**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**FORM
      10-Q**





(Mark
      One)


x
            Quarterly
                report under Section 13 or 15(d) of the Securities Exchange Act of
                1934
                for the quarterly period ended June 30,
                2005.





 ̈
            Transition
                report under Section 13 or 15(d) of the Exchange Act for the transition
                period from _____________ to
                ____________





Commission
      file number: 0-19258





BAYFIELD
      LOW INCOME HOUSING LIMITED PARTNERSHIP


(Exact
      Name of Registrant as Specified in Its Charter)





Delaware
              (State
                or Other Jurisdiction of
              Incorporation
                or Organization)
            11-3022123
              (I.R.S.
                Employer
              Identification
                No.)








c/o
      Megan
      Asset Management, Inc.


1424
      West
      Century Ave., Suite 102, Bismarck, ND 58503


(Address
      of Principal Executive Offices)








(Registrant's
      Telephone Number, Including Area Code): (701) 223-2923







Check
      whether
      the issuer (1) filed all reports required to be filed by Section 13 or 15(d)
      of
      the Exchange Act during the past 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
o
      No x







Indicate
      by
      check mark whether the registrant is a shell company (as defined in Rule 12b-2
      of the Exchange Act).


Yes
o
      No x








APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
      DURING THE PRECEDING FIVE YEARS




Check
      whether
      the registrant filed all documents and reports required to be filed by Section
      l2, 13 or 15(d) of the Exchange Act after the distribution of securities under
      a
      plan confirmed by a court.


Yes
oNo
o





APPLICABLE
      ONLY TO CORPORATE ISSUERS




State
      the
      number of shares outstanding of each of the issuer’s classes of common and
      preferred equity, as of the latest practicable date: N/A











BAYFIELD
      LOW INCOME HOUSING LIMITED PARTNERSHIP








QUARTERLY
      REPORT ON FORM 10-Q


FOR
      THE QUARTER ENDED JUNE 30, 2005








TABLE
      OF
      CONTENTS








**PART
                I.**
            **FINANCIAL
                INFORMATION**Item
                1.Financial
                Statements
            1Balance
                Sheets
            2Statements
                of
                Operations
            3Statements
                of Changes in Partners'
                Capital
            4Statements
                of Cash Flows
            5Notes
                to Financial Statements
            6Item
                2.
            Management's
                Discussion and Analysis of
                FinancialCondition
                and Results of Operations
            10Item
                3.
            Quantitative
                and Qualitative Disclosures About Market
                Risk
            15Item
                4.
            Controls
                and Procedures
            15**PART
                II.**Item
                1.
            Legal
                Proceedings
            16Item
                2.
            Changes
                in Securities
            17Item
                3.
            Defaults
                Upon Senior
                Securities
            17Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders
            17Item
                5.
            Other
                Information
            17Item
                6.
            Exhibits
                and Reports on Form 8-K
            18









**PART
      I**











**Item
      1. Financial Statements**




The
      interim
      financial information included herein is unaudited. Certain information and
      footnote disclosures normally included in the financial statements have been
      condensed or omitted pursuant to the rules and regulations of the Securities
      and
      Exchange Commission (the "SEC"), although the Partnership believes that the
      disclosures made are adequate to make the information presented not misleading.
      These financial statements should be read in conjunction with the financial
      statements and related notes contained in the Form 10-K for the period ended
      March 31, 2005. In the opinion of the Management, such unaudited information
      reflects all adjustments, consisting only of normal recurring accruals,
      necessary for a fair presentation of the unaudited information
      shown.




Results
      for
      interim periods are not necessarily indica-tive of results expected for the
      full
      year.





-1-


BAYFIELD
      LOW INCOME HOUSING LIMITED
      PARTNERSHIP





Balance
      Sheets (Unaudited)











ASSETS





June
                30,2005
            
            2004INVESTMENTS
                IN OPERATING LIMITED PARTNERSHIPS
            
            $
            40,227
            
            $
            31,840OTHER
                ASSETSCash
            
            
            452,640
            
            
            326,610Advances
                to operating partnerships
            
            
            173,725
            
            
            139,675Notes
                receivable — Note I
            
            
            745,912
            
            
            0$
            1,412,504
            
            $
            498,125











LIABILITIES
      AND PARTNERS’ CAPITAL








June
                30,2005
            
            2004Accounts
                payable and accrued expenses
            
            $
            152,925
            
            $
            166,035Loan
                payable — Dominium — Note H
            
            
            0
            
            
            199,397Contributions
                payable to operating partnerships
            
            
            16,122
            
            
            24,938169,047
            
            
            390,370Partners’
                capitalLimited
                partners
            
            
            2,279,001
            
            
            1,155,485General
                partner
            
            
            12,189
            
            
            3Subscriptions
                receivable
            
            
            (1,047,733
            )
            
            (1,047,733
            )1,243,457
            
            
            107,755$
            1,412,504
            
            $
            498,125





The
      Notes
      to Financial Statements are an integral part of these Statements






-2-


BAYFIELD
      LOW INCOME HOUSING LIMITED
      PARTNERSHIP





Statements
      of Operations (Unaudited)











For
                theThree
                Months EndedJune
                30,
            
            June
                30,2005
            
            2004IncomeInterest
                income
            
            $
            313
            
            $
            115Other
                income
            
            
            0
            
            
            0313
            
            
            115Equity
                in income (losses) of operating partnerships
            
            
            (57,143)
            
            
            212,390ExpensesManagement
                fees
            
            
            26,687
            
            
            29,500Professional
                services
            
            
            111,079
            
            
            96,532Continental
                pre-petition expense
            
            
            195,671
            
            
            0Other
                expense
            
            
            645
            
            
            3,587334,082
            
            
            129,619Net
                income (loss)
            
            $
            (390,912
            )
            $
            82,886Net
                income (loss) allocated to General Partner
            
            $
            (3,909
            )
            $
            829Net
                income (loss) allocated to Limited Partners
            
            $
            (
                387,003
            )
            $
            82,057Net
                income (loss) per .05% L. P. Interest
            
            $
            (193
            )
            $
            41





The
      Notes
      to Financial Statements are an integral part of these Statements.






-3-


BAYFIELD
      LOW INCOME HOUSING LIMITED
      PARTNERSHIP





Statements
      of Changes in Partners’ Capital (Unaudited)





Limited
                Partners
            
            General
                Partners
            
            Subscriptions
                Receivable
            
            TotalPartners’
                capital, March 31, 2004
            
            $
            1,072,599
            
            $
            3
            
            $
            (1,047,733
            )
            $
            24,869Net
                income (loss) for the quarter ended June 30, 2004
            
            
            82,057
            
            
            829
            
            
            0
            
            
            82,886Distributions
            
            
            0
            
            
            0
            
            
            0
            
            
            0Collections
                and Adjustments
            
            
            0
            
            
            0
            
            
            0
            
            
            0Partners’
                capital, June 30, 2004
            
            $
            1,154,656
            
            $
            832
            
            $
            (1,047,733
            )
            $
            107,755Partners’
                capital March 31, 2005
            
            $
            2,666,004
            
            $
            16,098
            
            $
            (1,047,733
            )
            $
            1,634,369Net
                income (loss) forquarter
                ended June 30, 2005
            
            
            (387,003
            )
            
            (3,909
            )
            
            0
            
            
            (390,912
            )Partners’
                capital, June 30, 2005
            
            $
            2,279,001
            
            $
            12,189
            
            $
            (1,047,733
            )
            $
            1,243,457





The
      Notes
      to Financial Statements are an integral part of these Statements.






-4-


BAYFIELD
      LOW INCOME HOUSING LIMITED PARTNERS





Statements
      of Cash Flows (Unaudited)














For
                theThree
                Months EndedJune
                30,
            
            June
                30,2005
            
            2004CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                income (loss)
            
            $
            (390,912
            )
            $
            82,886Adjustments
                to
                reconcile net loss to net cash used by operating
                activities:Equity
                in (profits) losses of Operating Partnerships
            
            
            57,143
            
            
            (212,390
            )Increase
                (decrease) in accounts payable and
                accrued expenses
            
            
            (7,327
            )
            
            (5,746
            )Total
                adjustments
            
            
            49,816
            
            
            (218,136
            )Net
                cash used by operating activities
            
            
            (341,096
            )
            
            (135,250
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Distributions from operating partnerships
            
            
            11,791
            
            
            16,375Sales proceeds — partnership interests
            
            
            (57,143)
            
            
            212,390Collection - Notes receivable
            
            
            521,001
            
            
            0Net
                cash provided by investing activities
            
            
            475,649
            
            
            228,765CASH
                FLOWS FROM FINANCING ACTIVITIES:Advances to operating partnerships
            
            
            (33,000
            )
            
            (25,000
            )Net
                cash provided
                by financing activities
            
            
            (33,000
            )
            
            (25,000
            )NET
                INCREASE (DECREASE) IN CASH
            
            
            101,552
            
            
            68,515CASH
                BALANCE, BEGINNING OF PERIOD
            
            
            351,088
            
            
            258,095CASH
                BALANCE, END OF PERIOD
            
            $
            452,640
            
            $
            326,610





The
      Notes
      to Financial Statements are an integral part of these Statements.






-5-


**Note
      A - Organization**





Bayfield
      Low
      Income Housing Limited Partnership (the “Master Limited Partnership”) was
      organized as of July 1, 1990 pursuant to the provisions of a Joint Plan of
      Reorganization of 52 debtor investor limited partnerships (“the Debtor Investor
      Partnerships”), dated May 9, 1990, pursuant to the provisions of Chapter 11 of
      Title 11, United States Code, as amended by an Order Clarifying the Joint Plan
      dated December 11, 1990 and an Order Modifying the Joint Plan entered March
      6,
      1991 or as may have been otherwise amended or modified by orders settling
      litigation with non-electing Developers with respect to those Developers or
      their Operating Partnerships (“the Plan”).





The
      Master
      Limited Partnership was created under the Plan as the entity into which all
      of
      the assets and liabilities of the fifty-two Debtor Investor Partnerships were
      “rolled-up” as of July 1, 1990 and after which their assets and businesses would
      be managed.





**Note
      B - Significant Accounting Policies**





**Investments
      in Operating Limited Partnerships**





The
      Master
      Limited Partnership accounts for its investments in Operating Partnerships
      (including acquisition costs) using the equity method, under which the Master
      Limited Partnership's capital investment in each Operating Partnership is
      adjusted for its share of the Operating Partnership's income or losses and
      for
      any distributions received or accrued. Such income and losses are recognized
      on
      a calendar year basis. Losses in excess of the Master Limited Partnership's
      aggregate investment in each Operating Partnership are not
      recognized.





Costs
      previously recorded by the Debtor Investor Partnerships for services provided
      or
      to be provided by the General Partner and its affiliates relating to
      acquisitions of Operating Partnerships, including syndication fees, agency
      fees,
      investor services fees, partnership operations fees and audit indemnification
      fees, have been included in the Master Limited Partnership's aggregate
      investment in each Operating Partnership.





For
      annual
      reporting purposes, the recorded equity in income or losses is based on the
      calendar year basis financial information submitted by the Operating
      Partnerships.





**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.





**Income
      Taxes**





No
      provision
      has been made for income taxes in the financial statements, as the partners’
shares of the results of the Master Limited Partnership’s operations are
      included in their respective income tax returns. Losses, which were previously
      allocated one percent to the General Partner and ninety-nine percent to the
      Limited Partners, will now, pursuant to the agreement of December 1991, as
      amended, be allocated to all of the Partners in proportion to the outstanding
      positive balances of their respective capital accounts until their respective
      capital accounts are reduced to zero. After capital accounts have been reduced
      to zero, further losses and LIHC’s would be allocated one percent to the General
      Partner and the remaining ninety-nine percent to all Limited
      Partners.






-6-


**B
      - Significant Accounting Policies — Continued**





**Contributions
      Payable to Operating Partnerships**





Contributions
      payable to Operating Partnerships are recorded at the gross amount due pursuant
      to the Plan. When the Master Limited Partnership sells or assigns an interest
      in
      an Operating Partnership, any remaining balance of contributions payable is
      included in computing the gain or loss on sale or assignment.





Pursuant
      to
      the Plan, amounts due and unpaid to Operating Partnerships by the Debtor
      Investor Partnerships after the implementation of the Plan in July, 1990, accrue
      interest at the rate of eight percent. Failure to pay this interest is not
      a
      default under the Plan and any such unpaid interest is contingently payable
      as a
      first priority out of Capital Events (Note F). The Master Limited Partnership
      has not made any payments of this interest and has not recorded such interest
      on
      the accompanying financial statements.





**Note
      C - Investment in Operating Limited Partnerships**





The
      Investment in Operating Partnerships was $40,227 as of June 30, 2005, and
      $31,840 as of June 30, 2004.





The
      remaining
      contributions payable to operating partnerships represent payments which have
      been deferred for an indeterminate time until certain conditions are met by
      the
      Operating Partnerships involved.





In
      addition
      to the capital contributions, the Master Limited Partnerships made advances
      to
      certain Operating Limited Partnerships totaling $173,725 and $139,675 at June
      30, 2005, and June 2004, respectively. While the uncollectible amount cannot
      be
      estimated, the advances may be collectible, if at all, only from a capital
      event
      upon the sale of the projects.





**Note
      D - Subscriptions Receivable**





When
      the
      investors were admitted as limited partners in one of the Debtor Investor
      Partnerships, each investor made a cash down payment for his or her limited
      partnership interest and executed a recourse promissory note for the balance.
      Contributions receivable represent the remaining balance of the recourse
      promissory notes executed by investors for their capital contributions which
      are
      payable to the Master Limited Partnership. While


the
      majority of the notes were non-interest bearing, the notes for certain Debtor
      Investor Partnerships included interest at rates ranging from four and one-half
      percent to nine percent.





Contributions
      receivable at June 30, 2005 consists of the following:





Past
                due
                installments from defaulting investors
            
            $                  
                1,065,782Amount
                representing unearned interest
            
            (18,049)$
            1,047,733





The
      Master
      Limited Partnership has recourse against the defaulting investors and has
      pursued collection of these amounts. However, all significant amounts deemed
      collectible have been collected. Subscriptions receivable are decreased with
      a
      corresponding decrease to the limited partners’ capital accounts as amounts are
      collected or the investor’s partnership unit is terminated.





-7-


**Note
      E - Independent Manager**





The
      Plan
      provides for the employment of an independent manager for the Master Limited
      Partnership. The Amended and Restated Management Agreement provides for the
      automatic annual renewal of the management agreement subject to certain events,
      as defined. Effective July 10, 1990, Megan Management Company, Inc. (“Megan”)
      was engaged to be the Independent Manager. As such, Megan became the Master
      Limited Partnership’s exclusive agent for all operations under the Plan. As of
      December 31, 1992, all rights, powers and obligations of the Independent Manager
      were assigned to Megan Asset Management, Inc. (Note A).





As
      compensation for its services, the Independent Manager received $26,687, and
      $29,500 for the quarters ended June 30, 2005, and 2004, respectively. The
      Independent Manager is also provided with amounts required to cover the costs
      of
      tax return preparation and audited financial statements.





The
      Amended
      and Restated Management provides for additional compensation to the Independent
      Manager for providing certain accounting and tax services to the Operating
      Partnerships. Paul J. Maddock PC, a company related to the Independent Manager,
      has been engaged to perform these services. In addition, Paul J. Maddock, PC
      prepares income tax returns for several Operating Partnerships and has been
      paid
      by the Master Limited Partnership on behalf of the Operating Partnership. The
      Master Limited Partnership has paid Paul J. Maddock, PC $34,500, and $12,500
      during the quarters ended June 30, 2005, and June 30, 2004, respectively, for
      these services. A corresponding receivable from the Operating Partnerships
      for
      the payments on their behalf has been recorded as amounts that had not been
      reimbursed.





Megan
      Asset
      is compensated for additional services rendered and expense reimbursement.
      The
      Independent Manager’s compensation and reimbursement was $4,331 and $2,912
      during the quarters ended June 30, 2005, and June 30, 2004.





**Note
      F - Contingencies**





Article
      15 of
      the Plan ("Payments from Capital Events") provides for certain further
      disbursements to the pre-petition creditors of available funds resulting from
      the sale of interests in Operating Partnerships subsequent to December 31,
      1994.
      Such payments, in order of priority, include the following:





a)
            Prorata
                payments to the Operating Partnerships of the full amount due from
                the
                Debtor Investor Partnerships and assumed by the Master Limited
                Partnership. In conjunction with the sale of the interest in the
                operating
                partnerships, the purchaser of the interest has assumed this contingent
                liability for the specific operating partnership. At June 30, 2005,
                the
                amount due which has not been assumed is approximately $600,000.
                It is not
                known to what extent, if any, the Master Limited Partnership will
                be
                required to make any payments on this
                contingency.






-8-


**Note
      F - Contingencies - Continued**





b)
            Payment
                of amounts due to Continental Construction totaling $2,379,645 plus
                interest at eight percent from September 30, 1989. Accrued interest
                at
                June 30, 2005 was $2,998,354.





On
                October 12, 1990, the Master Limited Partnership entered into a settlement
                agreement with Continental Construction, which canceled the above
                pre-petition obligation. Concurrently, the Master Limited Partnership
                agreed to pay Megan Asset Management, Inc., the substitute General
                Partner
                of the Master Limited Partnership, fifty percent of the calculated
                obligation to Continental Construction. The payments will be made
                from
                available cash from capital events. During the quarters ended June
                30,
                2005 and June 30, 2004, payments of $195,671 and $-0- respectively,
                were
                paid from cash available from capital events to Megan Asset Management,
                Inc. This amount was recorded as an expense in the Statement of
                Operations. The remaining amount due at June 30, 2005 was
                $2,389,567.





**Note
      G — Related Party Activity**





The
      Master
      Limited Partnership paid expenses for professional assistance relating to the
      proceedings with the Operating Partnerships and the Partnership, among other
      things, to Gary L. Maddock, PC, a company wholly-owned by the sole stockholder
      of the Independent Manager and General Partner, totaling $73,090, and $61,050
      for the quarters ended June 30, 2005, and June 30, 2004,
      respectively.





**Note
      H — Dominium**





The
      Partnership received loans of $402,465, which were secured by Bayfield’s
      partnership interests in the fourteen operating partnerships, of which $199,397
      was outstanding as of June 30, 2004. The Security Agreement provided the lender
      could accept the partnership interests in full payment of the loans, plus
      accrued interest. The lender did subsequently purchase or accept all fourteen
      operating partnership interests in full satisfaction of the advances including
      all interest.





**Note
      I — Receivable from Sale of Interest in Operating
      Partnerships**





At
      June 30,
      2005, the Master Limited Partnership had a receivable of $745,912 from the
      sale
      of the partnership interests. The remaining balance is due in two installments.
      The first one totaling $425,000 is due on December 15, 2005 and the second
      one
      totaling $320,912 is due on June 15, 2006. The receivable is secured by the
      partnership interest of the operating partnerships sold.







-9-


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





**General**




The
      Partnership was formed as of July 1, 1990, pur-suant to the Plan. In 1992 its
      fiscal year-end for accounting purposes was changed to March 31, from December
      31. The Partnership's fiscal year-end for tax purposes re-mains December
      31.





**Overview**




The
      Partnership was formed pursuant to the terms of the Plan, which mandated the
      Partnership's material commitments for expenditures and the anticipated sources
      of funds needed to fulfill such commitments. A Final Decree was signed by the
      United States Bankruptcy Court, Eastern District of New York in the Jointly
      Administered Chapter 11 cases on May 20, 1993.




Prior
      to
      calendar 1995, the Partnership's primary source of funds was the payment by Limited
      Partners of the amounts owed to the Part-nership for their capital contributions
      pursuant to their
      note given in payment of the purchase price at the time they purchased their
      interest in the Debtor Investor Partnership (the “Investor Notes”). Each of
      the Investor Notes was payable in semi-annual installments through
      Decem-ber 31, 1994.




Commencing
      in
      calendar 1995, although funds from certain other sources were received during
      the 1995 and 1996 fiscal years (see "Liquidity" below), the Partnership's
      primary source of funds became the annual distributions from the Oper-ating
      Partnerships in which the Partnership has an inter-est, which has been
      negotiated at $750 per year, per Oper-ating Partnership (the maximum allowed
      by
      the Plan), provided
      that such payment is not prohibited by any applicable agreement with a
      governmental agency or any applicable governmental agency rules or
      regulations .




The
      total
      amount due annually to the Partnership from the $750 distributions from the
      Operating Partnerships is approximately $104,000. The Partnership has been
      receiving only approximately 50% of the distributions due from the Operating
      Partnerships. To the extent that such distributions or portion thereof are
      not
      paid in any year, the remainders accumulate and are to be paid at the earliest
      time permitted. As indicated above, many of the distributions are not being
      made
      do to limitations by governmental regulations.




Beginning
      in
      2002 the Partnership’s primary source of funds became loans or the sale of its
      Partnership Interests in the Operating Partnerships (see “Liquidity”
below).




Other
      than
      the annual payment referred to above, the Partnership does not anticipate that
      it will receive material cash distributions from the operations of the Operating
      Partner-ships, or that it will derive net cash from its ordinary operations
      generally. Aside from such payments, the Partnership does not have significant
      external sources of Capital Resources other than through the sale of its
      Operating Partnership Interests under its Liquidity Program (discussed in "Item
      1. Business - Description of Business" above and “Liquidity” below). All of the
      above-named sources of Capital Resources are being used to meet the operating
      expenses of the Partnership to preserve and maintain the investment in its
      Projects and to sell its interests in the Operating Partnerships in anticipation
      of liquidating the Partnership, subject to the Required Consents.






-10-


It
      is
      anticipated that the liquidation and termination of a Limited Partner’s interest
      in the Partnership or the winding up and termination of the Partnership will
      enable a majority of the Partnership’s Limited Partners to begin utilizing the
      tax losses they have received but could not use and have carried forward over
      the life of the Partnership, “suspended” loss deductions, estimated by the
      Partnership to be approximately $30,000 for most Limited Partners, which could
      produce additional tax savings for those Limited Partners.





**Recent
      Developments**





**Sale
      of Fifteen Operating Partnership Interests to Affordable Housing Limited
      Partnership No. 2**




As
      of the
      15 th day of
      April, 2004, an affiliate of AHP1, Affordable Housing Limited Partnership No.
      2
      (“AHP2”) entered into a contract
      to purchase limited partnership interests with the
      Partnership (the “AHP2 Contract to Purchase”) for the purchase of up to fifty
      percent (50%) of the Partnership’s Interests in fifteen Operating Partnerships
      (the “Fifteen Operating Partnerships”):




In
      summary,
      the AHP2 Contract to Purchase provided that AHP2 would close upon the purchase
      of up to fifty
      percent of the Partnership’s Interests in the Fifteen Operating Partnerships for $160,000,
      plus the assumption of a proportionate amount of: (i) the
      Partnership’s obligations as the Limited or Investor Partner under each Operating Partnership
      Agreement and (ii) the 8%
      Interest Obligation to the extent that it relates to the Operating Partnership
      Interests being transferred in the approximate amount of $79,550.





The AFHP2
      Contract to Purchase further
      provided that in consideration of the payment of $15,000 the Partnership granted AHP2 an
      option to purchase the balance of the Partnership’s Interests in the Fifteen
      Operating Partnerships on or after July 15, 2005. The option to purchase was
      exercised with respect to all but one of the Fifteen Operating Partnerships
      (Gilman Senior Apartments as it was the subject of a foreclosure sale by RD,
      as
      discussed below, and only up to sixteen and one-half percent of the Partnership
      interests in Elliott
      Manor, Ltd., Kent Summit, Ltd., Lakecrest Apartments and Lead Bayou,
      Ltd. which
      would not have achieved the end of their 15-year Tax Credit Compliance Period
      and could not be sold until late in 2006 to avoid a technical termination of
      those Operating Partnerships which would cause adverse tax consequences to
      AHP2,
      but which continue subject to an option to purchase by AHP2). The option
      purchase price of $162,126
      was paid in July 2005 by AHP2 and an affiliated of AHP2, Affordable Housing
      Limited Partnership No. 9 (“AHP9”), and the interests under option were split
      between AHP2 and AHP9.





**Liquidity
      and Capital Resources**




The
      Partnership's principal uses of funds are its operating expenses, contractual
      obligations and expenses in connection with the sale of its Operating
      Partnerships and, prior to December 31, 1994, were for (i) capital
      contribu-tions to the Operating Partnerships and (ii) payments to the Secured
      Lenders of the Debtor Investor Partnerships. The remaining unpaid balances
      of
      such contractual obligations as of June 30, 2005, and June 30, 2004, was $16,122
      and $24,938 with respect to the Operating Partnerships that were in default
      on
      their obligations to the Partnership. The Partnership also assumed certain
      accrued expenses pursuant to the Plan that were paid in full as of March 31,
      1996, except for the Continental pre-petition expenses and 8% Interest
      Obligation. The Partnership also made distributions to certain Limited Partners
      that were in the original debtor Brighton Estates Limited Partnership as
      provided in the Plan.





-11-


For
      the
      three-month periods ended June 30, 2005 and June 30, 2004, gross cash amounts
      received by the Partnership were as follows:


(i)  None
      from
      payments of capital contributions by Limited Partners pursuant to their Investor
      Notes; and




(ii)  None
      from
      inter-est income on the Investor Notes during either of these years; however
      $313 and $115 of interest income was received on deposits main-tained in escrow
      accounts pursuant to the Plan were received, for the June 30, 2005 and June
      30,
      2004 quarters; and




(iii)  $57,143
      was a refund of purchase price on prior sale of Partnership Interest for the
      June 30, 2005 quarter. $212,390 was received from proceeds of sales of
      Partnership Interests for the June 30, 2004 quarter.




For
      the
      three-month periods ended June 30, 2005 and June 30, 2004, the uses of funds
      by
      the Partnership were as follows:





(i)  $33,000,
      and $25,000, respectively, for capital contributions to the Operating
      Partnerships;





(ii)  $111,079,
      and $96,532, respectively, for
      professional fees. The professional fees for the June 30, 2005 period included
      the continued preparation of the remaining Amended Partnership agreements,
      revisions to the Assignment and Assumption Agreements and Powers of Attorney
      and
      drafting legal opinions for the MPF acquisition; research relating to gain
      allocation, issues and documents relating to the sale of the 81 remaining
      Operating Partnerships to MacKenzie Patterson; documents related to the forced
      repurchase by the Partnership of the Missouri projects from MPF, Dominium and
      Affordable Housing Partners as RD is foreclosing on them; and research of SEC
      issues and meetings with Bayfield’s tax and SEC counsel to formulate a plan for
      the liquidation of Bayfield and items related thereto.





(iii)  $27,332,
      and $33,087 respec-tively, for oper-ating expenses; and





(iv)  $195,671,
      and $-0- respec-tively, for payments of Continental pre-petition expenses in
      accordance with the Plan.





(v)  None
      for
      payments as a return of capital to the Limited Part-ners during any of these
      periods.




The
      net
      increase in cash held by the Partnership amounted to $101,552 for the June
      30,
      2005 quarter, and $68,515 for the June 30, 2004 quarter. The Partnership no
      longer anticipates that the annual payments to be received from the Operating
      Partnerships, in combination with the Partnership's reserves, will be sufficient
      to permit the Partnership to meet its operating expenses until such time, if
      at
      all, a complete exit strategy has been identified and implemented. Accordingly,
      in view of the Partnership’s need to raise more capital to continue to maintain
      its operations as set forth herein, the Partnership continued to accept offers
      it received to sell the Partnership’s limited partnership interests in a number
      of those Operating Partnerships which own the Projects.





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However,
      there can be no assurance in the future that the Partnership will be able to
      meet its obligations through its Liquidity Program should the implementation
      of
      an exit strategy extend beyond the year 2006-, or if sufficient purchasers
      of
      the Operating Partnership interests are not available and the Required Consents
      cannot be obtained.





**Results
      of Operations**




The
      expenses,
      comprised principally of management fees, professional services costs, and
      Continental pre-petition expense, exceeded income, which is comprised
      principally of proceeds from the sale of the Partnership’s Interests in the
      Projects pursuant to the Liquidity Program, by $390,912 for the June 30, 2005
      quarter, and the income comprised principally of proceeds from the sale of
      the
      Partnership’s Interests, exceeded expenses, comprised principally of management
      fees, and professional services costs, by $82,886 for the June 30, 2004 quarter.




The
      Partnership's principal business was the maintenance of its interests in the
      Operating Partnerships, and because the Partnership has reached the end of
      its
      economic useful life, it does not expect to and does not have the funds
      available to make new investments or otherwise engage in additional activities.
      The Partnership's results of operations and its obligations are primarily
      determined by the results of operations of the Operating Partnerships, its
      obligations to the Independent Manager, and by expenses arising out of legal
      and
      professional fees related to its Operating Partnerships’ sales or business
      transactions. Accordingly, period-to-period comparisons of the results of
      operations of the Partnership may not be meaningful. The general partner of
      the
      Partnership, has evaluated the capital needs, competitive position and market
      conditions for each of the Projects, and used these factors to determine whether
      it is in the Partnership’s best interests to continue to own them. The General
      Partner decide that the best course of action was to sell some or all of the
      assets in the Partnership, subject to the Required Consents, and it has begun
      doing so. The following discussion attempts to highlight certain elements of
      the
      results of operations of the Partnership for the periods discussed.




We
      estimated
      that, without additional acquisitions of interests in limited partnerships
      owning properties with or eligible for Tax Credits to replace interests lost
      through insolvency, bankruptcy or the settlement of litigation, for which the
      Partnership does not have funds available, the amount of Tax Credits generated
      by the Partnership aggregated approximately $0.97 for every $1.00 invested
      by
      the Limited Partners, rather than the $1.10 for every $1.00 estimated in the
      Plan. This includes Tax Credits passed through to the Limited Partners by the
      Debtor Investor Partnerships previous to the inception of the Partnership.




Net
      loss was
      $(390,912) for the June 30, 2005 quarter, and there was net income of $82,886
      for the June 30, 2004 quarter. The equity in income from Operating Partnerships
      fluctuates from quarter to quarter. Net loss included equity in income of the
      Operating Partnerships of $57,143 for the June 30, 2005 quarter, and the net
      income of $82,886 for the June 30, 2004 quarter included $212,390 from equity
      in
      income from Operating Partnerships.





-13-


The
      Partnership uses the equity method of accounting for its investment in its
      Operating Partnerships and under the equity method losses in excess of aggregate
      investment in each Operating Partnership are not recognized. Therefore in recent
      years the reported losses from the Operating Partnerships have been declining
      due to basis limitation and the sale of Operating Partnership Interests. For
      income tax reporting purposes 100% of the losses are permitted to be passed
      through to the Limited Partners on their K-1's and each Limited Partner is
      to
      calculate basis limitation separately.




Management
      fees paid were $26,687 for the June 30, 2005 quarter, and $29,500 for the June
      30, 2004 quarter. The reduction in management fees resulted from the decrease
      by
      $750 annually for each Operating Partnership in which the Partnership’s
      Interests was completely sold prior to the beginning of a fiscal
      year.




Pursuant
      to
      the Plan, amounts due and unpaid to Operating Partnerships by the Debtor
      Investor Partnerships prior to the implementation of the Plan in July 1990
      accrued interest at the rate of eight percent (8%) until paid. Pursuant to
      the
      Settlement Agreement and the Management Agreement the Independent Manager is entitled
      to re-ceive an amount equal to 50% of any distributions originally payable
      to
      Continental Construction Management Corporation ,
      a
      subsidiary of First American, which sums also accrue interest at the rate of
      eight percent (8%) until paid. As the non-payment of these amounts are not
      a
      default under the Plan and any such unpaid amount becomes payable only as a
      first and second priority out of Capital Events respectively, contingent
      liabilities, or as liabilities or debts of the Partnership prior to any
      distribution under the Partnership Agreement, as the Partnership has not had
      sufficient funds to pay these amounts, the Partnership did not pay them
      currently and has not accrued the amount or any interest on its financial
      statements. In the June 30, 2005 quarter and the June 30, 2004 quarter the
      Partnership paid the Independent Manager $195,671 and $-0-, respectively, toward
      what it is entitled to re-ceive of the amount originally payable to Continental
      Construction Management Corporation under the Plan.




The
      amount of
      the interest which could be payable under the Plan to the Operating Partnerships
      as a first priority from Capital Events or as a liability or debt of the
      Partnership prior to any distribution under the Partnership Agreement is
      estimated at $600,000 as of June
      30,
      2005 and is
      subject to offsets of the amount of fees for professional services paid on
      behalf of certain Operating Partnerships, any unpaid or accrued annual
      distributions due the Partnership and
      a
      reduction by said sums payable to Operating Partnerships which have lost their
      Projects through foreclosure, bankruptcy or insolvency. The amount and interest
      which could be payable under the Plan as a second priority from Capital Events
      or as a liability or debt of the Partnership prior to any distribution under
      the
      Partnership Agreement to the Independent Manager is estimated at $2,389,567
      as
      of June 30, 2005 after the payments made as above.




The
      Partnership is organized as a limited partner-ship and is a "pass through"
      entity, which does not, itself, pay federal income tax. However, the partners
      of
      the Partner-ship receive their proportionate share of Tax Credits and other
      tax
      benefits accruing annually to the Partnership.




The
      quarter-to-quarter comparison of income or loss may not be meaningful, as the
      Partnership's income of the Operating Partnerships vary from quarter-to-quarter
      depending upon the closing date of the sale of the Partnership’s Interests in
      the Projects, and the expenses for professional services fluctuate depending
      upon the services being rendered for the quarter.






-14-


**Item
      3. Quantitative and Qualitative Disclosures About Market
      Risk.**




None.





**Item
      4. Controls and Procedures.**





Evaluation
      of Disclosure Controls and Procedures:





As
      of the end
      of the period covered by this report, the Partnership’s General Partner, under
      the supervision and with the participation of the Principal Executive Officer
      and Principal Financial Officer of Megan Asset Management, Inc. carried out
      an
      evaluation of the effectiveness of the Fund’s “disclosure controls and
      procedures” as defined in the Securities Exchange Act of 1934 Rules 13a-15(e)
      and 15d-15(e). Based on that evaluation, the Principal Executive Officer and
      Principal Financial Officer have concluded that as of the end of the period
      covered by this report, the Partnership’s disclosure controls and procedures
      were adequate and effective in timely alerting them to material information
      relating to the Partnership required to be included in the Partnership’s
      periodic SEC filings.





Changes
      in Internal Controls:





There
      were no
      changes in the Partnership’s internal control over financial reporting that
      occurred during the quarter ended June 30, 2005 that materially affected, or
      are
      reasonably likely to materially affect, the Partnership’s internal control over
      financial reporting.





**Forward
      Looking Statements**




Certain
      items
      discussed in this Report constitute forward-looking statements within the
      meaning of the Private Securities Litigation reform Act of 1995 and, as such,
      involve known and unknown risks, uncertainties and other factors which may
      cause
      the actual results, performance or achievements of the Partnership to be
      materially different from any future results, performance or achievements
      expressed or implied by such forward-looking statements. You can identify such
      statements by the fact that they do not relate strictly to historical or current
      facts. Statements which make reference to the expectations or beliefs of the
      Partnership or any of its management are such forward-looking statements. These
      statements use words such as “believe”, “expect”, “should”, “may”, “intends”,
“might”, “estimate” and “anticipate”.




All
      such
      forward-looking statements speak only as of the date of this report. The
      Partnership expressly disclaims any obligation or undertaking to release
      publicly any updates or revisions to any forward-looking statements contained
      herein to reflect any change in the Partnership’s expectations with regard
      thereto or any change in events, conditions or circumstances on which any such
      statement is based.




-15-


**PART
      II**





**Item
      1.**  **Legal
      Proceedings.**





Anderson
      Country Estates, L.P., Cedar Crest Apartments, L.P., Gilman Senior Apartments,
      L.P., Lagrange Apartments-Phase II, L.P., Lewistown Apartments, L.P., Oakwood
      Apartments, Ltd., Perry Apartments, L.P. and Wayland Apartments,
      L.P.


In
      December
      2004 the Partnership learned that the following Operating Partnerships were
      being foreclosed upon by RD due to substantial deferred maintenance and
      extremely high vacancies:





·
            Anderson
                Country Estates, L.P. a Missouri limited partnership, owner of a
                twenty-four (24) unit apartment project located in Palmyra,
                Missouri;


·
            Cedar
                Crest Apartments, L.P., a Missouri limited partnership, owner of
                a sixteen
                (16) unit apartment project located in Bourbon,
                Missouri;


·
            Gilman
                Senior Apartments, L.P., a Missouri limited partnership, owner of
                a six
                (6) unit apartment project located in Gilman City,
                Missouri;


·
            Lagrange
                Apartments-Phase II, L.P., a Missouri limited partnership, owner
                of an
                eight (8) unit apartment project located in Lagrange, Missouri;


·
            Lewistown
                Apartments, L.P., a Missouri limited partnership, owner of a twelve
                (12)
                unit apartment project located in Lewistown, Missouri;


·
            Oakwood
                Apartments, Ltd., a Missouri limited partnership, owner of a twenty-four
                (24) unit apartment project located in Hannibal, Missouri;


·
            Perry
                Apartments, L.P., a Missouri limited partnership, owner of an eight
                (8)
                unit apartment project located in Perry, Missouri; and


·
            Wayland
                Apartments, L.P., a Missouri limited partnership, owner of an eight
                (8)
                unit apartment project located in Wayland, Missouri (the “Missouri
                Operating Partnerships”).





As
      each of
      the Missouri Operating Partnerships were the subject of contracts to purchase
      and option agreements, the Partnership had to repurchase the interests in
      Anderson Country Estates, L.P., Oakwood Apartments, Ltd. and Perry Apartments,
      L.P. from Dominium (as hereinafter defined) for $52,168; Gilman Senior
      Apartments, L.P. from AHP2 (as hereinafter defined) for $6,830; and Cedar Crest
      Apartments, L.P., Lagrange Apartments-Phase II, L.P., Lewistown Apartments,
      L.P.
      and Wayland Apartments, L.P. from MPF BA (as hereinafter defined) for $32,573.




Upon
      the
      payment of $10,000, the Partnership entered in to an Option with the Operating
      General Partners of the Missouri Operating Partnerships for their repurchase
      of
      Anderson Country Estates, L.P., Cedar Crest Apartments, L.P., Lagrange
      Apartments-Phase II, L.P., Lewistown Apartments, L.P., Oakwood Apartments,
      Ltd.,
      and Perry Apartments, L.P. from the Partnership for $124,815. The Partnership
      is
      still negotiating with the Operating General Partners of the Missouri Operating
      Partnerships with respect to its interest in Gilman Senior Apartments, L.P.
      and
      Wayland Apartments, L.P., which have been foreclosed upon.




The
      Missouri
      Operating Partners exercised their option to purchase and did purchase Oakwood
      Apartments, Ltd. by an agreement dated the 27th day of September 2005. The
      obligation by the Missouri General Partners to pay the purchase price, in the
      amount of $28,589 due and payable on or before December 31, 2005, was secured
      by
      a Security Agreement of even date.






-16-


While
      all of
      the Missouri Operating Partnerships generated the last of their Tax Credits
      to
      which they were entitled, $1,330,028, in years 1998 to 2002, and each, except
      for Gilman Senior Apartments, L.P., have achieved the end of its 15-Year Tax
      Credit Compliance Period, RD’s foreclose will not cause the Partnership to lose
      any future Tax Credits and to recapture any of the Tax Credits the Partnership
      received from these Projects over the years. With respect to Gilman Senior
      Apartments, L.P., as this Project was foreclosed upon on August 25, 2005, the
      Partnership will not lose any future Tax Credits, however in that the
      foreclosure took place in the 14th year of its 15-Year Tax Credit Compliance
      Period, the Partnership will be required to recapture two-fifths of one-third
      of
      the Tax Credits the Partnership received from this Project over the years or
      $8,753, or approximately $4 per 0.05% of Limited Partnership Interest on its
      2005 tax return, which recapture will be passed on to the Limited Partners
      on
      their 2005 K-1’s. In addition, the value of Gilman Senior Apartments of (i)
      $1,500 which was the price the Partnership had to pay to repurchase 49.5% of
      that Project from AHP #2 and (ii) the value of the balance of the sale price
      of
      $2,500 will likely be lost to the Partnership as a result of this
      foreclosure.





Wayland
      Apartments, L.P. was also foreclosed upon as scheduled in August, 2005. As
      it
      had already achieved the end of its 15-Year Tax Credit Compliance Period, RD’s
      foreclosure will not cause the Partnership to lose any future or have to
      recapture any prior Tax Credits. The value of Wayland Apartments of (i) $7,287
      which was the price the Partnership had to pay to repurchase 49.5% of that
      Project from MPF BA and (ii) the value of the balance of the sale price of
      $8,317 will likely be lost to the Partnership as a result of this foreclosure,
      although the Partnership intends to attempt to collect said amounts from the
      Missouri General Partners.





**Item
      2.**  **Changes
      in Securities.**




None.




**Item
      3. Defaults Upon Senior
      Securities.**




None.




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




None.




**Item
      5. Other Information.**




None.




-17-


**Item
      6. Exhibits.**




The
      following
      exhibits are filed as part of this report:




**Exhibit****Number**
            **Description
                of Exhibits**31.1
            Certification
                pursuant to Securities and Exchange Act Rules 13a-14 and 15d-14,
                as
                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.31.2
            Certification
                pursuant to Securities and Exchange Act Rules 13a-14 and 15d-14,
                as
                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.32.2
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.











**SIGNATURES**




Pursuant
      to
      the requirements of the Securities Exchange Act of 1934, the registrant has
      duly
      caused this report to be signed on its behalf by the undersigned thereunto
      duly
      authorized.








Dated:
              
              July
                27, 2006
            BAYFIELD
                LOW INCOME HOUSING
              LIMITED
                PARTNERSHIP
              By:
                MEGAN ASSET MANAGEMENT, INC.
              Independent
                ManagerBy:/s/
                Paul J. Maddock
              Paul
                J. Maddock, President





-18-