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 [FEE REQUIRED]For the Fiscal Year Ended 
      February 28, 1998

                                       OR

[  ]  TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE  ACT OF 1934  [NO FEE  REQUIRED]  For the transition period
      from ______ to ______.

 0-17793(Commission File Number)

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.
      (Exact name of registrant as specified in its governing instruments)

          Delaware                                        13-3481443
(State or other jurisdiction of             (I.R.S.Employer Identification No.)
organization) 

Wilder Richman Historic Corporation
599 W. Putnam Avenue
Greenwich, Connecticut                                      06830
(Address of principal executive offices)                 (Zip code)


Registrant's telephone number, including area code:     (203) 869-0900

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

            None
(Title of each Class)

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

                      Units of Limited Partnership Interest
-------------------------------------------------------------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  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 a 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

The aggregate sales price of the units of limited  partnership  interest held by
non-affiliates  of the Registrant is  $19,280,000.  There is currently no public
market for the units of limited  partnership  interest  and,  accordingly,  such
figure does not represent the market value for the units.

Documents incorporated by reference:

The Prospectus of the Registrant,  dated May 13, 1988 and filed pursuant to Rule
424(b)(iii)  under the Securities Act of 1933, is incorporated by reference into
Parts I, II and III of this Annual Report on Form 10-K.


<PAGE>



                                         


                                     PART I

Item 1.    Business

     General Development of Business

     Registrant (also referred to as the "Partnership") is a limited partnership
which was formed under the Delaware  Revised Uniform Limited  Partnership Act on
October 15,  1987.  The general  partner of the  Partnership  is Wilder  Richman
Historic Corporation, a Delaware corporation (the "General Partner" or "WRHC").

     Registrant  was  organized  to  acquire  all  of  the  limited  partnership
interests in Dixon Mill  Associates I (Phase One),  Limited  Partnership,  Dixon
Mill Associates II (Phase Two), Limited  Partnership,  and Dixon Mill Associates
III (Phase Three),  Limited  Partnership,  each of which is a New Jersey limited
partnership  (individually "Dixon Mill I," "Dixon Mill II" and "Dixon Mill III,"
respectively,  and  collectively the "Operating  Partnerships").  Each Operating
Partnership  owns one  phase  ("Phase")  of an  aggregate  433-unit  residential
apartment  complex  (the  "Complex")  located in Jersey City,  New Jersey,  that
consists of buildings  designated as certified  historic  structures by the U.S.
Department  of  the  Interior.  The  Operating  Partnerships  have  constructed,
substantially rehabilitated and are operating the Complex. The rehabilitation of
the Complex  qualified for a  rehabilitation  tax credit in 1988, 1989 and 1990.
The general  partner of the Operating  Partnerships  is Dixon Venture Corp. (the
"Operating  General  Partner"),  which is not an affiliate of the Partnership or
WRHC.

     Pursuant  to  the  Partnership's   prospectus  dated  May  13,  1988,  (the
"Prospectus"),   the  Partnership   offered  $19,280,000  of  units  of  limited
partnership  interest in the  Partnership  (the "Units") at an offering price of
$24,100 per Unit.  The Units were  registered  under the  Securities Act of 1933
pursuant to a Registration  Statement on Form S-11  (Registration No. 33-19646).
The Prospectus is incorporated herein by reference.

     The closing of the offering of Units (the "Offering")  occurred on July 15,
1988. At such closing,  800 Units were sold,  representing  $19,280,000 in gross
proceeds.  After  payment of $674,800 of  organization  and  offering  expenses,
$674,800 in an origination  fee and $1,349,600 of selling  commissions,  the net
proceeds  available  for  investment  were  $16,580,800.  Of such net  proceeds,
$16,388,000 was allocated to the investment in the Operating Partnerships, which
included  investments  in  guaranteed  investments  contracts.  The remainder of
$192,800 was designated as working capital to be used for operating  expenses of
the Partnership.

     Financial Information About Industry Segments

     Registrant  is  engaged   solely  in  the  business  of  owning  a  limited
partnership  interest in each of the Operating  Partnerships.  A presentation of
information  regarding  industry  segments  is not  applicable  and would not be
material to an understanding of the Partnership's business taken as a whole. See
Item 8 below for a summary of Registrant's operations.

     Working Capital Reserves

     As of  February  28,  1998,  Registrant  had  working  capital  reserves of
approximately  $649,000 inclusive of funds previously restricted for the purpose
of providing operating deficit loans to the Operating  Partnerships (in order to
avoid  default  under  their  mortgages  pursuant  to  their  modified  mortgage
documents) which were substantially  invested in interest-bearing  deposits. See
Item 7 -  "Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations."

     Competition

     Information regarding competition, general risks, tax risks and partnership
risks is set  forth  under  the  heading  "RISK  FACTORS"  at pages 37 - 57
of the Prospectus.

     Compliance with Environmental Protection Provisions


                                       2

<PAGE>


     In connection with the environmental cleanup responsibilities pertaining to
the Complex,  the Operating General Partner submitted a declaration to the State
of New Jersey  Department of  Environmental  Protection  ("NJDEP")  stating that
there remains no hazardous  substances and wastes on the site. In August 1989,
the  Operating  General  Partner  received  notification  from  NJDEP  that  the
environmental  testing was complete and the Complex was in compliance with NJDEP
requirements.  All costs  incurred in  connection  with the review  conducted by
NJDEP were borne by The Dixon  Venture,  an affiliate of the  Operating  General
Partner. Information regarding such environmental matters is set forth under the
heading  "DESCRIPTION OF THE COMPLEX - ENVIRONMENTAL MATTERS" at pages 87 - 92 
of the Prospectus, which is incorporated herein by reference.



     Employees of Registrant

     Registrant  employs no personnel and incurs no payroll costs.  An affiliate
of the General Partner employs individuals who perform accounting,  secretarial,
transfer  and other  services on behalf of  Registrant  as are  necessary in the
ordinary course of business.  Such individuals also perform similar services for
other affiliates of the General Partner.

     Tax Reform Act of 1986,  Revenue Act of 1987,  Technical and  Miscellaneous
     Revenue Act of 1988,  Omnibus Budget  Reconciliation  Act of 1989,  Omnibus
     Budget  Reconciliation  Act of 1990,  Tax  Extension  Act of 1991,  Omnibus
     Budget  Reconciliation  Act of 1993, Uruguay  Round  Agreements  Act and
     Taxpayer Relief Act of 1997 (collectively the "Tax Acts")

     Registrant is organized as a limited  partnership and is a pass through tax
entity which does not, itself, pay Federal income tax. However,  the partners of
Registrant  who are  subject to Federal  income tax may be  affected  by the Tax
Acts.  Registrant will consider the effect of certain aspects of the Tax Acts on
the partners when making decisions regarding its investment. Registrant does not
anticipate  that the Tax Acts will currently  have a material  adverse impact on
Registrant's business operations, capital resources and plans or liquidity.


Item 2.    Properties

     The Complex  consists of  approximately  34 historic mill  buildings  built
between 1847 and 1932, all of which are certified historic  structures that have
been converted and substantially  rehabilitated into a 433 unit luxury apartment
complex that has received  financing  exempt from Federal income  taxation under
Internal Revenue Code Section 103(b)(4)(A).  As a consequence of this tax exempt
financing,  the Operating  Partnerships are required to rent at least 15% of the
dwelling  units  ("D.U.'s") in the Complex to  individuals or families of low or
moderate income as determined under such Code Section,  currently based on their
income not  exceeding 80% of the median income for the area as determined by the
United States Department of Housing and Urban Development ("HUD").  These income
limits are subject to increases pursuant to HUD guidelines.  In the Complex,  68
studio and efficiency D.U.'s and 17 one-bedroom  D.U.'s are set aside for rental
to low or moderate  income  persons.  There are no rent ceilings on those D.U.'s
set aside for low or moderate income persons.  Because such tax exempt financing
consists of bonds sold in 1985,  the 80% of median  income limit is not required
to be adjusted  based on family  size as would be required  under the Tax Reform
Act of 1986.

     The Complex is located on a 4-acre  site in Jersey  City,  New  Jersey.  In
addition,  one new five-story  building,  approximately  20 feet by 50 feet, was
built on the site.  The Complex is located in the Dixon  Crucible  Redevelopment
Area,  an area  so  designated  pursuant  to a  redevelopment  plan  adopted  in
September   1983 by ordinance of the City of Jersey City. The actual development
entails  three  Phases  with each Phase owned by a separate  New Jersey  limited
partnership,  respectively Dixon Mill I, Dixon Mill II and Dixon Mill III. Phase
I  consists  of seven  industrial  buildings  which have been  rehabilitated  to
provide  134  D.U.'s,   55  underground   and  77  surface  parking  spaces  and
approximately  1,550 square feet of  commercial  space.  Phase II consists of 11
industrial  buildings which have been rehabilitated to provide 191 D.U.'s and 62
underground  and  124  surface  parking  spaces.  Phase  III  consists  of  four
industrial  buildings which have been  rehabilitated  to provide 108 D.U.'s,  35
underground and 73 surface parking spaces and approximately 2,230 square feet of
commercial space.

     The Complex features  gardens,  elevated walkways and brick paved walkways.
The  Complex  also has its own  electronic  security  system and a free  shuttle
service to the Grove Street PATH  station is being  provided.  In addition,  the
residents  of the  Complex  have  access  to a  private  fitness  facility.  The
Complex's  commercial space is designated for retail stores and/or  professional
offices.

                                       3

<PAGE>
<TABLE>
<CAPTION>

As of December 31, 1997 and 1996,  the  occupancy  and rental rates were as
follows:

                                    December 31, 1997         December 31, 1996
     <S>                                   <C>                        <C>
Occupancy Rate                            99%                        99%
Monthly Rental Rates:
   Studio                             $  578 - $   935         $ 512 - $   895
   One-Bedroom                        $   666 - $ 1450         $  525 - $1,437

   Two-Bedroom                        $   808 - $1,695         $  600 - $1,595

   Three-Bedroom                      $ 1,695 - $2,195         $1,489 - $2,095

</TABLE>

The rental rates reflect  significant ranges because the apartments vary as to
size and floor plans (i.e., square footage, duplex, triplex,  penthouse) and due
to the  low-moderate  tenant  income  restrictions  for 15% to 20% of the D.U.'s
resulting from the tax-exempt financing described above.

Item 3.         Legal Proceedings

  As of February 28, 1998, there were no material  pending legal  proceedings to
which  Registrant or any of its  affiliates was a party or to which any of their
property was subject except for the following:

  A  complaint  has been  filed in  Federal  Court by a former  employee  of the
Operating Partnerships claiming sexual harassment. The Operating General Partner
cannot measure the potential liability, if any, at this time.

  The Operating  Partnerships  have been named as a  third-party  defendant in a
lawsuit  between  The  Dixon  Venture,  the party  who sold the  Complex  to the
Operating Partnerships, and the former owner, Joseph Dixon Crucible Company, for
indemnification for cost clean-up under the Comprehensive Environmental Response
Compensation  and Liability Act of 1980. The Operating  General Partner believes
that the Operating  Partnerships  have no liability or no liability  that is not
adequately covered by an indemnification from The Dixon Venture.

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

  There  were  no  matters  submitted  to a vote  of  the  limited  partners  of
Registrant during the fourth quarter of the fiscal year covered by this report.


                                       4

<PAGE>
<TABLE>
<CAPTION>

                                     PART II

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

  a)  Market

  There is no  developed  public  market for the  purchase and sale of Units and
Registrant does not anticipate that such a market will develop.

  b)  Holders

  As of February 28, 1998, there were  approximately 766 record holders of Units
holding an aggregate of 800 Units in the Partnership.

  c)  Distributions

  The  Agreement of Limited  Partnership  of the  Registrant  provides that cash
available for distribution,  if any, be distributed  annually to the partners in
specified  proportions.  As a result of the  mortgage  modification  on June 11,
1992,  certain  cash  flow  restrictions  have  been  placed  on  the  Operating
Partnerships.  See Item 7  "Management's  Discussion  and  Analysis of Financial
Condition  and  Results  of  Operations"  and Notes 3 and 5 to the  Dixon  Mills
Financial Statements included herein.

Item 6.     Selected Financial Data

                                                Year End
                        February   February   February    February   February
                        28, 1998    28, 1997  29, 1996    28, 1995   28, 1994
<S>                         <C>       <C>       <C>          <C>       <C>
Total revenues
  (Interest income)     $55,276   $ 50,994   $ 43,259    $ 30,858     $ 33,142


Equity in loss of 
  investment in
  Operating
  Partnerships        $(358,875) $(799,980) $(745,393)* $(873,701) $(1,372,573)
Net loss              $(333,793) $(779,882) $(736,763)  $(875,499) $(1,380,924)

Net loss per unit 
  of limited
  partnership 
  interest            $   (413)  $   (965)  $   (912)   $  (1,083) $    (1,709)
At year end:
  Total assets      $2,787,088 $3,105,881 $3,870,763   $4,592,526   $5,453,025

</TABLE>  

* This amount is net of an  extraordinary  gain of $366,499  resulting  from the
  forgiveness of debt of the Operating  Partnerships  reflected in  Registrant's
  financial statements.

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

     Liquidity and Capital Resources

     The operating  results of the Complex for 1997 were  favorable  compared to
1996.  During 1992,  the mortgages of the Operating  Partnerships  were modified
pursuant to agreements among Federal National  Mortgage  Association  ("FNMA" or
the "Lender"),  Chase Manhattan Bank, N.A.  ("Chase") and the Operating  General
Partner. The Partnership obtained the consent of the limited partners to utilize
the  proceeds  from  the  final  distribution  from  the  guaranteed  investment
contracts  to assist in  modifying  the  mortgages.  As a result of the mortgage
modification, the interest rate under the mortgages decreased from approximately
9.6% to approximately  6.74%,  thereby improving the financial  viability of the
Complex.   Recently,   there  has  been  ongoing  new   construction  of  luxury
multi-family  housing in the  vicinity of the  Complex.  Such  housing  includes
asking rents that are comparable and  substantially  higher than rents currently
charged by the Complex. It has not been determined whether such new housing will
have a  positive  or  negative  impact  on the  Complex  or its cash flow in the
future.

                                       5

<PAGE>


     In connection  with the mortgage  modification,  Chase and the  Partnership
each advanced $277,500 to the Operating Partnerships to pay for certain costs of
the  mortgage  modification.  In  addition,  in the  event of  future  operating
deficits, Chase and the Partnership each provided a letter of credit and cash of
approximately  $622,500 (the "Operating  Deficit  Escrows"),  for the purpose of
providing FNMA the ability to make pro-rata draws for debt service  payments and
other operating  expenses to the extent cash flow of the Operating  Partnerships
was insufficient to make the required payments under the modified mortgages. The
release of the Operating Deficit Escrow was based upon the later of (i) the date
on which  the  Operating  Partnerships  satisfy  the  Lender as to the 110% debt
service coverage ratio requirements on the mortgages or (ii) January 1, 1996 (to
coincide  with  the   expiration   of  Federal   income  tax  recapture  of  the
rehabilitation credits). During 1995, the Operating General Partner submitted to
the Lender the operating statement of the Complex for 1994,  reflecting that the
1994 operations satisfied the 110% debt service coverage ratio requirement. Such
submission  was  reviewed by the Lender and was  approved in June  1995 and the
letters of credit were released by the Lender in January 1996.

     Chase and the Partnership each originally  provided advances of $317,713 as
of December 31, 1995, with aggregate interest of approximately  $126,000 accrued
thereon by the Operating  Partnerships.  However,  the Operating General Partner
entered  into an agreement  with Chase on July 5, 1995  whereby  Chase agreed to
release the Operating  Partnerships  from  substantially  all of the outstanding
liabilities  owed to Chase in connection with  outstanding  advances and accrued
interest thereon  (discussed above) in return for the release of its outstanding
letter of credit in  January  1996.  Accordingly,  the  Operating  Partnerships
recorded a  forgiveness  of the  outstanding  debt and  accrued  interest  as of
December 31, 1995 in the aggregate of $370,201 in connection with the Chase note
and reflected  such  forgiveness  as an  extraordinary  gain in the statement of
operations for the year then ended. As of February 28, 1998, the Partnership has
accrued  interest  receivable  of  $119,260  in  connection  with  the  advances
provided.

     Because of the outstanding advance owed to the Partnership,  the Operating
Partnerships are subject to restrictions  concerning cash flow distributions and
the  payment  of  certain  fees to  affiliates.  Cash  flow,  if any,  generated
subsequent  to 1995 may be  retained  by the  Operating  Partnerships  or may be
distributed at the discretion of  management.  Any such cash flow  distributions
are subject to repaying the outstanding advance owed to the Partnership plus the
interest accrued thereon.  Thereafter,  cash flow may be distributed pursuant to
the terms of the limited partnership  agreements of the Operating  Partnerships.
To the  extent  there are  proceeds  from a future  sale or  refinancing  of the
Complex,  the Partnership  will receive 100% of any such proceeds  available for
distribution until the 7% cumulative  preferred  distribution has been achieved.
Through  December 1997, the cumulative  preferred  distribution is approximately
$9,450,000.   Although  recent  rental  market   conditions  have  been  strong,
management has been building up its cash balance (approximately $1,160,000 as of
December  31,  1997) to  protect  against  potential  adverse  changes in market
conditions and  unanticipated  expenses.  Accordingly,  the Partnership does not
anticipate  making  significant  cash flow  distributions in the near future and
cannot determine the extent of cash flow distributions over the long term. As of
December  31,  1997,  the  Operating  Partnerships'  balance in the  replacement
reserves  account,  which is  controlled  by the  Lender to be used for  certain
repairs or capital improvements, was approximately $662,000.

     As of December 31, 1997, the Operating  Partnerships' liquidity is improved
compared to December 31, 1996, with cash and cash  equivalents  having increased
by  approximately  $597,000  and the  replacement  reserve  having  increased by
approximately  $144,000.  Accounts  payable and accrued  expenses  increased  by
approximately  $19,000  and  amounts due to related  parties,  which  balance is
approximately  $1,840,000  as of December 31, 1997,  increased by  approximately
$180,000 due to the accrual of management fees and investor service fees.

     Cash and cash  equivalents  of the  Partnership  as of  February  28,  1998
includes  approximately  $582,000 which was released from the Operating  Deficit
Escrow.  Pursuant to the Partnership  Agreement,  the released Operating Deficit
Escrow of the Partnership may be held or utilized for other Partnership purposes
in the discretion of the General Partner. Presently, the General Partner intends
for the Partnership to hold such funds. During the year ended February 28, 1998,
the Partnership's  investment in Operating Partnerships decreased by $358,875 as
a result of the equity in loss of investment in Operating Partnerships.

     The annual investor service fees are payable from the operating  results of
the Operating  Partnerships  and from reserves.  As of February 28, 1998, due to
affiliates  includes  $140,000 of accrued  investor service fees, which includes
the Partnership's  expense for the last six fiscal periods and $50,000 otherwise
payable from the final  distribution of the guaranteed  investment  contracts in
January 1992.

                                        6



<PAGE>

  Results of Operations

     The  Partnership's  operating  results  are  dependent  upon the  operating
results of the  Operating  Partnerships  and are  significantly  impacted by the
policies of the Operating  Partnerships.  Registrant accounts for its investment
in Operating  Partnerships  in accordance  with the equity method of accounting,
the investment is carried at cost and is adjusted for Registrant's  share of the
Operating  Partnerships'  results of  operations  and by any cash  distributions
received.  Equity in loss of each investment in Operating  Partnership allocated
to Registrant is recognized to the extent of Registrant's  investment balance in
each  Operating  Partnership.  Any  equity  in loss in  excess  of  Registrant's
investment  balance in an Operating  Partnership is allocated to other partners'
capital in each such Operating  Partnership.  As a result, the equity in loss of
investment  in Operating  Partnerships  is expected to decrease as  Registrant's
investment balances in the respective Operating Partnerships become zero.

     Cumulative  losses  and cash  distributions  in  excess  of  investment  in
Operating Partnerships may result from a variety of circumstances, including the
Operating  Partnerships'  accounting  policies,  debt  structure  and  operating
deficits,   among  other  things.   Accordingly,   cumulative  losses  and  cash
distributions  in excess of the  investment  are not  necessarily  indicative of
adverse operating results of the Operating Partnerships.

     Year Ended February 28, 1998

     During the year ended February 28, 1998, the Partnership earned interest of
approximately  $55,000  including  approximately  $21,000 of accrued interest on
advances provided to the Operating Partnerships discussed above. During the year
ended February 28, 1998,  interest earnings  increased  compared to the previous
fiscal period due to the increase in average cash  balances.  The  Partnership's
operating expenses (which include accrued investor service fees of $15,000) were
comparable to the year ended  February 28, 1997.  The operating  expenses of the
Partnership  are  not  expected  to  vary  significantly  in  the  near  future.
Registrant's  equity in loss in  Operating  Partnerships  does not include a 99%
allocation  of the  loss  reported  by  the  Operating  Partnerships  due to the
nonrecognition  of losses in excess of Registrant's  investment in Dixon Mills I
of approximately $129,000, in accordance with the equity method of accounting.

     The Operating Partnerships reported a net loss from operations for the year
ended December 31, 1997 in the amount of  approximately  $493,000,  inclusive of
depreciation  and  amortization  of  approximately   $1,360,000.   However,  the
Operating  Partnerships generated cash flow after required debt service payments
and required replacement reserve deposits of approximately $645,000 during 1997,
which  considers  principal  amortization  under  the  mortgages  (approximately
$238,000) and net deposits to required  escrows  (approximately  $132,000),  and
excludes  accrued fees to affiliates of the  Operating  General  Partner and the
General Partner (approximately $175,000) and accrued interest to the Partnership
(approximately  $21,000).  Occupancy remained consistently high throughout 1997,
while  management  has  steadily   increased  rental  rates,   resulting  in  an
improvement in operating results compared to 1996.

     The Operating  Partnerships did not utilize any replacement reserves during
1997.  Although the results of  operations  have steadily  improved,  management
continues to examine methods to maintain healthy  occupancy rates while steadily
increasing  rental  rates and to closely  monitor  its  operating  costs.  As of
December 31, 1997, the occupancy rate was approximately 99%. Although operations
have significantly  improved since the mortgage  modification in June 1992, the
future  operating  results of the Complex will be extremely  dependent on market
conditions (which have been very strong but include newly developed multi-family
housing in the area) and the regional  economy,  and therefore may be subject to
significant volatility.

     Year Ended February 28, 1997

     During the year ended February 28, 1997, the Partnership earned interest of
approximately $51,000 including $21,000 of accrued interest on advances provided
to the Operating  Partnerships  discussed above.  During the year ended February
28, 1997, interest earnings increased compared to the previous fiscal period due
to  the  average  increase  of  short-term  interest  rates.  The  Partnership's
operating expenses (which include accrued investor service fees of $15,000) were
comparable to the year ended  February 29, 1996.  The operating  expenses of the
Partnership  are  not  expected  to  vary  significantly  in  the  near  future.
Registrant's  equity in loss in  Operating  Partnerships  does not include a 99%
allocation  of the  loss  reported  by  the  Operating  Partnerships  due to the
nonrecognition  of losses in excess of Registrant's  investment in Dixon Mills I
of approximately $47,000, in accordance with the equity method of accounting.

     The Operating Partnerships reported a net loss from operations for the year
ended December 31, 1996 in the amount of  approximately  $855,000,  inclusive of
depreciation  and  amortization  of  approximately   $1,363,000.   However,  the
Operating  Partnerships generated cash flow after required debt service payments
and required replacement reserve deposits of approximately $285,000 during 1996,
which  considers  principal  amortization  under  the  mortgages  (approximately
$223,000) and net deposits to required  escrows  (approximately  $200,000),  and
excludes  accrued fees to affiliates of the  Operating  General  Partner and the
General Partner (approximately $179,000) and accrued interest to the Partnership
(approximately  $21,000).  Occupancy remained high throughout 1996, resulting in
an improvement in operating results compared to 1995. The Operating Partnerships
did not utilize any replacement reserves during 1996.  As of December 31, 1996,
the occupancy rate was approximately 98%.

     Year Ended February 29, 1996

     During the year ended February 29, 1996, the Partnership earned interest of
approximately  $43,000 on  restricted  funds  (discussed  above),  reserves  and
advances provided to the Operating Partnerships.  During the year ended February
29, 1996,  interest earnings slightly  increased compared to the previous fiscal
period due to the average increase of short-term  interest rates and a change in
interest rates on the restricted deposits. The Partnership's  operating expenses
(which include accrued  investor service fees of $15,000) were comparable to the
year ended February 28, 1995.

     The Operating Partnerships reported a net loss from operations for the year
ended December 31, 1995 in the amount of approximately $1,123,000,  inclusive of
depreciation and  amortization of approximately  $1,363,000 and exclusive of the
extraordinary  gain  recorded in  connection  with the  forgiveness  of the note
payable to Chase discussed above. However, the Operating  Partnerships generated
cash flow after required debt service payments and required  replacement reserve
deposits  of  approximately   $63,000  during  1995,  which  considers principal
amortization  under the mortgages  (approximately  $208,000) and net deposits to
required  escrows  (approximately   $154,000)  and  excludes  accrued  fees  to
affiliates  of  the   Operating   General   Partner  and  the  General   Partner
(approximately  $164,000)  and accrued  interest  to Chase and the  Partnership
(approximately  $21,000).  The occupancy  fluctuated during 1995 while operating
expenses increased  (primarily from increases in real estate taxes and insurance
and  planned  improvements  which were not funded  from  replacement  reserves),
resulting  in a decline in operating  results  compared to 1994.  The  Operating
Partnerships  did not  utilize  any  Operating  Deficit  Escrows or  replacement
reserves  during  1995.  As  of  December  31,  1995,  the  occupancy  rate  was
approximately 99%.

                                       7

<PAGE>



       Inflation

     Inflation is not expected to have a material adverse impact on Registrant's
revenues during its period of equity ownership in the Operating Partnerships.

Item 8.       Financial Statements and Supplementary Data

     The financial  information required in response to this Item 8 is submitted
as part of Item 14(a) of this report.

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

     None.

                                       8

<PAGE>


                                    PART III

Item 10.      Directors and Executive Officers of the Registrant

     The Partnership has no directors or executive officers.

     The General  Partner was  incorporated in Delaware on November 24, 1986. As
described  below,  its  principals  have had  significant  experience in various
facets of the real estate  business  including the  development of  multi-family
rental  housing.  The  directors and officers of the General  Partner,  who have
served as such since inception, are as follows:

  Name               Age     Office

  Richard Paul Richman        50   President and Director

  Robert H. Wilder, Jr.       52   Executive  Vice   President,   Assistant  
                                   Secretary, Treasurer and Director.

  Gina S. Scotti              42   Secretary

     Richard Paul Richman,  50 years old, is President and Director of WRHC. Mr.
Richman  graduated  from the Columbia  University Law School with a Juris Doctor
degree, the Columbia University Graduate School of Business  Administration with
a Master of  Business  Administration  degree  and  Syracuse  University  with a
Bachelor of Arts degree in Political Science.  Mr. Richman has over ten years of
extensive  experience in both the  development  and  management  of  residential
properties.  From 1973 until 1979,  Mr. Richman  practiced  corporate law in New
York City with the law firm of Greenbaum, Wolff & Ernst and then as a partner of
Shipley, Richman & Nierenberg. For over six years, Mr. Richman acted as a lawyer
in connection with the development,  syndication and tax issues relating to real
estate.  Since 1988, Mr. Richman has been the President and sole  stockholder of
The  Richman  Group, Inc. and is the managing  partner of The  Richman  Group of
Connecticut,  L.L.C.  In recent years,  Mr. Richman has devoted full time to the
syndication and development of real estate. Mr. Richman was a vice president and
shareholder of Related Housing Companies  Incorporated,  New York, New York from
1978 until mid-1979 with  responsibility for that company's project  acquisition
and  syndication  activities.  Mr.  Richman  has been a member  of the  National
Advisory Board of the Housing and Development  Reporter, a bi-weekly publication
of the Bureau of  National  Affairs,  Inc.,  a frequent  speaker on real  estate
syndication,  and a member of the New York State Historic Credit Task Force, the
National  Leased Housing  Association,  the Coalition to Preserve the Low-Income
Tax  Credit  and  the  Minority  Developer  Assistance  Corporation  (which  was
established by the New York State Battery Park Commission).

     Robert H. Wilder, Jr., 52 years old, is Executive Vice President, Assistant
Secretary,  Treasurer  and  Director  of WRHC.  Mr.  Wilder  graduated  from the
University  of Michigan with a Bachelor of Arts degree in Economics and from the
Columbia  University  Graduate  School of  Business  with a Master  of  Business
Administration  degree.  After  graduation  in 1968,  Mr. Wilder joined James D.
Landauer  Associates,  Inc., a national real estate  consulting  firm, where his
account responsibilities included feasibility studies, market analyses, land use
studies,  portfolio valuations and appraisals of industrial,  office, commercial
and multi-family properties.  From 1973 until mid-1979, Mr. Wilder was executive
vice president and shareholder of Related Housing  Companies  Incorporated,  New
York, New York, and was responsible for mortgage financing and construction loan
placement and the  supervision  of the  development  of the company's  projects.
Since 1988,  Mr. Wilder has been the President  and sole  shareholder  of Wilder
Property  Companies Inc. Mr. Wilder is also a licensed real estate broker in New
York and Connecticut.

     Gina S.  Scotti,  42 years old, is Secretary of WRHC.  Ms.  Scotti,  a Vice
President  and  Secretary of The Richman  Group,  Inc.  and  Secretary of Wilder
Richman  Corporation  ("WRC"),  joined WRC in 1984 as a special assistant to the
President,  and has been the Director of Investor  Services with  responsibility
for communications with investors since 1986.

                                       9

<PAGE>


Item 11.      Executive Compensation

     The Partnership is not required to pay the officers,  directors or partners
of the General Partner any direct  compensation,  and no such  compensation  was
paid during the year ended February 28, 1998.


Item 12.      Security Ownership of Certain Beneficial Owners and Management

     No person or group is known by the Partnership to be the owner of record of
more than 5% of the outstanding Units as of February 28, 1998.


Item 13.      Certain Relationships and Related Transactions

     The financial  interests in  Registrant of the General  Partner and Special
Limited  Partner  are  set  forth  under  the  heading   "PROFITS,   LOSSES  and
DISTRIBUTIONS" at pages 117 - 124 of the Prospectus.

     Transactions with Affiliates of Management

     The General  Partner and certain of its  affiliates are entitled to receive
certain  compensation,  fees and  reimbursement of expenses during the offering,
operational and termination or refinancing stages of the Partnership.

     Wilder Richman Management Corporation ("WRMC"), an affiliate of the General
Partner,  is a  co-management  agent of the Complex.  In  connection  with these
services,  WRMC earned  management fees of $84,893 in 1997, of which $35,004 was
paid.

     Richman Asset Management, LLC., an affiliate of the General Partner, earned
compensation  in the amount of $60,000 in 1997 for its performance in connection
with investor services for the Partnership and the Operating  Partnerships,  all
of which was accrued.

     Indebtedness of Management

     No officer or  director  of the  General  Partner or any  affiliate  of the
foregoing was indebted to Registrant at any time during the years ended February
28, 1998 and 1997.

                                       10

<PAGE>


                                     PART IV

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

     a)Financial Statements

       (i) The list of Financial Statements of Registrant appears on page F-1.

       (ii)   The list of Financial  Statements  of the  Operating  Partnerships
              appears on page F-16.

       (3)    Exhibits:

       (3A)   Certificate  of Limited  Partnership  of Wilder  Richman  Historic
              Properties  II,  L.P.,  as filed  with the  Secretary  of State of
              Delaware on October 15, 1987;*

       (3B)   Form of  Agreement  of  Limited  Partnership  of Wilder  Richman
              Historic Properties II, L.P. (attached to Prospectus
              as Exhibit A);

       (4) Form of Subscription Agreement (attached to Prospectus as Exhibit B);

       (10A)  Previously  executed and filed Certificate of Limited  Partnership
              and Amended and Restated Certificate of Limited Partnership of (x)
              Dixon Mill  Associates I (Phase  One),  Limited  Partnership,  (y)
              Dixon Mill Associates II (Phase Two), Limited  Partnership and (z)
              Dixon Mill Associates III (Phase Three), Limited Partnership;*

       (10B)  Form  of  Amended  and  Restated  Agreement  and  Certificate  of 
              Limited Partnership of the Dixon Mill Partnerships:

            (1) Dixon Mill  Associates  I (Phase  One),  Limited  Partnership
             Amended and Restated Agreement and Certificate of Limited 
                  Partnership;**

              (2) Dixon Mill  Associates  II (Phase Two),  Limited  Partnership 
                  Amended and Restated Agreement and Certificate of Limited 
                  Partnership;** and

              (3) Dixon Mill Associates III (Phase Three),  Limited  
                  Partnership Amended and Restated Agreement and Certificate 
                  of Limited Partnership;**

       (10C)  Dixon Mill Complex Financing Documents;*

       (10D)  Administrative  Consent Order with New Jersey  Department of
              EnvironmentalProtection ("NJDEP") and NJDEP  Non-Applicability  
              Letter as to Dixon Mill Partnerships;*

       (10E)  Master   Services   Agreement,   dated  June  18,  1986,   
              between  VarickConstruction Corp. and IT Corporation;*

       (10F)  Documents related to Dixon Mill Complex historic certification;*

       (10G)  Form of Operating Deficit Guarantee Agreement;*

       (10H)  Form of Repurchase Agreement;**

       (10I)  Form of Investor Services Agreement;**

       (10J)  Form of Escrow Agreement among Wilder Richman Historic  Properties
              II, L.P.,  Wilder Richman  Historic  Corporation,  Shearson Lehman
              Hutton Inc. and FirsTier Bank, N.A., as escrow agent;**

                                       11

<PAGE>






       (10K)  Form of Financial Development  Consulting Agreement between 
              Wilder Richman Corporation and the Operating Partnerships;**

       (10L)  Form  of  Annuity  Issuance  Agreement  between  Wilder  Richman 
              Historic Properties II, L.P. and the Issuer;**

       (10M)  Form of  Guaranteed  Investment  Contract  Escrow  Agreement  
          among Wilder Richman Historic  Properties II, L.P., the Dixon Mill 
              Partnerships and the escrow agent;**

       (10N)  Form  of  Assignment  between  the  Dixon  Mill  Partnership,   as
              Assignor,  and Wilder  Richman  Historic  Properties  II, L.P., as
              Assignee;**

       (10O)  Form of Letter from The Dixon Venture to Wilder  Richman  Historic
              Properties  II, L.P.  and the Dixon Mill  Partnerships,  as to The
              Dixon Venture's agreement to bear all costs of compliance with the
              New Jersey Environmental Cleanup Responsibility Act;**

       (10P)  Amendment No. 1 to Agreement of Limited Partnership; ***

       (10Q)  Reinstatement and Modification Agreement; ***

       (10R)  Operating Deficit Escrow Agreement; ***

       (10S)  Priority Operating Deficit Escrow Agreement; ***

       (10T)  Amended and Restated Achievement Escrow Agreement; ***

       (10U)  Default Avoiding Loan Agreement; ***

       (10V)  Management Agreement; ***

       (10W)  Chase Note; ***

       (10X)  Letter of Intent to Reinstate and Modify the Mortgages; ****

        (27)  Financial Data Schedule.

*    Incorporated by Reference to Registrant's Form S-11 Registration  Statement
     as filed with the Securities and Exchange Commission on January 15, 1988.
**   Incorporated  by  Reference  to Amendment  No.1 to  Registrant's  Form S-11
     Registration Statement as filed with the Securities and Exchange Commission
     on May 9, 1988.
***  Submitted as exhibit to Form 10-K for the fiscal year ended February 29,
     1992.
**** Incorporated by Reference to Proxy dated March 23, 1992.

     b)  Reports on Form 8-K

       None.

                                       12




<PAGE>



















                                   SIGNATURES


  Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934,  Registrant  has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized on the 29th day of May, 1998.


                                   Wilder Richman Historic Properties II, L.P.

                                      By:   Wilder Richman Historic Corporation,
                                            General Partner


                                      By:  /s/  Richard Paul Richman
                                            Richard Paul Richman
                                            President and Director


                                      By:  /s/  Robert H. Wilder,Jr.
                                            Robert H. Wilder, Jr.
                                            Executive Vice President and
                                            Director


<PAGE>








                          WILDER RICHMAN HISTORIC PROPERTIES II, L.P.


                                  FINANCIAL STATEMENTS FOR THE

                             YEARS ENDED FEBRUARY 28, 1998 AND 1997
                                     AND FEBRUARY 29, 1996

                                AND INDEPENDENT AUDITORS' REPORT



<PAGE>








                  WILDER RICHMAN HISTORIC PROPERTIES II, L.P.


                          Financial Statements for the

              Years Ended February 28, 1998 and 1997 and February 29, 1996

                        and Independent Auditors' Report





                                C O N T E N T S

                                                                      Page

INDEPENDENT AUDITORS' REPORT                                           F-2


FINANCIAL STATEMENTS:

  Balance sheets                                                       F-3

  Statements of operations                                             F-4

  Statements of partners' equity                                       F-5

  Statements of cash flows                                             F-6

  Notes to financial statements                                     F-7 - F-14























                                       F-1


<PAGE>













                         INDEPENDENT AUDITORS' REPORT








Partners
Wilder Richman Historic Properties II, L.P.
Greenwich, Connecticut



We have  audited the  accompanying  balance  sheets of Wilder  Richman  Historic
Properties II, L.P. as of February 28, 1998 and 1997, and the related statements
of operations, partners' equity, and cash flows for the years ended February 28,
1998 and  1997  and  February  29,  1996.  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 Wilder  Richman  Historic
Properties  II,  L.P.  as of  February  28, 1998 and 1997 and the results of its
operations,  changes in  partners'  equity  and cash  flows for the years  ended
February 28, 1998 and 1997 and February 29, 1996 in  conformity  with  generally
accepted accounting principles.


/s/ Rosenburg, Neuwirth & Kuchner

May 29, 1998
New York, New York












                                       F-2


<PAGE>
<TABLE>
<CAPTION>




                  WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                                BALANCE SHEETS







                                                    February 29,   February 28,
           A S S E T S                                 1998         1997
           -----------                            --------------   -----------
<S>                                                    <C>            <C>
INVESTMENTS IN OPERATING PARTNERSHIPS
 (Notes 2, 3, 4 and 7)                               $1,700,882    $2,059,757

CASH AND CASH EQUIVALENTS (Note 2)                      649,233       629,975

NOTE RECEIVABLE (Note 3)                                317,713       317,713

ACCRUED INTEREST RECEIVABLE (Note 3)                    119,260        98,436
                                                     ----------    ----------

                                                     $2,787,088    $3,105,881



           LIABILITIES AND PARTNERS' EQUITY

LIABILITIES:
  Other liabilities                                  $   10,000    $   10,000

  Due to related parties (Note 4)                       154,201       139,201
                                                     ----------    ----------

                                                        164,201       149,201

COMMITMENTS AND CONTINGENCIES (Notes 3 and 7)

PARTNERS' EQUITY (Notes 2 and 5):

  Limited partners' equity                            2,762,967     3,093,422

  General partner's deficit                            (140,080)     (136,742)
                                                     ----------    ----------

                                                      2,622,887     2,956,680

                                                     $2,787,088    $3,105,881

</TABLE>






                        See notes to financial statements


                                      F-3


<PAGE>
<TABLE>
<CAPTION>


                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                             STATEMENTS OF OPERATIONS



                                                        Year ended
                                            February 28,         February 29,
                                          1998       1997           1996
<S>                                        <C>        <C>            <C>
Revenues:

Interest income                         $55,276     $50,994       $  43,259
                                      ---------    --------        --------



Expenses:

    Operating                            30,194      30,896         34,629
                                       --------    --------       --------
    

         Income from operations          25,082     20,098          8,630

Equity in loss of Operating
 Partnerships before 
 extraordinary item                    (358,875)  (799,980)    (1,111,892)
                                      ---------   --------     ----------

Net loss before extraordinary item     (333,793)  (779,882)    (1,103,262)
                                       --------   --------     ----------

Extraordinary item - Equity in
 forgiveness of debt of Operating
 Partnerships (Note 3)                       -          -         366,499
                                       --------  --------        --------

         NET LOSS                   $ (333,793) $(779,882)      $(736,763)
                                    ==========   ========       =========

Net loss attributable to:

    Limited partners                $ (330,455) $(772,083)      $(729,395)

    General partner                     (3,338)    (7,799)         (7,368)
                                    ----------  ----------     ----------

                                    $ (333,793) $(779,882)     $ (736,763)
                                    ==========  ==========     ==========

Net loss per unit of limited
 partnership interest before
 extraordinary item (800 units)          (413)       (965)         (1,365)

Extraordinary item                          -           -             453
                                     ---------     ------        --------

Net loss per unit of limited
 partnership interest                 $  (413)    $   (965)       $   (912)
                                    =========     =========     ==========

</TABLE>






                        See notes to financial statements


                                       F-4


<PAGE>
<TABLE>
<CAPTION>



                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                          STATEMENTS OF PARTNERS' EQUITY

           YEARS ENDED FEBRUARY 28, 1998 AND 1997 AND FEBRUARY 29, 1996









                                                        Limited      General
                                        Total           partners     partner
<S>                                     <C>                 <C>         <C>
Partners' equity (deficit),
  March 1, 1995                    $ 4,473,325       $ 4,594,900   $(121,575)

Net loss, year ended 
  February 29, 1996                  (736,763)          (729,395)     (7,368)
                                   ----------         ----------   -----------
                                  
                      

Partners' equity (deficit), 
  February 29, 1996                 3,736,562          3,865,505    (128,943)

Net loss, year ended 
  February 28, 1997                  (779,882)          (772,083)     (7,799)
                                 ------------         ----------  ---------- 
                                   
                     

Partners' equity (deficit), 
  February 28, 1997                 2,956,680          3,093,422    (136,742)

Net loss, year ended 
  February 28, 1998                  (333,793)          (330,455)     (3,338)
                                  -----------          ---------    --------

Partners' equity (deficit),  
  February 28, 1998                $2,622,887        $ 2,762,967   $(140,080)
                                    =========         ==========  ===========

Limited partnership units
   outstanding at February 28,
   1998 and 1997 and
   February 29, 1996                                        800



</TABLE>

















                        See notes to financial statements


                                       F-5


<PAGE>
<TABLE>
<CAPTION>


                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                            STATEMENTS OF CASH FLOWS








                                                         Year ended
                                                    February 28,    February 29,

                                               1998        1997          1996
                                             ----------------         ---------
<S>                                            <C>          <C>           <C>                        
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                  $(333,793) $(779,882)    $(736,763)
                                           ----------   --------    ----------
  Adjustments to reconcile net loss to 
   net cash provided
   by operating activities:
     Equity in loss of Operating
       Partnerships                           358,875    799,980       745,393
     Changes in assets and liabilities:
       Decrease in restricted cash                                     582,287
       Increase in accrued interest
         receivable                           (20,824)   (20,938)      (20,938)
       Increase in due to related parties      15,000     15,000        15,000
                                           ----------   --------   -----------


        Total adjustments                    353,051    794,042     1,321,742
                                            ---------  ---------     ---------

        Net cash provided by operating 
           activities                          19,258     14,160      584,979
                                            ---------- ----------   ---------


NET INCREASE IN CASH AND CASH
  EQUIVALENTS                                 19,258      14,160      584,979

CASH AND CASH EQUIVALENTS, beginning 
  of year                                    629,975     615,815       30,836
                                           ---------   ---------  -----------

CASH AND CASH EQUIVALENTS, end of year      $649,233    $629,975    $ 615,815
                                            ========    ========   ==========


</TABLE>














                        See notes to financial statements



                                       F-6


<PAGE>


                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                          NOTES TO FINANCIAL STATEMENTS

             YEARS ENDED FEBRUARY 28, 1998 AND 1997 AND FEBRUARY 29, 1996



1.    ORGANIZATION

      Wilder Richman Historic Properties II, L.P. (the "Partnership") was formed
      under the Delaware Revised Uniform Limited  Partnership Act on October 15,
      1987 to acquire  all of the  limited  partnership  interest  in Dixon Mill
      Associates I (Phase One), Limited Partnership ("Dixon Mill I"), Dixon Mill
      Associates II (Phase Two), Limited Partnership ("Dixon Mill II") and Dixon
      Mill Associates III (Phase Three),  Limited Partnership ("Dixon Mill III")
      (together  herein  referred  to as the  "Operating  Partnerships")  which,
      collectively,  constructed,  rehabilitated  and own and operate a 433-unit
      apartment  complex (the  "Complex")  located in Jersey  City,  New Jersey.
      Wilder Richman Historic Corporation (the "General Partner") is the General
      Partner  of  the  Partnership.   The  general  partner  of  the  Operating
      Partnerships is Dixon Venture Corp. (the "Operating General Partner").

      The  Partnership  filed  a  Form  S-11  registration  statement  with  the
      Securities and Exchange  Commission,  which became  effective May 9, 1988,
      covering an offering (the "Offering") of 800 limited  partnership units at
      $24,100 per unit.

      On  July  15,  1988,  the  Partnership   admitted  754  limited   partners
      representing 800 units of limited partnership interest (the "Closing") for
      $19,280,000  in cash and notes.  Immediately  following  the Closing,  the
      Partnership  acquired a 99% limited partnership  interest in the Operating
      Partnerships.  The Partnership  acquired its limited partnership  interest
      for $16,388,000 which was paid in installments.


2.    SIGNIFICANT ACCOUNTING POLICIES

      Financial statements

      The financial  statements of the  Partnership  are prepared on the accrual
      basis of accounting and include only those assets, liabilities and results
      of operations related to the business of the Partnership.

      Investments in Operating Partnerships

      The Partnership accounts for its investment in the Operating  Partnerships
      on the equity method of accounting. Under the equity method of accounting,
      the  investment  cost  is  adjusted  by  the  Partnership's  share  of the
      Operating  Partnerships'  results of operations,  which are limited to the
      respective  investment balances and by distributions  received or accrued.
      The  statements of  operations  includes the  Partnership's  equity in the
      earnings of the Operating Partnerships on a calendar year basis.

      Syndication costs

      Syndication  costs of $2,639,200 were charged  against  limited  partners'
      capital  upon the  closing  of the public  offering,  in  accordance  with
      prevalent industry practice.








                                       F-7


<PAGE>
<TABLE>
<CAPTION>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

             YEARS ENDED FEBRUARY 28, 1998 AND 1997 AND FEBRUARY 29, 1996


2.    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Income taxes

      No provisions have been made for federal, state and local income taxes, as
      they are the personal responsibility of the partners.

      Cash and cash equivalents

      For purposes of the statements of cash flows,  the  Partnership  considers
      all highly  liquid  debt  instruments  purchased  with a maturity of three
      months  or less to be cash  equivalents.  Cash  and cash  equivalents  are
      recorded at cost which approximates fair value.

      Fiscal year

      The Partnership's fiscal year ends on the last day in February.

      Use of estimates

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


3.    INVESTMENTS IN OPERATING PARTNERSHIPS

      The Investments in Operating Partnerships are as follows:

                                  Dixon       Dixon        Dixon
                                  Mill I      Mill II     Mill III     Total
         <S>                       <C>          <C>          <C>        <C>
      Balance, March 1, 1995    $547,117    $1,344,711   $1,713,302  $3,605,130

      Equity in loss of
       Operating Partnerships   (269,033)     (365,973)    (110,387)   (745,393)
                                --------      --------   ----------    --------

      Balance, February 29, 1996 278,084       978,738    1,602,915   2,859,737
      Equity in loss of
       Operating Partnerships   (278,084)     (346,227)    (175,669)   (799,980)
                                --------      --------    ---------   ---------

      Balance, February 28, 
       1997                           -        632,511    1,427,246   2,059,757

      Equity in loss of
       Operating Partnerships         -       (269,557)     (89,318)   (358,875)
                             ----------       --------    ----------  ---------

      Balance, February 28, 
         1998                    $    -      $ 362,954   $1,337,928  $1,700,882
                            ============    ==========   ==========   =========


</TABLE>


                                       F-8


<PAGE>
<TABLE>
<CAPTION>


                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

             YEARS ENDED FEBRUARY 28, 1998 AND 1997 AND FEBRUARY 29, 1996



3.    INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)


      The combined balance sheets of the Operating  Partnerships at December 31,
      1997 and 1996 are shown below.

                                                            December 31,
                                                          1997         1996
        <S>                                                <C>          <C>
      Assets:
        Land                                         $  1,150,473  $  1,150,473
        Buildings (net of accumulated depreciation
           of $ 11,164,490 and $9,869,372 in 1997 and
           1996, respectively)                         41,475,474    42,739,754
        Cash and cash equivalents                       1,159,863       563,084
        Deferred costs                                    537,180       580,814
        Mortgage escrow deposits                        1,067,734       902,221
        Tenant security deposits                          669,685       630,000
        Other assets                                       34,043         1,935
                                                   --------------  ------------

             Total assets                             $46,094,452   $46,568,281
                                                      ===========   ===========

      Liabilities:
        Mortgages payable                             $26,776,894   $27,015,128
        Note payable                                      317,713       317,713
        Accounts payable and accrued expenses             137,084       118,418
        Accrued interest payable                          249,734       230,288
        Tenants' security deposits payable                669,685       630,000
        Due to general partner and affiliates           1,840,349     1,660,566
                                                   -------------- -------------

             Total liabilities                         29,991,459    29,972,113
                                                    -------------  ------------

      Partners' equity:
        Wilder Richman Historic Properties II, L.P.     1,700,882     2,059,757
        General partner                                14,402,111    14,536,411

             Total partners' equity                    16,102,993    16,596,168
                                                    -------------  ------------

             Total liabilities and partners' equity    $46,094,452  $46,568,281



</TABLE>








                                       F-9


<PAGE>
<TABLE>
<CAPTION>


                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

             YEARS ENDED FEBRUARY 28, 1998 AND 1997 AND FEBRUARY 29, 1996



3. INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)

   The combined  statements of operations of the Operating  Partnerships for the
   years ended December 31, 1997, 1996 and 1995 are as follows:

                                                            Year ended
                                                  December 31,
                                                1997        1996          1995
         <S>                                    <C>          <C>         <C>
      Revenues:
        Rent                              $ 5,803,104   $5,530,885 $  5,196,552
        Interest                               31,153       14,497       11,419
                                          -----------   ------------ ----------

                                            5,834,257    5,545,382    5,207,971
                                          -----------   ----------   ----------
      Expenses:
        Administrative                        958,904      978,505      972,779
        Operating                           2,005,544    2,041,985    1,978,650
        Management fees                       169,787      168,976      153,281
        Interest                            1,832,950    1,847,737    1,863,047
        Depreciation and amortization       1,360,247    1,363,337    1,363,337
                                          -----------  ------------  ----------
                                            6,327,432    6,400,540    6,331,094
                                          -----------   ----------  ----------

      Loss before extraordinary item         (493,175)    (855,158)  (1,123,123)

      Extraordinary item - forgiveness of debt              -                 -
                                              ---------  ---------  ----------
       370,201

          NET LOSS                        $  (493,175)  $ (855,158)$   (752,922)
                                          ===========   ========== ============

      Loss before extraordinary item
       allocated to Wilder Richman Historic
       Properties II, L.P.                $  (358,875)  $ (799,980) $(1,111,892)

      Extraordinary item                         -            -         366,499
                                          -----------   ----------  -----------

      Net loss allocated to Wilder Richman
       Historic Properties II, L.P.       $  (358,875)  $ (799,980) $  (745,393)
                                          ===========   ==========  ==========

      Loss before extraordinary item
       allocated to Dixon Venture Corp.   $  (134,300)  $  (55,178) $   (11,231)

      Extraordinary item                         -               -        3,702
                                           ----------   ----------- -----------

      Net loss allocated to Dixon
         Venture Corp.                      $(134,300)  $ (55,178)      $(7,529)
                                         ============  ==========   ===========


</TABLE>



                                      F-10


<PAGE>



                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

             YEARS ENDED FEBRUARY 28, 1998 AND 1997 AND FEBRUARY 29, 1996



3.  INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)

    In  connection  with the  modification  of the  mortgages  of the  Operating
    Partnerships  on June 11, 1992, the  Partnership  provided (i) an advance of
    $300,000 to assist in covering costs  associated with such  modification and
    (ii) a letter of credit to Federal National Mortgage  Association  ("FNMA"),
    the lender, in the amount of $600,000. Such letter of credit was provided to
    assist in covering  future  operating  shortfalls,  if any, of the Operating
    Partnerships  in order to avoid  default  under  their  respective  mortgage
    obligations.  The term of the letter of credit was the later of (i)  January
    1, 1996 or (ii) the ability of the  operating  Partnerships  to operate at a
    debt  service  coverage  ratio  of 1.10  for a  twelve  month  period.  Such
    condition was satisfied for the twelve-month period ended December 31, 1994;
    accordingly,  the Partnership's  letter of credit was released on January 1,
    1996.  The  Partnership  provided an advance of $17,713 during 1992 to cover
    operating shortfalls pursuant to the terms of the mortgage modification.

    Any such  advances  bear  interest at 6.5% per annum and are  guaranteed  by
    principals  of the  Operating  General  Partner to the extent that such sums
    would have  otherwise  been  advanced  pursuant to their  operating  deficit
    guarantee obligation.  Outstanding advances as of February 28, 1998 and 1997
    amounted to $317,713 with accrued  interest  thereon of $119,260 and $98,436
    at February 28, 1998 and 1997,  respectively.  The outstanding  advances and
    accrued  interest are reflected in Note Payable and Accrued Interest Payable
    in the combined balance sheet of the Operating Partnerships presented above.


4.  RELATED PARTY TRANSACTIONS

    An annual  investor  services  fee is payable to an affiliate of the general
    partner of the Partnership in the amount of $15,000 from the Partnership and
    each of the Operating  Partnerships.  At February 28, 1998 and 1997,  due to
    related  parties  includes  $140,000 and $125,000,  respectively of Investor
    Services fees payable from the Partnership and the Operating Partnerships.

    At February 28, 1998 and 1997, due to related  parties also includes  $9,846
    due to the Operating Partnerships.

    An  affiliate  of the  General  Partner  is the  co-management  agent of the
    properties owned by the Operating  Partnerships.  Pursuant to the management
    agreement  such  management  fees are not to  exceed  1.5% of  annual  gross
    operating  revenues of the Complex.  The affiliated  management agent earned
    $84,893  and  $84,488  in the  years  ended  December  31,  1997  and  1996,
    respectively of which $35,004 and $35,005 were paid in 1997 and 1996.





















                                      F-11


<PAGE>



                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

             YEARS ENDED FEBRUARY 28, 1998 AND 1997 AND FEBRUARY 29, 1996



5.    PARTNERS' EQUITY

      The general partner,  the special limited partner and the limited partners
      were allocated 1%, .01% and 98.99%, respectively, of the losses.

      Distributions

      Cash flow of the Partnership  available  annually for  distribution  after
      payment of Partnership expenses will be distributed 98.99% to the investor
      limited  partners,  .01% to the special  limited  partner and 1.00% to the
      General Partner.

      Net cash proceeds  resulting  from a sale or  refinancing by the Operating
      Partnerships,  to the extent  available  (after the discharge of debts and
      obligations of the Operating  Partnerships and the Partnership,  including
      outstanding  loans  from  partners  or  affiliates),  will be  distributed
      generally as follows:

        -  98.99% to the investor limited partners,  .01% to the special limited
           partner and 1.00% to the General Partner,  until the investor limited
           partners   have   received   an  amount   equal  to  their   adjusted
           contributions;

        -  98.99% to the investor limited partners,  .01% to the special limited
           partner and 1.00% to the General Partner,  until the investor limited
           partners  have  received an amount  equal to the accrued  cumulative,
           non-compounded rate of 7% per annum (see Note 7).

        -  The balance of adjusted  capital  contributions of the General 
           Partner and special limited partner, and

        -  The balance, if any, 97.99% to the investor limited partners, .01% to
           the special limited partner and 2.00% to the General Partner.
























                                      F-12


<PAGE>
<TABLE>
<CAPTION>


                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

             YEARS ENDED FEBRUARY 28, 1998 AND 1997 AND FEBRUARY 29, 1996




6.    TAXABLE LOSS

      A  reconciliation  of the financial  statement loss of the Partnership for
      the years ended  February  28, 1998 and 1997 and  February 29, 1996 to the
      net loss as shown on the tax  returns  for the years  ended  December  31,
      1997, 1996 and 1995 is as follows:

                                                           Year ended 
                                                  December 31,
                                                  1997       1996        1995
         <S>                                     <C>         <C>         <C>
      Financial statement loss as of
       February 28, 1997, February 29, 1996
       and February 28, 1995, respectively    $(333,793)  $(779,882) $(736,763)

      Less  transactions  occurring  during 
       January  1 to  end of  February  of
       respective periods:
        Interest income                         (1,426)     (1,393)     (1,362)
        Fees to related party not deductible
         under Internal Revenue Code Section 
         267                                    15,000      15,000      15,000
                                               --------- ----------   --------

                                              (320,219)  (766,275)   (723,125)

      Financial  statement to tax return 
       difference  arising from 
       investments in
       Operating Partnerships:

      Forgiveness of debt                           -     366,499    (366,499)

      Excess of depreciation expense of  
        the operating partnerships for 
        income tax purposes over
        financial reporting purposes        (1,148,570)(1,048,735)   (817,582)
                                          ------------  ---------  ----------

      Taxable loss                         $(1,468,789$(1,448,511)$(1,907,206)
                                           =========== =========     =========



</TABLE>







                                      F-13


<PAGE>




                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

             YEARS ENDED FEBRUARY 28, 1998 AND 1997 AND FEBRUARY 29, 1996



7.    COMMITMENTS AND CONTINGENCIES

      Preferred return

      Pursuant to the Partnership  Agreement,  the investor limited partners are
      entitled to an annual preferred return in the amount of 7% of the investor
      limited partners'  adjusted  contributions  outstanding from time to time,
      subject  to  cash  flow  available  for  distribution   (including  lender
      restrictions).  As of December 31, 1997, the cumulative  preferred  amount
      due  from  the  Operating  Partnerships  is  $9,449,891.   Any  cumulative
      shortfall  not  recovered  out of future cash flow  distributions  will be
      payable from sale or refinancing proceeds, to the extent available.

      Operating Partnership Litigation

      A complaint  has been filed in Federal  Court by a former  employee of the
      Operating  Partnerships claiming sexual harassment.  The Company has moved
      to dismiss the common law claims  asserted in the complaint and intends to
      vigorously  defend the charges.  The Operating General Partner and counsel
      cannot measure the potential liability, if any, at this time.







































                                      F-14




<PAGE>


















                             DIXON MILLS ASSOCIATES


                      COMBINED FINANCIAL STATEMENTS FOR THE

                    YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

                        AND INDEPENDENT AUDITORS' REPORT






<PAGE>










                                C O N T E N T S

                                                                       Page

INDEPENDENT AUDITORS' REPORT                                           F-17


COMBINED FINANCIAL STATEMENTS:

  Combined balance sheets                                              F-18

  Combined statements of operations                                    F-19

  Combined statements of partners' equity                              F-20

  Combined statements of cash flows                                    F-21

  Notes to combined financial statements                            F-22 - F-27























                                     F-16


<PAGE>











                         INDEPENDENT AUDITORS' REPORT




Board of Directors and Stockholders
Dixon Venture Corp.
Secaucus, New Jersey

and

Partners
Wilder Richman Historic Properties II, LP
Greenwich, Connecticut


We have  audited  the  accompanying  combined  balance  sheets  of  Dixon  Mills
Associates  as of December  31, 1997 and 1996,  and the  related  statements  of
operations,  partners'  equity and cash flows for the years ended  December  31,
1997, 1996 and 1995. These financial  statements are the  responsibility  of the
Partnerships'  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 Dixon Mills Associates,  as of
December  31,  1997 and 1996,  and the  results  of its  operations,  changes in
partners'  equity and cash flows for the years ended December 31, 1997, 1996 and
1995 in conformity with generally accepted accounting principles.






February 23, 1998
New York, New York










                                      F-17


<PAGE>
<TABLE>
<CAPTION>




                             DIXON MILLS ASSOCIATES


                            COMBINED BALANCE SHEETS

                                                    December 31,
           A S S E T S                                1997              1996
           -----------                            -------------     ----------
<S>                                                      <C>            <C>
LAND (Notes 2 and 5)                                $  1,150,473 $  1,150,473

BUILDINGS (net of accumulated depreciation
  of $11,164,490 and $9,869,372 in 1997 and 1996,
   respectively) (Notes 2 and 5)                      41,475,474   42,739,754

CASH AND CASH EQUIVALENTS (Note 2)                     1,159,863      563,084

DEFERRED COSTS (Note 2)                                  537,180      580,814

MORTGAGE ESCROW DEPOSITS (Note 5)                      1,067,734      902,221

TENANT SECURITY DEPOSITS                                 669,685      630,000

OTHER ASSETS                                              34,043        1,935
                                                   -------------   ----------

                                                     $46,094,452  $46,568,281

           LIABILITIES AND PARTNERS' EQUITY

LIABILITIES:

  Mortgages payable (Note 5)                         $26,776,894  $27,015,128

  Note payable (Note 6)                                  317,713      317,713

  Accounts payable and accrued expenses                  137,084      118,418

  Accrued interest payable (Notes 5 and 6)               249,734      230,288

  Tenants' security deposits payable                     669,685      630,000

  Due to general partner and
   affiliates (Notes 4 and 6)                          1,840,349    1,660,566
                                                     -----------  -----------

                                                      29,991,459   29,972,113
COMMITMENTS AND CONTINGENCIES (Note 7)

PARTNERS' EQUITY (Note 3):
  WILDER RICHMAN HISTORIC
   PROPERTIES II, L.P., LIMITED PARTNER                1,700,882    2,059,757

  DIXON VENTURE CORP., GENERAL PARTNER                14,402,111   14,536,411
                                                     -----------  -----------

                                                      16,102,993   16,596,168

                                                     $46,094,452  $46,568,281
</TABLE>
                  See notes to combined financial statements

                                     F-18


<PAGE>
<TABLE>
<CAPTION>

                            DIXON MILLS ASSOCIATES


                       COMBINED STATEMENTS OF OPERATIONS




                                                   Yearended
                                                  December 31,
                                             1997        1996          1995
<S>                                          <C>          <C>           <C>
Revenues:
  Rent                                  $ 5,803,104   $5,530,885   $5,196,552
  Interest                                                31,153       14,497
                                                     -----------   ----------
11,419

                                          5,834,257    5,545,382    5,207,971
                                        -----------   ----------  -----------
Expenses:
  Administrative                            958,904      978,505      972,779
  Operating                               2,005,544    2,041,985    1,978,650
  Management fees (Note 4)                  169,787      168,976      153,281
  Interest (Notes 5 and 6)                1,832,950    1,847,737    1,863,047
  Depreciation and amortization           1,360,247    1,363,337    1,363,337
                                        -----------   ----------  -----------
                                          6,327,432    6,400,540    6,331,094
                                        -----------   ----------  -----------

Loss before extraordinary item             (493,175)    (855,158)  (1,123,123)

Extraordinary item - forgiveness
 of debt (Note 6)                              -             -        370,201
                                        ----------    ---------     ---------

      NET LOSS                          $  (493,175)  $ (855,158) $  (752,922)
                                        ===========   ==========  ===========

Loss before extraordinary item
 allocated to Wilder Richman Historic
 Properties II, L.P.                     $ (358,875)  $ (799,980) $(1,111,892)

Extraordinary item                             -              -       366,499
                                       ------------  -----------     --------

Net loss allocated to Wilder Richman
 Historic Properties II, L.P.           $  (358,875)  $ (799,980) $  (745,393)
                                        ===========   ==========  ===========

Loss before extraordinary item
 allocated to Dixon Venture Corp.       $  (134,300)  $  (55,178) $   (11,231)

Extraordinary item                             -              -         3,702
                                      -------------   ----------    ---------

Net loss allocated to Dixon Venture Corp.$ (134,300) $  (55,178)$     (7,529)
                                         ===========  ========== ============


</TABLE>








                   See notes to combined financial statements


                                     F-19


<PAGE>
<TABLE>
<CAPTION>



                            DIXON MILLS ASSOCIATES


                    COMBINED STATEMENTS OF PARTNERS' EQUITY

                 YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995








                                                       Limited    General
                                          Total        partner    partner

<S>                                        <C>           <C>         <C>
Partners' equity, January 1, 1995      $18,204,248   $3,605,130  $14,599,118

Net loss, year ended December 
   31, 1995                               (752,922)    (745,393)      (7,529)
                                      ------------   ----------   ----------

Partners' equity, December 31, 1995     17,451,326    2,859,737   14,591,589

Net loss, year ended December 31, 1996    (855,158)    (799,980)     (55,178)
                                       -----------     --------   ----------

Partners' equity, December 31, 1996     16,596,168    2,059,757   14,536,411

Net loss, year ended December 31, 1997    (493,175)    (358,875)    (134,300)
                                       -----------    ---------  -----------

Partners' equity, December 31, 1997    $16,102,993   $1,700,882  $14,402,111
                                       ===========   ==========  ===========



</TABLE>




















                   See notes to combined financial statements



                                     F-20


<PAGE>
<TABLE>
<CAPTION>




                             DIXON MILLS ASSOCIATES

                        COMBINED STATEMENTS OF CASH FLOWS



                                                   Year ended
                                                 December 31,
                                               1997         1996         1995
<S>                                             <C>         <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                $ (493,175)   $(855,158)   $(752,922)
                                           ---------    ---------    ---------
  Adjustments to reconcile net loss to
   net cash provided by operating activities:
    Depreciation and amortization          1,360,247    1,363,337    1,363,337
    Forgiveness of debt - note payable            -            -      (317,714)
  Change in assets:
    Increase in mortgage escrow deposits    (165,513)     (53,403)    (491,546)
    Increase in tenant security deposits     (39,685)     (28,016)    (111,102)
    Increase (decrease) in other assets      (32,108)      69,163      (34,004)
    Decrease in real estate tax receivable        -            -       208,442
  Change in liabilities:
    Increase (decrease) in accounts payable
     and accrued expenses                     18,666      (17,180)      17,159
    Increase (decrease) in accrued 
     interest payable                         19,446       19,484      (32,948)
    Increase in tenants security deposit      39,685       28,016      111,102
    Increase in due to General Partner 
     and affiliates                          179,783      178,971      164,101

       Total adjustments                   1,380,521    1,560,372      876,827
                                          ----------   ----------   ----------

       Net cash provided by
        operating activities                 887,346      705,214      123,905
                                          ----------    ---------   ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of fixed assets                   (52,333)         -             -
                                          ----------   ----------     --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payment of mortgages payable              (238,234)    (222,661)    (208,229)
                                           -----------   -----------  ---------

INCREASE (DECREASE) IN CASH                  596,779      482,553      (84,324)

CASH AND CASH EQUIVALENTS,
 beginning of year                           563,084       80,531      164,855
                                         -----------    ---------    ---------

CASH AND CASH EQUIVALENTS,
 end of year                             $ 1,159,863    $ 563,084    $  80,531
                                           =========    =========    =========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during year for interest       $ 1,813,502  $ 1,828,253  $ 1,843,507
                                           =========   ==========   ==========

</TABLE>





                   See notes to combined financial statements


                                      F-21


<PAGE>





                             DIXON MILLS ASSOCIATES

                     NOTES TO COMBINED FINANCIAL STATEMENTS

                    YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


1.  COMBINATION AND ORGANIZATION

    The  combined  financial  statements  include  the  accounts  of Dixon  Mill
    Associates  I  (Phase  One),  Limited   Partnership  ("DM  I"),  Dixon  Mill
    Associates  II, (Phase Two),  Limited  Partnership  ("DM II") and Dixon Mill
    Associates  III,  (Phase  Three),   Limited  Partnership  ("DM  III")  after
    elimination of all significant intercompany balances and transactions.

    Description of the business

    The partnerships are one of three limited partnerships collectively known as
    "Dixon Mills Associates" or the "Operating Partnerships", each of which owns
    one phase of an aggregate  433 units of  residential  apartments  located in
    Jersey City,  New Jersey,  that consist of buildings  that are designated as
    "certified historic structures" by the U.S. Department of the Interior.  The
    Operating Partnerships have constructed,  rehabilitated, and own and operate
    the complex. In accordance with the tax exempt financing of the complex, the
    Operating  Partnerships  are  required  to rent 15% to 20% of the  apartment
    units to individuals of low or moderate income.

     On July 15, 1988, the Operating Partnerships  transferred their 99% limited
partnership  interests  to Wilder  Richman  Historic  Properties  II, L.P.  (the
"Limited  Partner")  in  connection  with  that  limited   partnership's  public
offering. The remaining 1% interest remained with the Operating General Partner,
Dixon Venture Corp. ("DVC")


2.  SIGNIFICANT ACCOUNTING POLICIES

    Financial statements

    The financial  statements of the Operating  Partnerships are prepared on the
    accrual basis of accounting and include only those assets,  liabilities  and
    results of operations related to the business of the Operating Partnerships.

    Combined  financial  statements  are  presented as the  companies  are under
    common control, ownership, and management.

    Land and buildings

    Land and  buildings  are  stated at lower of cost or net  realizable  value,
    ("NRV").  NRV is the net cash flow  necessary to recover costs  exclusive of
    debt  service.  Depreciation  on buildings is computed on the  straight-line
    method. The depreciable lives assigned is 40 years for the real property.

    Effective  for the year ended  December  31,  1996 the  Partnership  adopted
    Statement of Financial  Accounting  Standards ("SFAS") No. 121,  "Accounting
    for Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
    of." This standard requires that long-lived assets and certain  identifiable
    intangibles  held and used by an entity be reviewed for impairment  whenever
    events or changes in  circumstances  indicate that the carrying amount of an
    asset may not be recoverable.













                                      F-22


<PAGE>



                             DIXON MILLS ASSOCIATES

                 NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

                    YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



2.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    Income taxes

    No provisions  have been made for federal,  state and local income taxes, as
    they are the responsibility of the partners.

    The partners of the Operating  Partnerships  were entitled to a 25% historic
    rehabilitation  tax credit on  eligible  costs as a  reduction  of their tax
    liabilities.  In addition, the tax basis of the property has been reduced by
    one-half of the historic  rehabilitation  tax credit for income tax purposes
    only.

    Cash and cash equivalents

    For purposes of the  statements of cash flows,  the  Operating  Partnerships
    consider all highly  liquid debt  instruments  purchased  with a maturity of
    three months or less to be cash  equivalents.  Cash and cash equivalents are
    recorded at cost which approximates fair value.

    Deferred costs

    Deferred costs  represent  costs  incurred in connection  with the mortgages
    (Note 5) and are being  amortized  over the term of the mortgages  using the
    straight line method.

    Use of Estimates

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


3.  PARTNERS' EQUITY

    In accordance  with the Partnership  agreement,  income and losses are to be
    allocated  1% and  99% to the  general  partner  and  the  Limited  Partner,
    respectively.

    Any equity in loss in excess of the Limited Partner's  investment balance in
    an operating partnership is allocated to the General Partner.
















                                      F-23


<PAGE>




                             DIXON MILLS ASSOCIATES

                 NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

                    YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995




3.  PARTNERS' EQUITY (CONTINUED)

    Distributions

    The partnership  agreements of the Operating  Partnerships provide that cash
    flow from  operations  will be distributed 99% to the Limited Partner and 1%
    to the Operating General Partner until the Limited Partner has received a 7%
    preferred  return  (the  "Preference   Amount")  on  their  initial  capital
    contributions.  The balance, if any, would be distributed 75% to the Limited
    Partner and 25% to the Operating General Partner.  Any cumulative  shortfall
    not recovered out of subsequent cash flow distributions will be payable from
    sale or  refinancing  proceeds,  to the  extent  available.  The  cumulative
    preferred  amount  due to the  Limited  Partner  at  December  31,  1997  is
    $9,449,891.  Distributions  of  annual  net  cash  flow are  subject  to the
    provisions of the note payable (Note 6). There is no assurance that all or a
    portion of such amount will be paid, and no amount has been accrued.

    Net  cash  proceeds  resulting  from a sale or  refinancing,  to the  extent
    available  (after the discharge of debts and obligations of the Partnership,
    including   outstanding   loans  from  partners  or  affiliates),   will  be
    distributed generally as follows:

      - 99% to the Limited  Partner  and 1% to the  Operating  General  Partner,
        until the Limited  Partner has  received an amount equal to its adjusted
        contributions.

      - 99% to the Limited  Partner  and 1% to the  Operating  General  Partner,
        until the Limited  Partner has  received an amount  equal to the accrued
        cumulative Preference Amount.

      - The balance of adjusted capital contributions of the General Partner.

      - The  balance,  if any,  75% to the  Limited  Partners   and 25% to the
        Operating General Partner.
























                                      F-24


<PAGE>
<TABLE>
<CAPTION>



                             DIXON MILLS ASSOCIATES

                 NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

                    YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



4.  RELATED PARTY TRANSACTIONS

    DVC  has  complete  authority,  management  and  control  of  the  Operating
    Partnerships.  The Operating Partnerships, in the normal course of business,
    have  transactions  with related parties.  Included in the balance sheet are
    the following items:

      Due to(from):
                                                           1997          1996
                                                           ----          ----
         <S>                                              <C>           <C>
        Morris Property Management                   $  391,782    $  306,888
        Morris Realty                                    (5,259)       (5,259)
        DVC                                             936,830       936,830
        Wilder Richman Management Corporation           291,996       242,107
        RG Housing Advisors, Inc.                        90,000        90,000
        Richman Asset Management, LLC                   135,000        90,000
                                                     ---------- -------------

                                                     $1,840,349    $1,660,566
     </TABLE>
    The Operating  Partnerships  incurred  annual  property  management  fees to
    Wilder  Richman  Management  Corp.  ("WRMC"),  an  affiliate  of the Limited
    Partner, in the amount of $84,893 in 1997, $84,488 in 1996, $76,641 in 1995.
    WRMC   received   payments   of  $35,004  and  $35,005  in  1997  and  1996,
    respectively.  In addition, property management fees of $84,894, $84,488 and
    $76,640  were  incurred  in 1997,  1996 and  1995,  respectively  to  Morris
    Property Management, an affiliate of the General Partner.

    The  Operating  Partnerships  incurred  investor  service fees of $45,000 to
    Richman Asset Management,  LLC, an affiliate of the Limited Partner in 1997,
    1996 and 1995.


5.  MORTGAGES PAYABLE

    On June 11, 1992, the Jersey City  Redevelopment  Agency  provided  mortgage
    financing for the Operating  Partnerships through the issuance of tax-exempt
    Bonds (the "Bonds")  guaranteed and secured by the Federal National Mortgage
    Association ("FNMA") mortgage pass-through certificate ("FNMA Certificate").
    The FNMA  Certificate  in turn was  secured  by  mortgages  in the amount of
    $27,545,000  (collectively,  the  "Mortgages")  and  letters  of  credit  of
    $4,260,000  (the  "Letters  of  Credit")  issued  by  Chase  Manhattan  Bank
    ("Chase").  The Letters of Credit were secured by an additional  mortgage in
    the same amount and the personal  guarantees  of certain  principals of DVC.
    The  Mortgages  provided  that the Letters of Credit  would remain until the
    Operating  Partnerships  meet certain debt service ratio tests as defined in
    the Mortgages (the "Debt Service  Test").  The Debt Service Test was met and
    the letters of credit were released in June, 1995.













                                      F-25


<PAGE>




                             DIXON MILLS ASSOCIATES

                 NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

                    YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995



5.  MORTGAGES PAYABLE (CONTINUED)

    The interest rate on the Mortgages is 6.74% with a monthly payment of
    $170,978.
    Principal amortization is based on a thirty-five year payment period.  The
    Mortgages are scheduled to mature as follows:

                   1998                             $   254,748
                   1999                                 262,586
                   2000                                 290,713
                   2001                                 310,924
                   2002                                 332,540
                   Thereafter                        25,325,383
                                                    -----------

                                                    $26,776,894

    The Mortgages are due for payment on May 1, 2000.  If the  underlying  bonds
    are not remarketed and the Trustee acquires the bonds on behalf of FNMA, the
    mortgage rate becomes  8.675% per annum and the Mortgages are extended until
    May 1, 2010.

    The  Mortgages   require   monthly   payments  to  a   replacement   reserve
    ("Replacement Reserve") account as follows:

        June 1996 - May 1997                            $16,667
        June 1997 - May 2012                              5,400

    The Replacement Reserve (included in mortgage escrow deposits) shall be used
    exclusively  to pay for  certain  repairs  or  replacements,  subject to the
    approval of FNMA.  The balance in this  account was $662,134 and $518,233 at
    December 31, 1997 and 1996, respectively.


6.  NOTE PAYABLE AND FOREGIVENESS OF DEBT

    Chase Manhattan Bank

    Chase advanced  $277,500 to the Operating  Partnerships for costs associated
    with the  Mortgages,  bearing  interest  at 6.50% with a maturity  of May 1,
    2000.  Payments of  principal  and interest  could not commence  sooner than
    January 1, 1996 depending on, among other things, cash flow generated by the
    Operating  Partnerships.  In  addition,  Chase  provided  FNMA with cash and
    letter of credit in the amount of  $622,500  (the "Chase  Operating  Deficit
    Escrows")  to provide  assistance  in the event the  Operating  Partnerships
    experience  future  operating  deficits.  Any  amounts  drawn  on the  Chase
    Operating Deficit Escrows also bore interest of 6.50%.














                                      F-26


<PAGE>





                             DIXON MILLS ASSOCIATES

                 NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

                    YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995


6.  NOTE PAYABLE (CONTINUED)

    In addition  by an  agreement  with Chase dated July 5, 1995,  to the extent
    that the $600,000  letter of credit issued to FNMA was  released,  the Chase
    note and any accrued and unpaid interest would be forgiven. In January 1996,
    pursuant to the Operating Deficit Escrow Agreement,  FNMA released the Chase
    letter of credit.  As a result of the full  release  of the Chase  Operating
    Deficit Escrow, the note payable of $317,714 and accrued interest of $52,487
    was written down to zero and is reflected  as a  forgiveness  of debt in the
    accompanying statement of operations for 1995.

    Limited Partner

    The Limited Partner also advanced  $277,500 in connection with the Mortgages
    which bear  interest at 6.50%.  Payments of  principal  and  interest  could
    commence no sooner than January 1, 1996  depending  on, among other  things,
    cash flow generated by the Operating Partnerships. The principal balance and
    unpaid  interest  become due upon a sale or refinancing of the property.  In
    addition, the Limited Partner provided FNMA with a letter of credit and cash
    in the amount of $622,500 (the "Limited Partner  Operating  Deficit Escrow")
    to provide  assistance  in the event the Operating  Partnerships  experience
    future  operating  deficits.   Pursuant  to  the  Operating  Deficit  Escrow
    Agreement,  FNMA released the letter of credit in January  1996.  Any amount
    drawn on the Limited  Partner  Operating  Deficit  Escrow bears  interest at
    6.50%. To the extent the Operating  Partnerships  make  distributions of net
    cash  flow,   all  such  net  cash  flow  with  respect  to  the  applicable
    distribution  periods must be paid to the Limited  Partner until the amounts
    outstanding to the Limited Partner are satisfied.

    Total  advances  provided  by the Limited  Partner as of  December  31, 1997
    amount to  $317,713  and  accrued  interest of  approximately  $114,000  and
    $94,000 as of December 31, 1997 and 1996, respectively. This note is secured
    by the personal  guarantees of certain  principals of DVC to the extent such
    amounts were advanced before February 1, 1994.


7.  COMMITMENTS AND CONTINGENCIES

    Litigation

    A  complaint  has been filed in Federal  Court by a former  employee  of the
    Operating Partnerships claiming sexual harassment.  The Company has moved to
    dismiss  the common law claims  asserted  in the  complaint  and  intends to
    vigorously  defend the charges.  The Operating  General  Partner and counsel
    cannot measure the potential liability, if any, at this time.


















                                      F-27

<PAGE>
<TABLE>
<CAPTION>





                             DIXON MILLS ASSOCIATES

                        COMBINED STATEMENTS OF CASH FLOWS


                                                        Year ended
                                                   December 31,
                                                1997        1996        1995
                                                ----        ----         ----
<S>                                             <S>          <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                 $(493,175)   $(855,158)   $(752,922)
                                            --------    ---------    ---------
  Adjustments to reconcile net loss to
   net cash provided by operating activities:
    Depreciation and amortization          1,360,247    1,363,337    1,363,337
    Forgiveness of debt - note payable           -            -       (317,714)
  Change in assets:
    Increase in mortgage escrow deposits    (165,513)     (53,403)    (491,546)
    Increase in tenant security deposits     (39,685)     (28,016)    (111,102)
    Decrease (increase) in other assets      (32,108)      69,163      (34,004)
    Decrease in real estate tax receivable        -           -        208,442
  Change in liabilities:
    (Decrease) increase in accounts payable
      and accrued expenses                      18,666    (17,180)      17,159
    Increase (decrease) in accrued interest 
       payable                                  19,446     19,484      (32,948)
    Increase in tenants security deposit        39,685     28,016      111,102
    Increase in due to General Partner
     and affiliates                            179,783    178,971      164,101

       Total adjustments                     1,380,521  1,560,372      876,827
                                           -----------   -----------  --------

       Net cash provided by operating
         activities                            887,346    705,214     123,905
                                            ----------- ---------   ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of fixed assets                     (66,664)       -           -
  Proceeds from sale of fixed assets            14,331        -           -
                                           -----------   -----------   --------

       Net cash used in investing activities    52,333        -             -
                                             ----------- -----------   --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payment of mortgages payable                (238,234)   (222,661)   (208,229)
                                           -----------   -----------   -----------

INCREASE (DECREASE) IN CASH                    596,779     482,553     (84,324)

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



<S>                                               <C>           <C>       <C>
CASH AND CASH EQUIVALENTS, beginning 
 of year                                      563,084        80,531    164,855
                                          -----------     ---------   --------

CASH AND CASH EQUIVALENTS, end of year    $ 1,159,863     $ 563,084   $ 80,531
                                            =========    ==========  ==========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during year for interest         $ 1,813,502   $ 1,828,253   $ 1,843,507
                                           ===========   ===========   ===========


</TABLE>







                   See notes to combined financial statements



                                      F-21