FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

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

For fiscal year ended December 31, 2001

Commission File Number 33-19316


QUALIFIED HOUSING PARTNERS LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in its Charter)


State of Formation:  North Carolina
I.R.S. Employee Identification No.:  56-1589469

Address of Principal Executive Offices
c/o Frederick Investment Corporation
4700 Homewood Court, Suite 220
Raleigh, North Carolina  27609

Registrant's Telephone Number, Including Area Code
(919) 787-4243

Securities registered pursuant to Section 12(b) of the Act:
     Units of Limited Partnership Interests.
Securities registered pursuant to Section 12(g) of the Act:
     None.

Indicate by a 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 such shorter period the registrant has
been required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.  Yes  X               No ___

As of December 31, 2001, there were 8,673 units of limited partnership
interests in registrant outstanding, $1,000 per unit, and the aggregate value
of such units was $8,673,000.  Of such units, 8,673 having an aggregate value
of $8,673,000, were held by limited partners deemed by the registrant to be
non-affiliates.




PART I

Item 1.  Business

The Partnership

The Partnership is a North Carolina limited partnership formed in December,
1987, and will end on December 31, 2038, unless terminated sooner under the
provisions of its Amended and Restated Agreement of Limited Partnership (the
"Partnership Agreement").  A copy of the Partnership Agreement is Exhibit A to
the Prospectus that is part of the Registration Statement on Form S-11, Number
33-19316 and effective May 20, 1988, the final form of which was filed on May
20, 1988 pursuant to Rule 424(b).  The Partnership was formed to invest in
multi-family rental housing properties (the "Properties") qualifying for Low
Income Housing Tax Credits and, in certain circumstances, the Rehabilitation
Tax Credit, which may be applied against the federal income tax liabilities of
the Partnership's limited partners (the "Limited Partners").  Each of the
Properties is owned and operated by a limited partnership (an "Operating
Partnership") of which the Partnership is a limited partner.  The Partnership
currently has no employees.

General Partners and Affiliates

The General Partners of the Partnership are Frederick Investment Corporation,
a North Carolina corporation (the "Managing General Partner"), and George F.
Marshall (the "Class A General Partner").  The business address of the General
Partners is the same as that of the Partnership.

Management of the Partnership

The Managing General Partner has authority for the overall management and
control of the Partnership and has responsibility for supervising the
Partnership's selection of, and investment in, Operating Partnerships.
Generally, subject to applicable governmental approvals, the Managing General
Partner is a general partner of each Operating Partnership, but management of
the Operating Partnerships is vested in the other general partners of the
Operating Partnerships (the "Local General Partners").  The Partnership has
limited voting rights with respect to each Operating Partnership and the
Managing General Partner may take management control of an Operating
Partnership under certain circumstances.

Partnership Objectives

In making investments, the Partnerships' primary objectives are to (i)
preserve and protect the Limited Partners' capital; (ii) generate tax benefits
primarily consisting of Tax Credits that the Limited Partners may use to
offset tax liabilities on income from other sources, and (iii) recognize
appreciation in the value of the Partnership's investments through cash
distributions resulting from sales or refinancings of the Partnership's
properties.

An objective of the Partnership is to invest in Operating Partnerships with a
view to generating Tax Credits and Cash Available for Distribution annually
averaging 14% to 16% of each Limited Partner's investment over ten of the
first twelve years of the Partnership, assuming, among other things, (a) the
applicability of current tax laws and regulations and the continuation of
current interpretations of such laws and regulations by the courts, (b) the
Properties of such Operating Partnerships are occupied at least 80% by
qualifying tenants beginning in the period from 1988 through 1989 and
throughout the succeeding 15 years, (c) the inclusion of all construction and
development related costs (excluding land acquisition costs) and of certain
fees and expenses in each Operating Partnership's tax basis in its Property
for purposes of calculating Tax Credits, and (d) interests in Operating
Partnerships can be acquired for amounts varying between 17% and 23% of the
permanent mortgage financing anticipated to be incurred by such Operating
Partnerships.  Low Income Housing Tax Credits are not available for a Property
until the Property has been placed in service and its apartment units are
occupied by tenants qualifying under applicable tax regulations (the
"Qualifying Tenants").

The Offering

The Partnership's public offering of up to 25,000 units of limited partnership
interests (the "Units") at $1,000 per Unit (the "Offering") commenced May 20,
1988 and terminated on August 25, 1989.  The Partnership sold 3,123 and 5,550
units during 1989 and 1988, respectively.  Net of offering costs aggregating
$879,000, capital of $7,794,000 was generated from the public offering of
limited partnership Units.

Partnership Business

The Partnership invested the net proceeds of the Offering after payment of
offering costs and certain fees and expenses in Operating Partnerships owning
existing Properties, or Properties being constructed or rehabilitated, that
are eligible for Tax Credits.  Each of these Properties receives direct
government assistance (such as rental assistance and mortgage subsidies under
various federal, state or local programs).  The Operating Partnerships are
responsible for construction, rehabilitation, and management of the
Properties.  The Properties are located primarily in the Mid-Atlantic and
Southeastern regions of the United States.

By investing its funds in Operating Partnerships owning Properties, the
Partnership is providing its Limited Partners with Tax Credits that, subject
to certain limitations, may be used to reduce federal income tax liability
over a ten year period.  Additional investment return, if any, will consist of
small cash distributions on an annual basis and proceeds realized on
disposition of one or more of the Properties or one or more of the
Partnership's interests in Operating Partnerships.  Furthermore, Limited
Partners with sufficient passive income may utilize passive losses that may be
generated by the Partnership's investments to reduce such passive income.

As of December 31, 2001, the Partnership had invested in twenty-seven
Operating Partnerships.  The Partnership does not intend to invest in any more
Operating Partnerships.



Item 2.  Properties

As of December 31, 2001, Qualified Housing Partners Limited Partnership had
invested in twenty-seven Operating Partnerships owning Properties that qualify
for the Low Income Housing Tax Credit.

A summary of those investments is as follows:

Cape Fear Apartments
Lillington, NC
24 units
Placed in service in January, 1988
Acquired by QHP in November, 1988
QHP contributed $164,350
Total Acquisition Cost of $1,016,932

Myrtle Grove
Myrtle, MS
24 unitsPlaced in service in November, 1988
Acquired by QHP in November, 1988
QHP contributed $204,500
Total Acquisition Cost of $971,648

Holly Estates
Holly Springs, MS
24 units
Placed in service in November, 1988
Acquired by QHP in November, 1988
QHP contributed $190,140
Total Acquisition Cost of $954,947

Parkland Apartments
Eden, NC
40 units
Placed in service in June, 1988
Acquired by QHP in November, 1988
QHP contributed $335,504
Total Acquisition Cost of $1,731,922

Southgate Apartments
Reidsville, NC
32 units
Placed in service in June, 1987
Acquired by QHP in November, 1988
QHP contributed $188,828
Total Acquisition Cost of $1,368,146

Glen Cove Apartments
Dumas, AR
20 units
Placed in service in March, 1988
Acquired by QHP in November, 1988
QHP contributed $110,687
Total Acquisition Cost of $739,967

Tuscarora Acres
Port Royal, PA
17 units
Placed in service in July, 1988
Acquired by QHP in November, 1988
QHP contributed $132,639
Total Acquisition Cost of $840,226

Forest Oaks Apartments
Albemarle, NC
32 units
Placed in service in April, 1989
Acquired by QHP in November, 1988
QHP contributed $295,465
Total Acquisition Cost of $1,511,920

Fayette Acres
McAlisterville, PA
10 units
Placed in service in November, 1988
Acquired by QHP in December, 1988
QHP contributed $84,456
Total Acquisition Cost of $497,130

Silverleaf Apartments
Haskell, OK
24 units
Placed in service in November, 1988
Acquired by QHP in January, 1989
QHP contributed $128,515
Total Acquisition Cost of $756,331

Carthage Heights II
Carthage, TX
40 units
Placed in service in September, 1988
Acquired by QHP in January, 1989
QHP contributed $184,400
Total Acquisition Cost of $1,131,195

North Street Manor
Mifflintown, PA
30 units
Placed in service in June, 1989
Acquired by QHP in December, 1988
QHP contributed $272,059
Total Acquisition Cost of $1,510,791



Baldwyn Estates
Baldwyn, MS
24 units
Placed in service in April, 1988
Acquired by QHP in January, 1989
QHP contributed $154,605
Total Acquisition Cost of $877,380

Gainesville Gardens
Gainesville, TX
40 units
Placed in service in February, 1989
Acquired by QHP in February, 1989
QHP contributed $176,200
Total Acquisition Cost of $1,104,265

Rayne Villas
Rayne, LA
32 units
Placed in service in February, 1989
Acquired by QHP in February, 1989
QHP contributed $218,079
Total Acquisition Cost of $1,327,135

Mountain View Villas
Mountain View, AR
27 units
Placed in service in December, 1988
Acquired by QHP in February, 1989
QHP contributed $188,761
Total Acquisition Cost of $1,098,968

Royal Hills, Phase II
Front Royal, VA
42 units
Placed in service in April, 1989
Acquired by QHP in March, 1989
QHP contributed $283,147
Total Acquisition Cost of $1,792,813

Dimmitt Senior Citizens Housing
Dimmitt, TX
24 units
Placed in service in May, 1989
Acquired by QHP in March, 1989
QHP contributed $131,229
Total Acquisition Cost of $748,689



Timber Ridge Apartments
Rockingham, NC
32 units
Placed in service in November, 1989
Acquired by QHP in April, 1989
QHP contributed $275,750
Total Acquisition Cost of $1,496,399

Village Green Apartments
Decatur, IN
30 units
Placed in service in November, 1989
Acquired by QHP in November, 1989
QHP contributed $169,600
Total Acquisition Cost of $1,108,658

Cedar Creek Apartments, Phase II
Middletown, VA
42 units
Placed in service in February, 1989
Acquired by QHP in February, 1989
QHP contributed $318,146
Total Acquisition Cost of $1,804,154

Booneville Manor
Booneville, MS
24 units
Placed in service in June, 1989
Acquired by QHP in March, 1989
QHP contributed $152,375
Total Acquisition Cost of $861,843

Northwood Apartments
Irvine, KY
24 units
Placed in service in May, 1989
Acquired by QHP in April, 1989
QHP contributed $161,070
Total Acquisition Cost of $972,314

Bloomfield Senior Apartments
Bloomfield, IN
24 units
Placed in service in May, 1989
Acquired by QHP in September, 1989
QHP contributed $141,300
Total Acquisition Cost of $857,287



Tschudi Court
Amory, MS
48 units
Placed in service in December, 1989
Acquired by QHP in December, 1989
QHP contributed $296,063
Total Acquisition Cost of $1,757,150

Woodstock Village, Phase II
Woodstock, VA
42 units
Placed in service in April, 1989
Acquired by QHP in March, 1989
QHP contributed $319,254
Total Acquisition Cost of $1,829,220

Litton Apartments
Nashville, TN
162 units
Placed in service in May, 1989
Acquired by QHP in August, 1989
QHP contributed $1,642,846
Total Acquisition Cost of $6,177,010


Item 3.  Legal Proceedings

None.

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

None.


PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholders'
Matters

a.  Market Information

The Partnership Agreement provides that no Unit may be sold or otherwise
transferred on or through an established securities market, secondary market,
or the substantial equivalent of a secondary market, within the meaning of
Section 7704 of the Internal Revenue Code, and otherwise provides substantial
restrictions upon transferability of a Unit.  Thus, there is no market for the
Units.

b.  Holders

As of December 31, 2001, the Partnership had 642 Limited Partners and two
General Partners.



c.  Dividends

The Partnership does not pay dividends.  Generally, Profits, Losses and Tax
Credits of the Partnership (as defined in the Partnership Agreement) are
allocated 99% to the Limited Partners and 1% to the General Partners.  Cash
Available for Distribution (as defined in the Partnership Agreement) is
generally distributed according to the same percentages.


Item 6.  Selected Financial Data

At December 31, 2001, 2000, 1999, 1998 and 1997 and for the years then ended:

CONSOLIDATED FINANCIAL CONDITION

                      2001        2000        1999        1998        1997

Total Assets     $28,855,351 $29,432,085 $30,069,507 $30,941,141 $31,856,502

Total
Liabilities      $26,249,559 $26,286,077 $26,604,161 $26,902,378 $27,233,947

Partners' Capital
General Partners     (66,634)    (61,774)     (58,622)   (52,938)    (46,988)
Limited Partners    $966,811  $1,447,971  $1,760,066  $2,322,799  $2,911,868

CONSOLIDATED RESULTS OF OPERATIONS

Rental Income     $3,899,681  $3,849,364  $3,728,140  $3,665,154  $3,693,001

Rental Expenses    4,271,165   4,044,435   4,179,773   4,135,607   4,189,539

Loss from Rental
   Activities       (371,484)   (195,071)   (451,633)   (470,453)   (496,538)

Interest Income          493         374         414         599         242

Other Expenses      (118,781)   (122,520)   (121,758)   (129,917)   (123,171)

Minority Interests
   In Losses of
   Subsidary Operating
   Partnerships        3,752       1,970       4,560       4,752       5,019

Net Loss           ($486,020)  ($315,247)  ($568,417)  ($595,019)  ($614,448)

NET LOSS PER LIMITED
   PARTNERSHIP UNIT  ($55.48)    ($35.98)    ($64.88)    ($67.92)    ($70.14)





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


LIQUIDITY AND CAPITAL RESOURCES

Net of the Subsidiary Operating Partnerships, QHP held approximately $5,500 in
cash and liquid investments at December 31, 2001.  These assets will be held
as working capital.  The only source of cash for QHP is annual cash
distributions from the Subsidiary Operating Partnerships.  Anticipated
receipts for 2002 total approximately $65,000.  Administrative expenses of QHP
other than the Partnership Management Fee are expected to total $35,000 in
2002. The annual Partnership Management Fee equals $84,562.   The General
Partners, or one of their affiliates, will either defer a portion of their
Partnership Management Fee or advance the Partnership sufficient funds to
cover the shortfall in 2002.  If advanced, interest will accrue at the prime
rate charged from time to time at First Union National Bank of North Carolina.
The loan plus interest will be repayable within one year of the advance.  In
previous years, the General Partners have deferred a portion of their fees.
The balance owed as of December 31, 2001 is $283,926.

Of the 27 Operating Partnerships, 14 distributed cash to QHP during 2001
totaling $66,000.  QHP utilized its working capital to pay $32,000 of the
Partnership Management Fee and to pay all other expenses of the Partnership.

RESULTS OF OPERATIONS

Income for 2001 increased slightly as a result of rent increases received by
several of the properties. Maintenance expenses continue to increase as the
properties age.  Large maintenance items include painting, re-carpeting,
heating and air conditioning repairs, new cabinetry, and security.  Real
estate tax expense for 2001 was significantly higher than last year because of
a large write-off in 2000.   The write-off resulted from taxes that were never
billed because of a jurisdictional dispute between municipalities.  All other
variances were a result of normal business fluctuations.  Occupancy of the 934
apartment units at December 31, 2001, decreased by 2% from a total of 856
units on December 31, 2000 to 848 units one year later.  Consistent with 2000,
the weighted average occupancy rate for 2001 was approximately 92%.  At
December 31, 2001, seven (7) properties had average occupancies of less than
90%, compared to ten (10) in 2000. One property, Southgate Apartments, with a
history of vacancy problems and no governmental subsidy was able to obtain
rental assistance for 30 of its 32 units.  In addition, it is also undergoing
a rehab funded by a combination of general partner contributions and a
subsequent loan from Rural Development.  The improvements to the property
should be completed in the first part of 2002. A 24-unit property, located in
Dimmit, Texas representing approximately 2.5% of QHP's assets, continues to
suffer from increasingly lower occupancy.  As the supply of subsidized housing
in the area continues to exceed demand, average occupancy has dropped annually
from a high of 87.5% in 1997 to an all-time low of 63% in 2001.  Management
requested a large rent increase to help offset the vacancy loss.  Rural
Development granted an increase, but in a lesser amount.  As a result,
management did not have sufficient funds to cover the property taxes,
therefore utilized a portion of the property's replacement reserve.  Because
the property paid its taxes in this manner for the past three years, the
replacement reserve will be fully depleted after the current tax payment.
Management continues to discuss this property's difficulties with Rural
Development in an effort to find a solution.

TAX CREDIT

One of the Partnership's primary investment objectives has been to generate
tax benefits through Low Income Housing Tax Credits. The Tax Credits were
available over a ten-year period beginning in the year the properties were
placed in service, or at the option of QHP, one year later.  The ten-year
credit period for all 27 properties expired by early 2000. However, pursuant
to IRS Code Section 42, a small number of apartment units are generating tax
credits over a fifteen-year period rather than ten years.  This will produce
an insignificant amount of tax credits through 2003.

FUTURE OUTLOOK

It is unlikely that the properties owned by the Subsidiary Operating
Partnerships will be sold in the foreseeable future. Although the ten-year tax
credit period has expired, the Subsidiary Operating Partnerships are required
to maintain the properties as tax credit qualified rentals for 15 years
(the "Compliance Period").  If the properties are sold during the Compliance
Period, the partners in QHP may be subject to recapture.  Future sale of one
or all of the 27 properties relies on factors such as the economy, local real
estate market conditions and tax laws at the time.  Because most of the
properties are located in small, rural communities, the most likely exit
strategy would involve a sale to a tax-motivated buyer.  Whether a tax program
will exist after the Compliance Period that will allow a buyer and seller to
benefit is uncertain.

IMPACT OF INFLATION

The effects of inflation and changes in prices on the Partnership's operating
results have not been significant.  Future inflation will likely cause
operating expenses of the Subsidiary Operating Partnerships to increase, but
Management believes that any such increases will be offset by increases in
rental revenues.  Continued inflation may also cause appreciation in the value
of the Subsidiary Operating Partnerships' rental properties over time as
rental rates and replacement costs increase.

FORWARD-LOOKING INFORMATION

This Annual Report to partners contains certain forward-looking statements
consisting of estimates and assumptions with respect to cash distributions
from the Subsidiary Operating Partnerships, administrative and other expenses
and other business of QHP that are subject to various factors which could
cause actual results to differ materially from these estimates and
assumptions.   Factors that could influence these estimates and assumptions
primarily include changes in the multi-family rental housing market in the
local markets in which the Subsidiary Operating Partnerships operate.



Item 8.	Financial Statements and Supplementary Information

CONSOLIDATED BALANCE SHEETS
December 31, 2001 and 2000

ASSETS                                                2001        2000

RENTAL PROPERTIES
Land                                            $ 1,326,402  $ 1,326,402
Buildings                                        34,375,952   34,374,557
Furniture and Fixtures                            2,054,878    2,074,335
Construction in Progress                            209,471          --
                                                 37,966,703   37,775,294
Accumulated depreciation                        (11,740,067) (10,931,621)

                                                  26,226,636    26,843,673

CASH                                                 327,416       360,620

OTHER ASSETS                                       2,301,299     2,227,792

                                                 $28,855,351   $29,432,085

LIABILITIES AND PARTNER'S CAPITAL

LIABILITIES APPLICABLE TO RENTAL PROPERTIES      $25,038,280   $25,204,311

OTHER LIABILITIES                                  1,211,279     1,081,766

   TOTAL LIABILITIES                              26,249,559    26,286,077

MINORITY INTEREST IN SUBSIDIARY
OPERATING PARTNERSHIPS                            1,705,615     1,759,811

PARTNERS' CAPITAL                                    900,177     1,386,197

                                                 $28,855,351   $29,432,085

*See accompanying notes.


CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
Years Ended December 31, 2001, 2000 and 1999

                                             2001        2000        1999

RENTAL INCOME                            $3,899,681  $3,849,364  $3,728,140

RENTAL EXPENSES
Interest                                    656,164     701,982     729,345
Depreciation                                891,714     955,896     955,446
Repairs and Maintenance                   1,009,162     850,265     942,704
Utilities                                   371,246     368,870     358,789
Real Estate Taxes                           360,856     243,502     312,435
Management Fees                             445,422     429,020     424,313
Other                                       536,601     494,900     456,741

                                          4,271,165   4,044,435   4,179,773

   LOSS FROM RENTAL ACTIVITIES             (371,484)   (195,071)   (451,633)

OTHER INCOME (EXPENSE)
Interest Income                                 493         374         414
Management Fees                             (84,562)    (84,562)    (84,562)
Administrative Costs                        (34,219)    (37,958)    (37,196)

LOSS BEFORE DEDUCTING MINORITY
INTERESTS IN LOSSES OF
SUBSIDIARY OPERATING PARTNERSHIPS          (489,772)   (317,217)   (572,977)

MINORITY INTERESTS IN LOSSES OF
   SUBSIDIARY OPERATING PARTNERSHIPS          3,752       1,970       4,560

   NET LOSS                               $(486,020)  $(315,247)  $(568,417)

NET LOSS ALLOCATED TO GENERAL PARTNERS    $  (4,860)  $  (3,152)  $  (5,684)
NET LOSS ALLOCATED TO LIMITED PARTNERS     (481,160)   (312,095)   (562,733)

   NET LOSS                               $(486,020)  $(315,247)  $ 568,417)

NET LOSS PER LIMITED PARTNERSHIP UNIT     $  (55.48)  $  (35.98)  $  (64.88)

AVERAGE NUMBER OF
   LIMITED PARTNERSHIP UNITS OUTSTANDING      8,673       8,673       8,673

*See accompanying notes.





CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
Years Ended December 31, 2001, 2002, and 1999

                                          General     Limited
                                          Partners    Partners       Total

PARTNERS' CAPITAL, January 1, 1999       $(52,938)  $ 2,322,799   $2,269,861

   Net Loss                                (5,684)     (562,733)    (568,417)

PARTNERS' CAPITAL, December 31, 1999      (58,622)    1,760,066    1,701,444

   Net Loss                                (3,152)     (312,095)    (315,247)

PARTNERS' CAPITAL, December 31, 2000      (61,774)    1,447,971    1,386,197

   Net Loss                                (4,860)     (481,160)    (486,020)

PARTNERS' CAPTIAL, December 31, 2001     $(66,634)  $   966,811   $  900,177

*See accompanying notes.





CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2001, 2000, and 1999

                                                2001       2000       1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                     $(486,020) $(315,247) $(568,417)

Adjustments to Reconcile Net Loss to Net
   Cash Provided By Operating Activities

      Depreciation                             891,714    955,896    955,446

      Minority Interests in Losses of
        Subsidiary Operating Partnership        (3,752)    (1,970)    (4,560)

      Change in Assets and Liabilities
        Increase in Other Assets               (73,507)  (104,603)       (99)
        Increase in Other Liabilities          105,634     56,941     46,344

        NET CASH PROVIDED BY OPERATING
           ACITIVITES                          434,069    591,017    428,714

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of Investments                            --         --     (72,601)
Redemption of Investments                          --       6,505     70,602
Purchases of Rental Properties                (274,677)  (119,910)   (58,397)

   NET CASH USED BY INVESTING ACTIVITIES      (274,677)  (113,405)   (60,396)

CASH FLOWS FROM FINANCING ACTIVITES

Net Cash Contribution from Minority
   Investors                                    23,879        --         --
Net Cash Distribution from Minority
   Investors                                   (50,444)    (2,121)      (440)
Proceeds From Long-Term Borrowing              246,186        --         --
Principal Payments to Long-Term
   Borrowings                                 (412,217)  (375,025)  (344,561)

NET CASH USED BY FINANCING ACTIVITIES         (192,596)  (377,146)  (345,001)

NET INCREASE (DECREASE) IN CASH                (33,204)   100,466     23,317

     CASH, BEGINNING                           360,620    260,154    236,837
     CASH, ENDING                            $ 327,416  $ 360,620  $ 260,154

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash Paid During the Year for Interest       $ 660,749  $ 699,667  $ 731,438

*See accompanying notes.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2001, 2000 and 1999

Note A   Organization

Qualified Housing Partners Limited Partnership ("QHP" or the "Partnership")
was formed under the laws of the State of North Carolina on December 22, 1987.
One unit of limited partnership interest (a "Unit") was issued for $1,000 to
the original Limited Partner and $1,000 was contributed for the General
Partners' continuing interest.  The Partnership commenced operations in 1988.

The Partnership was formed for the purpose of investing in multi-family rental
housing properties qualifying for the Low Income Housing Tax Credit and, in
certain circumstances, the Rehabilitation Tax Credit, which tax credits may be
applied against the federal income tax liabilities of the Partnership's
partners.  The Partnership's investment is in the form of limited partnership
interests in limited partnerships (the "Subsidiary Operating Partnerships")
that own the rental properties.  Frederick Investment Corporation, a North
Carolina corporation (the "Managing General Partner"), and George F. Marshall
are the general partners (the "General Partners") of the Partnership.

Subsidiary Operating Partnerships that receive either rental assistance or
mortgage subsidies from governmental agencies, are subject to regulations
restricting their ability to distribute significant cash flow to the
Partnership.  Therefore, it is not anticipated that the Operating Partnerships
will distribute significant amounts of cash to the Partnership.  The
Partnership is generally entitled to between 75% and 98.99% of the
distributable cash flow of the Operating Partnerships in which it invests.

The Partnership Agreement provides that profits, losses and tax credits of the
Partnership generally will be allocated 99% to the Limited Partners and 1% to
the General Partners.  A complete description of the provisions of the
Partnership Agreement governing allocations of profits, losses, tax credits,
cash flows and other items to the partners is included in the public offering
prospectus dated May 20, 1988, the supplements thereto dated October 18, 1988
and December 23, 1988, and the amendment thereto dated August 25, 1989.

As more fully discussed in Note C, the Partnership acquired interests in
twenty-seven Operating Partnerships during 1988 and 1989.  No additional
Operating Partnership interests were acquired subsequent to 1989.


Note B   Summary of Significant Accounting Policies

PRINCIPLES OF CONSOLIDATION

The Partnership owns 98.99% limited partnership interests in twenty-six
Subsidiary Operating Partnerships and a 94.99% limited partnership interest in
one Subsidiary Operating Partnership.  The consolidated financial statements
include the accounts of Qualified Housing Partners Limited Partnership and
those twenty-seven majority-owned Subsidiary Partnerships.  All significant
inter-company transactions and balances have been eliminated in consolidation.

RENTAL PROPERTIES

Rental properties are recorded at their respective costs to the Partnership,
which costs include certain fees paid to an outside party for consulting with
the Managing General Partner in its selection of the Partnership's investments
in Subsidiary Operating Partnerships.  Depreciation is determined by the
straight-line method over the estimated useful lives of the rental properties.
Estimated useful lives are 25 to 50 years for buildings and 10 to 12 years for
furniture and fixtures.  The costs of major improvements are capitalized while
the costs of ordinary maintenance and repairs are charged to expense as
incurred.  When properties are sold or retired, their costs and the related
accumulated depreciation will be removed from the accounts and the gain or
loss reflected in income.  The     Partnership periodically reviews long-lived
assets, when indicators of impairment exist, and an impairment loss will be
recognized if the value of assets is impaired.

RECENT ACCOUNTING PRONOUNCEMENTS

On January 1, 2001, the Partnership adopted Statement of Financial Accounting
Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging
Activities.  This Statement established accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities.  The Partnership has no derivative financial instruments and does
not engage in any hedging activities; accordingly, the adoption of the
statement did not affect the Partnership's financial statements.

In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS No.
141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible
Assets.  SFAS No. 141 requires that all business combinations initiated after
June 30, 2001 be accounted for using the purchase method.  SFAS No. 142
changes the accounting for goodwill and certain other intangible assets from
an amortization method to an impairment only approach.  Since the Partnership
does not have goodwill or other intangible assets, the adoption of SFAS Nos.
141 and 142 on January 1, 2002 is not expected to significantly affect the
Partnership's financial statements.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations.  SFAS No. 143 requires that obligations associated with the
retirement of tangible long-lived assets be recorded as a liability when those
obligations are incurred, with the amount of liability initially measured at
fair value.  SFAS No. 143 will be effective for financial statements for
fiscal years beginning after June 15, 2002, though early adoption is
encouraged.  The application of this statement is not expected to have a
material impact on the Partnership's financial statements.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets.  This standard
provides guidance for differentiating between long-lived assets to be held and
used, long-lived assets to be disposed of other than by sale and long-lived
assets to be disposed of by sale.  SFAS No. 144 supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and/or Long-Lived Assets to
Be Disposed Of.  SFAS No. 144 also amends APB Opinion No. 30, Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions.  This statement is effective for fiscal years beginning after
December 15, 2001.  Adoption of SFAS No. 144 on January 1, 2002 will not have
a significant effect on the Partnership's financial statements.



OTHER ASSETS
Other Assets at December 31, 2001 and 2000 consist of the following:

                                                     2001           2000

   Accounts Receivable                           $  117,529     $  108,693

   Prepayments and Deferred Charges                  87,391         84,494

   Restricted Cash Consisting Principally of
      Reserves, Tenant Deposits and Certain
      Escrow Balances of Operating Partnerships   2,096,379      2,034,605

                                                 $2,301,299     $2,227,792


NET LOSS PER LIMITED PARTNERSHIP UNIT

Net loss per Limited Partnership Unit is based upon the net loss allocated to
the limited partners and is computed using the weighted average number of
Units outstanding of 8,673 Units.

USE OF ESTIMATES

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


Note C   Operating Partnerships

Commencing on the date of the initial closing of the public offering, the
Partnership began acquiring majority ownership interests in Subsidiary
Operating Partnerships in transactions accounted for as purchases.  The
Partnership completed the acquisition of the 27 Subsidiary Operating
Partnerships in August 1989.  Since the acquisitions occurred either during or
within a short period after the completion of the development or
rehabilitation phase of each Subsidiary Operating Partnership, the fair values
of net assets of the Subsidiary Operating Partnerships approximated historical
costs.  The Subsidiary Operating Partnerships generally allocate 98.99% of
income or loss and tax credits, and from 75% to 98.99% of distributable cash
to the Partnership.




Note D   Liabilities Applicable to Rental Properties

Liabilities applicable to rental properties consist of
   the following at December 31, 2001 and 2000:
   2001          2000
Rural Development financed mortgage loans to
   Subsidiary Operating Partnerships
   collateralized by deeds of trust on the rental
   properties and assignments of all rents, profits
   and income of the respective Subsidiary Operating
   Partnerships.  Loans are payable in various
   monthly amounts which include interest at stated
   rates of 8.5% and 9.5%.  The effective rate of
   interest on each mortgage loan is reduced by
   interest subsidies to 1% as long as the
   respective Subsidiary Operating Partnership
   remains in compliance with the provisions of
   the mortgage loan agreement....................$24,249,349    $24,076,071

Conventional mortgage loan with an interest
   rate of 10% amortized over 149 months..........    788,931      1,128,240

                                                  $25,038,280    $25,204,311


The estimated future maturities of mortgage loan obligations as of December
31, 2001 are as follows:

          2002      $   460,176
          2003          507,456
          2004          102,234
          2005          111,961
          2006          121,642
     Thereafter      23,734,811

                    $25,038,280


Note E   Fair Value of Financial Instruments

The carrying amounts reflected in the consolidated balance sheets for cash,
including restricted cash, and cash equivalents approximate their respective
fair values because of the short maturities of these instruments.  Management
believes it is not praticable to estimate the fair value of liabilities
applicable to rental properties, which consist primarily of Rural Development
financed mortgage loans, because programs with similar characteristics are not
currently available.




Note F   Related Party Transactions

The accompanying consolidated financial statements reflect transactions
between the Partnership and its General Partners or their affiliates and
between the various Subsidiary Operating Partnerships and their general
partners.  Frederick Investment Corporation, the Managing General Partner of
QHP, is a general or special limited partner in each of the Subsidiary
Operating Partnerships.  Each Subsidiary Operating Partnership also has one or
more other general partners (the "Local General Partners").  Following is a
summary of related party transactions for 2001, 2000 and 1999:

                                     QHP                General Partners of
                                     General Partner    Operating Partnerships
2001                                 or Affiliates      or Affiliates
ITEMS PAID OR PAYABLE BY QHP
   Management Fees                     $  84,562             $     --
   Reimbursable Operating Expenses        21,449                   --
ITEMS PAID OR PAYABLE BY
   SUBSIDIARY PARTNERSHIPS
   Property Management/Service Fees          --              $ 405,813

                                       $ 106,011             $ 405,813
PAYABLE BALANCES AT DECEMBER 31
   By QHP                              $ 283,926                   --
   By Subsidiary Partnerships                --              $ 318,467

 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
2000
ITEMS PAID OR PAYABLE BY QHP
   Management Fees                     $  84,562             $     --
   Reimbursable Operating Expenses        26,284                   --
ITEMS PAID OR PAYABLE BY
   SUBSIDIARY PARTNERSHIPS
   Property Management/Service Fees          --              $ 380,918

                                       $ 110,846             $ 380,918
PAYABLE BALANCES AT DECEMBER 31
   By QHP                              $ 232,748                   --
   By Subsidiary Partnerships                --              $ 295,159

 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
1999
ITEMS PAID OR PAYABLE BY QHP
   Management Fees                     $  84,562             $     --
   Reimbursable Operating Expenses        25,789                   --
ITEMS PAID OR PAYABLE BY
   SUBSIDIARY PARTNERSHIPS
   Property Management/Service Fees          --              $ 372,679

                                       $ 110,351             $ 372,679
PAYABLE BALANCES AT DECEMBER 31
   By QHP                              $ 170,735                   --
   By Subsidiary Partnerships                --              $ 257,483



Most of the rental properties were constructed or rehabilitated by the
respective Local General Partner(s) or affiliated entities. Pursuant to the
operating partnership agreements, the Local General Partner must lend the
Subsidiary Operating Partnership funds sufficient to establish a working
capital reserve equal to 2% of the project's development costs and such
additional operating loans as needed.  At December 31, 2001, 2000, and 1999
such loans in the amount of $296,433, $271,354, and $246,639 respectively,
were included in Other Liabilities.

Note G   Income Taxes

The Managing General Partner believes the Partnership is a partnership for
federal income tax purposes.  Accordingly, no provision has been made for
federal or state income taxes because income, gains, deductions, losses and
credits of the Partnership were not reportable by the partners under the
partnership form of organization.  The following is a reconciliation of loss
before deducting minority interest in Subsidiary Operating Partnerships for
financial reporting purposes to loss allocated to QHP's limited partners for
federal income tax purposes:

                                                2001       2000        1999

Loss Before Deducting Minority Interest
   In Subsidiary Partnerships                $ 489,772  $ 317,217  $ 572,977

Excess of Depreciation for Federal Income
   Tax Purposes over Depreciation for
   Financial Reporting Purposes                431,101    360,076    348,859

Other Differences                               (8,676)   (22,897)      (818)

Combined Losses for Federal Income Tax
   Purposes of QHP and its Subsidiary
   Partnership                                 912,197    654,396    921,018

Loss Allocated to the General Partners of
   QHP and its Subsidiary Partnerships, Net    (17,060)   (11,866)   (17,206)

Loss Allocated to QHP's Limited Partners for
   Federal Income Tax Purposes               $ 895,137  $ 642,530  $ 903,812

At December 31, 2001 and 2000, the Partnership's reported net assets exceeded
their tax bases by approximately $5,800,000 and $5,370,000, respectively.




Note H   Selected Quarterly Financial Data (unaudited)

                      1st Qtr 2001  2nd Qtr 2001   3rd Qtr 2001   4th Qtr 2001

Rental Income            $964,789      $970,317     $1,001,817      $962,758

Loss From Rental
   Activities             (87,039)      (55,354)       (16,322)     (212,769)
Net Loss                 (127,420)      (81,706)       (42,728)     (234,166)
Net Loss per Limited
   Partnership Unit       ($14.54)       ($9.33)        ($4.88)      ($26.73)

                      1st Qtr 2000  2nd Qtr 2000   3rd Qtr 2000   4th Qtr 2000

Rental Income            $966,154      $965,404       $966,527    $1,029,887

Loss From Rental
   Activities             (25,757)      (42,830)       (40,241)      (86,243)
Net Loss                  (66,583)      (69,296)       (66,247)     (113,382)
Net Loss per Limited
   Partnership Unit        ($7.57)       ($7.91)        ($7.56)      ($12.94)

The fourth quarter of 2001 includes a year-end adjustment increasing real
estate taxes expense by approximately $125,000




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 Managing General Partner, Frederick Investment Corporation ("FIC"), is
responsible for managing the Partnership and its operations.  It was
incorporated in North Carolina in 1976 and its executive officers are George
F. Marshall (who is also the Class A General Partner) and Jenny C. Petri.  Mr.
Marshall, age 62, is the President and Director of FIC.  He graduated from
Washington and Lee University, and received an M.B.A. from the University of
North Carolina at Chapel Hill.

Ms. Petri, age 43, has been an employee of FIC since 1981 and since 1984 has
served as its Vice President/General Manager.  She is also the Executive Vice
President of One Management, Inc.  Ms. Petri is a 1981 graduate of the
University of North Carolina at Chapel Hill, with a B.S. degree in Business
Administration.

One Management, Inc. was incorporated in 1991 and is involved primarily in
rendering services in connection with real estate development and management.
Beginning in 1993, it provided the administrative support needed by FIC in the
performance of its duties as Managing General Partner.


Item 11.  Executive Compensation

The General Partners are entitled to receive reimbursement of Organization and
Offering Expenses, Acquisition Expenses, Development Expenses and expenses and
costs advanced by them, or either of them, and payment of Development Fees and
a Partnership Management Fee, all as provided for and defined in the
Partnership Agreement.  A copy of the Partnership Agreement is Exhibit A to
the Prospectus which is part of the Registration Statement on Form S-11,
Number 33-19316 and effective May 20, 1988, the final form of which was filed
on May 20, 1988 pursuant to Rule 424(b).

ITEMS PAID OR PAYABLE BY THE PARTNERSHIP IN 2001
Management fees..........$84,562

During 2001, the Partnership's Managing General Partner incurred various
reimbursable operating expenses aggregating approximately $26,000 on behalf of
the Partnership.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

No person is known to the registrant to beneficially own more than five
percent (5%) of the Units.

The Class A General Partner, who is also President and a Director of the
Managing General Partner, owns 20 units (0.2% of units outstanding) at
December 31, 2001.  No other executive officer or director of the Managing
General Partner owns any Units.


Item 13.  Certain Relationships and Related Transactions

See Items 1 and 11 above which are incorporated herein by reference.


PART IV

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

a.  Consolidated Financial Statements

See Item 8 above which is incorporated herein by reference.

b.  Independent Auditors' Report


To the Partners
Qualified Housing Partners Limited Partnership
Raleigh, North Carolina

We have audited the accompanying consolidated balance sheets of Qualified
Housing Partners Limited Partnership and subsidiary operating partnerships
as of December 31, 2001 and 2000 and the related consolidated statements of
income and expenses, partners' capital, and cash flows for each of the
three years in the period ended December 31, 2001. These consolidated
financial statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards in the United
States of America.  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 consolidated financial position of Qualified
Housing Partners Limited Partnership and subsidiary operating partnerships
as of December 31, 2001 and 2000, and the consolidated results of their
operations and their cash flows for each of the three years in the period
ended December 31, 2001 in accordance with accounting principles generally
accepted in the United States of America.


DIXON ODOM PLLC

High Point, North Carolina
March 11, 2002




c.  Financial Statement Schedules

All financial statement schedules are omitted because the required information
is either not applicable, is immaterial, or is included in the consolidated
financial statements of the Partnership and the notes thereto.

d.  Exhibits

None.

e.  Reports on Form 8-K

The Partnership filed no report Form 8-K in 2001.