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, 1999

                                       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                            (I.R.S.Employer
        of organization)                                Identification No.)

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
on-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,  1999,  Registrant  had working  capital  reserves of
approximately $663,000, 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

       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


                                       2
<PAGE>

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>

As of  December  31,  1998 and 1997,  the  occupancy  and  rental  rates were as
follows:

                               December 31, 1998             December 31, 1997
                               -----------------             -----------------

Occupancy Rate                        96%                           99%
Monthly Rental Rates:
     Studio                    $  614 - $1,044               $   578 - $  935
     One-Bedroom               $  715 - $1,395               $   666 - $1,450
     Two-Bedroom               $1,001 - $1,802               $   808 - $1,695
     Three-Bedroom             $1,658 - $2,395               $ 1,695 - $2,195

       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, 1999, 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:

       Two  complaints  were filed in Federal  Court by former  employees of the
Operating  Partnerships  (one of whom is a  relative  of the  principals  of the
Operating  General Partner)  claiming sexual  harassment.  The Operating General
Partner  settled  such  complaints  on  behalf  of  the  Operating  Partnerships
subsequent  to February 28, 1999,  each in the amount of $250,000,  inclusive of
respective  legal fees.  Such  settlements  were  conducted  despite the General
Partner's  refusal to provide its consent.  The results of the  settlement  were
accrued in the Operating  Partnerships'  financial statements as of December 31,
1998.

       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>

                                     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, 1999, there were  approximately  743 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

<TABLE>
<CAPTION>
                                                                     Year End
                                  ------------------------------------------------------------------------------
                                     February         February       February       February          February
                                     28, 1999         28, 1998       29, 1997       28, 1996          28, 1995
                                     --------         --------       --------       --------          --------
<S>                               <C>               <C>            <C>            <C>               <C>
Total revenues
  (Interest income)               $    52,660       $    55,276    $    50,994    $    43,259       $    30,858

Equity in loss of investment in
  Operating Partnerships          $  (508,146)(b)   $  (358,875)   $  (799,980)   $  (745,393)(a)   $  (873,701)
Net loss                          $  (488,061)      $  (333,793)   $  (779,882)   $  (736,763)      $  (875,499)

Net loss per unit of limited
  partnership interest            $      (604)      $      (413)   $      (965)   $      (912)      $    (1,083)
At year end:
  Total assets                    $ 2,314,027       $ 2,787,088    $ 3,105,881    $ 3,870,763       $ 4,592,526
</TABLE>


(a)  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.

(b)  Includes  extraordinary  loss of $321,753  in  connection  with  litigation
     settlement. See Management's Discussion and Analysis of Financial Condition
     and Results of operations.


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 1998  (before  extraordinary
charges)  were  favorable  compared to 1997.  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


                                       5
<PAGE>

housing will have a positive or negative  impact on the Complex or its cash flow
in the future.

       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.
During  1995,   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 . As of February 28,
1999, the Partnership had accrued interest  receivable of $140,083 in connection
with the advances provided.  Such outstanding  advances and all accrued interest
thereon were repaid by the Operating Partnerships during April 1999.

       Because the outstanding  advance owed to the Partnership was repaid,  the
Operating  Partnerships  are no longer subject to  restrictions  concerning cash
flow distributions and the payment of certain fees to affiliates.  To the extent
cash flow is  generated  by the  Operating  Partnerships,  such cash flow may be
retained by the Operating  Partnerships  or may be distributed at the discretion
of management,  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 1998, the cumulative preferred
distribution  is  approximately  $10,813,000.   Although  recent  rental  market
conditions have been strong, management has been building up its cash balance to
protect against potential adverse changes in market conditions and unanticipated
expenses.  In  addition,   because  the  property  has  been  in  operation  for
approximately  ten  years,  management  is  addressing  the  potential  need for
extensive  capital  improvements  that may be necessary in the near future.  The
General Partner and the Operating General Partner are contemplating the economic
benefits of a refinancing  of the Property in order to enhance cash flow.  Until
such time as the  Property is  refinanced  at a lower annual debt  service,  the
Partnership does not anticipate making annual cash flow distributions to Limited
Partners (except as discussed below).  If a refinancing is ultimately  achieved,
the resumption of cash flow  distributions will be assessed on an ongoing basis,
based on the results of operations,  the physical  condition of the property and
the local market  conditions,  among other things.  As of December 31, 1998, 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 $747,000.

       As of  December  31,  1998,  the  Operating  Partnerships'  liquidity  is
improved  compared to December 31, 1997, with cash and cash  equivalents  having
increased by approximately $791,000 and the replacement reserve having increased
by approximately  $85,000.  Accounts  payable and accrued expenses  increased by
approximately   $539,000  (primarily  due  to  the  accrual  of  the  litigation
settlement  discussed below) and amounts due to related  parties,  which balance
was approximately $2,029,000 as of December 31, 1998, increased by approximately
$188,000  due to the  accrual of  management  fees and  investor  service  fees.
Subsequent  to December 31, 1998,  the Operating  Partnerships  utilized cash to
repay  the   Partnership   for  its  advance  and   accrued   interest   thereon
(approximately  $460,000),  settle outstanding litigation matters (in the amount
of $500,000),  pay outstanding  investor service fees ($270,000) and pay accrued
property management fees.

       Two  complaints  were filed in Federal  Court by former  employees of the
Operating  Partnerships  (one of whom is a  relative  of the  principals  of the
Operating  General Partner)  claiming sexual  harassment.  The Operating General
Partner  settled  such  complaints  on  behalf  of  the  Operating  Partnerships
subsequent  to February 28, 1999,  each in the amount of $250,000,  inclusive of
respective  legal fees.  Such  settlements  were  conducted  despite the General
Partner's  refusal to provide  its  consent.  The General  Partner is  reviewing
whether there may be a claim for damages.  The results of the  settlements  were
accrued in the Operating  Partnerships'  financial statements as of December 31,
1998.

       Cash and cash  equivalents of the  Partnership as of February 28, 1999 of
$663,495 includes  approximately  $582,000 which was released from the Operating
Deficit Escrow. In addition,  the Partnership received approximately $460,000 as
repayment of its advance to the Operating Partnerships in May, 1999. Pursuant to
the  Partnership  Agreement,  the  released  Operating  Deficit  Escrow  of  the


                                       6
<PAGE>

Partnership  may be held or  utilized  for  other  Partnership  purposes  in the
discretion  of the General  Partner.  The General  Partner is planning to make a
distribution  to  limited  partners  of  record  as  of  December  31,  1999  of
approximately  $964,000  ($1,205 per Unit) in the first quarter of 2000.  During
the year ended  February 28, 1999,  the  Partnership's  investment  in Operating
Partnerships  decreased  by  $508,146  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, 1999, due to
affiliates  includes  $155,000 of accrued  investor service fees, which includes
the  Partnership's  expense  for the  last  seven  fiscal  periods  and  $50,000
otherwise  payable  from the final  distribution  of the  guaranteed  investment
contracts in January 1992.

       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,
under which 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, 1999

       During the year ended February 28, 1999, the Partnership  earned interest
of approximately $53,000 including  approximately $21,000 of accrued interest on
advances provided to the Operating Partnerships discussed above. During the year
ended February 28, 1999, interest earnings was comparable to the previous fiscal
period.  The  Partnership's  operating  expenses (which include accrued investor
service fees of $15,000) were  comparable  to the year ended  February 28, 1998.
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 $233,000, in accordance with the equity method of
accounting.

       The Operating  Partnerships  reported a net loss from  operations for the
year ended December 31, 1998 in the amount of approximately $748,000,  inclusive
of  depreciation   and   amortization  of   approximately   $1,360,000  and  the
extraordinary  charge in connection with the litigation  settlement of $500,000.
However,  the Operating  Partnerships  generated  cash flow after  required debt
service  payments and required  replacement  reserve  deposits of  approximately
$781,000 during 1998, which considers principal amortization under the mortgages
(approximately  $254,000)  and net deposits to required  escrows  (approximately
$85,000),  and excludes the extraordinary charge,  accrued fees to affiliates of
the Operating General Partner and the General Partner  (approximately  $232,000)
and  accrued  interest to the  Partnership  (approximately  $21,000).  Occupancy
remained  consistently  high  throughout  1998,  while  management  has steadily
increased  rental  rates,  resulting  in an  improvement  in  operating  results
compared to 1997. In future periods,  the related party services are more likely
to be paid on a current  basis  because  the  Partnership  advances  were repaid
during 1999.

       The  Operating  Partnerships  did not  utilize any  replacement  reserves
during  1998.  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.  In addition,  management  is addressing  the potential  need for capital
improvements  to be conducted in the near future.  As of December 31, 1998,  the
occupancy rate was  approximately  96%. 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.


                                       7
<PAGE>

       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. As of December 31, 1997,
the occupancy rate was approximately 99%.


       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 99%.

       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.

        Year 2000 Compliance

       The  inability  of  computers,  software  and other  equipment  utilizing
microprocessors  to recognize and properly process data fields  containing a two
digit year is commonly referred to as the year 2000 compliance ("Y2K") issue. As
the year 2000  approaches,  such  systems  may be unable to  accurately  process
certain  data-based  information.  Many businesses may need to upgrade  existing
systems or purchase new ones to correct the Y2K issue.  Registrant has performed
an assessment of its computer software and hardware and believes it has made the
necessary upgrades in an effort to ensure compliance.  However,  there can be no
assurance that the systems of other entities on which Registrant  relies will be
timely  converted.  The total cost  associated  with Y2K  implementation  is not
expected


                                       8
<PAGE>

to materially impact Registrant's financial position or results of operations in
any given year. However,  there can be no assurance that a failure to convert by
Registrant  or  another  entity  would  not have a  material  adverse  impact on
Registrant.

       Quantitative and Qualitative  Disclosure About Market Risk

       Because of the Property's proximity to New York City and the strong local
rental  market,  there  is a  significant  likelihood  that  other  multi-family
residential  complexes  will be built in the general  vicinity of the  Property,
which may adversely affect the Property's ability to maintain its high occupancy
levels or its ability to increase rents.

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.


                                       9
<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         51         President and Director

   Robert H. Wilder, Jr.        53         Executive Vice President, Assistant
                                           Secretary, Treasurer and Director.

   Gina S. Scotti               43         Secretary

       Richard Paul  Richman,  51 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.,  53 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,  43 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.


                                       10
<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, 1999.


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, 1999.


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 $78,444 in 1998, 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 1999 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, 1999 and 1998.


                                       11
<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
              Environmental  Protection  ("NJDEP")  and NJDEP  Non-Applicability
              Letter as to Dixon Mill Partnerships;*

       (10E)  Master  Services  Agreement,  dated June 18, 1986,  between Varick
              Construction 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;**


                                       12
<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.


                                       13
<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  14th  day of
December, 1999.


                                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


                                       14
<PAGE>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.


                          FINANCIAL STATEMENTS FOR THE

                  YEARS ENDED FEBRUARY 28, 1999, 1998 AND 1997

                        AND INDEPENDENT AUDITORS' REPORT

<PAGE>

                  WILDER RICHMAN HISTORIC PROPERTIES II, L.P.


                          Financial Statements for the

                  Years Ended February 28, 1999, 1998 and 1997

                        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, 1999 and 1998, and the related statements
of operations, partners' equity, and cash flows for the years ended February 28,
1999, 1998 and 1997. These financial  statements are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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, 1999 and 1998 and the results of its
operations,  changes in  partners'  equity  and cash  flows for the years  ended
February  28,  1999,  1998  and  1997  in  conformity  with  generally  accepted
accounting principles.



/s/ Rosenburg, Neuwirth & Kuchner

May 3, 1999
New York, New York



                                      F-2
<PAGE>

                  WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                                 BALANCE SHEETS


                                                     February 28,   February 28,
           A S S E T S                                  1999           1998
           -----------                               -----------    -----------

INVESTMENTS IN OPERATING PARTNERSHIPS
 (Notes 2, 3, 4 and 7)                               $ 1,192,736    $ 1,700,882

CASH AND CASH EQUIVALENTS (Note 2)                       663,495        649,233

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

ACCRUED INTEREST RECEIVABLE (Note 3)                     140,083        119,260
                                                     -----------    -----------

                                                     $ 2,314,027    $ 2,787,088
                                                     ===========    ===========

           LIABILITIES AND PARTNERS' EQUITY

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

   Due to related parties (Note 4)                       169,201        154,201
                                                     -----------    -----------

                                                         179,201        164,201
                                                     -----------    -----------

COMMITMENTS AND CONTINGENCIES (Notes 3 and 7)

PARTNERS' EQUITY (Notes 2 and 5):

   Limited partners' equity                            2,279,787      2,762,967

   General partner's deficit                            (144,961)      (140,080)
                                                     -----------    -----------

                                                       2,134,826      2,622,887
                                                     -----------    -----------

                                                     $ 2,314,027    $ 2,787,088
                                                     ===========    ===========


                        See notes to financial statements


                                      F-3
<PAGE>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                Year ended
                                                                February 28,
                                                      -----------------------------------
                                                        1999         1998          1997
                                                      ---------    ---------    ---------
<S>                                                   <C>          <C>          <C>
Revenues:

Interest income                                       $  52,660    $  55,276    $  50,994
                                                      ---------    ---------    ---------

Expenses:

Operating                                                32,575       30,194       30,896
                                                      ---------    ---------    ---------

   Income from operations                                20,085       25,082       20,098

Equity in loss of Operating Partnerships before
   extraordinary item  (Note 3)                        (186,393)    (358,875)    (799,980)
                                                      ---------    ---------    ---------


Net loss before extraordinary item                     (166,308)    (333,793)    (779,882)

Extraordinary item - litigation settlement (Note 7)    (321,753)        --           --
                                                      ---------    ---------    ---------

             NET LOSS                                 $(488,061)   $(333,793)   $(779,882)
                                                      =========    =========    =========

Net loss attributable to:

      Limited partners                                $(483,180)   $(330,455)   $(772,083)

      General partner                                    (4,881)      (3,338)      (7,799)
                                                      ---------    ---------    ---------

                                                      $(488,061)   $(333,793)   $(779,882)
                                                      =========    =========    =========
Net loss per unit of limited
 partnership interest                                 $    (604)   $    (413)   $    (965)
                                                      =========    =========    =========
</TABLE>

                        See notes to financial statements


                                      F-4
<PAGE>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                         STATEMENTS OF PARTNERS' EQUITY

                  YEARS ENDED FEBRUARY 28, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
                                                                        Limited          General
                                                          Total         partners         partner
                                                        -----------    -----------    -----------
<S>                               <C>                   <C>            <C>            <C>
Partners' equity (deficit), March 1, 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)

Net loss, year ended February 28, 1999                     (488,061)      (483,180)        (4,881)
                                                        -----------    -----------    -----------

Partners' Equity (deficit) February 28, 1999            $ 2,134,826    $ 2,279,787    $  (144,961)
                                                        ===========    ===========    ===========

Limited partnership units outstanding at February 28,
     1999, 1998 and 1997                                        800
                                                        ===========
</TABLE>

                        See notes to financial statements


                                      F-5
<PAGE>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                       Year ended
                                                                       February 28,
                                                            -----------------------------------
                                                              1999        1998           1997
                                                            ---------    ---------    ---------
<S>                                                         <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                 $(488,061)   $(333,793)   $(779,882)
                                                            ---------    ---------    ---------
   Adjustments to reconcile net loss to net cash provided
     by operating activities:
        Equity in loss of Operating Partnerships              508,146      358,875      799,980
        Changes in assets and liabilities:
           Decrease in restricted cash
           Increase in accrued interest receivable            (20,823)     (20,824)     (20,938)
           Increase in due to related parties                  15,000       15,000       15,000
                                                            ---------    ---------    ---------


            Total adjustments                                 502,323      353,051      794,042
                                                            ---------    ---------    ---------

            Net cash provided by operating activities          14,262       19,258       14,160
                                                            ---------    ---------    ---------


NET INCREASE IN CASH AND CASH
   EQUIVALENTS                                                 14,262       19,258       14,160

CASH AND CASH EQUIVALENTS, beginning of year                  649,233      629,975      615,815
                                                            ---------    ---------    ---------

CASH AND CASH EQUIVALENTS, end of year                      $ 663,495    $ 649,233    $ 629,975
                                                            =========    =========    =========
</TABLE>


                        See notes to financial statements


                                      F-6
<PAGE>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                  YEARS ENDED FEBRUARY 28, 1999, 1998 AND 1997

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>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED FEBRUARY 28, 1999, 1998 AND 1997


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:

<TABLE>
<CAPTION>
                                               Dixon          Dixon         Dixon
                                               Mill I        Mill II       Mill III        Total
                                           -----------   -----------    -----------    -----------
<S>                                        <C>               <C>          <C>            <C>
Balance, March 1, 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, March 1,1996                             --         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

Equity in loss of Operating Partnerships          --        (362,954)      (145,192)      (508,146)
                                           -----------   -----------    -----------    -----------

Balance, February 28, 1999                 $      --     $      --      $ 1,192,736    $ 1,192,736
                                           ===========   ===========    ===========    ===========
</TABLE>



                                      F-8
<PAGE>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED FEBRUARY 28, 1999, 1998 AND 1997


3.       INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)


         The combined  balance sheets of the Operating  Partnerships at December
31, 1998 and 1997 are shown below.

                                                           December 31,
                                                    -------------------------
                                                       1998            1997
                                                    -----------   -----------
Assets:
   Land                                             $ 1,150,473   $ 1,150,473
   Buildings (net of accumulated depreciation
       of $ 12,497,566 and 11,164,490 in 1998 and
       1997, respectively)                           40,402,992    41,475,474
   Cash and cash equivalents                          1,951,002     1,159,863
   Deferred costs                                       493,546       537,180
   Mortgage escrow deposits                           1,134,739     1,067,734
   Tenant security deposits                             725,172       669,685
   Other assets                                          36,594        34,043
                                                    -----------   -----------

       Total assets                                 $45,894,518   $46,094,452
                                                    ===========   ===========

Liabilities:
   Mortgages payable                                $26,522,146   $26,776,894
   Note payable                                         317,713       317,713
   Accounts payable and accrued expenses                676,712       137,084
   Accrued interest payable                             269,139       249,734
   Tenants' security deposits payable                   725,172       669,685
   Due to general partner and affiliates              2,028,955     1,840,349
                                                    -----------   -----------

      Total liabilities                              30,539,837    29,991,459
                                                    -----------   -----------

Partners' equity:
   Wilder Richman Historic Properties II, L.P.        1,192,736     1,700,882
   General partner                                   14,161,945    14,402,111
                                                    -----------   -----------

       Total partners' equity                        15,354,681    16,102,993
                                                    -----------   -----------

       Total liabilities and partners' equity       $45,894,518   $46,094,452
                                                    ===========   ===========


                                      F-9
<PAGE>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED FEBRUARY 28, 1999, 1998 AND 1997

3.   INVESTMENTS IN OPERATING PARTNERSHIPS (CONTINUED)

     The combined statements of operations of the Operating Partnerships for the
     years ended December 31, 1998, 1997 and 1996are as follows:

<TABLE>
<CAPTION>
                                                                  Year ended December 31,
                                                       ----------------------------------------
                                                          1998           1997           1996
                                                       -----------    -----------    -----------
<S>                                                    <C>            <C>            <C>
     Revenues:
         Rent                                          $ 6,083,567    $ 5,803,104    $ 5,530,885
         Interest                                           56,291         31,153         14,497
                                                       -----------    -----------    -----------

                                                         6,139,858      5,834,257      5,545,382
                                                       -----------    -----------    -----------
     Expenses:
         Administrative                                    997,976        958,904        978,505
         Operating                                       2,018,481      2,005,544      2,041,985
         Management fees                                   178,610        169,787        168,976
         Interest                                        1,816,393      1,832,950      1,847,737
         Depreciation and amortization                   1,376,710      1,360,247      1,363,337
                                                       -----------    -----------    -----------
                                                         6,388,170      6,327,432      6,400,540
                                                       -----------    -----------    -----------

     Loss before extraordinary item                       (248,312)      (493,175)      (855,158)

     Extraordinary item - litigation settlement           (500,000)          --             --
                                                       -----------    -----------    -----------

           NET LOSS                                    $  (748,312)   $  (493,175)   $  (855,158)
                                                       ===========    ===========    ===========


      Loss before extraordinary item allocated to
         Wilder Richman Historic Properties II, L.P.   $  (186,393)   $  (358,875)   $  (799,980)

       Extraordinary item                                 (321,753)          --             --
                                                       -----------    -----------    -----------

       Net loss allocated to Wilder Richman Historic
           Properties II, L.P.                         $  (508,146)   $  (358,875)   $  (799,980)
                                                       ===========    ===========    ===========

       Loss before extraordinary item allocated to
                      Dixon Venture Corp.              $   (61,919)   $  (134,300)   $   (55,178)

          Extraordinary item                              (178,247)          --             --
                                                       -----------    -----------    -----------

          Net loss allocated to Dixon Venture Corp.    $  (240,166)   $  (134,300)   $   (55,178)
                                                       ===========    ===========    ===========

</TABLE>


                                      F-10
<PAGE>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED FEBRUARY 28, 1999, 1998 AND 1997



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, 1999 and
      1998  amounted to $317,713 with accrued  interest  thereon of $140,083 and
      $119,260 at  February  28, 1999 and 1998,  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, 1999 and 1998, due
      to  related  parties  includes  $155,000  and  $140,000,  respectively  of
      Investor  Services  fees payable from the  Partnership  and the  Operating
      Partnerships.

      At February 28, 1999 and 1998, 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
      $78,444  and  $74,915  in the  years  ended  December  31,  1998 and 1997,
      respectively of which $35,004 was paid in 1998 and 1997.


                                      F-11
<PAGE>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED FEBRUARY 28, 1999, 1998 AND 1997



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>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED FEBRUARY 28, 1999, 1998 AND 1997


6.       TAXABLE LOSS

         A reconciliation of the financial statement loss of the Partnership for
         the years ended  February  28,  1999,  1998 and 1997 to the net loss as
         shown on the tax returns for the years ended  December 31,  1998,  1997
         and 1996 is as follows:

<TABLE>
<CAPTION>
                                                                                                   Year ended
                                                                                                 December 31,
                                                                                   -----------------------------------------
                                                                                       1998          1997          1996
                                                                                   -----------    -----------    -----------
<S>                                                                                <C>            <C>            <C>
         Financial statement loss as of February 28, 1999,
            1998 and 1997, respectively                                            $  (488,061)   $  (333,793)   $  (779,882)

         Less  transactions  occurring  during  January 1 to
            end of  February of respective periods:
             Interest income                                                            (1,308)        (1,426)        (1,393)
             Fees to related party not deductible
                under Internal Revenue Code Section 267                                 15,000         15,000         15,000
                                                                                   -----------    -----------    -----------

                                                                                      (474,369)      (320,219)      (766,275)

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

         Forgiveness of debt                                                              --             --          366,499

         Excess of depreciation expense of  the operating
            partnerships for income  tax purposes over
            financial reporting purposes                                            (1,064,685)    (1,148,570)    (1,048,735)
                                                                                   -----------    -----------    -----------

         Taxable loss                                                              $(1,217,301)   $(1,468,789)   $(1,448,511)
                                                                                   ===========    ===========    ===========

</TABLE>


                                      F-13
<PAGE>

                   WILDER RICHMAN HISTORIC PROPERTIES II, L.P.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED FEBRUARY 28, 1999, 1998 AND 1997



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, 1998, the cumulative preferred
         amount  due  from  the  Operating  Partnerships  is  $10,813,180.   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 civil  complaint  was  filed in a prior  year by an  employee  of the
         Operating  Partnerships against the Operating  Partnerships and another
         employee. A separate similar suit was initiated subsequently by another
         employee  of the  Operating  Partnerships  who is also a relative of an
         officer/owner  of  the  corporate  general  partner  against  the  same
         defendant.  The  defendant  is no  longer  employed  by  the  Operating
         Partnerships.  Both complaints were settled  subsequent to February 28,
         1999 for an aggregate amount of $500,000.  The aggregate  settlement is
         accrued in the Operating Partnerships' combined financial statements as
         of December 31, 1998.


                                      F-14
<PAGE>

                             DIXON MILLS ASSOCIATES


                      COMBINED FINANCIAL STATEMENTS FOR THE

                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

                        AND INDEPENDENT AUDITORS' REPORT
<PAGE>

                             DIXON MILLS ASSOCIATES


                      Combined Financial Statements for the

                  Years Ended December 31, 1998, 1997 and 1996

                        and Independent Auditors' Report


                                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>

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, 1998 and 1997,  and the  related  statements  of
operations,  partners'  equity and cash flows for the years ended  December  31,
1998, 1997 and 1996. 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,  1998 and 1997,  and the  results  of its  operations,  changes in
partners'  equity and cash flows for the years ended December 31, 1998, 1997 and
1996 in conformity with generally accepted accounting principles.






February 26, 1999
New York, New York


                                      F-17
<PAGE>

                             DIXON MILLS ASSOCIATES

                                               COMBINED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                 December 31,
           A S S E T S                                       1998            1997
           -----------                                     -----------   -----------
<S>                                                        <C>           <C>
LAND (Notes 2 and 5)                                       $ 1,150,473   $ 1,150,473

BUILDINGS (net of accumulated depreciation
   of $12,497,566 and $11,164,490 in 1998 and 1997,
    respectively) (Notes 2 and 5)                           40,402,992    41,475,474

CASH AND CASH EQUIVALENTS (Note 2)                           1,951,002     1,159,863

DEFERRED COSTS (Note 2)                                        493,546       537,180

MORTGAGE ESCROW DEPOSITS (Note 5)                            1,134,739     1,067,734

TENANT SECURITY DEPOSITS                                       725,172       669,685

OTHER ASSETS                                                    36,594        34,043
                                                           -----------   -----------
                                                           $45,894,518   $46,094,452
                                                           ===========   ===========

           LIABILITIES AND PARTNERS' EQUITY

LIABILITIES:

   Mortgages payable (Note 5)                              $26,522,146   $26,776,894

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

   Accounts payable and accrued expenses (Note 7)              676,712       137,084

   Accrued interest payable (Notes 5 and 6)                    269,139       249,734

   Tenants' security deposits payable                          725,172       669,685

   Due to general partner and affiliates (Notes 4 and 6)     2,028,955     1,840,349
                                                           -----------   -----------

                                                            30,539,837    29,991,459
COMMITMENTS AND CONTINGENCIES (Note 7)

PARTNERS' EQUITY (Note 3):
   WILDER RICHMAN HISTORIC
    PROPERTIES II, L.P., LIMITED PARTNER                     1,192,736     1,700,882

   DIXON VENTURE CORP., GENERAL PARTNER                     14,161,945    14,402,111
                                                           -----------   -----------

                                                            15,354,681    16,102,993

                                                           $45,894,518   $46,094,452
</TABLE>

                   See notes to combined financial statements


                                      F-18
<PAGE>

                             DIXON MILLS ASSOCIATES


                        COMBINED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                       Year ended
                                                                       December 31,
                                                      -----------------------------------------
                                                        1998            1997            1996
                                                      -----------    -----------    -----------
<S>                                                   <C>            <C>            <C>
Revenues:
   Rent                                               $ 6,083,567    $ 5,803,104    $ 5,530,885
   Interest                                                56,291         31,153         14,497
                                                      -----------    -----------    -----------

                                                        6,139,858      5,834,257      5,545,382
                                                      -----------    -----------    -----------
Expenses:
   Administrative                                         997,976        958,904        978,505
   Operating                                            2,018,481      2,005,544      2,041,985
   Management fees (Note 4)                               178,610        169,787        168,976
   Interest (Notes 5 and 6)                             1,816,393      1,832,950      1,847,737
   Depreciation and amortization                        1,376,710      1,360,247      1,363,337
                                                      -----------    -----------    -----------
                                                        6,388,170      6,327,432      6,400,540
                                                      -----------    -----------    -----------

Loss before extraordinary item                           (248,312)      (493,175)      (855,158)

Extraordinary item - litigation settlement (Note 7)      (500,000)          --             --
                                                      -----------    -----------    -----------

         NET LOSS                                     $  (748,312)   $  (493,175)   $  (855,158)
                                                      ===========    ===========    -----------

Loss before extraordinary item allocated to
    Wilder Richman Historic Properties II, L.P.       $  (186,393)   $  (358,875)   $  (799,980)

Extraordinary item                                       (321,753)          --             --
                                                      -----------    -----------    -----------

Net loss allocated to Wilder Richman Historic
     Properties II, L.P.                              $  (508,146)   $  (358,875)   $  (799,980)
                                                      ===========    ===========    ===========

Loss before extraordinary item allocated to
     Dixon Venture Corp.                              $   (61,919)   $  (134,300)   $   (55,178)

Extraordinary item                                       (178,247)          --             --
                                                      -----------    -----------    -----------

Net loss allocated to Dixon Venture Corp.             $  (240,166)   $  (134,300)   $   (55,178)
                                                      ===========    ===========    ===========
</TABLE>

                   See notes to combined financial statements


                                      F-19
<PAGE>

                             DIXON MILLS ASSOCIATES


                     COMBINED STATEMENTS OF PARTNERS' EQUITY

                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
                                                            Limited          General
                                            Total           partner         partner

<S>                                      <C>             <C>             <C>
Partners' equity, January 1, 1996        $ 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

Net loss, year ended December 31, 1998       (748,312)       (508,146)       (240,166)
                                         ------------    ------------    ------------

Partners' equity, December 31, 1998      $ 15,354,681    $  1,192,736    $ 14,161,945
                                         ============    ============    ============
</TABLE>

                   See notes to combined financial statements


                                      F-20
<PAGE>

                             DIXON MILLS ASSOCIATES

                        COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                   Year ended December  31,
                                                             1998           1997           1996
                                                          -----------    -----------    -----------
<S>                                                       <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                               $  (748,312)   $  (493,175)   $  (855,158)
                                                          -----------    -----------    -----------
   Adjustments to reconcile net loss to
    net cash provided by operating activities:
      Depreciation and amortization                         1,376,710      1,360,247      1,363,337
   Change in assets:
      Increase in mortgage escrow deposits                    (67,005)      (165,513)       (53,403)
      Increase in tenant security deposits                    (55,487)       (39,685)       (28,016)
      Increase (decrease) in other assets                      (2,551)       (32,108)        69,163
   Change in liabilities:
      Increase (decrease) in accounts payable
       and accrued expenses                                   539,628         18,666        (17,180)
      Increase (decrease) in accrued interest payable          19,405         19,446         19,484
      Increase in tenants security deposit                     55,487         39,685         28,016
      Increase in due to General Partner and affiliates       188,606        179,783        178,971
                                                          -----------    -----------    -----------

          Total adjustments                                 2,054,793      1,380,521      1,560,372
                                                          -----------    -----------    -----------

          Net cash provided by
           operating activities                             1,306,481        887,346        705,214
                                                          -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of fixed assets                                  (260,594)       (52,333)          --
                                                          -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payment of mortgages payable                              (254,748)      (238,234)      (222,661)
                                                          -----------    -----------    -----------

INCREASE IN CASH                                              791,139        596,779        482,553

CASH AND CASH EQUIVALENTS,
 beginning of year                                          1,159,863        563,084         80,531
                                                          -----------    -----------    -----------

CASH AND CASH EQUIVALENTS,
 end of year                                              $ 1,951,002    $ 1,159,863    $   563,084
                                                          ===========    ===========    ===========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during year for interest                        $ 1,796,988    $ 1,813,502    $ 1,828,253
                                                          ===========    ===========    ===========
</TABLE>

                   See notes to combined financial statements


                                      F-21
<PAGE>

                             DIXON MILLS ASSOCIATES

                     NOTES TO COMBINED FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


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, 1998, 1997 AND 1996

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, 1998, 1997 AND 1996

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,
      1998 is $10,813,180.  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 Partner and 25% to the
            Operating General Partner.


                                      F-24
<PAGE>

                             DIXON MILLS ASSOCIATES

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

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):
                                                   1998           1997
                                                   ----           ----
      Morris Property Management              $   535,304    $   435,138
      Morris Realty                                (5,259)        (5,259)
      DVC                                         936,830        936,830
      Wilder Richman Management Corporation       292,080        248,640
      RG Housing Advisors, Inc.                    90,000         90,000
      Richman Asset Management, LLC               180,000        135,000
                                              -----------    -----------
                                              $ 2,028,955    $ 1,840,349
                                              ===========    ===========


      The Operating  Partnerships  incurred annual  property  management fees to
      Wilder  Richman  Management  Corp.  ("WRMC"),  an affiliate of the Limited
      Partner,  in the amount of $78,444 in 1998, $74,915 in 1997 and $74,590 in
      1996. WRMC received  payments of $35,004 1998 and 1997,  respectively.  In
      addition,  property management fees of $100,166,  $94,872 and $94,386 were
      incurred  in  1998,  1997  and  1996,   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
      1998, 1997 and 1996.


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, 1998, 1997 AND 1996

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:

               1999                                        $   262,586
               2000                                            290,713
               2001                                            310,924
               2002                                            332,540
               2003                                            356,499
               Thereafter                                   24,968,884
                                                            ----------

                                                           $26,522,146
                                                           ===========

      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  $747,117  and
      $662,134 at December 31, 1998 and 1997, 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%.

      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 in 1995.


                                      F-26
<PAGE>

                             DIXON MILLS ASSOCIATES

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

                  YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996


6.    NOTE PAYABLE (CONTINUED)

      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

      Subsequent Event

      A civil  complaint  was  filed  in a  prior  year  by an  employee  of the
      Operating  Partnerships  against the  Operating  Partnerships  and another
      employee. A separate similar suit was initiated  subsequently by a related
      party of the corporate  general partner  against the same  defendant.  The
      defendant  is no  longer  employed  by the  Operating  Partnerships.  Both
      complaints  were  settled,  including  legal fees,  in 1999 for a total of
      $500,000.  The aforementioned related party's settlement was in the amount
      of  $244,000.  The  aggregate  settlement  is accrued in the  accompanying
      combined financial statements as of December 31, 1998.

                                      F-27