voting securities of
the Partnership, except those affiliates bound by the Standstill Agreement will
not be deemed to have violated it and formed a "group" solely by acting in
accordance with the Standstill Agreement, (v) disclose in writing to any third
party any intention, plan or arrangement inconsistent with the terms of the
Standstill Agreement, or (vi) loan money to, advise, assist or encourage any
person in connection with any action inconsistent with the terms of the
Standstill Agreement. In addition, Lehigh I agreed that until the Standstill
Expiration Date it will not sell any BACs acquired by it unless the buyer of
such BACs agrees to be bound by the Standstill Agreement; provided, however,
Lehigh I may make transfers in the secondary market to any purchaser which
represents that following such sale it will not own three (j%) percent or more
of the BACs outstanding. By the terms of the Standstill Agreement, Lehigh I also
agreed to vote its BACs in the same manner as a majority of all voting BACs
holders; provided, however, Lehigh I is entitled to vote its BACs as it
determines with regard to any proposal (i) to remove the Related General Partner
as a general partner of the Partnership or (ii) concerning the reduction of any
fees, profits, distributions or allocations for the benefit of the Related
General Partner or its affiliates. The addresses of each of the Partnership,
Lehigh I and the Related General Partner is 625 Madison Avenue, New York, New
York 10022.


                                      -34-
<PAGE>

(3) All of such BACs represent BACs owned directly by Lehigh, I and Lehigh Tax
Credit Partners II, L.L.C. ("Lehigh II") for which the Managing Member serves as
managing member. As of June 23,1998, Lehigh I held 3,410.65 BACs and Lehigh H
held 3,435.65 BACs.

(4) Each such party serves as a director and executive officer of the Managing
Member and owns Member and owns an equity interest therein.

Item 13.  Certain Relationships and Related Transactions.

The Partnership has and will continue to have certain relationships with the
General Partner and its affiliates, as discussed in Item 11 and also Note 8 to
the Financial Statements in Item 8 above, which is incorporated herein by
reference. However, there have been no direct financial transactions between the
Partnership and the directors and officers of the general partner of the General
Partner.


                                      -35-
<PAGE>


                                      PART IV

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

<TABLE>
<CAPTION>
                                                                            Sequential
                                                                               Page
                                                                            ----------

<S>      <C>                                                                   <C>
(a) 1.   Financial Statements

         Independent Auditors' Report                                          14

         Consolidated Balance Sheets at March 31, 1998 and 1997                84

         Consolidated Statements of Operations for the Years Ended
         March 31, 1998, 1997 and 1996                                         85

         Consolidated Statements of Changes in Partners' Capital for
         the Years Ended March 31, 1998, 1997 and 1996                         86

         Consolidated Statements of Cash Flows for the Years Ended
         March 31, 1998, 1997 and 1996                                         87

         Notes to Consolidated Financial Statements                            89

(a) 2.   Consolidated Financial Statement Schedules

         Independent Auditors' Report                                          110

         Schedule I- Condensed Financial Information of Registrant             111

         Schedule III - Real Estate and Accumulated Depreciation               114

(a) 3.   Exhibits

(3A)     Form of Amended and Restated Agreement of Limited Partnership
         of Independence Tax Credit Plus L.P., attached to the
         Prospectus as Exhibit A*

(3B)     Amended and Restated Certificate of Limited Partnership of
         Independence Tax Credit Plus L.P.*

(10A)    Form of Subscription Agreement attached to the Prospectus as
         Exhibit B*

(10B)    Form of Purchase and Sales Agreement pertaining to the
         Partnership's acquisition of Local Partnership Interests*

(10C)    Form of Amended and Restated Agreement of Limited Partnership
         of Local Partnerships*

(21)     Subsidiaries of the Registrant                                        107

(27)     Financial Data Schedule (filed herewith)                              117
</TABLE>


                                      -36-
<PAGE>


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

<TABLE>
<CAPTION>
                                                                            Sequential
                                                                               Page
                                                                            ----------

<S>     <C>                                                                  <C>
         *Incorporated herein as an exhibit by reference to
         exhibits filed with Pre-Effective Amendment No. 1
         to the Independence Tax Credit Plus L.P.
         Registration Statement on Form S-11 (Registration
         No. 33-37704)

(b)      Reports on Form 8-K

         No reports on Form 8-K were filed during the quarter.

</TABLE>

                                      -37-
<PAGE>


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

<TABLE>
<CAPTION>
                                                              Jurisdiction
(c)      Subsidiaries of the Registrant (Exhibit 21)        of  Organization
<S>     <C>                                                      <C>
         Harbor Court Limited Partnership                         NY
         Old Public Limited Partnership                           TN
         Lancaster Terrace Limited Partnership                    OR
         655 North Street Limited Partnership                     LA
         Landreth Venture                                         PA
         Homestead Apartments Associates Ltd.                     FL
         Bethel Villa Associates, L.P.                            DE
         West Diamond Street Associates                           PA
         Susquehanna Partners                                     PA
         Boston Bay Limited Partnership                           MA
         Morrant Bay Limited Partnership                          MA
         Hope Bay Limited Partnership                             MA
         Lares Apartments Limited Partnership                     PR
         Lajas Apartments Limited Partnership                     PR
         Arlington-Rodeo Properties                               CA
         Conifer Bateman Associates                               NY
         Hampden Hall Associates, L.P.                            MO
         Chester Renaissance Associates                           PA
         Homestead Apartments II, LTD.                            FL
         P.S. 157 Associates, L.P.                                NY
         Cloisters Limited Partnership II                         PA
         Creative Choice Homes II, LTD.                           FL
         Milford Crossing Associates L.P.                         DE
         BX-7F Associates, L.P.                                   NY
         Los Angeles Limited Partnership                          PR
         Christine Apartments, L.P.                               NY
         Plainsboro Housing Partners, L.P.                        NJ
         Rolling Green Associates, L.P.                           NY

(d)      Not applicable
</TABLE>

                                      -38-
<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.

                 INDEPENDENCE TAX CREDIT PLUS L.P.
                 ---------------------------------
                           (Registrant)

                     By:  RELATED INDEPENDENCE ASSOCIATES L.P.,
                          its General Partner

                     By:  RELATED INDEPENDENCE ASSOCIATES INC.,
                          a General Partner

Date: June 23, 1998       By: /s/ J. Michael Fried
                              ----------------------------------------
                              J. Michael Fried
                              President, Chief Executive Officer and Director
                              (Principal Executive Officer)

<PAGE>


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:

         
<TABLE>
<CAPTION>
       Signature                          Title                         Date
---------------------     -------------------------------------     ------------
<S>                       <C>                                      <C>
                          President and Chief Executive Officer
/s/ J. Michael Fried      (principal executive officer)
---------------------     and Director of
J. Michael Fried          Related Independence Associates Inc.     June 23, 1998

/s/ Alan P. Hirmes        Senior Vice President
---------------------     (principal financial officer) of
Alan P. Hirmes            Related Independence Associates Inc.     June 23, 1998

/s/ Glenn F. Hopps        Treasurer
---------------------     (principal accounting officer) of
Glenn F. Hopps            Related Independence Associates Inc.     June 23, 1998

/s/ Stephen M. Ross       Director of                         
---------------------     Related Independence Associates Inc.     June 23, 1998
Stephen M. Ross           
</TABLE>

<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To the Partners of
Independence Tax Credit Plus L.P. and Subsidiaries
(A Delaware Limited Partnership)

In connection with our audits of the consolidated financial statements of
Independence Tax Credit Plus L.P. and Subsidiaries included in the Form 10-K as
presented in our opinion dated June 4, 1998 on page 14, and based on the
reports of other auditors, we have also audited supporting Schedule I for the
1997, 1996 and 1995 Fiscal Years and Schedule III at March 31, 1998. In our
opinion, and based upon the reports of the other auditors, these consolidated
schedules present fairly, when read in conjunction with the related consolidated
financial statements, the financial data required to be set forth therein.

/s/ Trien Rosenberg Rosenberg
    Weinberg Ciullo & Fazzari LLP

Trien Rosenberg Rosenberg
Weinberg Ciullo & Fazzari LLP

New York, New York
June 4, 1998

<PAGE>


                        INDEPENDENCE TAX CREDIT PLUS L.P.
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
              (NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)


                            CONDENSED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                              March 31,
                                                   -----------------------------
                                                       1998              1997
                                                   -----------       -----------
<S>                                                <C>               <C>        
Cash and cash equivalents                          $   119,445       $   180,902
Investment in subsidiary partnerships               46,373,608        50,332,231
Cash held in escrow                                    359,700           987,136
Due from subsidiary partnership                        761,045           752,907
Other assets                                           131,386           131,386
                                                   -----------       -----------

  Total assets                                     $47,745,184       $52,384,562
                                                   ===========       ===========


                        LIABILITIES AND PARTNERS' CAPITAL

Other liabilities                                  $     2,303       $     3,090
Due to general partners and affiliates                 642,506           540,394
                                                   -----------       -----------

  Total liabilities                                    644,809           543,484

Partners' capital*                                  47,100,375        51,841,078
                                                   -----------       -----------

  Total liabilities and partners' capital          $47,745,184       $52,384,562
                                                   ===========       ===========
</TABLE>

Investments in subsidiary partnerships are recorded in accordance with the
equity method of accounting, wherein the investments are not reduced below zero.

*Condensed partners' capital includes $800,875 and $836,470 of related party
income at March 31, 1998 and 1997, respectively.

<PAGE>


                        INDEPENDENCE TAX CREDIT PLUS L.P.
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
              (NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)

                       CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                              Year Ended March 31,
                                  ---------------------------------------------
                                      1998             1997             1996
                                  -----------      -----------      -----------
<S>                               <C>              <C>              <C>        
Revenues                          $    12,468      $    13,679      $    12,533
                                  -----------      -----------      -----------

Expenses

  Administrative and management       113,897          143,070          144,290
  Administrative and
    management-related parties        195,804          172,413          770,077
  Amortization                              0            3,333           10,000
                                  -----------      -----------      -----------

  Total expenses                      309,701          318,816          924,367
                                  -----------      -----------      -----------

Loss from operations                 (297,233)        (305,137)        (911,834)

Equity in loss of
  subsidiary partnerships          (4,443,470)      (4,960,578)      (4,006,055)
                                  -----------      -----------      -----------

Net loss                          $(4,740,703)     $(5,265,715)     $(4,917,889)
                                  ===========      ===========      ===========
</TABLE>

<PAGE>


                        INDEPENDENCE TAX CREDIT PLUS L.P.
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
              (NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)

                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                  Year Ended March 31,
                                        ---------------------------------------
                                            1998          1997          1996
                                        -----------   -----------   -----------
<S>                                     <C>           <C>           <C>         
Cash flows from operating activities:

Net loss                                $(4,740,703)  $(5,265,715)  $(4,917,889)
                                        -----------   -----------   -----------

Adjustments to reconcile net loss
  to net cash used in operating
  activities:

  Equity in loss of subsidiary
    partnerships                          4,443,470     4,960,578     4,006,055
  (Decrease) increase in other
    liabilities                                (787)         (224)        1,023
  Increase in due from general
    partner and affiliates                  102,112       149,461       670,778
                                        -----------   -----------   -----------

  Total adjustments                       4,544,795     5,109,815     4,677,856
                                        -----------   -----------   -----------

  Net cash used in operating activities    (195,908)     (155,900)     (240,033)
                                        -----------   -----------   -----------

Cash flows from investing activities:

  Decrease in cash held in
    escrow-purchase price payments          627,436       322,393       346,250
  Decrease in other assets                        0         3,333        10,000
  Investment in subsidiary partnerships    (627,436)     (322,393)     (346,250)
  Distributions from subsidiaries           142,589        52,019        58,592
  (Increase) decrease in due
    from subsidiary partnership              (8,138)      (83,466)       30,000
                                        -----------   -----------   -----------

  Net cash provided by (used in)
   investing activities                     134,451       (28,114)       98,592
                                        -----------   -----------   -----------

Net decrease in cash and cash
  equivalents                               (61,457)     (184,014)     (141,441)

Cash and cash equivalents,
  beginning of year                         180,902       364,916       506,357
                                        -----------   -----------   -----------

Cash and cash equivalents, end of year  $   119,445   $   180,902   $   364,916
                                        ===========   ===========   ===========
</TABLE>

<PAGE>


                        INDEPENDENCE TAX CREDIT PLUS L.P.

                                AND SUBSIDIARIES

                                  SCHEDULE III

                    REAL ESTATE AND ACCUMULATED DEPRECIATION

                   Partnership Property Pledged as Collateral

                                 MARCH 31, 1998

<TABLE>
<CAPTION>
                                                          Initial Cost            Cost                Gross Amount at which         
                                                          to Partnership       Capitalized          Carried At Close of Period      
                                                     ------------------------   Subsequent    ------------------------------------- 
                                                                Buildings and  Acquisition:              Buildings and              
            Description               Encumbrances     Land      Improvements  Improvements     Land      Improvements     Total    
                                      ------------   --------   -------------  ------------   --------   -------------   ---------- 
<S>                                    <C>           <C>           <C>            <C>             <C>         <C>            <C>    
Apartment Complexes

Harbor Court Limited Partnership
  Staten Island, NY                    $        0    $137,450    $1,007,966    $    69,289    $140,813     $1,073,892    $1,214,705 
Old Public Limited Partnership                                                                                          
  Lawrenceburg, TN                        499,355      10,000     1,713,310         74,504      13,640      1,784,174     1,797,814 
Lancaster Terrace Limited Partnership                                                                                   
  Salem, OR                             1,694,369     161,269     3,679,601         39,075     163,105      3,716,840     3,879,945 
655 North Street Limited Partnership                                                                                    
  Baton Rouge, LA                       4,898,500     125,500     3,040,980      5,607,596     127,751      8,646,325     8,774,076 
Landreth Venture                                                                                                        
  Philadelphia, PA                      3,398,422       1,761     5,903,337         29,843       3,645      5,931,296     5,934,941 
Homestead Apartments Associates Ltd.                                                                                    
  Homestead, FL                         3,560,193     329,402             0      5,916,800     331,468      5,914,734     6,246,202 
Bethel Villa Associates, L.P.                                                                                           
  Wilmington, DE                        6,270,652     270,000     5,969,354      3,066,962     275,099      9,031,217     9,306,316 
West Diamond Street Associates (a)                                                                                      
  Philadelphia, PA                      1,576,000      30,829     3,444,649     (1,051,741)     32,414      2,391,323     2,423,737 
Susquehanna Partners                                                                                                    
  Philadelphia, PA                      1,902,874      16,000             0      3,975,693      17,585      3,974,108     3,991,693 
Boston Bay Limited Partnership                                                                                          
  Boston, MA                            3,203,117     440,000     4,143,758        658,472     441,585      4,800,645     5,242,230 
Morrant Bay Limited Partnership                                                                                         
  Boston, MA                            4,823,502     650,000     5,522,250        999,896     651,585      6,520,561     7,172,146 
Hope Bay Limited Partnership                                                                                            
  Boston, MA                            1,464,769     225,000     1,435,185        527,915     226,585      1,961,515     2,188,100 
Lares Apartments Limited Partnership                                                                                    
  Lares, PR                             4,495,916     137,000             0      5,474,570     151,585      5,459,985     5,611,570 
Lajas Apartments Limited Partnership                                                                                    
  Lajas, PR                             4,145,597     110,090     4,952,929         77,342     111,675      5,028,686     5,140,361 
Arlington-Rodeo Properties                                                                                              
  Los Angeles, CA                       3,543,123     624,052             0      5,022,966     625,637      5,021,381     5,647,018 
Conifer Bateman Associates                                                                                              
  Lowville, NY                          1,049,704      15,000     2,525,729         53,225      16,585      2,577,369     2,593,954 
Hampden Hall Associates, L.P.                                                                                           
  St. Louis, MO                         3,110,000           0             0      7,828,912       1,585      7,827,327     7,828,912 
Chester Renaissance Associates                                                                                          
  Chester, PA                             853,000      33,667       168,333      1,773,283      42,153      1,933,130     1,975,283 
Homestead Apartments II, LTD                                                                                            
  Homestead, FL                         3,496,837     338,966             0      5,254,556     340,551      5,252,971     5,593,522 
                                                                                                                      
<CAPTION>
                                                                                 Life on which    
                                                                                Depreciation in  
                                                         Year of                Latest Income
                                         Accumulated   Construction/   Date      Statement is
            Description                  Depreciation   Renovation   Acquired     Computed*
                                         ------------  ------------  ---------  --------------
<S>                                       <C>              <C>       <C>          <C>       
Apartment Complexes

Harbor Court Limited Partnership
  Staten Island, NY                       $   230,063      1991      Dec. 1991    27.5 years
Old Public Limited Partnership
  Lawrenceburg, TN                            383,802      1991      Dec. 1991    27.5 years
Lancaster Terrace Limited Partnership
  Salem, OR                                   944,071      1992      Feb. 1992    15-27.5 years
655 North Street Limited Partnership
  Baton Rouge, LA                           1,634,122      1992      Mar. 1992    27.5 years
Landreth Venture
  Philadelphia, PA                            813,355      1992      Mar. 1992    40 years
Homestead Apartments Associates Ltd. 
  Homestead, FL                               744,194      1992      Mar. 1992    40 years
Bethel Villa Associates, L.P. 
  Wilmington, DE                            1,757,523      1992      Apr. 1992    27.5 years
West Diamond Street Associates (a)
  Philadelphia, PA                              7,055      1992      May 1992     40 years
Susquehanna Partners
  Philadelphia, PA                            497,173      1992      May 1992     20-40 years
Boston Bay Limited Partnership
  Boston, MA                                1,035,528      1991      Aug. 1992    27.5 years
Morrant Bay Limited Partnership
  Boston, MA                                1,426,372      1991      Aug. 1992    27.5 years
Hope Bay Limited Partnership
  Boston, MA                                  424,017      1991      Aug. 1992    27.5 years
Lares Apartments Limited Partnership
  Lares, PR                                   810,204      1992      Aug. 1992    40 years
Lajas Apartments Limited Partnership
  Lajas, PR                                   733,208      1992      Aug. 1992    40 years
Arlington-Rodeo Properties
  Los Angeles, CA                             790,422      1992      Aug. 1992    27.5 years
Conifer Bateman Associates
  Lowville, NY                                524,434      1990      Aug. 1992    15-27.5 years
Hampden Hall Associates, L.P. 
  St. Louis, MO                             1,204,739      1992      Sep. 1992    27.5 years
Chester Renaissance Associates
  Chester, PA                                 219,401      1992      Sep. 1992    40 years
Homestead Apartments II, LTD
  Homestead, FL                               589,457      1992      Oct. 1992    40 years
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                        Initial Cost             Cost                  Gross Amount at which        
                                                        to Partnership        Capitalized            Carried At Close of Period     
                                    ------------   ------------------------    Subsequent    ---------------------------------------
                                                               Buildings and  Acquisition:               Buildings and              
            Description             Encumbrances      Land      Improvements  Improvements      Land      Improvements     Total    
                                    ------------   ----------  -------------  ------------   ----------  ------------- -------------
<S>                                  <C>           <C>           <C>           <C>           <C>         <C>           <C>         
Apartment Complexes                                            
                                                               
P.S. 157 Associates, L.P.                                      
  New York, NY                                 0       36,500      9,350,642        76,382       38,085     9,425,439     9,463,524
Cloisters Limited Partnership II                               
  Philadelphia, PA                             0       35,160              0     9,480,501       36,745     9,478,916     9,515,661
Creative Choice Homes II, LTD                                  
  Opa-Locka, FL                       11,728,710            0              0    21,433,650      574,637    20,859,013    21,433,650
Milford Crossing Associates L.P. (b)                           
  Milford, DE                          2,590,909      203,006              0     4,374,192      115,519     4,461,679     4,577,198
BX-7F Associates, L.P.                                         
  Bronx, NY                            3,763,755            4      5,705,064        51,963        2,178     5,754,853     5,757,031
Los Angeles Limited Partnership                                
  Rio Piedras, PR                      3,682,947      201,210              0     6,599,292      203,384     6,597,118     6,800,502
Christine Apartments, L.P.                                     
  Buffalo, NY                          1,245,000       10,000      2,351,072        69,551       12,174     2,418,449     2,430,623
Plainsboro Housing Partners, L.P.                              
  Plainsboro, NJ                       4,079,226      800,000              0     8,851,487      802,174     8,849,313     9,651,487
Rolling Green Associates, L.P.                                 
  Syracuse, NY                        16,077,500      180,000     19,583,101       337,156      182,174    19,918,083    20,100,257
                                     -----------   ----------    -----------   -----------   ----------  ------------  ------------
                                     $97,153,977   $5,121,866    $80,497,260   $96,673,332   $5,682,116  $176,610,342  $182,292,458
                                     ===========   ==========    ===========   ===========   ==========  ============  ============
                                                              
<CAPTION>
                                                                                 Life on which    
                                                                                Depreciation in  
                                                         Year of                Latest Income
                                         Accumulated   Construction/   Date      Statement is
            Description                  Depreciation   Renovation   Acquired     Computed*
                                         ------------  ------------  ---------  --------------
<S>                                       <C>              <C>       <C>          <C>       
Apartment Complexes

P.S. 157 Associates, L.P. 
  New York, NY                              1,217,644      1992      Nov 1992     40 years
Cloisters Limited Partnership II
  Philadelphia, PA                          1,117,415      1992      Nov 1992     40 years
Creative Choice Homes II, LTD
  Opa-Locka, FL                             2,339,920      1988      Dec 1992     40 years
Milford Crossing Associates L.P. (b)
  Milford, DE                                 704,166      1992      Dec. 1992    27.5 years
BX-7F Associates, L.P. 
  Bronx, NY                                   747,879      1993      Jan. 1993    40 years
Los Angeles Limited Partnership
  Rio Piedras, PR                             686,711      1994      Apr. 1993    40 years
Christine Apartments, L.P. 
  Buffalo, NY                                 385,596      1993      June 1993    27.5 years
Plainsboro Housing Partners, L.P. 
  Plainsboro, NJ                            1,159,003      1994      July 1993    27.5 years
Rolling Green Associates, L.P. 
  Syracuse, NY                              3,633,699      1992      Oct. 1993    27.5 years
                                          -----------
                                          $26,761,173      
                                          ===========      
</TABLE>

* Personal property is depreciated over the estimated useful life ranging from 3
to 10 years.

(a) Included in Gross Amount of Buildings and Improvements at Close of Period
and accumulated depreciation is a loss on impairment of assets in the amount of
$1,098,853 and $598,853, respectively. The total loss is also included in Costs
Capitalized Subsequent to Acquisition. See Note 4 in Item 8. Financial
Statements and Supplementary Data. 

(b) During the year ended December 31, 1997, the Partnership sold a parcel of
land for $210,000 to an entity with a member who is also the general partner of
the Partnership.

<PAGE>


                        INDEPENDENCE TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                 MARCH 31, 1998

<TABLE>
<CAPTION>
                                               Cost of Property and Equipment                     Accumulated Depreciation
                                        ---------------------------------------------    ------------------------------------------
                                                                              Year Ended March 31,
                                        -------------------------------------------------------------------------------------------
                                             1998            1997             1996            1998           1997           1996
                                        ------------     ------------    ------------     -----------     -----------   -----------
<S>                                     <C>              <C>             <C>              <C>             <C>           <C>         
Balance at beginning of period          $183,169,973     $182,915,946    $182,534,521     $21,272,068     $15,437,715   $ 9,648,615
                                                                        
Additions during period:                                                
                                                                        
  Improvements                               316,410          254,027         902,196
  Depreciation expense                                                                      6,087,958       5,834,353     5,858,536
Deductions during period:                                               
                                                                        
  Dispositions                               (95,072)               0               0               0               0             0
  Loss on impairment                      (1,098,853)               0               0        (598,853)              0             0
  Adjustments                                      0                0        (520,771)              0               0       (69,436)
                                        ------------     ------------    ------------     -----------     -----------   -----------
                                                                        
Balance at close of period              $182,292,458     $183,169,973    $182,915,946     $26,761,173     $21,272,068   $15,437,715
                                        ============     ============    ============     ===========     ===========   ===========
</TABLE>

At the time the Local Partnerships were acquired by Independence Tax Credit Plus
L.P., the entire purchase price paid by Independence Tax Credit Plus L.P. was
pushed down to the local partnerships as property and equipment with an
offsetting credit to capital. Since the projects were in the construction phase
at the time of acquisition, the capital accounts were insignificant at the time
of purchase. Therefore, there are no material differences between the original
cost basis for tax and GAAP.