CONTENTS



|                                 |                                                              |      | Page
|-------------------------------- | ------------------------------------------------------------ | ---- | ----
|                                 |                                                              |      |     
|INDEPENDENT
    AUDITOR’S REPORT |                                                              | F-2 
|                                 |                                                              |     
|FINANCIAL
    STATEMENTS:        |                                                              |     
|                                 |                                                              |     
|                                 | Balance
    Sheets                                           |      | F-3 
|                                 |                                                              |      |     
|                                 | Statements
    of Operations and Changes in Partners’ Equity |      | F-5 
|                                 |                                                              |      |     
|                                 | Statements
    of Cash Flows                                 |      | F-6 
|                                 |                                                              |      |     
|                                 | Notes
    to Financial Statements                            |      | F-8 
|                                 |                                                              |      |     
|SUPPLEMENTARY
    INFORMATION:   |                                                              | F-13
|                                 |                                                              |     
|                                 | Supplemental
    Schedule of Expenses                        |      | F-14
|                                 |                                                              |      |     
|                                 | Supplemental
    Schedule of Changes in Partners’ Equity     |      |     





F-1







Partners

Blessed
Rock of El Monte

Costa
Mesa, California



INDEPENDENT
AUDITOR’S REPORT



I
have audited the accompanying balance sheet of Blessed Rock of El Monte, a California Limited Partnership as of December 31, 2003
and 2004, and the related statements of operations and changes in partners’ equity, and operating cash flows for the years
then ended. These financial statements are the responsibility of the partnership’s management. My responsibility is to express
an opinion on these financial statements based on my audits.



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



In
my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Blessed
Rock of El Monte as of December 31, 2003 and 2004 and the results of its operations and its operating cash flows for the years
then ended in conformity with accounting principles generally accepted in the United States.



My
audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary
information shown on page 12 and 13 is presented for the purpose of additional analysis and is not a required part of the basic
financial statements of Blessed Rock of El Monte. Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in my opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.



|January
    19, 2005 | 33-0724657
|-------------------- | ----------





F-2







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)



BALANCE
SHEETS, DECEMBER 31, 2003 AND 2004



ASSETS







|                                                |  | 2004 |            |   | 2003 |  
|----------------------------------------------- |  | ---- | ---------- | - | ---- | -
|Current Assets:                                 |  |      |            |   |      |  
|Operating
    cash and equivalents              |  | $    | 227,596    |   |      | $
|Security deposit
    cash                       |  |      | 25,969     |   |      |  
|Tenant accounts
    receivable                  |  |      | -          |   |      |  
|Other accounts
    receivable                   |  |      | 81,081     |   |      |  
|Prepaid expenses                                |  |      | 51,897     |   |      |  
|Total current
    assets                        |  |      | 386,543    |   |      |  
|                                                |  |      |            |   |      |  
|Property, Building, and
    Equipment, At Cost: |  |      |            |   |      |  
|Land                                            |  |      | 1,271,162  |   |      |  
|Building and improvements                       |  |      | 7,992,586  |   |      |  
|Equipment                                       |  |      | 54,657     |   |      |  
|                                                |  |      | 9,318,405  |   |      |  
|Accumulated
    depreciation                    |  |      | (1,523,169 | ) |      |  
|Property, building,
    and equipment - net     |  |      | 7,795,236  |   |      |  
|                                                |  |      |            |   |      |  
|Other Assets:                                   |  |      |            |   |      |  
|Replacement reserve                             |  |      | 135,579    |   |      |  
|Tax and insurance
    restricted accounts       |  |      | 23,916     |   |      |  
|Total other
    assets                          |  |      | 159,495    |   |      |  
|                                                |  | $    | 8,341,274  |   |      | $





See
the accompanying notes to financial statements.



F-3







Blessed
Rock of El Monte

Balance
Sheets, December 31, 2003 and 2004

Page
2



LIABILITIES
AND PARTNERS’ EQUITY





|                                                          |  | 2004 |           |  | 2003 |  
|--------------------------------------------------------- |  | ---- | --------- |  | ---- | -
|Current Liabilities:                                      |  |      |           |  |      |  
|Current
    portion of long-term debt                     |  | $    | 43,214    |  |      | $
|Accounts payable                                          |  |      | 4,535     |  |      |  
|Security trust
    liability                              |  |      | 23,770    |  |      |  
|Accrued interest                                          |  |      | 14,701    |  |      |  
|Accrued asset management
    fees                         |  |      | 33,078    |  |      |  
|Unearned rental
    income                                |  |      | 1,007     |  |      |  
|Total current
    liabilities                             |  |      | 120,305   |  |      |  
|                                                          |  |      |           |  |      |  
|Long-term Debt:                                           |  |      |           |  |      |  
|Mortgage payable,
    less current portion included above |  |      | 2,459,144 |  |      |  
|Notes payable                                             |  |      | 681,525   |  |      |  
|Accrued interest
    payable                              |  |      | 169,654   |  |      |  
|Grant loan payable                                        |  |      | 400,000   |  |      |  
|Developer fee
    payable                                 |  |      | -         |  |      |  
|Total long-term
    debt                                  |  |      | 3,710,323 |  |      |  
|                                                          |  |      |           |  |      |  
|Partners’
    equity                                      |  |      | 4,510,646 |  |      |  
|                                                          |  |      |           |  |      |  
|                                                          |  | $    | 8,341,274 |  |      | $





See
the accompanying notes to financial statements.



F-4







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

STATEMENTS
OF OPERATIONS AND CHANGES

IN
PARTNERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2004





|                                  |  | 2004 |           |   | 2003 |  
|--------------------------------- |  | ---- | --------- | - | ---- | -
|Revenue:                          |  |      |           |   |      |  
|Gross
    potential rents         |  | $    | 722,814   |   |      | $
|Excess rents                      |  |      | 129,960   |   |      |  
|Less vacancies                    |  |      | (5,344    | ) |      |  
|Net rental income                 |  |      | 847,430   |   |      |  
|Laundry and vending               |  |      | 11,703    |   |      |  
|Tenant charges                    |  |      | 1,942     |   |      |  
|Interest income                   |  |      | 977       |   |      |  
|Other income                      |  |      | 35,276    |   |      |  
|Total revenues                    |  |      | 897,328   |   |      |  
|                                  |  |      |           |   |      |  
|Expenses:                         |  |      |           |   |      |  
|Administrative                    |  |      | 177,881   |   |      |  
|Utilities                         |  |      | 64,157    |   |      |  
|Operating and maintenance         |  |      | 103,812   |   |      |  
|Taxes and insurance               |  |      | 58,507    |   |      |  
|Interest                          |  |      | 210,744   |   |      |  
|Depreciation and
    amortization |  |      | 206,876   |   |      |  
|Total expenses                    |  |      | 819,310   |   |      |  
|                                  |  |      |           |   |      |  
|Net income (loss)                 |  |      | 78,018    |   |      |  
|                                  |  |      |           |   |      |  
|Partners’ equity -
    beginning  |  |      | 4,495,325 |   |      |  
|                                  |  |      |           |   |      |  
|Partners’
    distributions       |  |      | (62,697   | ) |      |  
|                                  |  |      |           |   |      |  
|Partners’ equity - ending         |  | $    | 4,510,646 |   |      | $





See
the accompanying notes to financial statements.



F-5







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

STATEMENTS
OF CASH FLOWS

FOR
THE YEARS ENDED DECEMBER 31, 2003 AND 2004



|                                              |  | 2004 |          |   | 2003 |  
|--------------------------------------------- |  | ---- | -------- | - | ---- | -
|Cash flows from operating
    activities:     |  |      |          |   |      |  
|Rental
    receipts                           |  | $    | 835,626  |   |      | $
|Operating interest
    receipts               |  |      | 402      |   |      |  
|Other operating
    receipts                  |  |      | 13,645   |   |      |  
|Payments to suppliers
    and employees:      |  |      |          |   |      |  
|Administrative
    expenses                   |  |      | (44,918  | ) |      |  
|Management fees                               |  |      | (41,569  | ) |      |  
|Utilities                                     |  |      | (64,157  | ) |      |  
|Salaries and wages                            |  |      | (55,374  | ) |      |  
|Operating and maintenance                     |  |      | (87,221  | ) |      |  
|Real estate taxes                             |  |      | (9,675   | ) |      |  
|Payroll taxes                                 |  |      | (7,017   | ) |      |  
|Property insurance                            |  |      | (8,405   | ) |      |  
|Miscellaneous taxes
    and insurance         |  |      | (21,224  | ) |      |  
|Interest on mortgage                          |  |      | (177,972 | ) |      |  
|Interest on other
    notes                   |  |      | -        |   |      |  
|Funding security
    deposit account          |  |      | (1,961   | ) |      |  
|Net cash provided
    by operating activities |  |      | 330,180  |   |      |  
|                                              |  |      |          |   |      |  
|Cash flows from investing
    activities:     |  |      |          |   |      |  
|Net tax and insurance
    impounds            |  |      | (36,463  | ) |      |  
|Net reserve deposits,
    including interest  |  |      | (21,018  | ) |      |  
|Reserve interest                              |  |      | 575      |   |      |  
|Capital expenditures                          |  |      | -        |   |      |  
|Net cash used
    in investing activities     |  |      | (56,906  | ) |      |  
|                                              |  |      |          |   |      |  
|Cash flows from financing
    activities:     |  |      |          |   |      |  
|Mortgage principal
    payments               |  |      | (40,281  | ) |      |  
|Developer fee payments                        |  |      | (7,719   | ) |      |  
|Advances to general
    partner               |  |      | (6,281   | ) |      |  
|Partner distributions                         |  |      | (62,697  | ) |      |  
|Other note
    payments                       |  |      | -        |   |      |  
|Net cash used
    in financing activities     |  |      | (116,978 | ) |      |  
|                                              |  |      |          |   |      |  
|Net increase (decrease)
    in cash           |  |      | 156,296  |   |      |  
|Cash at beginning
    of year                 |  |      | 71,300   |   |      |  
|                                              |  |      |          |   |      |  
|Cash at end of year                           |  | $    | 227,596  |   |      | $





See
the accompanying notes to financial statements.



F-6







Blessed
Rock of El Monte

Statements
of Cash Flows, December 31, 2003 and 2004

Page
2



Reconciliation
of Net Income (Loss)

to
Net Cash Provided by Operating Activities





|                                                                                             |  | 2004 |         |   | 2003 |  
|-------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|Net income (loss)                                                                            |  | $    | 78,018  |   |      | $
|Adjustments to reconcile
    net income (loss) to net cash Provided by operating activities: |  |      |         |   |      |  
|Depreciation and
    amortization                                                            |  |      | 206,876 |   |      |  
|Decrease (increase)
    in:                                                                  |  |      |         |   |      |  
|Security deposit
    cash                                                                    |  |      | (1,746  | ) |      |  
|Receivables                                                                                  |  |      | 109     |   |      |  
|Prepaids                                                                                     |  |      | 12,500  |   |      |  
|Increase (decrease)
    in:                                                                  |  |      |         |   |      |  
|Payables                                                                                     |  |      | 4,535   |   |      |  
|Security deposit
    liability                                                               |  |      | (215    | ) |      |  
|Accrued expenses                                                                             |  |      | 30,303  |   |      |  
|Unearned rental
    income                                                                   |  |      | 375     |   |      |  
|Reserve interest
    earned                                                                  |  |      | (575    | ) |      |  
|                                                                                             |  |      |         |   |      |  
|Net cash provided by operating
    activities                                                |  | $    | 330,180 |   |      | $







See
the accompanying notes to financial statements.



F-7







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

NOTES
TO FINANCIAL STATEMENTS

DECEMBER
31, 2004



|1. | ORGANIZATION
                                                                                                                                                                            AND
                                                                                                                                                                            SUMMARY
                                                                                                                                                                            OF
                                                                                                                                                                            SIGNIFICANT
                                                                                                                                                                            ACCOUNTING
                                                                                                                                                                            POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Organization:
                                                                                      Blessed Rock of El Monte, a California limited
                                                                                      partnership, was formed on November 22,
                                                                                      1995 by and between Everland, Inc., a California
                                                                                      Corporation, as the general partner and
                                                                                      Tom Y. Lee as the limited partner. The Partnership
                                                                                      Agreement was amended and restated on December
                                                                                      29, 2000 defining the various partners of
                                                                                      the partnership as the General Partner,
                                                                                      the Managing General Partner, the Limited
                                                                                      Partners and the Special Limited Partner.                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The
                                                                                      Partnership was formed to acquire, construct,
                                                                                      own and operate a 137-unit elderly facility
                                                                                      apartment complex for low income residents
                                                                                      in El Monte, California. The Partnership
                                                                                      also generates tax credits to the partners
                                                                                      in accordance with the provisions of the
                                                                                      code and applicable Treasury regulations.
                                                                                      The Partnership has qualified for low income
                                                                                      housing tax credits as currently allowable
                                                                                      under Section 42 of the Internal Revenue
                                                                                      Code.                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The
                                                                                      Partnership received HOME funds from the
                                                                                      City of El Monte and redevelopment funds
                                                                                      from the El Monte Community Redevelopment
                                                                                      Agency as part of a public program to ensure
                                                                                      affordable housing for senior citizen tenants.
                                                                                      In addition, the El Monte Community Redevelopment
                                                                                      Agency paid various project impact fees
                                                                                      to the City of El Monte associated with
                                                                                      the construction and development of the
                                                                                      Project on behalf of the Partnership.                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Capitalization
                                                                                      and Depreciation:Assets
                                                                                      are recorded at cost and depreciated for
                                                                                      financial accounting purposes using the
                                                                                      straight-line method over their estimated
                                                                                      useful lives. The principal estimated useful
                                                                                      lives used in computing the depreciation
                                                                                      provisions are 10 to 40 years for building
                                                                                      and improvements, and 3 to 10 years for
                                                                                      equipment The policy of the project is to
                                                                                      charge amounts expended for maintenance,
                                                                                      repairs, and minor replacements to expense,
                                                                                      and to capitalize expenditures for major
                                                                                      replacements and betterments.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Cash
                                                                                      and Cash Equivalents: For purposes
                                                                                      of reporting cash flows, cash includes unrestricted
                                                                                      cash in bank, cash on hand, savings accounts,
                                                                                      and all certificates of deposit with original
                                                                                      maturities of three months or less.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The
                                                                                      Partnership maintains its cash in bank deposit
                                                                                      accounts, which at times may exceed federally
                                                                                      insured limits. The Partnership has not
                                                                                      experienced any losses in such accounts.
                                                                                      The Partnership believes it is not exposed
                                                                                      to any significant credit risk on cash and
                                                                                      cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Deferred
                                                                                      Costs: Deferred costs, comprised
                                                                                      of tax credit fees and organization costs
                                                                                      are being amortized over five years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    



F-8









Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2004

Page
2



|   | Estimates:The preparation of
                                                                                                     financial statements in conformity
                                                                                                     with generally accepted accounting
                                                                                                     principles requires management
                                                                                                     to make estimates and assumptions
                                                                                                     that affect: (1) the reported
                                                                                                     amounts of assets and liabilities
                                                                                                     and disclosure of contingencies
                                                                                                     at the date of the financial
                                                                                                     statements, and (2) the reported
                                                                                                     amounts of revenues and expenses
                                                                                                     during the reporting period.
                                                                                                     Actual results could differ
                                                                                                     from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Rental
                                                                                                                                                                                            Income
                                                                                                                                                                                            and
                                                                                                                                                                                            Unearned
                                                                                                                                                                                            Rents:The
                                                                                                                                                                                            Partnership
                                                                                                                                                                                            rents
                                                                                                                                                                                            apartment
                                                                                                                                                                                            units
                                                                                                                                                                                            on
                                                                                                                                                                                            a
                                                                                                                                                                                            month
                                                                                                                                                                                            to
                                                                                                                                                                                            month
                                                                                                                                                                                            basis
                                                                                                                                                                                            and
                                                                                                                                                                                            recognizes
                                                                                                                                                                                            revenues
                                                                                                                                                                                            when
                                                                                                                                                                                            earned.
                                                                                                                                                                                            Advance
                                                                                                                                                                                            receipts
                                                                                                                                                                                            of
                                                                                                                                                                                            rents
                                                                                                                                                                                            are
                                                                                                                                                                                            classified
                                                                                                                                                                                            as
                                                                                                                                                                                            liabilities
                                                                                                                                                                                            until
                                                                                                                                                                                            earned.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Income
                                                                                      Taxes: No provision is made for
                                                                                      income taxes since such taxes, if any, are
                                                                                      the liability of the individual partners.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2. | RESTRICTED
                                                                                                                                                             FUNDS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The
                                                                                      Partnership is required to make monthly
                                                                                      impound deposits to cover insurance premiums,
                                                                                      property taxes and to maintain a reserve
                                                                                      for replacements. These restricted funds
                                                                                      are held by, and expenditures are subject
                                                                                      to supervision and approval by, GMAC Commercial
                                                                                      Mortgage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3. | MORTGAGE
                                                                                                                                                             PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          







| | Mortgage payable consists of a 7.05% real estate mortgage, payable
    to GMAC Commercial Mortgage, collateralized by a deed of trust on the real property. The obligation is payable in aggregate
    monthly principal and interest installments of $18,188 beginning July 1, 1998 with a balloon payment in the amount of $2,017,000
    payable June 1, 2013. |  | $ | 2,502,358 |  
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | --------- | -
| |                                                                                                                                                                                                                                                                                                                                                                   |  |   |           |  
| | Less current portion                                                                                                                                                                                                                                                                                                                                              |  |   | (43,214   | )
| |                                                                                                                                                                                                                                                                                                                                                                   |  |   |           |  
| |                                                                                                                                                                                                                                                                                                                                                                   |  | $ | 2,459,144 |  





The
amounts maturing for the next five years are:



| | 2005 |  |  | $ | 43,214 | 
| | ---- |  |  | - | ------ | 
| | 2006 |  |  |   | 46,361 | 
| | 2007 |  |  |   | 49,737 | 
| | 2008 |  |  |   | 53,360 | 
| | 2009 |  |  |   | 57,245 | 



F-9







Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2004

Page
3



|4. | NOTES
                                                                                                                                                                            PAYABLE
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | Notes
    payable at December 31, 2004 consist of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |   |         | 
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------- | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   |         | 
| | 4%
    note payable with a term of 15 years, payable to El Monte Community Redevelopment Agency (RDA), secured by deed of trust and
    rents from Project. Note subject to prepayment in whole or in part based on events constituting default under terms of promissory
    note agreement. No events of default have occurred through December 31, 2004. Payments of interest and principal made annually
    beginning on April 1, 2003, and thereafter on April 1 until outstanding principal balance of note and all accrued interest
    paid in full. Payments paid from 50% of the residual rental income, as defined in the promissory note agreement.  Payments,
    if any, applied first to accrued interest and second to principal of note. At December 31, 2004, accrued interest on note
    was $21,035. |  | $ | 250,878 | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   |         | 
| | 1%
    note payable with a term of 30 years beginning April 3, 1996, payable to RDA for various development fees, secured by a deed
    of trust and rents from the Project. Commencing April 3, 1997, and thereafter on April 3 for the following 6 succeeding years,
    payment of $4,239 due each year. Payment increases to $8,478 April 3, 2004 and continues the next 7 succeeding years.  April
    3, 2012, payment increases to $32,534 and continues the next 14 succeeding years, or until paid in full.  Payments
    to be paid from 50% of residual rental income, as defined in promissory note agreement. Payments first applied to interest.
    At December 31, 2004, accrued interest on note was $8,618.                                                                                              |  |   | 430,647 | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |   |         | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | $ | 681,525 | 





F-10







Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2004

Page
4



|5. | GRANT
                                                                                                                                                                            LOAN
                                                                                                                                                                            PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The
                                                                                      Partnership received a loan of $400,000
                                                                                      on April 3, 1996 from the City of El Monte
                                                                                      as part of a public program to ensure affordable
                                                                                      housing for senior citizen tenants. Interest
                                                                                      accrues on the principal amount at 4%, with
                                                                                      a term of 55 years. Loan is secured by a
                                                                                      deed of trust and rents from the Project.
                                                                                      At maturity, the principal amount of the
                                                                                      loan and all accrued interest shall be deemed
                                                                                      discharged and waived by the City unless
                                                                                      there is an occurrence of an event of default,
                                                                                      as specified under the loan agreement. If
                                                                                      default occurs, the City of El Monte is
                                                                                      entitled to exercise its rights and the
                                                                                      entire principal amount outstanding and
                                                                                      any accrued interest could become due and
                                                                                      payable at the option of the City of El
                                                                                      Monte. Accrued interest at December 31,
                                                                                      2004 was $140,000.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6. | RELATED
                                                                                                                                                             PARTY
                                                                                                                                                             TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Capital
                                                                                      Contributions: The limited partners,
                                                                                      WNC Housing Tax Credit Fund V, L.P. Series
                                                                                      III and IV, 49.495% limited partners, are
                                                                                      required to make a capital contribution
                                                                                      of $5,162,171, which shall be made equally
                                                                                      between them, in amounts and at times as
                                                                                      stated in the Limited Partnership Agreement.
                                                                                      The limited partners’ cash contributions
                                                                                      may be reduced to account for reduced tax
                                                                                      benefits, if any. At December 31, 2004,
                                                                                      the limited partners have contributed $5,021,578.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Project
                                                                                      or Loss Allocations: All items included
                                                                                      in the calculation of income or loss not
                                                                                      arising from a sale or refinancing, and
                                                                                      all tax credits, shall be allocated 98.99%
                                                                                      equally to the limited partners, .01% to
                                                                                      the special limited partner, .99% to the
                                                                                      general partner, and .01% to the managing
                                                                                      general partner.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Developer
                                                                                      Fee Payable and Advance Payable to General
                                                                                      Partner: Under the terms of the
                                                                                      Partnership Agreement, Everland, Inc., the
                                                                                      developer, is to receive a developer fee
                                                                                      totaling $1,050,416. This developer fee
                                                                                      bears no interest and is payable upon additional
                                                                                      capital contributions by the limited partners.
                                                                                      During the periods ended December 31, 2004
                                                                                      and 2003, $14,000 and $91,000 of payments
                                                                                      of the developer fees were made, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Management
                                                                                      Fee: A monthly property management
                                                                                      fee in an amount computed at 5% of the collected
                                                                                      gross revenue is payable to the management
                                                                                      agent. Property management services to the
                                                                                      Partnership are provided by an affiliate
                                                                                      of the limited partners. Property management
                                                                                      fees were $42,505 and $42,105 for the years
                                                                                      2004 and 2003, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                



F-11







Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2004

Page
5



|   | Incentive
                                                                                                     Management and Other Fees: Under the terms
                                                                                                     of the Limited Partnership
                                                                                                     Agreement, incentive management
                                                                                                     fees shall be paid to the
                                                                                                     general partner for services
                                                                                                     incidental to the administration
                                                                                                     of the business and affairs
                                                                                                     of the Partnership, reporting
                                                                                                     fees to the limited partners
                                                                                                     for services performed in
                                                                                                     monitoring the operations
                                                                                                     of the Partnership, services
                                                                                                     in connection with the Partnership’s
                                                                                                     accounting matters and assisting
                                                                                                     with the preparation of tax
                                                                                                     returns. $60,442 of fees
                                                                                                     for the years 1998, 1999
                                                                                                     and 2000 were recorded for
                                                                                                     year ended December 31, 2001.
                                                                                                     $55,013 of the fees were
                                                                                                     paid in year 2001. None were
                                                                                                     paid in prior years. The
                                                                                                     limited partners earned $12,000
                                                                                                     in reporting fees during
                                                                                                     2002 and 2003 and were paid
                                                                                                     $29,647 each year, resulting
                                                                                                     in $29,865 in prepaid reporting
                                                                                                     fees at December 31, 2004.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The
                                                                                      managing general partner earned $16,440
                                                                                      for 2001, 2002 and 2003 for an operational
                                                                                      asset management fee which was accrued in
                                                                                      2003. $16,440 was paid in 2003 leaving an
                                                                                      accrual balance of $32,880.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|7. | CURRENT
                                                                                                                                                             VULNERABILITY
                                                                                                                                                             DUE
                                                                                                                                                             TO
                                                                                                                                                             CERTAIN
                                                                                                                                                             CONCENTRATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The
                                                                                      Partnership’s sole asset is a 137-unit
                                                                                      apartment complex. The Partnership’s
                                                                                      operations are concentrated in the multifamily
                                                                                      real estate market In addition, the Partnership
                                                                                      operates in a heavily regulated environment.
                                                                                      The operations of the project are subject
                                                                                      to the administrative directives, rules
                                                                                      and regulations of local regulatory agencies.
                                                                                      Such administrative directives, rules and
                                                                                      regulations are subject to change. Such
                                                                                      changes may occur with little notice or
                                                                                      inadequate funding to pay for related costs,
                                                                                      including the additional administrative
                                                                                      burden, to comply with a change.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



F-12



























SUPPLEMENTARY
INFORMATION























F-13









BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

SUPPLEMENTAL
SCHEDULE OF EXPENSES

FOR
THE YEAR ENDED DECEMBER 31, 2003 and 2004





|                                                 |  | 2004 |         |  | 2003 |  
|------------------------------------------------ |  | ---- | ------- |  | ---- | -
|Site
    management payroll                      |  | $    | 38,783  |  |      | $
|Manager’s
    rent-free apartment                |  |      | 12,288  |  |      |  
|Management
    fee                               |  |      | 42,505  |  |      |  
|Partnership
    asset management fees            |  |      | 16,440  |  |      |  
|Reporting
    fee                                |  |      | 12,000  |  |      |  
|Audit
    fee                                    |  |      | 5,800   |  |      |  
|Legal
    fees                                   |  |      | 250     |  |      |  
|Advertising                                      |  |      | -       |  |      |  
|Telephone
    and answering service              |  |      | 7,148   |  |      |  
|Office
    supplies                              |  |      | 5,052   |  |      |  
|Educational
    and social programs              |  |      | 11,520  |  |      |  
|Health
    insurance and other employee benefits |  |      | 6,381   |  |      |  
|Payroll
    taxes                                |  |      | 7,017   |  |      |  
|Workers’
    compensation                        |  |      | 10,331  |  |      |  
|Other
    administration                         |  |      | 2,366   |  |      |  
|Subtotal
    administrative expenses             |  |      | 177,881 |  |      |  
|                                                 |  |      |         |  |      |  
|Electricity                                      |  |      | 21,944  |  |      |  
|Water
    and sewer                              |  |      | 20,754  |  |      |  
|Fuel                                             |  |      | 17,579  |  |      |  
|Garbage
    and trash removal                    |  |      | 3,880   |  |      |  
|Subtotal
    utilities                           |  |      | 64,157  |  |      |  
|                                                 |  |      |         |  |      |  
|Maintenance
    and repairs payroll              |  |      | 16,591  |  |      |  
|Maintenance
    and repairs supply               |  |      | 6,620   |  |      |  
|Maintenance
    and repairs contract             |  |      | 11,062  |  |      |  
|Painting
    and decorating                      |  |      | 24,779  |  |      |  
|Grounds                                          |  |      | 12,640  |  |      |  
|Services                                         |  |      | 3,085   |  |      |  
|Furniture
    and furnishings replacement        |  |      | 29,035  |  |      |  
|Subtotal
    maintenance expenses                |  |      | 103,812 |  |      |  
|                                                 |  |      |         |  |      |  
|Property
    taxes                               |  |      | 9,675   |  |      |  
|Other
    taxes and licenses                     |  |      | 6,680   |  |      |  
|Property
    and liability insurance             |  |      | 41,505  |  |      |  
|Other
    insurance                              |  |      | 647     |  |      |  
|Subtotal
    tax and insurance                   |  |      | 58,507  |  |      |  
|                                                 |  |      |         |  |      |  
|Interest                                         |  |      | 208,077 |  |      |  
|                                                 |  |      |         |  |      |  
|Depreciation
    and amortization                |  |      | 206,876 |  |      |  
|Total
    expenses                               |  | $    | 819,310 |  |      | $







F-14









CONTENTS



|                                 |                                                              |      | Page
|-------------------------------- | ------------------------------------------------------------ | ---- | ----
|                                 |                                                              |      |     
|INDEPENDENT
    AUDITOR’S REPORT |                                                              | F-2 
|                                 |                                                              |     
|FINANCIAL STATEMENTS:            |                                                              |     
|                                 |                                                              |     
|                                 | Balance
    Sheets                                           |      | F-3 
|                                 |                                                              |      |     
|                                 | Statements
    of Operations and Changes in Partners’ Equity |      | F-5 
|                                 |                                                              |      |     
|                                 | Statements
    of Cash Flows                                 |      | F-6 
|                                 |                                                              |      |     
|                                 | Notes
    to Financial Statements                            |      | F-8 
|                                 |                                                              |      |     
|SUPPLEMENTARY
    INFORMATION:   |                                                              | F-13
|                                 |                                                              |     
|                                 | Supplemental
    Schedule of Expenses                        |      | F-14
|                                 |                                                              |      |     
|                                 | Supplemental
    Schedule of Changes in Partners’ Equity     |      |     



F-1







Partners

Blessed
Rock of El Monte

Costa
Mesa, California



INDEPENDENT
AUDITOR’S REPORT



I
have audited the accompanying balance sheet of Blessed Rock of El Monte, a California Limited Partnership as of December 31, 2004
and 2005, and the related statements of operations and changes in partners’ equity, and operating cash flows for the years
then ended. These financial statements are the responsibility of the partnership’s management. My responsibility is to express
an opinion on these financial statements based on my audits.



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



In
my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Blessed
Rock of El Monte as of December 31, 2004 and 2005 and the results of its operations and its operating cash flows for the years
then ended in conformity with accounting principles generally accepted in the United States.



My
audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary
information shown on page 12 and 13 is presented for the purpose of additional analysis and is not a required part of the basic
financial statements of Blessed Rock of El Monte. Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in my opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.



|February
    8, 2006 | 33-0724657
|-------------------- | ----------



F-2







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

BALANCE
SHEETS, DECEMBER 31, 2004 AND 2005



ASSETS



|                                            |  | 2005 |            |   | 2004 |  
|------------------------------------------- |  | ---- | ---------- | - | ---- | -
|Current Assets:                             |  |      |            |   |      |  
|Operating cash and equivalents              |  | $    | 459,783    |   |      | $
|Security deposit cash                       |  |      | 25,801     |   |      |  
|Tenant accounts receivable                  |  |      | 370        |   |      |  
|Other accounts receivable                   |  |      | 6,281      |   |      |  
|Prepaid expenses                            |  |      | 61,945     |   |      |  
|Total current assets                        |  |      | 554,180    |   |      |  
|                                            |  |      |            |   |      |  
|Property, Building, and Equipment. At Cost: |  |      |            |   |      |  
|Land                                        |  |      | 1,271,162  |   |      |  
|Building and improvements                   |  |      | 7,992,586  |   |      |  
|Equipment                                   |  |      | 54,657     |   |      |  
|                                            |  |      | 9,318,405  |   |      |  
|Accumulated depreciation                    |  |      | (1,728,013 | ) |      |  
|Property, building, and equipment - net     |  |      | 7,590,392  |   |      |  
|                                            |  |      |            |   |      |  
|Other Assets:                               |  |      |            |   |      |  
|Replacement reserve                         |  |      | 156,909    |   |      |  
|Tax and insurance restricted accounts       |  |      | 22,073     |   |      |  
|Total other assets                          |  |      | 178,982    |   |      |  
|                                            |  | $    | 8,323,554  |   |      | $





See
the accompanying notes to financial statements.



F-3







Blessed
Rock of El Monte

Balance
Sheets, December 31, 2004 and 2005

Page
2



LIABILITIES
AND PARTNERS’ EQUITY



|                                                      |  | 2005 |           |  | 2004 |  
|----------------------------------------------------- |  | ---- | --------- |  | ---- | -
|Current Liabilities:                                  |  |      |           |  |      |  
|Current portion of long-term debt                     |  | $    | 46,361    |  |      | $
|Accounts payable                                      |  |      | 6,667     |  |      |  
|Security trust liability                              |  |      | 23,635    |  |      |  
|Accrued interest                                      |  |      | 14,175    |  |      |  
|Accrued asset management fees                         |  |      | 32,880    |  |      |  
|Other accruals                                        |  |      | 6,025     |  |      |  
|Unearned rental income                                |  |      | 1,054     |  |      |  
|Total current liabilities                             |  |      | 130,797   |  |      |  
|                                                      |  |      |           |  |      |  
|Long-term Debt:                                       |  |      |           |  |      |  
|Mortgage payable, less current portion included above |  |      | 2,412,783 |  |      |  
|Notes payable                                         |  |      | 681,525   |  |      |  
|Accrued interest payable                              |  |      | 199,995   |  |      |  
|Grant loan payable                                    |  |      | 400,000   |  |      |  
|Developer fee payable                                 |  |      | -         |  |      |  
|Total long-term debt                                  |  |      | 3,694,303 |  |      |  
|                                                      |  |      |           |  |      |  
|Partners’ equity                                      |  |      | 4,498,454 |  |      |  
|                                                      |  |      |           |  |      |  
|                                                      |  | $    | 8,323,554 |  |      | $





See
the accompanying notes to financial statements.



F-4







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

STATEMENTS
OF OPERATIONS AND CHANGES

IN
PARTNERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2005



|                              |  | 2005 |           |   | 2004 |  
|----------------------------- |  | ---- | --------- | - | ---- | -
|Revenue:                      |  |      |           |   |      |  
|Gross potential rents         |  | $    | 745,260   |   |      | $
|Excess rents                  |  |      | 117,337   |   |      |  
|Less vacancies                |  |      | (1,442    | ) |      |  
|Net rental income             |  |      | 861,155   |   |      |  
|Laundry and vending           |  |      | 13,410    |   |      |  
|Tenant charges                |  |      | 1,482     |   |      |  
|Interest income               |  |      | 2,490     |   |      |  
|Other income                  |  |      | 886       |   |      |  
|Total revenues                |  |      | 879,423   |   |      |  
|                              |  |      |           |   |      |  
|Expenses:                     |  |      |           |   |      |  
|Administrative                |  |      | 200,758   |   |      |  
|Utilities                     |  |      | 74,145    |   |      |  
|Operating and maintenance     |  |      | 128,436   |   |      |  
|Taxes and insurance           |  |      | 56,579    |   |      |  
|Interest                      |  |      | 208,077   |   |      |  
|Depreciation and amortization |  |      | 204,844   |   |      |  
|Total expenses                |  |      | 869,615   |   |      |  
|                              |  |      |           |   |      |  
|Net income (loss)             |  |      | 9,808     |   |      |  
|                              |  |      |           |   |      |  
|Partners’ equity - beginning  |  |      | 4,510,646 |   |      |  
|                              |  |      |           |   |      |  
|Partners’ distributions       |  |      | (22,000   | ) |      |  
|                              |  |      |           |   |      |  
|Partners’ equity - ending     |  | $    | 4,498,454 |   |      | $







See
the accompanying notes to financial statements.



F-5







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

STATEMENTS
OF CASH FLOWS

FOR
THE YEARS ENDED DECEMBER 31, 2004 AND 2005





|                                              |  | 2005 |          |   | 2004 |  
|--------------------------------------------- |  | ---- | -------- | - | ---- | -
|Cash
    flows from operating activities:     |  |      |          |   |      |  
|Rental
    receipts                           |  | $    | 848,544  |   |      | $
|Operating
    interest receipts               |  |      | 1,704    |   |      |  
|Other
    operating receipts                  |  |      | 90,578   |   |      |  
|Payments
    to suppliers and employees:      |  |      |          |   |      |  
|Administrative
    expenses                   |  |      | (47,918  | ) |      |  
|Management
    fees                           |  |      | (99,011  | ) |      |  
|Utilities                                     |  |      | (71,596  | ) |      |  
|Salaries
    and wages                        |  |      | (43,358  | ) |      |  
|Operating
    and maintenance                 |  |      | (115,758 | ) |      |  
|Real
    estate taxes                         |  |      | (7,643   | ) |      |  
|Payroll
    taxes                             |  |      | (5,062   | ) |      |  
|Property
    insurance                        |  |      | (45,120  | ) |      |  
|Miscellaneous
    taxes and insurance         |  |      | (17,907  | ) |      |  
|Interest
    on mortgage                      |  |      | (171,384 | ) |      |  
|Funding
    security deposit account          |  |      | 33       |   |      |  
|Net
    cash provided by operating activities |  |      | 316,102  |   |      |  
|                                              |  |      |          |   |      |  
|Cash
    flows from investing activities:     |  |      |          |   |      |  
|Net
    tax and insurance impounds            |  |      | 1,843    |   |      |  
|Net
    reserve deposits, including interest  |  |      | (21,330  | ) |      |  
|Reserve
    interest                          |  |      | 786      |   |      |  
|Net
    cash used in investing activities     |  |      | (18,701  | ) |      |  
|                                              |  |      |          |   |      |  
|Cash
    flows from financing activities:     |  |      |          |   |      |  
|Mortgage
    principal payments               |  |      | (43,214  | ) |      |  
|Developer
    fee payments                    |  |      | -        |   |      |  
|Advances
    to general partner               |  |      | -        |   |      |  
|Partner
    distributions                     |  |      | (22,000  | ) |      |  
|Net
    cash used in financing activities     |  |      | (65,214  | ) |      |  
|                                              |  |      |          |   |      |  
|Net
    increase (decrease) in cash           |  |      | 232,187  |   |      |  
|Cash
    at beginning of year                 |  |      | 227,596  |   |      |  
|                                              |  |      |          |   |      |  
|Cash
    at end of year                       |  | $    | 459,783  |   |      | $





See
the accompanying notes to financial statements.



F-6







Blessed
Rock of El Monte

Statements
of Cash Flows, December 31, 2004 and 2005

Page
2



Reconciliation
of Net Income (Loss)

to
Net Cash Provided by Operating Activities





|                                                                                             |  | 2005 |         |   | 2004 |  
|-------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|Net income (loss)                                                                            |  | $    | 9,808   |   |      | $
|Adjustments to reconcile net income (loss) to net cash Provided by
    operating activities: |  |      |         |   |      |  
|Depreciation and amortization                                                                |  |      | 204,844 |   |      |  
|Decrease (increase) in:                                                                      |  |      |         |   |      |  
|Security deposit cash                                                                        |  |      | 168     |   |      |  
|Receivables                                                                                  |  |      | 74,430  |   |      |  
|Prepaids                                                                                     |  |      | (10,048 | ) |      |  
|Increase (decrease) in:                                                                      |  |      |         |   |      |  
|Payables                                                                                     |  |      | (1,522  | ) |      |  
|Security deposit liability                                                                   |  |      | (135    | ) |      |  
|Accrued expenses                                                                             |  |      | 39,296  |   |      |  
|Unearned rental income                                                                       |  |      | 47      |   |      |  
|Reserve interest earned                                                                      |  |      | (786    | ) |      |  
|                                                                                             |  |      |         |   |      |  
|Net cash provided by operating activities                                                    |  | $    | 316,102 |   |      | $





See
the accompanying notes to financial statements.



F-7







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

NOTES
TO FINANCIAL STATEMENTS

DECEMBER
31, 2005



|1. | ORGANIZATION
    AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Organization:
    Blessed Rock of El Monte, a California limited partnership, was formed on November 22, 1995 by and between Everland, Inc.,
    a California Corporation, as the general partner and Tom Y. Lee as the limited partner. The Partnership Agreement was amended
    and restated on December 29, 2000 defining the various partners of the partnership as the General Partner, the Managing General
    Partner, the Limited Partners and the Special Limited Partner.                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The
    Partnership was formed to acquire, construct, own and operate a 137-unit elderly facility apartment complex for low income
    residents in El Monte, California. The Partnership also generates tax credits to the partners in accordance with the provisions
    of the code and applicable Treasury regulations. The Partnership has qualified for low income housing tax credits as currently
    allowable under Section 42 of the Internal Revenue Code.                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The
    Partnership received HOME funds from the City of El Monte and redevelopment funds from the El Monte Community Redevelopment
    Agency as part of a public program to ensure affordable housing for senior citizen tenants. In addition, the El Monte Community
    Redevelopment Agency paid various project impact fees to the City of El Monte associated with the construction and development
    of the Project on behalf of the Partnership.                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Capitalization
    and Depreciation:Assets are recorded at cost and depreciated for financial accounting purposes using the straight-line
    method over their estimated useful lives. The principal estimated useful lives used in computing the depreciation provisions
    are 10 to 40 years for building and improvements, and 3 to 10 years for equipment The policy of the project is to charge amounts
    expended for maintenance, repairs, and minor replacements to expense, and to capitalize expenditures for major replacements
    and betterments.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Cash
    and Cash Equivalents: For purposes of reporting cash flows, cash includes unrestricted cash in bank, cash on hand,
    savings accounts, and all certificates of deposit with original maturities of three months or less.                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The
    Partnership maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. The Partnership
    has not experienced any losses in such accounts. The Partnership believes it is not exposed to any significant credit risk
    on cash and cash equivalents.                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Deferred
    Costs:Deferred costs, comprised of tax credit fees and organization costs are being amortized over five years.                                                                                                                                                                                                                                                                                                                                                                                                                                         



F-8







Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2005

Page
2





|   | Estimates:The preparation of financial statements in conformity with generally accepted accounting principles requires management
    to make estimates and assumptions that affect: (1) the reported amounts of assets and liabilities and disclosure of contingencies
    at the date of the financial statements, and (2) the reported amounts of revenues and expenses during the reporting period.
    Actual results could differ from those estimates.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Rental
    Income and Unearned Rents:The Partnership rents apartment units on a month to month basis and recognizes revenues
    when earned. Advance receipts of rents are classified as liabilities until earned.                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Income
    Taxes:No provision is made for income taxes since such taxes, if any, are the liability of the individual
    partners.                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2. | RESTRICTED
    FUNDS                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The
    Partnership is required to make monthly impound deposits to cover insurance premiums, property taxes and to maintain a reserve
    for replacements. These restricted funds are held by, and expenditures are subject to supervision and approval by, GMAC Commercial
    Mortgage.                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | MORTGAGE
    PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                         



| | Mortgage payable consists of a 7.05% real estate mortgage, payable
    to GMAC Commercial Mortgage, collateralized by a deed of trust on the real property. The obligation is payable in aggregate
    monthly principal and interest installments of $18,188 beginning July 1, 1998 with a balloon payment in the amount of $2,017,000
    payable June 1, 2013. |  | $ | 2,459,144 |  
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | --------- | -
| |                                                                                                                                                                                                                                                                                                                                                                   |  |   |           |  
| | Less current portion                                                                                                                                                                                                                                                                                                                                              |  |   | (46,361   | )
| |                                                                                                                                                                                                                                                                                                                                                                   |  |   |           |  
| |                                                                                                                                                                                                                                                                                                                                                                   |  | $ | 2,412,783 |  



The
amounts maturing for the next five years are:



| | 2006 |  |  | $ | 46,361 | 
| | ---- |  |  | - | ------ | 
| | 2007 |  |  |   | 49,737 | 
| | 2008 |  |  |   | 53,360 | 
| | 2009 |  |  |   | 57,245 | 
| | 2010 |  |  |   | 61,414 | 



F-9







Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2005

Page
3



| | 4. | NOTES
                                                                                                                                                                                                                                                                            PAYABLE
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Notes
    payable at December 31, 2005 consist of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |   |         | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------- | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |   |         | 
| | 4%
    note payable with a term of 15 years, payable to El Monte Community Redevelopment Agency (RDA), secured by deed of trust and
    rents from Project. Note subject to prepayment in whole or in part based on events constituting default under terms of promissory
    note agreement. No events of default have occurred through December 31, 2005. Payments of interest and principal made annually
    beginning on April 1, 2003, and thereafter on April 1 until outstanding principal balance of note and all accrued interest
    paid in full. Payments paid from 50% of the residual rental income, as defined in the promissory note agreement. Payments,
    if any, applied first to accrued interest and second to principal of note. At December 31, 2005, accrued interest on note
    was $31,070. |  | $ | 250,878 | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |   |         | 
| | 1%
    note payable with a term of 30 years beginning April 3, 1996, payable to RDA for various development fees, secured by a deed
    of trust and rents from the Project. Commencing April 3, 1997, and thereafter on April 3 for the following 6 succeeding years,
    payment of $4,239 due each year. Payment increases to $8,478 April 3, 2004 and continues the next 7 succeeding years. April
    3, 2012, payment increases to $32,534 and continues the next 14 succeeding years, or until paid in full. Payments to be paid
    from 50% of residual rental income, as defined in promissory note agreement. Payments first applied to interest. At
    December 31, 2005, accrued interest on note was $12,924.                                                                                              |  |   | 430,647 | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |   |         | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | $ | 681,525 | 



F-10







Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2005

Page
4



|5. | GRANT
    LOAN PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The
    Partnership received a loan of $400,000 on April 3, 1996 from the City of El Monte as part of a public program to ensure affordable
    housing for senior citizen tenants. Interest accrues on the principal amount at 4%, with a term of 55 years. Loan is secured
    by a deed of trust and rents from the Project. At maturity, the principal amount of the loan and all accrued interest shall
    be deemed discharged and waived by the City unless there is an occurrence of an event of default, as specified under the loan
    agreement. If default occurs, the City of El Monte is entitled to exercise its rights and the entire principal amount outstanding
    and any accrued interest could become due and payable at the option of the City of El Monte. Accrued interest at December
    31, 2005 was $156,000.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|6. | RELATED
    PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Project
    or Loss Allocations: All items included in the calculation of income or loss not arising from a sale or refinancing,
    and all tax credits, shall be allocated 98.99% equally to the limited partners, .01% to the special limited partner, .99%
    to the general partner, and .01% to the managing general partner.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Developer
    Fee Payable and Advance Payable to General Partner: Under the terms of the Partnership Agreement, Everland, Inc.,
    the developer, is to receive a developer fee totaling $1,050,416. This developer fee bears no interest and is payable upon
    additional capital contributions by the limited partners. For 2004, $14,000 was paid. No payments were made in 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Management
    Fee: A monthly property management fee in an amount computed at 5% of the collected gross revenue is payable to the
    management agent. Property management services to the Partnership are provided by an affiliate of the limited partners. Property
    management fees were $42,505 and $43,206 for the years 2004 and 2005, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Incentive
    Management and Other Fees:Under the terms of the Limited Partnership Agreement, incentive management fees shall be
    paid to the general partner for services incidental to the administration of the business and affairs of the Partnership.
    Reporting fees shall be paid to the limited partners for services performed in monitoring the operations of the Partnership,
    services in connection with the Partnership’s accounting matters and assisting with the preparation of tax returns.
    The limited partners earned $12,000 in reporting fees for 2004 and $46,889 for 2005. Payments of $12,000 and $11,000 were
    made for 2004 and 2005, respectively, leaving a balance in accrued reporting fees of $6,024.                                                                                       



F-11







Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2005

Page
5



|   | The
    managing general partner earned $16,440 for an operational asset management fee for the years 2001 through 2005. Payments
    of $16,440 were made each of the years from 2003 through 2005, leaving an accrued balance of $32,880 at December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|7. | CURRENT
    VULNERABILITY DUE TO CERTAIN CONCENTRATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The
    Partnership’s sole asset is a 137-unit apartment complex. The Partnership’s operations are concentrated in the
    multifamily real estate market. In addition, the Partnership operates in a heavily regulated environment. The operations of
    the project are subject to the administrative directives, rules and regulations of local regulatory agencies. Such administrative
    directives, rules and regulations are subject to change. Such changes may occur with little notice or inadequate funding to
    pay for related costs, including the additional administrative burden, to comply with a change.



F-12

























SUPPLEMENTARY
INFORMATION





















F-13









BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

SUPPLEMENTAL
SCHEDULE OF EXPENSES

FOR
THE YEAR ENDED DECEMBER 31, 2004 and 2005



|                                             |  | 2005 |         |  | 2004 |  
|-------------------------------------------- |  | ---- | ------- |  | ---- | -
|Site management payroll                      |  | $    | 30,830  |  |      | $
|Manager’s rent-free apartment                |  |      | 12,288  |  |      |  
|Management fee                               |  |      | 43,206  |  |      |  
|Partnership asset management fees            |  |      | 16,440  |  |      |  
|Reporting fee                                |  |      | 46,889  |  |      |  
|Audit fee                                    |  |      | 6,000   |  |      |  
|Legal fees                                   |  |      | 424     |  |      |  
|Telephone and answering service              |  |      | 4,731   |  |      |  
|Office supplies                              |  |      | 4,528   |  |      |  
|Educational and social programs              |  |      | 11,520  |  |      |  
|Health insurance and other employee benefits |  |      | 4,349   |  |      |  
|Payroll taxes                                |  |      | 5,062   |  |      |  
|Workers’ compensation                        |  |      | 8,536   |  |      |  
|Other administration                         |  |      | 5,955   |  |      |  
|Subtotal administrative expenses             |  |      | 200,758 |  |      |  
|                                             |  |      |         |  |      |  
|Electricity                                  |  |      | 22,412  |  |      |  
|Water and sewer                              |  |      | 23,294  |  |      |  
|Fuel                                         |  |      | 24,196  |  |      |  
|Garbage and trash removal                    |  |      | 4,243   |  |      |  
|Subtotal utilities                           |  |      | 74,145  |  |      |  
|                                             |  |      |         |  |      |  
|Maintenance and repairs payroll              |  |      | 12,528  |  |      |  
|Maintenance and repairs supply               |  |      | 7,472   |  |      |  
|Maintenance and repairs contract             |  |      | 19,337  |  |      |  
|Painting and decorating                      |  |      | 25,216  |  |      |  
|Grounds                                      |  |      | 10,519  |  |      |  
|Services                                     |  |      | 2,195   |  |      |  
|Furniture and furnishings replacement        |  |      | 51,169  |  |      |  
|Subtotal maintenance expenses                |  |      | 128,436 |  |      |  
|                                             |  |      |         |  |      |  
|Property taxes                               |  |      | 7,644   |  |      |  
|Other taxes and licenses                     |  |      | 3,995   |  |      |  
|Property and liability insurance             |  |      | 43,913  |  |      |  
|Other insurance                              |  |      | 1,027   |  |      |  
|Subtotal tax and insurance                   |  |      | 56,579  |  |      |  
|                                             |  |      |         |  |      |  
|Interest                                     |  |      | 204,853 |  |      |  
|                                             |  |      |         |  |      |  
|Depreciation and amortization                |  |      | 204,844 |  |      |  
|                                             |  |      |         |  |      |  
|Total expenses                               |  | $    | 869,615 |  |      | $







F-14







CONTENTS





|                                 |                                                              |      | Page
|-------------------------------- | ------------------------------------------------------------ | ---- | ----
|                                 |                                                              |      |     
|INDEPENDENT
    AUDITOR’S REPORT |                                                              | F-2 
|                                 |                                                              |     
|FINANCIAL
    STATEMENTS:        |                                                              |     
|                                 |                                                              |     
|                                 | Balance
    Sheets                                           |      | F-3 
|                                 |                                                              |      |     
|                                 | Statements
    of Operations and Changes in Partners’ Equity |      | F-5 
|                                 |                                                              |      |     
|                                 | Statements
    of Cash Flows                                 |      | F-6 
|                                 |                                                              |      |     
|                                 | Notes
    to Financial Statements                            |      | F-8 
|                                 |                                                              |      |     
|SUPPLEMENTARY
    INFORMATION:   |                                                              | F-13
|                                 |                                                              |     
|                                 | Supplemental
    Schedule of Expenses                        |      | F-14
|                                 |                                                              |      |     
|                                 | Supplemental
    Schedule of Changes in Partners’ Equity     |      |     



F-1







Partners

Blessed
Rock of El Monte

Costa
Mesa, California



INDEPENDENT
AUDITOR’S REPORT



I
have audited the accompanying balance sheet of Blessed Rock of El Monte, a California Limited Partnership as of December 31, 2005
and 2006, and the related statements of operations and changes in partners’ equity, and operating cash flows for the years
then ended. These financial statements are the responsibility of the partnership’s management. My responsibility is to express
an opinion on these financial statements based on my audits.



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



In
my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Blessed
Rock of El Monte as of December 31, 2005 and 2006 and the results of its operations and its operating cash flows for the years
then ended in conformity with accounting principles generally accepted in the United States.



My
audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary
information shown on page 12 and 13 is presented for the purpose of additional analysis and is not a required part of the basic
financial statements of Blessed Rock of El Monte. Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in my opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.



|March
    7, 2007 | 33-0724657
|----------------- | ----------



F-2







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

BALANCE
SHEETS, DECEMBER 31, 2005 AND 2006



ASSETS



|                                            |  | 2006 |            |   | 2005 |  
|------------------------------------------- |  | ---- | ---------- | - | ---- | -
|Current Assets:                             |  |      |            |   |      |  
|Operating cash and equivalents              |  | $    | 584,149    |   |      | $
|Security deposit cash                       |  |      | 25,522     |   |      |  
|Tenant accounts receivable                  |  |      | 1,625      |   |      |  
|Other accounts receivable                   |  |      | 6,281      |   |      |  
|Prepaid expenses                            |  |      | 51,682     |   |      |  
|Total current assets                        |  |      | 669,259    |   |      |  
|                                            |  |      |            |   |      |  
|Property, Building, and Equipment, At Cost: |  |      |            |   |      |  
|Land                                        |  |      | 1,271,162  |   |      |  
|Building and improvements                   |  |      | 8,030,159  |   |      |  
|Equipment                                   |  |      | 54,657     |   |      |  
|                                            |  |      | 9,355,978  |   |      |  
|Accumulated depreciation                    |  |      | (1,933,378 | ) |      |  
|Property, building, and equipment - net     |  |      | 7,422,600  |   |      |  
|                                            |  |      |            |   |      |  
|Other Assets:                               |  |      |            |   |      |  
|Replacement reserve                         |  |      | 134,830    |   |      |  
|Tax and insurance restricted accounts       |  |      | 33,152     |   |      |  
|Total other assets                          |  |      | 167,982    |   |      |  
|                                            |  | $    | 8,259,841  |   |      | $





See
the accompanying notes to financial statements.



F-3







Blessed
Rock of El Monte

Balance
Sheets, December 31, 2005 and 2006

Page
2



LIABILITIES
AND PARTNERS’ EQUITY



|                                                      |  | 2006 |           |  | 2005 |  
|----------------------------------------------------- |  | ---- | --------- |  | ---- | -
|Current Liabilities:                                  |  |      |           |  |      |  
|Current portion of long-term debt                     |  | $    | 49,737    |  |      | $
|Accounts payable                                      |  |      | 11,556    |  |      |  
|Security trust liability                              |  |      | 23,635    |  |      |  
|Accrued interest                                      |  |      | 14,175    |  |      |  
|Accrued asset management fees                         |  |      | 17,810    |  |      |  
|Other accruals                                        |  |      | 37,712    |  |      |  
|Unearned rental income                                |  |      | 696       |  |      |  
|Total current liabilities                             |  |      | 155,321   |  |      |  
|                                                      |  |      |           |  |      |  
|Long-term Debt:                                       |  |      |           |  |      |  
|Mortgage payable, less current portion included above |  |      | 2,363,046 |  |      |  
|Notes payable                                         |  |      | 681,525   |  |      |  
|Accrued interest payable                              |  |      | 230,335   |  |      |  
|Grant loan payable                                    |  |      | 400,000   |  |      |  
|Total long-term debt                                  |  |      | 3,674,906 |  |      |  
|                                                      |  |      |           |  |      |  
|Partners’ equity                                      |  |      | 4,429,614 |  |      |  
|                                                      |  |      |           |  |      |  
|                                                      |  | $    | 8,259,841 |  |      | $







See
the accompanying notes to financial statements.



F-4







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

STATEMENTS
OF OPERATIONS AND CHANGES

IN
PARTNERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2006



|                              |  | 2006 |           |   | 2005 |  
|----------------------------- |  | ---- | --------- | - | ---- | -
|Revenue:                      |  |      |           |   |      |  
|Gross potential rents         |  | $    | 723,570   |   |      | $
|Excess rents                  |  |      | 149,429   |   |      |  
|Less vacancies                |  |      | (918      | ) |      |  
|Net rental income             |  |      | 872,081   |   |      |  
|Laundry and vending           |  |      | 9,684     |   |      |  
|Tenant charges                |  |      | 2,040     |   |      |  
|Interest income               |  |      | 3,488     |   |      |  
|Other income                  |  |      | -         |   |      |  
|Total revenues                |  |      | 887,293   |   |      |  
|                              |  |      |           |   |      |  
|Expenses:                     |  |      |           |   |      |  
|Administrative                |  |      | 211,138   |   |      |  
|Utilities                     |  |      | 80,904    |   |      |  
|Operating and maintenance     |  |      | 106,694   |   |      |  
|Taxes and insurance           |  |      | 53,138    |   |      |  
|Interest                      |  |      | 204,853   |   |      |  
|Depreciation and amortization |  |      | 205,365   |   |      |  
|Total expenses                |  |      | 859,469   |   |      |  
|                              |  |      |           |   |      |  
|Net income (loss)             |  |      | 27,824    |   |      |  
|                              |  |      |           |   |      |  
|Partners’ equity - beginning  |  |      | 4,498,454 |   |      |  
|                              |  |      |           |   |      |  
|Partners’ distributions       |  |      | (96,664   | ) |      |  
|                              |  |      |           |   |      |  
|Partners’ equity - ending     |  | $    | 4,429,614 |   |      | $





See
the accompanying notes to financial statements.



F-5







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

STATEMENTS
OF CASH FLOWS

FOR
THE YEARS ENDED DECEMBER 31, 2005 AND 2006



|                                          |  | 2006 |          |   | 2005 |  
|----------------------------------------- |  | ---- | -------- | - | ---- | -
|Cash flows from operating activities:     |  |      |          |   |      |  
|Rental receipts                           |  | $    | 858,180  |   |      | $
|Operating interest receipts               |  |      | 2,261    |   |      |  
|Other operating receipts                  |  |      | 11,724   |   |      |  
|Payments to suppliers and employees:      |  |      |          |   |      |  
|Administrative expenses                   |  |      | (91,469  | ) |      |  
|Management fees                           |  |      | (37,407  | ) |      |  
|Utilities                                 |  |      | (79,498  | ) |      |  
|Salaries and wages                        |  |      | (35,402  | ) |      |  
|Operating and maintenance                 |  |      | (94,059  | ) |      |  
|Real estate taxes                         |  |      | (7,371   | ) |      |  
|Payroll taxes                             |  |      | (5,371   | ) |      |  
|Property insurance                        |  |      | (36,328  | ) |      |  
|Miscellaneous taxes and insurance         |  |      | (17,257  | ) |      |  
|Interest on mortgage                      |  |      | (175,545 | ) |      |  
|Funding security deposit account          |  |      | 279      |   |      |  
|Net cash provided by operating activities |  |      | 292,737  |   |      |  
|                                          |  |      |          |   |      |  
|Cash flows from investing activities:     |  |      |          |   |      |  
|Net tax and insurance impounds            |  |      | (11,079  | ) |      |  
|Net reserve activity, including interest  |  |      | 22,079   |   |      |  
|Reserve interest                          |  |      | 1,227    |   |      |  
|Capital expenditures                      |  |      | (37,573  | ) |      |  
|Net cash used in investing activities     |  |      | (25,346  | ) |      |  
|                                          |  |      |          |   |      |  
|Cash flows from financing activities:     |  |      |          |   |      |  
|Mortgage principal payments               |  |      | (46,361  | ) |      |  
|Partner distributions                     |  |      | (96,664  | ) |      |  
|Net cash used in financing activities     |  |      | (143,025 | ) |      |  
|                                          |  |      |          |   |      |  
|Net increase (decrease) in cash           |  |      | 124,366  |   |      |  
|Cash at beginning of year                 |  |      | 459,783  |   |      |  
|                                          |  |      |          |   |      |  
|Cash at end of year                       |  | $    | 584,149  |   |      | $



See
the accompanying notes to financial statements.



F-6







Blessed
Rock of El Monte

Statements
of Cash Flows, December 31, 2005 and 2006

Page
2



Reconciliation
of Net Income (Loss)

to
Net Cash Provided by Operating Activities





|                                                                                             |  | 2006 |         |   | 2005 |  
|-------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|Net income (loss)                                                                            |  | $    | 27,824  |   |      | $
|Adjustments to reconcile net income (loss) to net cash Provided by
    operating activities: |  |      |         |   |      |  
|Depreciation and amortization                                                                |  |      | 205,365 |   |      |  
|Decrease (increase) in:                                                                      |  |      |         |   |      |  
|Security deposit cash                                                                        |  |      | 279     |   |      |  
|Receivables                                                                                  |  |      | (1,255  | ) |      |  
|Prepaids                                                                                     |  |      | 10,263  |   |      |  
|Increase (decrease) in:                                                                      |  |      |         |   |      |  
|Payables                                                                                     |  |      | 8,543   |   |      |  
|Security deposit liability                                                                   |  |      | -       |   |      |  
|Accrued expenses                                                                             |  |      | 43,303  |   |      |  
|Unearned rental income                                                                       |  |      | (358    | ) |      |  
|Reserve interest earned                                                                      |  |      | (1,227  | ) |      |  
|                                                                                             |  |      |         |   |      |  
|Net cash provided by operating activities                                                    |  | $    | 292,737 |   |      | $







See
the accompanying notes to financial statements.



F-7







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

NOTES
TO FINANCIAL STATEMENTS

DECEMBER
31, 2006



|1. | ORGANIZATION
                                                                                                                                                                            AND
                                                                                                                                                                            SUMMARY
                                                                                                                                                                            OF
                                                                                                                                                                            SIGNIFICANT
                                                                                                                                                                            ACCOUNTING
                                                                                                                                                                            POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Organization:
                                                                                      Blessed Rock of El Monte, a California limited
                                                                                      partnership, was formed on November 22,
                                                                                      1995 by and between Everland, Inc., a California
                                                                                      Corporation, as the general partner and
                                                                                      Tom Y. Lee as the limited partner. The Partnership
                                                                                      Agreement was amended and restated on December
                                                                                      29, 2000 defining the various partners of
                                                                                      the partnership as the General Partner,
                                                                                      the Managing General Partner, the Limited
                                                                                      Partners and the Special Limited Partner.                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The
                                                                                      Partnership was formed to acquire, construct,
                                                                                      own and operate a 137-unit elderly facility
                                                                                      apartment complex for low income residents
                                                                                      in El Monte, California. The Partnership
                                                                                      also generates tax credits to the partners
                                                                                      in accordance with the provisions of the
                                                                                      code and applicable Treasury regulations.
                                                                                      The Partnership has qualified for low income
                                                                                      housing tax credits as currently allowable
                                                                                      under Section 42 of the Internal Revenue
                                                                                      Code.                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The
                                                                                      Partnership received HOME funds from the
                                                                                      City of El Monte and redevelopment funds
                                                                                      from the El Monte Community Redevelopment
                                                                                      Agency as part of a public program to ensure
                                                                                      affordable housing for senior citizen tenants.
                                                                                      In addition, the El Monte Community Redevelopment
                                                                                      Agency paid various project impact fees
                                                                                      to the City of El Monte associated with
                                                                                      the construction and development of the
                                                                                      Project on behalf of the Partnership.                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Capitalization
                                                                                      and Depreciation:Assets
                                                                                      are recorded at cost and depreciated for
                                                                                      financial accounting purposes using the
                                                                                      straight-line method over their estimated
                                                                                      useful lives. The principal estimated useful
                                                                                      lives used in computing the depreciation
                                                                                      provisions are 10 to 40 years for building
                                                                                      and improvements, and 3 to 10 years for
                                                                                      equipment The policy of the project is to
                                                                                      charge amounts expended for maintenance,
                                                                                      repairs, and minor replacements to expense,
                                                                                      and to capitalize expenditures for major
                                                                                      replacements and betterments.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Cash
                                                                                      and Cash Equivalents: For purposes
                                                                                      of reporting cash flows, cash includes unrestricted
                                                                                      cash in bank, cash on hand, savings accounts,
                                                                                      and all certificates of deposit with original
                                                                                      maturities of three months or less.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The
                                                                                      Partnership maintains its cash in bank deposit
                                                                                      accounts, which at times may exceed federally
                                                                                      insured limits. The Partnership has not
                                                                                      experienced any losses in such accounts.
                                                                                      The Partnership believes it is not exposed
                                                                                      to any significant credit risk on cash and
                                                                                      cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Deferred
                                                                                      Costs:Deferred costs, comprised
                                                                                      of tax credit fees and organization costs
                                                                                      are being amortized over five years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



F-8







Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2006

Page
2



|   | Estimates:The preparation of
                                                                                                     financial statements in conformity
                                                                                                     with generally accepted accounting
                                                                                                     principles requires management
                                                                                                     to make estimates and assumptions
                                                                                                     that affect: (1) the reported
                                                                                                     amounts of assets and liabilities
                                                                                                     and disclosure of contingencies
                                                                                                     at the date of the financial
                                                                                                     statements, and (2) the reported
                                                                                                     amounts of revenues and expenses
                                                                                                     during the reporting period.
                                                                                                     Actual results could differ
                                                                                                     from those estimates.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Rental
                                                                                      Income and Unearned Rents:The Partnership
                                                                                      rents apartment units on a month to month
                                                                                      basis and recognizes revenues when earned.
                                                                                      Advance receipts of rents are classified
                                                                                      as liabilities until earned.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Income
                                                                                      Taxes:No provision is made
                                                                                      for income taxes since such taxes, if any,
                                                                                      are the liability of the individual partners.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | RESTRICTED
                                                                                                                                                             FUNDS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The
                                                                                      Partnership is required to make monthly
                                                                                      impound deposits to cover insurance premiums,
                                                                                      property taxes and to maintain a reserve
                                                                                      for replacements. These restricted funds
                                                                                      are held by, and expenditures are subject
                                                                                      to supervision and approval by, GMAC Commercial
                                                                                      Mortgage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. | MORTGAGE
                                                                                                                                                             PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



| | Mortgage payable consists of a 7.05% real estate mortgage, payable
    to GMAC Commercial Mortgage, collateralized by a deed of trust on the real property. The obligation is payable in aggregate
    monthly principal and interest installments of $18,188 beginning July 1, 1998 with a balloon payment in the amount of $2,017,000
    payable June 1, 2013. |  | $ | 2,412,783 |  
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | --------- | -
| |                                                                                                                                                                                                                                                                                                                                                                   |  |   |           |  
| | Less current portion                                                                                                                                                                                                                                                                                                                                              |  |   | (49,737   | )
| |                                                                                                                                                                                                                                                                                                                                                                   |  |   |           |  
| |                                                                                                                                                                                                                                                                                                                                                                   |  | $ | 2,363,046 |  



The
amounts maturing for the next five years are:



| | 2007 |  |  | $ | 49,737 | 
| | ---- |  |  | - | ------ | 
| | 2008 |  |  |   | 53,360 | 
| | 2009 |  |  |   | 57,245 | 
| | 2010 |  |  |   | 61,414 | 
| | 2011 |  |  |   | 65,887 | 



F-9







Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2006

Page
3



|4. | NOTES
                                                                                                                                                                            PAYABLE
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | Notes
    payable at December 31, 2005 consist of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |   |         | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------- | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |   |         | 
| | 4%
    note payable with a term of 15 years, payable to El Monte Community Redevelopment Agency (RDA), secured by deed of trust and
    rents from Project. Note subject to prepayment in whole or in part based on events constituting default under terms of promissory
    note agreement. Payments of interest and principal made annually beginning on April 1, 2003, and thereafter on April 1 until
    outstanding principal balance of note and all accrued interest paid in full. Payments paid from 50% of the residual rental
    income, as defined in the promissory note agreement. Payments, if any, applied first to accrued interest and second to principal
    of note. At December 31, 2006, accrued interest on note was $41,105. |  | $ | 250,878 | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |   |         | 
| | 1%
    note payable with a term of 30 years beginning April 3, 1996, payable to RDA for various development fees, secured by a deed
    of trust and rents from the Project. Commencing April 3, 1997, and thereafter on April 3 for the following 6 succeeding years,
    payment of $4,239 due each year. Payment increases to $8,478 April 3, 2004 and continues the next 7 succeeding years. April
    3, 2012, payment increases to $32,534 and continues the next 14 succeeding years, or until paid in full. Payments to be paid
    from 50% of residual rental income, as defined in promissory note agreement. Payments first applied to interest. At December
    31, 2006, accrued interest on note was $17,230.                            |  |   | 430,647 | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |   |         | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | $ | 681,525 | 



F-10







Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2006

Page
4



|5. | GRANT
                                                                                                                                                                            LOAN
                                                                                                                                                                            PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The
                                                                                      Partnership received a loan of $400,000
                                                                                      on April 3, 1996 from the City of El Monte
                                                                                      as part of a public program to ensure affordable
                                                                                      housing for senior citizen tenants. Interest
                                                                                      accrues on the principal amount at 4%, with
                                                                                      a term of 55 years. Loan is secured by a
                                                                                      deed of trust and rents from the Project.
                                                                                      At maturity, the principal amount of the
                                                                                      loan and all accrued interest shall be deemed
                                                                                      discharged and waived by the City unless
                                                                                      there is an occurrence of an event of default,
                                                                                      as specified under the loan agreement. If
                                                                                      default occurs, the City of El Monte is
                                                                                      entitled to exercise its rights and the
                                                                                      entire principal amount outstanding and
                                                                                      any accrued interest could become due and
                                                                                      payable at the option of the City of El
                                                                                      Monte. Accrued interest at December 31,
                                                                                      2006 was $172,000.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6. | RELATED
                                                                                                                                                             PARTY
                                                                                                                                                             TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Project
                                                                                      or Loss Allocations: All items included
                                                                                      in the calculation of income or loss not
                                                                                      arising from a sale or refinancing, and
                                                                                      all tax credits, shall be allocated 98.99%
                                                                                      equally to the limited partners, .01% to
                                                                                      the special limited partner, .99% to the
                                                                                      general partner, and .01% to the managing
                                                                                      general partner.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Management
                                                                                      Fee: A monthly property management
                                                                                      fee in an amount computed at 5% of the collected
                                                                                      gross revenue is payable to the management
                                                                                      agent. Property management services to the
                                                                                      Partnership are provided by an affiliate
                                                                                      of the limited partners. Property management
                                                                                      fees were $43,206 and $43,333 for the years
                                                                                      2005 and 2006, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Incentive
                                                                                      Management and Other Fees:Under
                                                                                      the terms of the Limited Partnership Agreement,
                                                                                      incentive management fees shall be paid
                                                                                      to the general partner for services incidental
                                                                                      to the administration of the business and
                                                                                      affairs of the Partnership. Reporting fees
                                                                                      shall be paid to the limited partners for
                                                                                      services performed in monitoring the operations
                                                                                      of the Partnership, services in connection
                                                                                      with the Partnership’s accounting
                                                                                      matters and assisting with the preparation
                                                                                      of tax returns. The limited partners earned
                                                                                      $46,889 in reporting fees for 2005 and $68,279
                                                                                      for 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The
                                                                                      managing general partner earned $16,440
                                                                                      annually for an operational asset management
                                                                                      fee for the years 2001 through 2006. Balance
                                                                                      of accrued operational asset management
                                                                                      fee at December 31, 2006 is $17,810.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



F-11







Blessed
Rock of El Monte

Notes
to Financial Statements, December 31, 2006

Page
5



|7. | CURRENT
                                                                                                                                                                            VULNERABILITY
                                                                                                                                                                            DUE
                                                                                                                                                                            TO
                                                                                                                                                                            CERTAIN
                                                                                                                                                                            CONCENTRATIONS
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | The
                                                                                                     Partnership’s sole
                                                                                                     asset is a 137-unit apartment
                                                                                                     complex. The Partnership’s
                                                                                                     operations are concentrated
                                                                                                     in the multifamily real estate
                                                                                                     market. In addition, the
                                                                                                     Partnership operates in a
                                                                                                     heavily regulated environment.
                                                                                                     The operations of the project
                                                                                                     are subject to the administrative
                                                                                                     directives, rules and regulations
                                                                                                     of local regulatory agencies.
                                                                                                     Such administrative directives,
                                                                                                     rules and regulations are
                                                                                                     subject to change. Such changes
                                                                                                     may occur with little notice
                                                                                                     or inadequate funding to
                                                                                                     pay for related costs, including
                                                                                                     the additional administrative
                                                                                                     burden, to comply with a
                                                                                                     change.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-12

























SUPPLEMENTARY
INFORMATION





















F-13







BLESSED
ROCK OF EL MONTE

(A
California Limited Partnership)

SUPPLEMENTAL
SCHEDULE OF EXPENSES

FOR
THE YEAR ENDED DECEMBER 31, 2005 and 2006





|                                             |  | 2006 |         |  | 2005 |  
|-------------------------------------------- |  | ---- | ------- |  | ---- | -
|Site management payroll                      |  | $    | 34,027  |  |      | $
|Manager's rent-free apartment                |  |      | 12,288  |  |      |  
|Management fee                               |  |      | 43,333  |  |      |  
|Reporting/asset management fee               |  |      | 68,823  |  |      |  
|Audit fee                                    |  |      | 6,700   |  |      |  
|Legal fees                                   |  |      | -       |  |      |  
|Telephone and answering service              |  |      | 5,675   |  |      |  
|Office supplies                              |  |      | 4,050   |  |      |  
|Educational and social programs              |  |      | 8,640   |  |      |  
|Health insurance and other employee benefits |  |      | 4,226   |  |      |  
|Payroll taxes                                |  |      | 5,371   |  |      |  
|Workers' compensation                        |  |      | 8,029   |  |      |  
|Other administration                         |  |      | 9,976   |  |      |  
|Subtotal administrative expenses             |  |      | 211,138 |  |      |  
|                                             |  |      |         |  |      |  
|Electricity                                  |  |      | 30,475  |  |      |  
|Water and sewer                              |  |      | 23,862  |  |      |  
|Fuel                                         |  |      | 20,816  |  |      |  
|Garbage and trash removal                    |  |      | 5,751   |  |      |  
|Subtotal utilities                           |  |      | 80,904  |  |      |  
|                                             |  |      |         |  |      |  
|Maintenance and repairs payroll              |  |      | 12,785  |  |      |  
|Maintenance and repairs supply               |  |      | 8,715   |  |      |  
|Maintenance and repairs contract             |  |      | 29,582  |  |      |  
|Painting and decorating                      |  |      | 17,753  |  |      |  
|Grounds                                      |  |      | 8,693   |  |      |  
|Services                                     |  |      | 1,430   |  |      |  
|Furniture and furnishings replacement        |  |      | 27,736  |  |      |  
|Subtotal maintenance expenses                |  |      | 106,694 |  |      |  
|                                             |  |      |         |  |      |  
|Property taxes                               |  |      | 7,371   |  |      |  
|Other taxes and licenses                     |  |      | 3,930   |  |      |  
|Property and liability insurance             |  |      | 40,765  |  |      |  
|Other insurance                              |  |      | 1,072   |  |      |  
|Subtotal tax and insurance                   |  |      | 53,138  |  |      |  
|                                             |  |      |         |  |      |  
|Interest                                     |  |      | 202,230 |  |      |  
|                                             |  |      |         |  |      |  
|Depreciation and amortization                |  |      | 205,365 |  |      |  
|                                             |  |      |         |  |      |  
|Total expenses                               |  | $    | 859,469 |  |      | $







F-14