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















FINANCIAL STATEMENTS AND
 INDEPENDENT
ACCOUNTANTS’ REPORT



BLESSED ROCK
OF EL MONTE

(A
CALIFORNIA LIMITED PARTNERSHIP)



DECEMBER 31, 2007













Blessed Rock
of El Monte

(A California Limited Partnership)



TABLE OF CONTENTS



|                                                   |  | PAGE
|-------------------------------------------------- |  | ----
|INDEPENDENT AUDITOR’S REPORT                       |  | 3   
|                                                   |  |     
|FINANCIAL STATEMENTS:                              |  |     
|                                                   |  |     
|BALANCE SHEET                                      |  | 5   
|                                                   |  |     
|STATEMENT OF OPERATIONS                            |  | 7   
|                                                   |  |     
|STATEMENT OF CHANGES IN PARTNERS’ EQUITY (DEFICIT) |  | 9   
|                                                   |  |     
|STATEMENT OF CASH FLOWS                            |  | 10  
|                                                   |  |     
|NOTES TO FINANCIAL STATEMENTS                      |  | 11  











| |  | Reznick
                                                                                                   Group, RC.
                           7700
                           Old Georgetown Road
                           Suite
                           400Bethesda,
                                                                                                                               MD
                                                                                                                               20814-6224 | Tel:
    (301) 652-9100Fax:
(301) 652-1848



www.reznickgroup.com
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------





INDEPENDENT AUDITOR’S REPORT



To the Partners

Blessed Rock of El Monte



We have audited the accompanying
balance sheet of Blessed Rock of El Monte (a California Limited Partnership) as of December 31, 2007, and the related statements
of operations, changes in partners’ equity (deficit), and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements
based on our audit.



We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits
contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership
has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.



In our opinion, the financial
statements referred to above present fairly, in all material respects, the financial position of Blessed Rock of El Monte as of
December 31, 2007, and the results of its operations and cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.



As discussed more fully in
note 8 of the financial statements, certain errors resulting principally in the overstatement of depreciation and amortization
due to misallocation of building, deferred fees and organization cost, in prior years, were discovered by management of the Partnership
during the current year. Accordingly, adjustments have been made to partners’ equity (deficit) as of January 1, 2007, to
correct the errors.



|                        |                               
|----------------------- | ------------------------------
|Skokie, Illinois        | Taxpayer Identification Number
|December 17, 2008       | 52-1088612                    
|                        |                               
|Lead Auditor: Jeff Dowd |                               



Atlanta
● Austin ● Baltimore ● Bethesda ● Birmingham ● Charlotte ● Chicago ● Los Angeles ●
Sacramento ● Tysons Corner











Blessed Rock of El Monte

(A California Limited Partnership)



BALANCE SHEET



December 31, 2007





|Current assets                                |  |   |            |  
|--------------------------------------------- |  | - | ---------- | -
|Cash and cash equivalents                     |  | $ | 742,805    |  
|Accounts receivable - tenants                 |  |   | 697        |  
|Accounts receivable - other                   |  |   | 6,281      |  
|Prepaid expenses                              |  |   | 16,709     |  
|                                              |  |   |            |  
|Total rental property                         |  |   | 766,492    |  
|                                              |  |   |            |  
|Deposits held in trust - funded               |  |   |            |  
|Tenant security deposits                      |  |   | 23,710     |  
|                                              |  |   |            |  
|Restricted deposits and funded reserves       |  |   |            |  
|Mortgage escrow deposits                      |  |   | 21,386     |  
|Replacement reserve (note 3)                  |  |   | 156,559    |  
|                                              |  |   |            |  
|Total restricted deposits and funded reserves |  |   | 177,945    |  
|                                              |  |   |            |  
|Property and equipment (note 1)               |  |   |            |  
|Land and land improvements                    |  |   | 1,271,162  |  
|Buildings                                     |  |   | 8,099,384  |  
|Furnishings                                   |  |   | 57,645     |  
|                                              |  |   | 9,428,191  |  
|Less accumulated depreciation                 |  |   | (2,159,703 | )
|                                              |  |   |            |  
|Total property and equipment                  |  |   | 7,268,488  |  
|                                              |  |   |            |  
|Other assets                                  |  |   |            |  
|Deferred fees, net                            |  |   | 35,780     |  
|                                              |  |   |            |  
|Total other assets                            |  |   | 35,780     |  
|Total assets                                  |  | $ | 8,272,415  |  



(continued)











Blessed Rock of El Monte

(A California Limited Partnership)



BALANCE SHEET - CONTINUED



December 31, 2007



|LIABILITIES AND PARTNERS’ EQUITY                          |  |   |          
|--------------------------------------------------------- |  | - | ---------
|Current liabilities                                       |  |   |          
|Accounts payable                                          |  | $ | 11,404   
|Accrued management fee                                    |  |   | 3,882    
|Accrued mortgage loan interest                            |  |   | 13,883   
|Accrued interest                                          |  |   | 72,677   
|Miscellaneous current liabilities                         |  |   | 13,700   
|Prepaid rent                                              |  |   | 4,122    
|Current maturities of long term liabilities (note 3)      |  |   | 53,360   
|                                                          |  |   |          
|Total current liabilities                                 |  |   | 173,028  
|                                                          |  |   |          
|Deposit liabilities                                       |  |   |          
|Tenant security deposits                                  |  |   | 23,710   
|                                                          |  |   |          
|Long-term liabilities                                     |  |   |          
|Mortgage loan payable, net of current maturities (note 3) |  |   | 2,309,685
|Notes payable (note 4)                                    |  |   | 681,525  
|Grant loan payable                                        |  |   | 400,000  
|Accrued interest                                          |  |   | 188,000  
|                                                          |  |   |          
|Total long-term liabilities                               |  |   | 3,579,210
|                                                          |  |   |          
|Total liabilities                                         |  |   | 3,775,948
|                                                          |  |   |          
|Contingency (note 7)                                      |  |   |          
|                                                          |  |   |          
|Partners’ equity (note 6)                                 |  |   | 4,496,467
|                                                          |  |   |          
|Total liabilities and Partners’ equity                    |  | $ | 8,272,415



See notes to financial statements











Blessed Rock of El Monte

(A California Limited Partnership)



STATEMENT OF OPERATIONS



Year ended December 31, 2007



|Income from rental operations            |  |   |               | 
|---------------------------------------- |  | - | ------------- | 
|Rental income - tenant, net              |  | $ | 927,076       | 
|Laundry and vending                      |  |   | 10,417        | 
|Interest income                          |  |   | 7,330         | 
|Miscellaneous revenue                    |  |   | 5,184         | 
|Tenant charges                           |  |   | 1,313         | 
|                                         |  |   |               | 
|Total income from rental operations      |  |   | 951,320       | 
|                                         |  |   |               | 
|Administrative expenses                  |  |   |               | 
|Advertising and marketing                |  |   | 294           | 
|Office expenses                          |  |   | 22,266        | 
|Other renting expenses                   |  |   | 960           | 
|Management fee Manager salaries          |  |   | 44,489 41,261 | 
|Legal expenses - Project                 |  |   | 4,316         | 
|Bookkeeping fees                         |  |   | 1,000         | 
|Audit expenses                           |  |   | 9,950         | 
|Bad debts                                |  |   | 38            | 
|Miscellaneous administrative expenses    |  |   | 14,451        | 
|                                         |  |   |               | 
|Total administrative expenses            |  |   | 139,025       | 
|                                         |  |   |               | 
|Utilities expense                        |  |   |               | 
|Electricity                              |  |   | 27,360        | 
|Water                                    |  |   | 25,609        | 
|Gas                                      |  |   | 20,664        | 
|                                         |  |   |               | 
|Total utilities expense                  |  |   | 73,633        | 
|                                         |  |   |               | 
|Operating and maintenance expenses       |  |   |               | 
|Payroll                                  |  |   | 16,857        | 
|Supplies                                 |  |   | 40,304        | 
|Contracts                                |  |   | 46,163        | 
|Miscellaneous operating expenses         |  |   | 355           | 
|Garbage and trash removal                |  |   | 6,229         | 
|                                         |  |   |               | 
|Total operating and maintenance expenses |  |   | 109,908       | 



(continued)











Blessed Rock of El Monte

(A California Limited Partnership)



STATEMENT OF OPERATIONS - CONTINUED



Year ended December 31, 2007



|Taxes and insurance                                             |  |   |         | 
|--------------------------------------------------------------- |  | - | ------- | 
|Real estate taxes                                               |  |   | 11,816  | 
|Payroll taxes                                                   |  |   | 7,355   | 
|Property and liability insurance                                |  |   | 37,439  | 
|Fidelity bond insurance                                         |  |   | 615     | 
|Workers’ compensation                                           |  |   | 9,514   | 
|Health benefits and other employee benefits                     |  |   | 5,865   | 
|Miscellaneous                                                   |  |   | 4,864   | 
|Property tax administrative cost                                |  |   | -       | 
|                                                                |  |   |         | 
|Total taxes and insurance                                       |  |   | 77,468  | 
|                                                                |  |   |         | 
|Income before financial expenses, depreciation and amortization |  |   | 551,286 | 
|                                                                |  |   |         | 
|Financial expenses                                              |  |   |         | 
|Interest on mortgage loan payable                               |  |   | 169,156 | 
|Interest on notes payable                                       |  |   | 14,342  | 
|Interest on grant loan payable                                  |  |   | 16,000  | 
|Asset management fee                                            |  |   | 108,926 | 
|                                                                |  |   |         | 
|Total financial expenses                                        |  |   | 308,424 | 
|                                                                |  |   |         | 
|Income before depreciation and amortization                     |  |   | 242,862 | 
|                                                                |  |   |         | 
|Depreciation                                                    |  |   | 212,807 | 
|Amortization                                                    |  |   | 6,899   | 
|                                                                |  |   |         | 
|Net income                                                      |  | $ | 23,156  | 



See notes to financial statements













Blessed Rock of El Monte

(A California Limited Partnership)



STATEMENT OF CHANGES IN PARTNERS’ EQUITY (DEFICIT)



Year ended December 31, 2007



|                                                                    |  | Managing General Partner |         |   | General Partner |   |      | Special Limited Partner |  |   | Limited Partners |   |  | Total |          
|------------------------------------------------------------------- |  | ------------------------ | ------- | - | --------------- | - | ---- | ----------------------- |  | - | ---------------- | - |  | ----- | ---------
|Partners’ equity (deficit), December 31, 2006, as previously stated |  | $                        | (1,975  | ) |                 | $ | (895 | )                       |  | $ | (81,036          | ) |  | $     | 4,513,520
|                                                                    |  |                          |         |   |                 |   |      |                         |  |   |                  |   |  |       |          
|Prior period adjustment                                             |  |                          | 9       |   |                 |   | 9    |                         |  |   | 906              |   |  |       | 90,568   
|Partners’ equity (deficit), December 31, 2006, as restated          |  |                          | (1,966  | ) |                 |   | (886 | )                       |  |   | (80,130          | ) |  |       | 4,604,088
|                                                                    |  |                          |         |   |                 |   |      |                         |  |   |                  |   |  |       |          
|Distributions                                                       |  |                          | (23,897 | ) |                 |   | -    |                         |  |   | -                |   |  |       | (23,898  
|                                                                    |  |                          |         |   |                 |   |      |                         |  |   |                  |   |  |       |          
|Net income                                                          |  |                          | 2       |   |                 |   | 2    |                         |  |   | 229              |   |  |       | 22,923   
|                                                                    |  |                          |         |   |                 |   |      |                         |  |   |                  |   |  |       |          
|Partners’ equity (deficit), December 31, 2007                       |  | $                        | (25,861 | ) |                 | $ | (884 | )                       |  | $ | (79,901          | ) |  | $     | 4,603,113



See notes to financial statements













Blessed Rock of El Monte

(A California Limited Partnership)



STATEMENT OF CASH FLOWS



Year ended December 31, 2007



|Cash flow from operating activities                                              |  |   |         |  
|-------------------------------------------------------------------------------- |  | - | ------- | -
|Net income                                                                       |  | $ | 23,156  |  
|Adjustments to reconcile net income to net cash provided by operating activities |  |   |         |  
|Depreciation                                                                     |  |   | 212,807 |  
|Amortization                                                                     |  |   | 6,899   |  
|Changes in:                                                                      |  |   |         |  
|Tenant security deposits                                                         |  |   | 1,812   |  
|Tenant accounts receivable                                                       |  |   | 928     |  
|Prepaid expenses                                                                 |  |   | 2,093   |  
|Tenant security deposits liability                                               |  |   | 75      |  
|Accounts payable                                                                 |  |   | (151    | )
|Accrued mortgage loan interest                                                   |  |   | (292    | )
|Accrued liabilities                                                              |  |   | (8,942  | )
|Accrued management fee                                                           |  |   | 3,882   |  
|Accrued interest payable on second mortgage                                      |  |   | 30,342  |  
|Prepaid rent                                                                     |  |   | 3,426   |  
|Net cash provided by operating activities                                        |  |   | 276,035 |  
|Cash flows from investing activities                                             |  |   |         |  
|Purchase of property and equipment                                               |  |   | (9,883  | )
|Net change in escrow deposits                                                    |  |   | 11,766  |  
|Net change in replacement reserve                                                |  |   | (21,729 | )
|Net cash used in investing activities                                            |  |   | (19,846 | )
|Cash flows from financing activities                                             |  |   |         |  
|Principal payments on mortgage payable                                           |  |   | (49,738 | )
|Distributions                                                                    |  |   | (47,795 | )
|Net cash used in financing activities                                            |  |   | (97,533 | )
|Net change in cash and cash equivalents                                          |  |   | 158,656 |  
|Cash and cash equivalents, beginning                                             |  |   | 584,149 |  
|Cash and cash equivalents, ending                                                |  | $ | 742,805 |  



See notes to financial statements













Blessed Rock of El Monte

(A California Limited Partnership)



NOTES TO FINANCIAL STATEMENTS



December 31, 2007





NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES



Blessed Rock of El Monte (a California Limited
Partnership) was organized on February 14, 1996 to acquire, construct, own and operate a 137-unit apartment project (the “Project”)
known as Blessed Rock of El Monte located in El Monte, California.



The Project is eligible and qualifies for low-income
housing tax credits in accordance with Section 42 of the Internal Revenue Code (the “Code”) of 1986. Generally, the
low-income housing credit is computed as a percentage of the qualified basis of the property including the rehabilitation and is
allowed annually during a period of ten years commencing with the years the building is placed into service. In addition, in order
to qualify for the credit, the Partnership must conform with certain occupancy standards as set forth in the Code.



The following is a summary of significant accounting
policies followed in the preparation of these financial statements:



Property
and equipment



Property and equipment is recorded at cost. The
assets are being depreciated using the straight-line method over the estimated useful lives. The cost of maintenance and repairs
is charged to income as incurred. Significant renewals and betterments are capitalized.



Assets are depreciated over their estimated useful
lives. The estimated service lives of the assets for depreciation purposes may be different than their actual economic useful lives.



|                  |  | Method        |  | Estimated lives
|----------------- |  | ------------- |  | ---------------
|Buildings         |  | Straight-line |  | 40 years       
|Land improvements |  | Straight-line |  | 15 years       
|Furnishings       |  | Straight-line |  | 5 years        



Management of the Partnership assesses the recoverability
of property and equipment by determining whether the depreciation of such assets over their remaining lives can be recovered through
projected undiscounted cash flows. The amount of impairment, if any, is measured based on fair value (projected discounted cash
flows) and is charged to operations in the period in which such impairment is determined by management. To date, management has
not identified any impairment of property and equipment.











Blessed Rock of El Monte

(A California Limited Partnership)



NOTES TO FINANCIAL STATEMENTS – CONTINUED



December 31, 2007



Deferred
fees and Amortization



Loan fees are amortized over the term of the mortgage
loan using the straight-line method. Accounting principles generally accepted in the United States of America require that the
effective yield method be used to amortize financing costs; however, the effect of using the straight-line method is not materially
different from the results that would have been obtained under the effective yield method. Tax credit fees are amortized over 15
years using the straight-line method.



Rental
income



Rental income is recognized as rentals become due.
Rental payments received in advance are deferred until earned. All leases between the Partnership and the tenants of the property
are operating leases.



Tenant
receivable and bad debt



Delinquent receivables are written off and included
in bad debt expense in the period the balances are deemed to be uncollectible, which is generally after the tenant vacates.



Accounting principles generally accepted in the
United States of America require that the allowance method be used to recognize bad debts; however, the effect of using the direct
write-off method is not materially different from the results that would have been obtained under the allowance method.



Property
taxes



Property taxes are expensed in the year of lien
on the property such that twelve months of expense is charged to operations each period.



Cash
and cash equivalents



For purposes of the statement of cash flows, the
Partnership considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.
At December 31, 2007, cash and cash equivalents consist of two unrestricted checking accounts and a petty cash fund.











Blessed Rock of El Monte

(A California Limited Partnership)



NOTES TO FINANCIAL STATEMENTS - CONTINUED



December 31, 2007



Use
of estimates



The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.



Income
taxes



Blessed Rock of El Monte is a Partnership, and thus
income, losses, and credits are recognized for federal income tax purposes by the individual Partners. Accordingly, no provision
for federal or state taxes on revenue and income has been recognized in the accompanying financial statements.



Advertising
costs



Advertising costs are expensed as incurred. Advertising
expense totaled $294 for the year ended December 31, 2007.



Reclassification



Certain prior year amounts have been reclassified to
conform to the current year financial statement presentation. These reclassifications had no effect on the reported net loss of
the Partnership.



Concentration
of credit risk



The Partnership deposits its cash in financial institutions.
At times, deposits may exceed federally insured limits. The Partnership has not experienced any losses in such accounts.



The Partnership’s operations are concentrated
in the multifamily real estate market. In addition, the Partnership operated in a heavily regulated environment. The operations
of the Partnership are subject to the administrative directives, rules and regulations of federal, state and local regulatory agencies.
Such administrative directives, rules and regulations are subject to change by an act of Congress. Such changes may occur with
little notice or inadequate funding to pay for the related cost, including the additional administrative burden, if any, to comply
with a change.











Blessed Rock of El Monte

(A California Limited Partnership)



NOTES TO FINANCIAL STATEMENTS - CONTINUED



December 31, 2007



NOTE 2 - DEFERRED FEES AND AMORTIZATION



The costs incurred to obtain financing and tax
credits have been capitalized and are being amortized. The balance of such costs at December 31, 2007 is as follows:



|                               |  | Amortization |          |  |  |  
|------------------------------ |  | ------------ | -------- |  |  | -
|                               |  | Period       |          |  |  |  
|Loan fees                      |  |              | 16 years |  |  | $
|Tax credit fees                |  |              | 15 years |  |  |  
|                               |  |              |          |  |  |  
|Less: Accumulated amortization |  |              |          |  |  |  
|Net capitalized costs          |  |              |          |  |  | $



As a result of a reevaluation of accumulated
amortization through December 31, 2007 it was determined that excess amortization had been taken in prior years and a correction
was made resulting in a net recovery amount of $9,256 for 2007.



NOTE 3 - MORTGAGE LOAN



The Partnership has entered into a mortgage loan
agreement in the original amount of $2,720,000. The loan agreement provides, among other things, for the following:



|a. |  | An interest rate of 7.05% per annum;                             
|-- |  | -----------------------------------------------------------------
|b. |  | Monthly principal and interest payments of $18,188;              
|c. |  | A balloon payment of $2,017,000 payable June 1, 2013;            
|d. |  | A maturity date of June 1, 2013; and                             
|e. |  | The funding of a reserve fund for replacing assets of the Project











Blessed Rock of El Monte

(A California Limited Partnership)



NOTES TO FINANCIAL STATEMENTS - CONTINUED



December 31, 2007



Mortgage loan principal payments for each of
the next five years and thereafter are estimated as follows:



|2008       |  |  | $ | 53,360    | 
|---------- |  |  | - | --------- | 
|2009       |  |  |   | 57,245    | 
|2010       |  |  |   | 61,414    | 
|2011       |  |  |   | 65,887    | 
|2012       |  |  |   | 70,686    | 
|Thereafter |  |  |   | 2,054,453 | 
|           |  |  | $ | 2,363,045 | 



The liability of the Partnership under the
mortgage loan is limited to the underlying value of the property and equipment collateral in addition to other amounts deposited
with the lender. For the year ended December 31, 2007, interest expense was $169,156, and accrued interest was $13,883 as of December
31, 2007.



Replacement
reserve



In accordance with the Partnership Agreement,
the Partnership is required to establish and maintain a replacement reserve account for the purpose of capital improvements. The
reserve account is to be funded in the amount of $20,544 per year. As of December 31, 2007, the balance of the replacement reserve
was $156,559.



NOTE 4 - NOTES PAYABLE



Notes payable at December 31, 2007 consist of
the following:



A 4% note payable in the amount of $250,878,
with a term of 15 years, is payable to El Monte Community Redevelopment Agency (RDA), secured by a deed of trust and rents from
the Project. Payments of interest and principal are made annually beginning on April 1, 2003, and thereafter each April 1, until
the outstanding principal balance of the note and all accrued interest are paid in full. Payments are to be paid from 50% of the
residual rental income, as defined in the promissory note agreement. Payments, if any, are applied first to accrued interest and
second to principal on the note. At December 31, 2007, accrued interest on the note was $51,141.











Blessed Rock of El Monte

(A California Limited Partnership)



NOTES TO FINANCIAL STATEMENTS - CONTINUED



December 31, 2007



A 1% note payable in the amount of $430,647, with a
term of 30 years beginning April 3, 1996, is 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 each April 3 for the following six succeeding years, payments of
$4,239 were due. Payments increased to $8,478 April 3, 2004 and continue for the next seven succeeding years. On April 3, 2012,
payments increase to $32,534 and continue for 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, 2007, accrued
interest on the note was $21,536.



Cash
held for payment of notes



The Partners’ calculation of 50% of residual rental
income for 2006 was $72,677. This amount was not confirmed by RDA, nor was the required payment made during 2007. The agent is
currently attempting to confirm the amount due and forward the payment to RDA.



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. The 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, 2007 was $188,000











Blessed Rock of El Monte

(A California Limited Partnership)



NOTES TO FINANCIAL STATEMENTS - CONTINUED



December 31, 2007



Accrued interest at December 31, 2007, is as
follows:



|4% note payable                     |  | $ | 51,141  |  
|----------------------------------- |  | - | ------- | -
|1% note payable                     |  |   | 21,536  |  
|Grant loan                          |  |   | 188,000 |  
|                                    |  |   | 260,677 |  
|Cash held                           |  |   | (72,677 | )
|Accrued interest on second mortgage |  | $ | 188,000 |  



NOTE 5 - RELATED PARTY TRANSACTIONS



Operational
asset management fee



The Partnership Agreement provides for an asset
management fee equal to $10 per unit per month, to accrue to the Managing General Partner and is payable based on the cash flow
provisions of the Partnership Agreement. The fee to be paid is cumulative if not paid each year. During the year ended December
31, 2007, $6,233 of operational asset management fees were incurred and paid. At December 31, 2007, no amounts remained payable.



Asset
management fee

.

The Partnership Agreement provides for an asset
management fee equal to 30% of Remaining Cash, as defined, to accrue to the Limited Partner and is payable based on the cash flow
provisions of the Partnership Agreement. The fee to be paid is cumulative if not paid each year. During the year ended December
31, 2007, $68,279 was incurred and paid.



Incentive
management fee



The Partnership shall pay to the General Partner
an incentive management fee equal to 40% of Remaining Cash, as defined. The incentive management fee shall be paid from available
cash flow and does not accrue from year to year. For the year ended December 31, 2007, incentive management fees of $31,864 were
incurred and paid.











Blessed Rock of El Monte

(A California Limited Partnership)



NOTES TO FINANCIAL STATEMENTS - CONTINUED



December 31, 2007



Reporting
fee



The Partnership shall pay to each Limited Partner
a reporting fee equal to 15% of the Cash Flow from Operations, as defined, but should not be less than $6,000 for each Limited
Partner. The reporting fee shall be paid from available cash flow and accrues from year to year. For the year ended December 31,
2007, a reporting fee of $2,550 was incurred and paid.



Management
Fee



For the period January 1, 2006 through July 18,
2007, the Partnership’s management agent was WNC Management, an affiliate of the General Partner (the “Former Agent”).
Effective July 19, 2007, the Partnership entered into an agreement with Professional Property Management, LLC (“PPM”),
an unrelated party (the “Agent”), in connection with the management of the Project’s rental operations. For the
year ended December 31, 2007, management fees expensed were $44,489, of which $3,882 remained payable.



NOTE 6 - PARTNERS’ PROFIT, LOSSES, AND DISTRIBUTIONS



In general, income (loss), tax credits and cash
flow from operations are allocated 98.99% to the Limited Partners, .99% to the Special Limited Partner, .01% to the General Partner
and .01% to the Managing General Partner.



Income (loss) and cash flow from sources other
than operations will be allocated pursuant to the terms of the Partnership Agreement regarding such.



NOTE 7 - CONTINGENCY



The Project’s low-income housing credits
are contingent on its ability to maintain compliance with applicable sections of Section 42. Failure to maintain compliance with
occupant eligibility, and/or unit gross rent, or to correct non-compliance within a specified time period could result in recapture
of previously taken tax credits plus interest. In addition, such potential noncompliance may require an adjustment to the contributed
capital by the Investor Limited Partner.











Blessed Rock of El Monte

(A California Limited Partnership)



NOTES TO FINANCIAL STATEMENTS - CONTINUED



December 31, 2007



NOTE 8 - RESTATEMENT OF BEGINING PARTNERS EQUITY (DEFICIT)



During 2007 management determined that original
costs related to building, deferred fees, and organization costs had been incorrectly allocated. As a result building costs and
deferred fees were understated by $62,330 and $106,041, respectively, while organization costs had been overstated. After adjusting
building, deferred fees and organization costs to reflect the correct allocations it was determined accumulated depreciation and
amortization had been overstated in prior years by $79,927 and $11,565, respectively. As a result, net adjustments totaling $91,492
have been made to beginning partners’ equity as of January 1, 2007, to correct for these errors.













FINANCIAL STATEMENTS
AND

INDEPENDENT AUDITOR’S REPORT



BLESSED ROCK OF EL MONTE



DECEMBER 31, 2008



1







BLESSED
ROCK OF EL MONTE



TABLE OF CONTENTS



|                                                                                        |  | PAGE |   
|--------------------------------------------------------------------------------------- |  | ---- | --
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                 |  |      | 3 
|                                                                                        |  |      |   
|FINANCIAL STATEMENTS:                                                                   |  |      |   
|                                                                                        |  |      |   
|BALANCE SHEET                                                                           |  |      | 4 
|                                                                                        |  |      |   
|STATEMENT OF OPERATIONS                                                                 |  |      | 6 
|                                                                                        |  |      |   
|STATEMENT OF CHANGES IN PARTNERS’ CAPITAL                                               |  |      | 7 
|                                                                                        |  |      |   
|STATEMENT OF CASH FLOWS                                                                 |  |      | 8 
|                                                                                        |  |      |   
|NOTES TO FINANCIAL STATEMENTS                                                           |  |      | 9 
|                                                                                        |  |      |   
|ACCOMPANYING INFORMATION:                                                               |  |      |   
|                                                                                        |  |      |   
|INDEPENDENT AUDITOR’S REPORT ON INFORMATION ACCOMPANYING THE BASIC FINANCIAL STATEMENTS |  |      | 16
|                                                                                        |  |      |   
|SUPPLEMENTAL INFORMATION                                                                |  |      | 17



2











REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM



To the Partners

Blessed Rock of El Monte



We
have audited the accompanying balance sheet of Blessed Rock of El Monte, a California Limited Partnership, as of December 31, 2008
and the related statements of operations, changes in partners’ capital and cash flows for the year then ended. These financial
statements are the responsibility of the partnership’s management. Our responsibility is to express an opinion on these financial
statements based on our audit.



We
conducted our audit in accordance with the Standards of the Public Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.



In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Blessed
Rock of El Monte as of December 31, 2008 and the results of its operations, changes in partners’ capital and cash flows for
the year then ended in conformity with accounting principles generally accepted in the United States of America.





Metairie, Louisiana

March 1, 2009



3421
N. Causeway Blvd., Suite 701. Metairie, LA 70002 Telephone (504) 837-0770 . Fax (504) 837-7102

Member
of

IGAF
Worldwide - Member Firms in Principal Cities . PCAOB - Public Company Accounting Oversight Board

AICPA
Centers . Center for Public Company Audit Firms (SEC)

Governmental
Audit Quality Center . Private Companies Practice Section (PCPS)



3







BLESSED
ROCK OF EL MONTE



BALANCE
SHEET



DECEMBER
31, 2008



|ASSETS                                |  |   |            |  
|------------------------------------- |  | - | ---------- | -
|Current Assets                        |  |   |            |  
|Cash                                  |  | $ | 563,168    |  
|Accounts Receivable                   |  |   | 6,281      |  
|                                      |  |   |            |  
|Total Current Assets                  |  |   | 569,449    |  
|                                      |  |   |            |  
|Restricted Reserves and Escrows       |  |   |            |  
|Tax and Insurance Escrow              |  |   | 45,199     |  
|Replacement Reserve                   |  |   | 178,178    |  
|Tenant Security Deposits              |  |   | 23,823     |  
|                                      |  |   |            |  
|Total Restricted Reserves and Escrows |  |   | 247,200    |  
|                                      |  |   |            |  
|Property and Equipment                |  |   |            |  
|Land                                  |  |   | 1,322,838  |  
|Buildings and Improvements            |  |   | 8,129,484  |  
|Furniture and Equipment               |  |   | 124,266    |  
|Total Property and Equipment          |  |   | 9,576,588  |  
|Less: Accumulated Depreciation        |  |   | (2,375,206 | )
|Property and Equipment, Net           |  |   | 7,201,382  |  
|                                      |  |   |            |  
|Other Assets                          |  |   |            |  
|                                      |  |   |            |  
|Deferred Fees, Net                    |  |   | 28,881     |  
|                                      |  |   |            |  
|TOTAL ASSETS                          |  | $ | 8,046,912  |  



See auditor’s
report and accompanying notes to the financial statements.



4







BLESSED
ROCK OF EL MONTE



BALANCE
SHEET



DECEMBER
31, 2008



|LIABILITIES AND PARTNERS’ CAPITAL       |  |   |           |  
|--------------------------------------- |  | - | --------- | -
|                                        |  |   |           |  
|Current Liabilities                     |  |   |           |  
|Accounts Payable                        |  | $ | 2,107     |  
|Accrued Management Fees                 |  |   | 3,954     |  
|Accrued Interest                        |  |   | 13,569    |  
|Accrued Expenses                        |  |   | 13,700    |  
|Current Portion Mortgage Payable        |  |   | 57,245    |  
|Prepaid Rents                           |  |   | 2,487     |  
|                                        |  |   |           |  
|Total Current Liabilities               |  |   | 93,062    |  
|                                        |  |   |           |  
|Deposits & Prepayment Liabilities       |  |   |           |  
|Tenants’ Security Deposits              |  |   | 23,725    |  
|                                        |  |   |           |  
|Long Term Liabilities                   |  |   |           |  
|Mortgage Payable                        |  |   | 2,309,686 |  
|Less: Current Portion                   |  |   | (57,245   | )
|Notes Payable                           |  |   | 637,331   |  
|Grant Payable                           |  |   | 400,000   |  
|Accrued Interest, Long Term             |  |   | 230,516   |  
|                                        |  |   |           |  
|Total Long Term Liabilities             |  |   | 3,520,288 |  
|                                        |  |   |           |  
|Total Liabilities                       |  |   | 3,637,075 |  
|                                        |  |   |           |  
|Partners’ Equity                        |  |   |           |  
|                                        |  |   |           |  
|Partners’ Equity                        |  |   | 4,409,837 |  
|TOTAL LIABILITIES AND PARTNERS’ CAPITAL |  | $ | 8,046,912 |  



See auditor’s report and
accompanying notes to the financial statements.



5







BLESSED
ROCK OF EL MONTE



STATEMENT
OF OPERATIONS



DECEMBER
31, 2008



|Revenue                           |  |   |          |  
|--------------------------------- |  | - | -------- | -
|Rental Income                     |  | $ | 946,624  |  
|Tenant Charges                    |  |   | 1,147    |  
|Miscellaneous revenue             |  |   | 13,727   |  
|                                  |  |   |          |  
|Total Revenue                     |  |   | 961,498  |  
|                                  |  |   |          |  
|Operating expenses                |  |   |          |  
|General and administrative        |  |   | 69,444   |  
|Management fee                    |  |   | 47,399   |  
|Legal and other professional fees |  |   | 46,865   |  
|Utilities                         |  |   | 77,026   |  
|Tax and insurance                 |  |   | 94,650   |  
|Repairs and maintenance           |  |   | 93,973   |  
|Financial expenses                |  |   | 343,524  |  
|                                  |  |   |          |  
|Total Operating Expenses          |  |   | 772,881  |  
|                                  |  |   |          |  
|Operating Income (Loss)           |  |   | 188,617  |  
|                                  |  |   |          |  
|Other Income and (Expenses)       |  |   |          |  
|Interest income                   |  |   | 7,442    |  
|Depreciation and amortization     |  |   | (222,402 | )
|                                  |  |   |          |  
|Net Other Income and (Expenses)   |  |   | 214,960  |  
|                                  |  |   |          |  
|Net Income (Loss)                 |  | $ | (26,343  | )



See auditor’s
report and accompanying notes to the financial statements.



6







BLESSED
ROCK OF EL MONTE



STATEMENT
OF CHANGES IN PARTNERS’ CAPITAL



DECEMBER
31, 2008



|                            |  |          |         |   |          |   |           | Total     | 
|--------------------------- |  | -------- | ------- | - | -------- | - | --------- | --------- | 
|                            |  | General  |         |   | Limited  |   |           | Partners’ | 
|                            |  | Partners |         |   | Partners |   |           | Capital   | 
|Balance - January 1, 2008   |  | $        | (26,745 | ) |          | $ | 4,523,212 |           | 
|                            |  |          |         |   |          |   |           |           | 
|Net Income (Loss)           |  |          | (263    | ) |          |   | (26,080   | )         | 
|                            |  |          |         |   |          |   |           |           | 
|Distributions to Members    |  |          | -       |   |          |   | (60,287   | )         | 
|                            |  |          |         |   |          |   |           |           | 
|Balance - December 31, 2008 |  | $        | (27,008 | ) |          | $ | 4,436,845 |           | 
|                            |  |          |         |   |          |   |           |           | 
|Percentages                 |  |          | 1       | % |          |   | 99        | %         | 



See auditor’s report and
accompanying notes to the financial statements.



7







BLESSED
ROCK OF EL MONTE



STATEMENT
OF CASH FLOWS



DECEMBER
31, 2008



|Cash flows from operating activities:            |  |   |          |  
|------------------------------------------------ |  | - | -------- | -
|Net Loss                                         |  | $ | (26,343  | )
|Adjustments to reconcile net loss to net cash    |  |   |          |  
|provided by operating activities:                |  |   |          |  
|Depreciation and amortization                    |  |   | 222,402  |  
|(Increase) decrease in accounts receivable       |  |   | 697      |  
|(Increase) decrease in prepaid expenses          |  |   | 16,709   |  
|Increase (decrease) in accounts payable          |  |   | (9,297   | )
|Increase (decrease) in security deposits payable |  |   | 15       |  
|Increase (decrease) in accrued management fee    |  |   | 72       |  
|Increase (decrease) in prepaid rent              |  |   | (1,635   | )
|Increase (decrease) in accrued interest payable  |  |   | (30,475  | )
|Total adjustments                                |  |   | 198,488  |  
|Net cash provided (used) by operating activities |  |   | 172,145  |  
|                                                 |  |   |          |  
|Cash flows from investing activities:            |  |   |          |  
|Purchase of property and equipment               |  |   | (148,397 | )
|(Deposit) withdrawal tax and insurance escrows   |  |   | (23,813  | )
|(Deposit) withdrawal reserve                     |  |   | (21,619  | )
|(Deposit) withdrawal security deposit account    |  |   | (113     | )
|Net cash provided (used) by investing activities |  |   | (193,942 | )
|                                                 |  |   |          |  
|Cash flows from financing activities:            |  |   |          |  
|Principal payments on mortgage payable           |  |   | (44,194  | )
|Principal payments on notes payable              |  |   | (53,359  | )
|Distributions                                    |  |   | (60,287  | )
|Net cash provided (used) by financing activities |  |   | (157,840 | )
|                                                 |  |   |          |  
|Net increase (decrease) in cash and equivalents  |  |   | (179,637 | )
|Cash and equivalents, beginning of year          |  |   | 742,805  |  
|                                                 |  |   |          |  
|Cash and equivalents, end of year                |  | $ | 563,168  |  



See auditor’s
report and accompanying notes to the financial statements.



8







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER 31, 2008



NOTE A - NATURE OF OPERATIONS



Blessed
Rock of El Monte, a California Limited Partnership, was organized on February 14, 1996 to acquire, construct, own and operate a
137-unit apartment project known as Blessed Rock of El Monte (“the Project”) located in El Monte, California.



The Project is eligible
and qualifies for low-income housing tax credits in accordance with Section 42 of the Internal Revenue Code of 1986. Generally,
the low-income housing credit is computed as a percentage of the qualified basis of the property including rehabilitation and is
allowed annually during a period of ten years commencing with the years the building is placed into service. In addition, in order
to qualify for the credit, the Partnership must conform with certain occupancy standards as set forth in the Code.



NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES



Basis of Accounting



The Partnership prepares
its financial statements on the accrual basis of accounting consistent with accounting principles generally accepted in the United
States of America.



Cash and Cash Equivalents



Cash and cash equivalents
include all cash balances and highly liquid investments with a maturity of three months or less at the acquisition date. At December
31, 2008, cash and cash equivalents consist of two unrestricted checking accounts and a petty cash fund. Restricted cash is not
considered cash equivalents.



Concentration of Credit Risk



The Partnership deposits
its cash in financial institutions. At times, the account balances may exceed the institution’s federally insured limits.
The Partnership has not experienced any losses in such accounts.



Tenant Accounts Receivable and Bad Debt
Expense



Delinquent rent receivables
are written off and included in bad debt expense in the period the balances are deemed to be uncollectible, which is generally
after the tenant vacates.



Accounting principles
generally accepted in the United States of America require that the allowance method be used to recognize bad debts; however, the
effect of using the direct write-off method is not materially different from the results that would have been obtained under the
allowance method.



9







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER 31, 2008



NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)



Property and Equipment



Property and equipment
are recorded at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations
over their estimated service lives using the straight-line method. Maintenance and repairs are charged to expense as incurred;
major renewals and betterments are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated
depreciation are removed from the accounts, and any gain or loss is included in income. The rental property is depreciated over
estimated service lives as follows:



|Buildings               | 27.5 years | Straight-Line
|----------------------- | ---------- | -------------
|Land Improvements       | 15 years   | Straight-Line
|Furnishings & Equipment | 5 years    | Straight-Line



Other Assets



Other assets
consist of Loan Fees and Tax Credit Fees which have been recorded at cost. These costs will be amortized using the straight-line
method over a period of 15 and 16 years, respectively.



Property Taxes



Property taxes are
expensed in the year of lien on the property such that twelve months of expense is charged to operations each period.



Rental Income



Rental income is recognized
as rentals become due. Rental payments received in advance are deferred until earned. All leases between the Partnership and the
tenants of the property are operating leases.



Income Taxes



Incomes taxes on Partnership
income are levied on the partners at the partner level. Accordingly, no income tax provision has been included in the financial
statements since income or loss of the Partnership is required to be reported by the partners on their respective income tax returns.



Estimates



The preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results
may differ from those estimates.



10







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER 31, 2008



NOTE C - MORTGAGE PAYABLE



The Partnership has entered into a mortgage
loan agreement in the original amount of $2,720.000. The terms are set forth below:



|a. |  | An interest rate of 7.05% per annum;
|-- |  | ------------------------------------

|b. |  | Monthly principal and interest payments of $18,188;
|-- |  | ---------------------------------------------------

|c. |  | A balloon payment of $2,017,000 payable June 1, 2013;
|-- |  | -----------------------------------------------------

|d. |  | A maturity date of June 1, 2013; and
|-- |  | ------------------------------------

|e. |  | The funding of a reserve fund for replacing assets of the Project.
|-- |  | ------------------------------------------------------------------



Future minimum principal payments of the
mortgage payable over each of the next five years are as follows:



|Year ending December 31, |  |  |   |           | 
|------------------------ |  |  | - | --------- | 
|                         |  |  |   |           | 
|2009                     |  |  | $ | 57,245    | 
|2010                     |  |  |   | 61,414    | 
|2011                     |  |  |   | 65,887    | 
|2012                     |  |  |   | 70,686    | 
|2013                     |  |  |   | 75,835    | 
|Thereafter               |  |  |   | 1,978,619 | 
|                         |  |  | $ | 2,309,686 | 



The liability of the
Partnership under the mortgage loan is limited to the underlying value of the property and equipment collateral in addition to
other amounts deposited with the lender. For the year ended December 31, 2008, interest expense was $164,579 and accrued interest
was $13,569.



Replacement Reserve



In accordance with
the Partnership Agreement, the Partnership is required to establish and maintain a replacement reserve account for the purpose
of capital improvements. The reserve account is to be funded in the amount of $20,544 per year. As of December 31, 2008, the balance
of the replacement reserve was $178,178.



11







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER 31, 2008



NOTE D - NOTES PAYABLE



Notes payable at December 31, 2008 consist
of the following:



A 4% note payable
in the amount of $250,878 with a term of 15 years, is payable to El Monte Community Redevelopment Agency (“RDA”), secured
by a deed of trust and rents from the Project. Payments of interest and principal are made annually beginning on April 1, 2003,
and thereafter each April 1, until the outstanding principal balance of note and all accrued interest are paid in full. Payments
are to be paid from 50% of the residual rental income, as defined in the promissory note agreement. Payments, if any, are applied
first to accrued interest and second to principal on the note. As of December 31, 2008, the balance of the note payable was $206,684.
At December 31, 2008, accrued interest on the note was $9,151.



A 1% note payable
in the amount of $430,647 with a term of 30 years beginning April 3, 1996, is 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 each April 3 for the following six succeeding
years, payments of $4,239 were due. Payments increase to $8,478 April 3, 2004 and continue for the next seven succeeding years.
On April 3, 2012, payments increase to $32,534 and continue for 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 are applied first to interest. As
of December 31, 2008, the balance of the development fee note payable was $430,647. At December 31, 2008, accrued interest on the
note was $17,365.



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. The 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, 2008 was $204,000.



Accrued interest at December 31, 2008 is
as follows:



|4% note payable                           |  | $ | 9,151   | 
|----------------------------------------- |  | - | ------- | 
|1% note payable                           |  |   | 17,365  | 
|Grant loan                                |  |   | 204,000 | 
|                                          |  |   |         | 
|Total accrued interest on second mortgage |  | $ | 230,516 | 



12







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER 31, 2008



NOTE E - RELATED PARTY TRANSACTIONS



Operational Asset Management Fee



The Partnership Agreement
provides for an asset management fee equal to $10 per unit per month, to accrue to the Managing General Partner and is payable
based on the cash flow provisions of the Partnership Agreement. The fee to be paid is cumulative if not paid each year. During
the year ended December 31, 2008, $6,233 of operational asset management fees were incurred. No amounts remained payable at December
31, 2008.



Incentive Management Fee



The Partnership shall
pay to the General Partner an incentive management fee equal to 40% of Remaining Cash, as defined. The incentive management fee
shall be paid from available cash flow and does not accrue from year to year. For the year ended December 31, 2008, incentive management
fees of $41,525 were paid.



NOTE F - MANAGEMENT FEE



Effective July 19,
2007, the Partnership entered into an agreement with Professional Property Management, LLC (“PPM”), an unrelated party,
in connection with the management of the Project’s rental operations. For the year ended December 31, 2008, management fees
expensed totaled $47,399 of which $3,954 remained payable.



NOTE G - PROFITS, LOSSES AND DISTRIBUTIONS



In general, income
(loss), tax credits and cash flow from operations are allocated 98.99% to the Limited Partners, .01% to the Special Limited Partner,
..99% to the General Partner and .01% to the Managing General Partner.



Income (loss) and
cash flow from sources other than operations will be allocated pursuant to the terms of the Partnership Agreement regarding such.



NOTE H – ADVERTISING



The Partnership expenses
advertising costs as they are incurred. Advertising expenses for the year ended December 31, 2008 amounted to $227.



13







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER 31, 2008



NOTE I – CONTINGENCIES



Housing Tax Credits



As incentive for investment
equity, the Partnership applied for and received an allocation certificate for housing tax credits established by the Tax Reform
Act of 1986. To qualify for the tax credits, the Partnership must meet certain requirements, including attaining a qualified basis
sufficient to support the credit allocation. In addition, tenant eligibility and rental charges are restricted in accordance with
Internal Revenue Code Section 42. Management has certified that each tax credit unit has met these qualifications to allow the
credits allocated to each unit to be claimed. Compliance with these regulations must be maintained in each of the ten consecutive
years of the compliance period. Failure to maintain compliance with occupant eligibility, unit gross rent, or to correct noncompliance
within a reasonable time period could result in recapture of previously claimed tax credits plus interest.



NOTE J - CURRENT VULNERABILITY DUE TO
CERTAIN CONCENTRATIONS



The Partnership’s
sole asset is the apartment complex. The Partnership’s operations are concentrated in the affordable housing real estate
market. In addition, the Partnership operates in a heavily regulated environment. The operations of the Partnership are subject
to the administrative directives, rules and regulations of federal, state and local regulatory agencies. Such administrative directives,
rules and regulations are subject to change by an act of Congress. Such changes may occur with little notice or inadequate funding
to pay for the related cost, including the additional administrative burden, to comply with a change.



14



































ACCOMPANYING INFORMATION

























15











INDEPENDENT
AUDITOR’S REPORT ON INFORMATION

ACCOMPANYING THE BASIC FINANCIAL STATEMENTS



To the Partners

Blessed Rock of El Monte



Our audit
of the 2008 financial statements presented in the preceding section of this report was for the purpose of forming an opinion on
such financial statements taken as a whole. The accompanying information shown on the following pages is presented for purposes
of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material
respects in relation to the 2008 basic financial statements taken as a whole.





Metairie, Louisiana

March 1, 2009





3421
N. Causeway Blvd., Suite 701. Metairie, LA 70002 Telephone (504) 837-0770 . Fax (504) 837-7102

Member
of

IGAF
Worldwide - Member Firms in Principal Cities . PCAOB - Public Company Accounting Oversight Board

AICPA
Centers . Center for Public Company Audit Firms (SEC)

Governmental
Audit Quality Center . Private Companies Practice Section (PCPS)



16







BLESSED
ROCK OF EL MONTE



SUPPLEMENTAL
INFORMATION



FOR THE
YEAR ENDED DECEMBER 31, 2008



|A. SCHEDULES OF EXPENSES    |  |   |        | 
|--------------------------- |  | - | ------ | 
|                            |  |   | 2008   | 
|                            |  |   |        | 
|General and Administrative: |  |   |        | 
|Administrative - Salaries   |  | $ | 33,901 | 
|Training                    |  |   | 407    | 
|Marketing and Advertising   |  |   | 227    | 
|Credit Reports              |  |   | 292    | 
|Office Supplies             |  |   | 10,745 | 
|Telephone Expenses          |  |   | 10,577 | 
|Social Programming          |  |   | 12,538 | 
|Bad Debts                   |  |   | 619    | 
|Miscellaneous               |  |   | 138    | 
|                            |  |   |        | 
|Total                       |  | $ | 69,444 | 
|                            |  |   |        | 
|Utilities:                  |  |   |        | 
|Electricity                 |  | $ | 25,581 | 
|Gas                         |  |   | 23,557 | 
|Water & Sewer               |  |   | 27,888 | 
|                            |  |   |        | 
|Total                       |  | $ | 77,026 | 
|                            |  |   |        | 
|Repairs and Maintenance:    |  |   |        | 
|Maintenance - Contracts     |  | $ | 16,215 | 
|Maintenance - Salaries      |  |   | 16,763 | 
|Maintenance - Supplies      |  |   | 7,899  | 
|Painting and Decorating     |  |   | 16,124 | 
|Garbage and Trash Removal   |  |   | 15,248 | 
|Exterminating               |  |   | 1,940  | 
|Grounds Maintenance         |  |   | 19,784 | 
|                            |  |   |        | 
|Total                       |  | $ | 93,973 | 



17







BLESSED
ROCK OF EL MONTE



SUPPLEMENTAL
INFORMATION



FOR THE
YEAR ENDED DECEMBER 31, 2008



|                                             |  | 2008 |        
|-------------------------------------------- |  | ---- | -------
|Tax and Insurance:                           |  |      |        
|Real Estate Taxes                            |  | $    | 19,578 
|Property & Liability Insurance               |  |      | 43,846 
|Payroll Taxes                                |  |      | 7,397  
|Worker’s Compensation                        |  |      | 11,508 
|Health Insurance and other Employee Benefits |  |      | 5,809  
|Other Taxes and Insurance                    |  |      | 6,512  
|                                             |  |      |        
|Total                                        |  | $    | 94,650 
|                                             |  |      |        
|Financial Expenses:                          |  |      |        
|Interest on Mortgages                        |  | $    | 194,036
|MIP/Service Charges                          |  |      | 140    
|Bank Fees                                    |  |      | 2,401  
|Operational Asset Management Fee             |  |      | 16,440 
|Asset Management Fee                         |  |      | 88,982 
|Partnership Management Fee                   |  |      | 41,525 
|                                             |  |      |        
|Total                                        |  | $    | 343,524



18









FINANCIAL
STATEMENTS AND

INDEPENDENT
AUDITOR’S REPORT



BLESSED
ROCK OF EL MONTE



DECEMBER
31, 2009











BLESSED
ROCK OF EL MONTE



TABLE OF CONTENTS



|                                                        |                                           |     | PAGE
|------------------------------------------------------- | ----------------------------------------- | --- | ----
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |                                           | F-2
|                                                        |                                           |     |     
|                                                        | FINANCIAL
    STATEMENTS:                 |     |     
|                                                        |                                           |     |     
|                                                        | BALANCE SHEET                             |     | F-3 
|                                                        |                                           |     |     
|                                                        | STATEMENT OF OPERATIONS                   |     | F-5 
|                                                        |                                           |     |     
|                                                        | STATEMENT OF CHANGES IN PARTNERS’ CAPITAL |     | F-6 
|                                                        |                                           |     |     
|                                                        | STATEMENT OF CASH FLOWS                   |     | F-7 
|                                                        |                                           |     |     
|                                                        | NOTES TO FINANCIAL STATEMENTS             |     | F-8 



F-1











REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To
the Partners

Blessed
Rock of EI Monte



We
have audited the accompanying balance sheet of Blessed Rock of El Monte, a California Limited Partnership, as of December 31,
2009 and the related statements of operations, changes in partners’ capital and cash flows for the year then ended. These
financial statements are the responsibility of the partnership’s management. Our responsibility is to express an opinion
on these financial statements based on our audit.



We
conducted our audit in accordance with the Standards of the Public Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the partnership’s internal control over financial reporting. Accordingly, we express no such opinion.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.



In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Blessed
Rock of El Monte as of December 31, 2009 and the results of its operations, changes in partners’ capital and cash flows
for the year then ended in conformity with accounting principles generally accepted in the United States of America.





|                        | 
|----------------------- | 
|                        | 
|Metairie,
    Louisiana | 
|February
    19, 2010   | 





3421
N. Causeway Blvd., Suite 701. Metairie, LA 70002 Telephone (504) 837-0770 . Fax (504) 837-7102

Member
of

IGAF
Worldwide - Member Firms in Principal Cities . PCAOB - Public Company Accounting Oversight Board

AICPA
Centers . Center for Public Company Audit Firms (SEC)

Governmental
Audit Quality Center . Private Companies Practice Section (PCPS)



F-2







BLESSED
ROCK OF EL MONTE



BALANCE
SHEET



DECEMBER
31, 2009





|ASSETS                                |  |   |           
|------------------------------------- |  | - | ----------
|Current Assets                        |  |   |           
|Cash                                  |  | $ | 569,007   
|Prepaid expenses                      |  |   | 41,116    
|Total Current Assets                  |  |   | 610,123   
|Restricted Reserves and Escrows       |  |   |           
|Tax and Insurance Escrow              |  |   | 9,530     
|Replacement Reserve                   |  |   | 164,751   
|Tenant Security Deposits              |  |   | 23,845    
|Total Restricted Reserves and Escrows |  |   | 198,126   
|Property and Equipment                |  |   |           
|Land                                  |  |   | 1,324,238 
|Buildings and Improvements            |  |   | 8,130,654 
|Furniture and Equipment               |  |   | 144,029   
|Total Property and Equipment          |  |   | 9,598,921 
|Less: Accumulated Depreciation        |  |   | (2,599,615
|Property and Equipment, Net           |  |   | 6,999,306 
|Other Assets                          |  |   |           
|Deferred Fees, Net                    |  |   | 21,982    
|TOTAL ASSETS                          |  | $ | 7,829,537 



See
auditor’s report and accompanying notes to the financial statements.



F-3







BLESSED
ROCK OF EL MONTE



BALANCE
SHEET



DECEMBER
31, 2009



|LIABILITIES AND PARTNERS’ CAPITAL             |  |   |           |  
|--------------------------------------------- |  | - | --------- | -
|Current Liabilities                           |  |   |           |  
|Accounts Payable                              |  | $ | 4,000     |  
|Accrued Management Fees                       |  |   | 4,165     |  
|Accrued Property Tax Exemption Compliance Fee |  |   | 1,591     |  
|Accrued Interest                              |  |   | 13,233    |  
|Accrued Expenses                              |  |   | 13,700    |  
|Current Portion Mortgage Payable              |  |   | 61,414    |  
|Prepaid Rents                                 |  |   | 5,362     |  
|                                              |  |   |           |  
|Total Current Liabilities                     |  |   | 103,465   |  
|                                              |  |   |           |  
|Deposits & Prepayment Liabilities             |  |   |           |  
|Tenants’ Security Deposits                    |  |   | 23,683    |  
|                                              |  |   |           |  
|Long Term Liabilities                         |  |   |           |  
|Mortgage Payable                              |  |   | 2,252,440 |  
|Less: Current Portion                         |  |   | (61,414   | )
|Notes Payable                                 |  |   | 434,024   |  
|Grant Payable                                 |  |   | 400,000   |  
|Accrued Interest, Long Term                   |  |   | 221,111   |  
|                                              |  |   |           |  
|Total Long Term Liabilities                   |  |   | 3,246,161 |  
|                                              |  |   |           |  
|Total Liabilities                             |  |   | 3,373,309 |  
|                                              |  |   |           |  
|Partners’ Equity                              |  |   |           |  
|                                              |  |   |           |  
|Partners’ Equity                              |  |   | 4,456,228 |  
|                                              |  |   |           |  
|TOTAL LIABILITIES AND PARTNERS’ CAPITAL       |  | $ | 7,829,537 |  



See
auditor’s report and accompanying notes to the financial statements.



F-4









BLESSED
ROCK OF EL MONTE



STATEMENT
OF OPERATIONS



DECEMBER
31, 2009



|Revenue                         |  |   |          |  
|------------------------------- |  | - | -------- | -
|Rental Income                   |  | $ | 956,056  |  
|Tenant Charges                  |  |   | 859      |  
|Miscellaneous revenue           |  |   | 13,822   |  
|Total Revenue                   |  |   | 970,737  |  
|                                |  |   |          |  
|Operating expenses              |  |   |          |  
|General and administrative      |  |   | 75,894   |  
|Management fee                  |  |   | 48,379   |  
|Utilities                       |  |   | 64,208   |  
|Repairs and maintenance         |  |   | 93,743   |  
|Tax and insurance               |  |   | 97,754   |  
|Financial expenses              |  |   | 299,301  |  
|                                |  |   |          |  
|Total Operating Expenses        |  |   | 679,279  |  
|                                |  |   |          |  
|Operating Income (Loss)         |  |   | 291,458  |  
|                                |  |   |          |  
|Other Income and (Expenses)     |  |   |          |  
|Interest income                 |  |   | 842      |  
|Depreciation and amortization   |  |   | (231,308 | )
|                                |  |   |          |  
|Net Other Income and (Expenses) |  |   | 230,466  |  
|                                |  |   |          |  
|Net Income (Loss)               |  | $ | 60,992   |  



See
auditor’s report and accompanying notes to the financial statements.



F-5









BLESSED
                                                                                                                         ROCK
                                                                                                                         OF EL
                                                                                                                         MONTE



STATEMENT
OF CHANGES IN PARTNERS’ CAPITAL



DECEMBER
31, 2009



|                            |  | General
                                                                           Partners |         |   | Limited
                                                                           Partners |   |           | Total
                                                                           Partners’
                                                                           Capital | 
|--------------------------- |  | ------------------------------------------------------------------------------------------- | ------- | - | ------------------------------------------------------------------------------------------- | - | --------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Balance - January 1, 2009   |  | $                                                                                           | (27,008 | ) |                                                                                             | $ | 4,436,845 |                                                                                                                                                                               | 
|                            |  |                                                                                             |         |   |                                                                                             |   |           |                                                                                                                                                                               | 
|Net Income (Loss)           |  |                                                                                             | 610     |   |                                                                                             |   | 60,382    |                                                                                                                                                                               | 
|                            |  |                                                                                             |         |   |                                                                                             |   |           |                                                                                                                                                                               | 
|Distributions to Members    |  |                                                                                             | (14,601 | ) |                                                                                             |   | -         |                                                                                                                                                                               | 
|                            |  |                                                                                             |         |   |                                                                                             |   |           |                                                                                                                                                                               | 
|Balance - December 31, 2009 |  | $                                                                                           | (40,999 | ) |                                                                                             | $ | 4,497,227 |                                                                                                                                                                               | 
|                            |  |                                                                                             |         |   |                                                                                             |   |           |                                                                                                                                                                               | 
|Percentages                 |  |                                                                                             | 1       | % |                                                                                             |   | 99        | %                                                                                                                                                                             | 



See
auditor’s report and accompanying notes to the financial statements.



F-6







BLESSED
ROCK OF EL MONTE



STATEMENT
OF CASH FLOWS



DECEMBER
31, 2009



|Cash flows from operating activities:                                               |  |   |         
|----------------------------------------------------------------------------------- |  | - | --------
|Net Loss                                                                            |  | $ | 60,992  
|Adjustments to reconcile net loss to net cash provided by operating
    activities: |  |   |         
|Depreciation and amortization                                                       |  |   | 231,308 
|(Increase) decrease in accounts receivable                                          |  |   | 6,281   
|(Increase) decrease in prepaid expenses                                             |  |   | (41,116 
|Increase (decrease) in accounts payable                                             |  |   | 3,484   
|Increase (decrease) in security deposits payable                                    |  |   | (42     
|Increase (decrease) in accrued management fee                                       |  |   | 211     
|Increase (decrease) in prepaid rent                                                 |  |   | 2,875   
|Increase (decrease) in accrued interest payable                                     |  |   | (9,741  
|Total adjustments                                                                   |  |   | 193,260 
|Net cash provided (used) by operating activities                                    |  |   | 254,252 
|                                                                                    |  |   |         
|Cash flows from investing activities:                                               |  |   |         
|Purchase of property and equipment                                                  |  |   | (22,333 
|(Deposit) withdrawal tax and insurance escrows                                      |  |   | 35,669  
|(Deposit) withdrawal reserve                                                        |  |   | 13,427  
|(Deposit) withdrawal security deposit account                                       |  |   | (22     
|Net cash provided (used) by investing activities                                    |  |   | 26,741  
|                                                                                    |  |   |         
|Cash flows from financing activities:                                               |  |   |         
|Principal payments on mortgage payable                                              |  |   | (57,246 
|Principal payments on notes payable                                                 |  |   | (203,307
|Distributions                                                                       |  |   | (14,601 
|Net cash provided (used) by financing activities                                    |  |   | (275,154
|                                                                                    |  |   |         
|Net increase (decrease) in cash and equivalents                                     |  |   | 5,839   
|Cash and equivalents, beginning of year                                             |  |   | 563,168 
|                                                                                    |  |   |         
|Cash and equivalents, end of year                                                   |  | $ | 569,007 
|                                                                                    |  |   |         
|Supplemental disclosures of cash flow information:                                  |  |   |         
|Cash paid during the year for:                                                      |  |   |         
|Interest Expense                                                                    |  | $ | 161,006 



See
auditor’s report and accompanying notes to the financial statements.



F-7







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER
31, 2009



NOTE
A - NATURE OF OPERATIONS



Blessed
Rock of El Monte, a California Limited Partnership, was organized on February 14, 1996 to acquire, construct, own and operate
a 137-unit apartment project known as Blessed Rock of El Monte (“the Project”) located in El Monte, California.



The
Project is eligible and qualifies for low-income housing tax credits in accordance with Section 42 of the Internal Revenue Code
of 1986. Generally, the low-income housing credit is computed as a percentage of the qualified basis of the property including
rehabilitation and is allowed annually during a period of ten years commencing with the years the building is placed into service.
In addition, in order to qualify for the credit, the Partnership must conform with certain occupancy standards as set forth in
the Code.



NOTE
B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis
of Accounting



The
Partnership prepares its financial statements on the accrual basis of accounting consistent with accounting principles generally
accepted in the United States of America.



Cash
and Cash Equivalents



Cash
and cash equivalents include all cash balances and highly liquid investments with a maturity of three months or less at the acquisition
date. At December 31, 2009, cash and cash equivalents consist of two unrestricted checking accounts and a petty cash fund. Restricted
cash is not considered cash equivalents.



Concentration
of Credit Risk



The
Partnership deposits its cash in financial institutions. At times, the account balances may exceed the institution’s federally
insured limits. The Partnership has not experienced any losses in such accounts.



Tenant
Accounts Receivable and Bad Debt Expense



Delinquent
rent receivables are written off and included in bad debt expense in the period the balances are deemed to be uncollectible, which
is generally after the tenant vacates.



Accounting
principles generally accepted in the United States of America require that the allowance method be used to recognize bad debts;
however, the effect of using the direct write-off method is not materially different from the results that would have been obtained
under the allowance method.



F-8







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER
31, 2009





NOTE
B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Property
and Equipment



Property
and equipment are recorded at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets
to operations over their estimated service lives using the straight-line method. Maintenance and repairs are charged to expense
as incurred; major renewals and betterments are capitalized. When items of property or equipment are sold or retired, the related
cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in income. The rental property
is depreciated over estimated service lives as follows:



|Buildings                   |  | 27.5
    years |  | Straight-Line
|--------------------------- |  | -------------- |  | -------------
|Land
    Improvements       |  | 15
    years   |  | Straight-Line
|Furnishings
    & Equipment |  | 5
    years    |  | Straight-Line



Impairment
of Long-Lived Assets



In
accordance with Accounting Standards Codification 360-10-05-4,Accounting for the Impairment
or Disposal of Long-Lived Assets, the partnership reviews its rental property for impairment whenever events or changes
in circumstances indicate that the carrying value of an asset may not be recovered. If the fair value is less than the carrying
amount for the asset, an impairment loss is recognized for the difference. No impairment loss has been recognized during the year
ended December 31, 2009.



Other
Assets



Other
assets consist of Loan Fees and Tax Credit Fees which have been recorded at cost. These costs will be amortized using the straight-line
method over a period of 15 and 16 years, respectively.



Property
Taxes



Property
taxes are expensed in the year of lien on the property such that twelve months of expense is charged to operations each period.



Rental
Income



Rental
income is recognized as rentals become due. Rental payments received in advance are deferred until earned. All leases between
the Partnership and the tenants of the property are operating leases.



Estimates



The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying
notes. Actual results may differ from those estimates.



F-9







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER
31, 2009



NOTE
B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Income
Taxes



Income
taxes on Partnership income are levied on the partners at the partner level. Accordingly, all profits and losses of the Partnership
are recognized by each partner on its respective tax return. The Partnership has adopted provisions of FASB Accounting Standards
Codification Topic ASC 740-10 (previously Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes), on January
1, 2009. The implementation of this standard had no impact on the financial statements. As of both the date of adoption, and as
of December 31, 2009, the unrecognized tax benefit accrual was zero. The Partnership will recognize future accrued interest and
penalties related to unrecognized tax benefits in income tax expense, if incurred. The Partnership’s tax filings are subject
to audit by various taxing authorities, and the open audit periods are 2006 through 2008.



Fair
Value



In
2009, the Partnership adopted the Fair Value Measurement topic of the FASBAccounting Standards
Codification (ASC) 820 which provides guidance for assets and liabilities which are required to be measured at fair
value and requires expanded disclosure for fair value measurement. The standard applies whenever other standards require or permit
assets or liabilities to be measured at fair value and does not require any new fair value measurements. The implementation of
Fair Value Measurement did not have a material impact on the Partnership’s financial statements for the year ended December
31, 2009.

The
standard establishes a fair value hierarchy based on three levels:





|● | Level 1 - | Quoted prices in active markets for identical assets or liabilities.                  
|- | --------- | --------------------------------------------------------------------------------------
|● | Level 2 - | Quoted prices for similar assets or liabilities in active markets.                    
|● | Level 3 - | Unobservable inputs for the asset or liability based on the best available information







Affordable
housing projects operate in a heavily regulated environment which typically includes restrictions such as land use restrictions,
rent restrictions, government subsidies in the form of rental assistance through either rent subsidy or tenant vouchers, subsidized
interest mortgage interest rates, and restrictions on selling or transferring the projects.



A
summary of the methods and significant assumptions used to estimate the fair values of financial instruments is as follows:



Short-term
financial instruments - The fair value of short-term financial instruments, including cash and cash equivalents, accounts receivable,
accounts payable and accrued liabilities approximate the carrying value in the accompanying financial statements due to the short
maturity of such instruments.



Long-term
liabilities - The fair value of long-term liabilities approximates the carrying value in the accompanying financial statements
based on current borrowing rates.



F-10









BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER
31, 2009



NOTE
C - INTANGIBLE ASSETS



Intangible
assets at December 31, 2009 were net of accumulated amortization of $84,059. Amortization expense for the same year ended was
$6,899. Estimated aggregated amortization expense for each of the next four years is:



| | 2010  |  |  | $ | 6,899  | 
| | ----- |  |  | - | ------ | 
| | 2011  |  |  |   | 6,899  | 
| | 2012  |  |  |   | 6,899  | 
| | 2013  |  |  |   | 1,285  | 
| |       |  |  |   |        | 
| | Total |  |  | $ | 21,982 | 



NOTE
D - MORTGAGE PAYABLE



The
Partnership has entered into a mortgage loan agreement in the original amount of $2,720.000. The terms are set forth below:



| | a. | An
    interest rate of 7.05% per annum;                              
| | -- | ----------------------------------------------------------------------
| | b. | Monthly
    principal and interest payments of $18,188;               
| | c. | A
    balloon payment of $2,017,000 payable June 1, 2013;             
| | d. | A
    maturity date of June 1, 2013; and                              
| | e. | The
    funding of a reserve fund for replacing assets of the Project.



Future
minimum principal payments of the mortgage payable over each of the next five years are as follows:



| | Year ending December 31, |  |  |   |           | 
| | ------------------------ |  |  | - | --------- | 
| | 2010                     |  |  | $ | 61,414    | 
| | 2011                     |  |  |   | 65,887    | 
| | 2012                     |  |  |   | 70,686    | 
| | 2013                     |  |  |   | 75,835    | 
| | 2014                     |  |  |   | 81,359    | 
| | Thereafter               |  |  |   | 1,897,259 | 
| |                          |  |  | $ | 2,252,440 | 



The
liability of the Partnership under the mortgage loan is limited to the underlying value of the property and equipment collateral
in addition to other amounts deposited with the lender. For the year ended December 31, 2009, interest expense was $160,670 and
accrued interest was $13,233.



F-11







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER
31, 2009



NOTE
D - MORTGAGE PAYABLE (CONTINUED)



Replacement
Reserve



In
accordance with the Partnership Agreement, the Partnership is required to establish and maintain a replacement reserve account
for the purpose of capital improvements. The reserve account is to be funded in the amount of $20,544 per year. As of December
31, 2009, the balance of the replacement reserve was $164,751.



NOTE
E - NOTES PAYABLE



Notes
payable at December 31, 2009 consist of the following:



A
4% note payable in the amount of $250,878 with a term of 15 years, is payable to El
Monte Community Redevelopment Agency (“RDA”), secured by a deed of trust and rents from the Project. Payments of
interest and principal are made annually beginning on April 1, 2003, and thereafter each April 1, until the outstanding
principal balance of note and all accrued interest are paid in full. Payments are to be paid from 50% of the residual rental
income, as defined in the promissory note agreement. Payments, if any, are applied first to accrued interest and second to
principal on the note. As of December 31, 2009, the balance of the note payable was $3,377. At December 31, 2009, accrued
interest on the note was $33.



A
1% note payable in the amount of $430,647 with a term of 30 years beginning April 3, 1996, is 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 each April 3 for the
following six succeeding years, payments of $4,239 were due. Payments increase to $8,478 April 3, 2004 and continue for the next
seven succeeding years. On April 3, 2012, payments increase to $32,534 and continue for 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 are applied
first to interest. As of December 31, 2009, the balance of the development fee note payable was $430,647. At December 31, 2009,
accrued interest on the note was $1,078.



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. The 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, 2009 was
$220,000.



F-12







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER
31, 2009



NOTE
E - NOTES PAYABLE (CONTINUED)



Accrued
interest at December 31, 2009 is as follows:



|4% note payable                           |  | $ | 33      | 
|----------------------------------------- |  | - | ------- | 
|1% note payable                           |  |   | 1,078   | 
|Grant loan                                |  |   | 220,000 | 
|                                          |  |   |         | 
|Total accrued interest on second mortgage |  | $ | 221,111 | 



NOTE
F - RELATED PARTY TRANSACTIONS



Operational
Asset Management Fee



The
Partnership Agreement provides for an asset management fee equal to $10 per unit per month, to accrue to the Managing General
Partner and is payable based on the cash flow provisions of the Partnership Agreement. The fee to be paid is cumulative if not
paid each year. During the year ended December 31, 2009, an operational asset management fee of $16,440 was expensed and paid.



Asset
Management Fee



The
Partnership Agreement provides for am asset management fee equal to 30% of Remaining Cash, as defined, to accrue to the Limited
Partner and is payable based on the cash flow provisions of the Partnership Agreement. The fee is cumulative if not paid each
year. During the year ended December 31, 2009, $50,417 was expensed and paid.



Incentive
Management Fee



The
Partnership shall pay to the General Partner an incentive management fee equal to 40% of Remaining Cash, as defined. The incentive
management fee shall be paid from available cash flow and does not accrue from year to year. For the year ended December 31, 2009,
an incentive management fee of $23,528 was expensed and paid.



Reporting
Fee



The
Partnership shall pay to the Limited Partner a reporting fee equal to 15% of the Cash Flow from Operations, as defined, but should
not be less than $6,000 for each Limited Partner. The reporting fee shall be paid from available cash flow and accrued from year
to year. During the year ended December 31, 2009, a reporting fee of $17,646 was earned and paid.



F-13







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER
31, 2009



NOTE
F - RELATED PARTY TRANSACTIONS (CONTINUED)



Property
Tax Exemption Compliance Fee



Pursuant
to the Partnership Agreement, the Partnership shall pay to the Managing General Partner an annual fee of $1,500 for ensuring the
Partnership is in compliance with the Property Tax Exemption requirements. The annual fee shall be increased by 3% each year,
beginning in 2007 and continuing each year thereafter. For the year ended December 31, 2009, $4,636 was expensed of which $1,591
remained payable at year-end.



NOTE
G - MANAGEMENT FEE



Effective
July 19, 2007, the Partnership entered into an agreement with Professional Property Management, LLC (“PPM”), an unrelated
party, in connection with the management of the Project’s rental operations. For the year ended December 31, 2009, management
fees expensed totaled $48,379 of which $4,165 remained payable.



NOTE
H - PROFITS, LOSSES AND DISTRIBUTIONS



In
general, income (loss), tax credits and cash flow from operations are allocated 98.99% to the Limited Partners, .01% to the Special
Limited Partner, .99% to the General Partner and .01% to the Managing General Partner.

Income
(loss) and cash flow from sources other than operations will be allocated pursuant to the terms of the Partnership Agreement regarding
such.



NOTE
I -  ADVERTISING



The
Partnership expenses advertising costs as they are incurred. Advertising expenses for the year ended December 31, 2009 amounted
to $175.



F-14







BLESSED
ROCK OF EL MONTE



NOTES
TO FINANCIAL STATEMENTS



DECEMBER
31, 2009



NOTE
J -  CONTINGENCIES



Housing
Tax Credits



As
incentive for investment equity, the Partnership applied for and received an allocation certificate for housing tax credits established
by the Tax Reform Act of 1986. To qualify for the tax credits, the Partnership must meet certain requirements, including attaining
a qualified basis sufficient to support the credit allocation. In addition, tenant eligibility and rental charges are restricted
in accordance with Internal Revenue Code Section 42. Management has certified that each tax credit unit has met these qualifications
to allow the credits allocated to each unit to be claimed. Compliance with these regulations must be maintained in each of the
ten consecutive years of the compliance period. Failure to maintain compliance with occupant eligibility, unit gross rent, or
to correct noncompliance within a reasonable time period could result in recapture of previously claimed tax credits plus interest.



NOTE
K - CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS



The
Partnership’s sole asset is the apartment complex. The Partnership’s operations are concentrated in the affordable
housing real estate market. In addition, the Partnership operates in a heavily regulated environment. The operations of the Partnership
are subject to the administrative directives, rules and regulations of federal, state and local regulatory agencies. Such administrative
directives, rules and regulations are subject to change by an act of Congress. Such changes may occur with little notice or inadequate
funding to pay for the related cost, including the additional administrative burden, to comply with a change.



NOTE
L - SUBSEQUENT EVENTS



FASB
ASC 855,Subsequent Events, addresses events which occur after the balance sheet
date but before the issuance of financial statements. An entity must record the effects of subsequent events that provide evidence
about conditions that existed at the balance sheet date and must disclose but not record the effects of subsequent events which
provide evidence about conditions that existed after the balance sheet date. Additionally, Topic 855 requires disclosure relative
to the date through which subsequent events have been evaluated and whether that is the date on which the financial statements
were issued or were available to be issued. Management evaluated the activity of Blessed Rock of El Monte through February 19,
2010, the date the financial statements were issued, and concluded that no subsequent events have occurred that would require
recognition in the Financial Statements or disclosure in the Notes to the Financial Statements.



F-15





































ACCOMPANYING INFORMATION































F-16











INDEPENDENT
AUDITOR’S REPORT ON INFORMATION

ACCOMPANYING THE BASIC FINANCIAL STATEMENTS



To the Partners

Blessed
Rock of El Monte



Our audit
of the 2009 financial statements presented in the preceding section of this report was for the purpose of forming an opinion on
such financial statements taken as a whole. The accompanying information shown on the following pages is presented for purposes
of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material
respects in relation to the 2009 basic financial statements taken as a whole.



|                    | 
|------------------- | 
|Metairie, Louisiana | 
|February 19, 2010   | 



3421 N. Causeway
Blvd., Suite 701. Metairie, LA 70002 Telephone (504) 837-0770 . Fax (504) 837-7102

Member of

IGAF Worldwide
- Member Firms in Principal Cities . PCAOB - Public Company Accounting Oversight Board

AICPA Centers
.. Center for Public Company Audit Firms (SEC)

Governmental Audit Quality Center
.. Private Companies Practice Section (PCPS)



F-17







BLESSED
ROCK OF EL MONTE



SUPPLEMENTAL
INFORMATION



FOR THE
YEAR ENDED DECEMBER 31, 2009



|A. SCHEDULES OF EXPENSES    |  |   |        | 
|--------------------------- |  | - | ------ | 
|                            |  |   | 2009   | 
|                            |  |   |        | 
|General and Administrative: |  |   |        | 
|Administrative - Salaries   |  | $ | 35,355 | 
|Marketing and advertising   |  |   | 175    | 
|Legal Fees                  |  |   | 628    | 
|Audit Expense               |  |   | 5,205  | 
|Training                    |  |   | 1,742  | 
|Credit Reports              |  |   | 334    | 
|Office Supplies             |  |   | 10,062 | 
|Telephone Expenses          |  |   | 8,869  | 
|Social Programming          |  |   | 12,924 | 
|Miscellaneous               |  |   | 600    | 
|                            |  |   |        | 
|Total                       |  | $ | 75,894 | 
|                            |  |   |        | 
|Utilities:                  |  |   |        | 
|Electricity                 |  | $ | 20,313 | 
|Gas                         |  |   | 15,442 | 
|Water & Sewer               |  |   | 28,453 | 
|                            |  |   |        | 
|Total                       |  | $ | 64,208 | 
|                            |  |   |        | 
|Repairs and Maintenance:    |  |   |        | 
|Maintenance - Contracts     |  | $ | 32,083 | 
|Maintenance - Salaries      |  |   | 16,832 | 
|Maintenance - Supplies      |  |   | 6,936  | 
|Painting and Decorating     |  |   | 5,547  | 
|Garbage and Trash Removal   |  |   | 16,798 | 
|Exterminating               |  |   | 3,635  | 
|Grounds Maintenance         |  |   | 11,912 | 
|                            |  |   |        | 
|Total                       |  | $ | 93,743 | 



F-18







BLESSED
ROCK OF EL MONTE



SUPPLEMENTAL
INFORMATION



FOR THE
YEAR ENDED DECEMBER 31, 2009



|                                             |  |   | 2009    | 
|-------------------------------------------- |  | - | ------- | 
|Tax and Insurance:                           |  |   |         | 
|Real Estate Taxes                            |  | $ | 24,500  | 
|Property & Liability Insurance               |  |   | 42,489  | 
|Payroll Taxes                                |  |   | 9,063   | 
|Worker’s Compensation                        |  |   | 10,138  | 
|Health Insurance and other Employee Benefits |  |   | 4,719   | 
|Other Taxes and Insurance                    |  |   | 6,845   | 
|                                             |  |   |         | 
|Total                                        |  | $ | 97,754  | 
|                                             |  |   |         | 
|Financial Expenses:                          |  |   |         | 
|Interest on Mortgages                        |  | $ | 185,372 | 
|Service Charges                              |  |   | 182     | 
|Bank Fees                                    |  |   | 1,080   | 
|Reporting Fee                                |  |   | 17,646  | 
|Operational Asset Management Fee             |  |   | 16,440  | 
|Property Tax Exemption Compliance Fee        |  |   | 4,636   | 
|Asset Management Fee                         |  |   | 50,417  | 
|Partnership Management Fee                   |  |   | 23,528  | 
|Total                                        |  | $ | 299,301 | 



F-19









FINANCIAL STATEMENTS AND

INDEPENDENT AUDITOR’S REPORT



BLESSED ROCK OF EL MONTE



DECEMBER 31, 2010











BLESSED ROCK OF EL MONTE



TABLE OF CONTENTS



|                                                                                        |  | PAGE
|--------------------------------------------------------------------------------------- |  | ----
|                                                                                        |  |     
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                 |  | F-2 
|                                                                                        |  |     
|FINANCIAL STATEMENTS:                                                                   |  |     
|                                                                                        |  |     
|BALANCE SHEET                                                                           |  | F-3 
|                                                                                        |  |     
|STATEMENT OF OPERATIONS                                                                 |  | F-5 
|                                                                                        |  |     
|STATEMENT OF CHANGES IN PARTNERS’ CAPITAL                                               |  | F-6 
|                                                                                        |  |     
|STATEMENT OF CASH FLOWS                                                                 |  | F-7 
|                                                                                        |  |     
|NOTES TO FINANCIAL STATEMENTS                                                           |  | F-8 
|                                                                                        |  |     
|ACCOMPANYING INFORMATION:                                                               |  |     
|                                                                                        |  |     
|INDEPENDENT AUDITOR’S REPORT ON INFORMATION ACCOMPANYING THE BASIC FINANCIAL STATEMENTS |  | F-17
|                                                                                        |  |     
|SUPPLEMENTAL INFORMATION                                                                |  | F-18



F-1











REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM



To the Partners

Blessed Rock of El Monte



We have audited the accompanying
balance sheet of Blessed Rock of El Monte, a California Limited Partnership, as of December 31, 2010 and the related statements
of operations, changes in partners’ capital and cash flows for the year then ended. These financial statements are the responsibility
of the partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audit.



We conducted our audit in accordance
with the Standards of the Public Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The partnership
has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.



In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of Blessed Rock of El Monte as of December 31,
2010 and the results of its operations, changes in partners’ capital and cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.



|                    | 
|------------------- | 
|Metairie, Louisiana | 
|February 4, 2011    | 



3421 N. Causeway
Blvd., Suite 701. Metairie, LA 70002 Telephone (504) 837-0770 . Fax (504) 837-7102

Member of

IGAF Worldwide
- Member Firms in Principal Cities . PCAOB - Public Company Accounting Oversight Board

AICPA Centers
.. Center for Public Company Audit Firms (SEC)

Governmental Audit Quality Center
.. Private Companies Practice Section (PCPS)



F-2







BLESSED ROCK
OF EL MONTE



BALANCE SHEET



DECEMBER
31, 2010



|ASSETS                                    |  |   |            |  
|----------------------------------------- |  | - | ---------- | -
|                                          |  |   |            |  
|Current Assets                            |  |   |            |  
|Cash                                      |  | $ | 465,732    |  
|Prepaid Operational Asset Management Fees |  |   | 8,220      |  
|Prepaid Expenses                          |  |   | 40,979     |  
|                                          |  |   |            |  
|Total Current Assets                      |  |   | 514,931    |  
|                                          |  |   |            |  
|Restricted Reserves and Escrows           |  |   |            |  
|Tax and Insurance Escrow                  |  |   | 10,618     |  
|Replacement Reserve                       |  |   | 185,580    |  
|Tenant Security Deposits                  |  |   | 24,109     |  
|Total Restricted Reserves and Escrows     |  |   | 220,307    |  
|                                          |  |   |            |  
|Property and Equipment                    |  |   |            |  
|                                          |  |   |            |  
|Land and Improvements                     |  |   | 1,333,738  |  
|Buildings                                 |  |   | 8,158,504  |  
|Furniture and Equipment                   |  |   | 179,205    |  
|Total Property and Equipment              |  |   | 9,671,447  |  
|Less: Accumulated Depreciation            |  |   | (2,828,737 | )
|Property and Equipment, Net               |  |   | 6,842,710  |  
|                                          |  |   |            |  
|Other Assets                              |  |   |            |  
|                                          |  |   |            |  
|Deferred Fees, Net                        |  |   | 15,083     |  
|                                          |  |   |            |  
|TOTAL ASSETS                              |  | $ | 7,593,031  |  



See auditor’s report and accompanying
notes to the financial statements.





F-3







BLESSED ROCK
OF EL MONTE



BALANCE SHEET



DECEMBER
31, 2010



|LIABILITIES AND PARTNERS’ CAPITAL       |  |   |           |  
|--------------------------------------- |  | - | --------- | -
|                                        |  |   |           |  
|Current Liabilities                     |  |   |           |  
|Accounts Payable                        |  | $ | 3,062     |  
|Accrued Management Fees                 |  |   | 4,043     |  
|Accrued Interest                        |  |   | 12,872    |  
|Accrued Expenses                        |  |   | 13,700    |  
|Current Portion Mortgage Payable        |  |   | 65,887    |  
|Prepaid Rents                           |  |   | 63        |  
|                                        |  |   |           |  
|Total Current Liabilities               |  |   | 99,627    |  
|                                        |  |   |           |  
|Deposits & Prepayment Liabilities       |  |   |           |  
|Tenants’ Security Deposits              |  |   | 23,955    |  
|                                        |  |   |           |  
|Long Term Liabilities                   |  |   |           |  
|Mortgage Payable                        |  |   | 2,191,026 |  
|Less: Current Portion                   |  |   | (65,887   | )
|Notes Payable                           |  |   | 251,515   |  
|Grant Payable                           |  |   | 400,000   |  
|Accrued Interest, Long Term             |  |   | 236,000   |  
|                                        |  |   |           |  
|Total Long Term Liabilities             |  |   | 3,012,654 |  
|                                        |  |   |           |  
|Total Liabilities                       |  |   | 3,136,236 |  
|                                        |  |   |           |  
|Partners’ Equity                        |  |   |           |  
|                                        |  |   |           |  
|Partners’ Equity                        |  |   | 4,456,795 |  
|                                        |  |   |           |  
|TOTAL LIABILITIES AND PARTNERS’ CAPITAL |  | $ | 7,593,031 |  



See auditor’s
report and accompanying notes to the financial statements.



F-4







BLESSED ROCK
OF EL MONTE



STATEMENT
OF OPERATIONS



DECEMBER
31, 2010



|Revenue                         |  |   |          |  
|------------------------------- |  | - | -------- | -
|Rental Income                   |  | $ | 978,070  |  
|Tenant Charges                  |  |   | 1,785    |  
|Miscellaneous revenue           |  |   | 11,954   |  
|                                |  |   |          |  
|Total Revenue                   |  |   | 991,809  |  
|                                |  |   |          |  
|Operating expenses              |  |   |          |  
|General and administrative      |  |   | 72,703   |  
|Management fee                  |  |   | 48,614   |  
|Utilities                       |  |   | 64,911   |  
|Repairs and maintenance         |  |   | 147,707  |  
|Tax and insurance               |  |   | 93,287   |  
|Financial expenses              |  |   | 259,844  |  
|                                |  |   |          |  
|Total Operating Expenses        |  |   | 687,066  |  
|                                |  |   |          |  
|Operating Income (Loss)         |  |   | 304,743  |  
|                                |  |   |          |  
|Other Income and (Expenses)     |  |   |          |  
|Interest income                 |  |   | 395      |  
|Depreciation and amortization   |  |   | (236,021 | )
|                                |  |   |          |  
|Net Other Income and (Expenses) |  |   | 235,626  |  
|                                |  |   |          |  
|Net Income (Loss)               |  | $ | 69,117   |  



See auditor’s
report and accompanying notes to the financial statements.



F-5







BLESSED ROCK
OF EL MONTE



STATEMENT
OF CHANGES IN PARTNERS’ CAPITAL



DECEMBER
31, 2010



|                            |  |          |         |   |          |   |           | Total     | 
|--------------------------- |  | -------- | ------- | - | -------- | - | --------- | --------- | 
|                            |  | General  |         |   | Limited  |   |           | Partners’ | 
|                            |  | Partners |         |   | Partners |   |           | Capital   | 
|                            |  |          |         |   |          |   |           |           | 
|Balance - January 1, 2010   |  | $        | (40,999 | ) |          | $ | 4,497,227 |           | 
|                            |  |          |         |   |          |   |           |           | 
|Net Income (Loss)           |  |          | 691     |   |          |   | 68,426    |           | 
|                            |  |          |         |   |          |   |           |           | 
|Distributions to Members    |  |          | (34,275 | ) |          |   | (34,275   | )         | 
|                            |  |          |         |   |          |   |           |           | 
|Balance - December 31, 2010 |  | $        | (74,583 | ) |          | $ | 4,531,378 |           | 
|                            |  |          |         |   |          |   |           |           | 
|Percentages                 |  |          | 1       | % |          |   | 99        | %         | 



See auditor’s
report and accompanying notes to the financial statements.



F-6







BLESSED ROCK
OF EL MONTE



STATEMENT
OF CASH FLOWS



DECEMBER
31, 2010



|Cash flows from operating activities:                                |  |   |          |  
|-------------------------------------------------------------------- |  | - | -------- | -
|Net Income (Loss)                                                    |  | $ | 69,117   |  
|Adjustments to reconcile net income (loss) to net cash               |  |   |          |  
|provided by operating activities:                                    |  |   |          |  
|Depreciation and amortization                                        |  |   | 236,021  |  
|(Increase) decrease in prepaid operational asset management fees     |  |   | (8,220   | )
|(Increase) decrease in prepaid expenses                              |  |   | 137      |  
|Increase (decrease) in accounts payable                              |  |   | (938     | )
|Increase (decrease) in security deposits payable                     |  |   | 272      |  
|Increase (decrease) in accrued management fee                        |  |   | (122     | )
|Increase (decrease) in accrued property tax exemption compliance fee |  |   | (1,591   | )
|Increase (decrease) in prepaid rent                                  |  |   | (5,299   | )
|Increase (decrease) in accrued interest payable                      |  |   | 18,230   |  
|Total adjustments                                                    |  |   | 238,490  |  
|Net cash provided (used) by operating activities                     |  |   | 307,607  |  
|                                                                     |  |   |          |  
|Cash flows from investing activities:                                |  |   |          |  
|Purchase of property and equipment                                   |  |   | (72,526  | )
|(Deposit) withdrawal tax and insurance escrows                       |  |   | (1,088   | )
|(Deposit) withdrawal reserve                                         |  |   | (20,829  | )
|(Deposit) withdrawal security deposit account                        |  |   | (264     | )
|Net cash provided (used) by investing activities                     |  |   | (94,707  | )
|                                                                     |  |   |          |  
|Cash flows from financing activities:                                |  |   |          |  
|Principal payments on mortgage payable                               |  |   | (61,414  | )
|Principal payments on notes payable                                  |  |   | (182,509 | )
|Accrued interest payment - notes payable                             |  |   | (3,702   | )
|Distributions                                                        |  |   | (68,550  | )
|Net cash provided (used) by financing activities                     |  |   | (316,175 | )
|                                                                     |  |   |          |  
|Net increase (decrease) in cash and equivalents                      |  |   | (103,275 | )
|Cash and equivalents, beginning of year                              |  |   | 569,007  |  
|                                                                     |  |   |          |  
|Cash and equivalents, end of year                                    |  | $ | 465,732  |  
|                                                                     |  |   |          |  
|Supplemental disclosures of cash flow information:                   |  |   |          |  
|Cash paid during the year for:                                       |  |   |          |  
|                                                                     |  |   |          |  
|Interest Expense                                                     |  | $ | 160,540  |  



See auditor’s report and accompanying
notes to the financial statements.



F-7







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2010



NOTE A - NATURE OF OPERATIONS



Blessed Rock of El Monte, a California
Limited Partnership, (“the Partnership”) was organized on February 14, 1996 to acquire, construct, own and operate
a 137-unit apartment project known as Blessed Rock of El Monte (“the Project”) located in El Monte, California (“the
Project”). The term of the Partnership shall extend until December 31, 2047, unless sooner terminated as provided in the
Partnership Agreement.



The Project is eligible and qualifies
for low-income housing tax credits in accordance with Section 42 of the Internal Revenue Code of 1986. Generally, the low-income
housing credit is computed as a percentage of the qualified basis of the property including rehabilitation and is allowed annually
during a period of ten years commencing with the years the building is placed into service. In addition, in order to qualify for
the credit, the Partnership must conform with certain occupancy standards as set forth in the Code.



The General Partner is Everland,
Inc. The Managing General Partner is Community Housing Assistance Program, Inc., a non-profit corporation. The Limited Partners
are WNC Housing Tax Credit Fund V, L.P., Series 3, and WNC Housing Tax Credit Fund V, L.P., Series 4. The Special Limited Partner
is WNC Housing, L.P.



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES



Basis of Accounting



The Partnership prepares its financial
statements on the accrual basis of accounting consistent with accounting principles generally accepted in the United States of
America.



Cash and Cash Equivalents



Cash and cash equivalents include
all cash balances and highly liquid investments with a maturity of three months or less at the acquisition date. At December 31,
2010, cash and cash equivalents consist of two unrestricted checking accounts and a petty cash fund. Restricted cash is not considered
cash equivalents.



Tenant Accounts Receivable and
Bad Debt Expense



Tenant rent charges for the current
month are due on the first of the month. Tenants who are evicted or move-out are charged with damages or cleaning fees, if applicable.
Tenant receivable consists of amounts due from rental income, security deposit or the charges for damages and cleaning fees. The
Partnership does not accrue interest on the tenant receivable balances.



F-8







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2010



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)



Tenant receivables are charged to
bad debt expense when they are determined to be uncollectible based upon a periodic review or the accounts by management. Accounting
principles generally accepted in the United States of America require that the allowance method be used to recognize bad debts;
however, the effect of using the direct write-off method is not materially different from the results that would have been obtained
under the allowance method. Bad debts expensed for the year ended December 31, 2010 totaled $185.



Property and Equipment



Property and equipment are recorded
at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated
service lives using the straight-line method. Maintenance and repairs are charged to expense as incurred; major renewals and betterments
are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed
from the accounts, and any gain or loss is included in income. The rental property is depreciated over estimated service lives
as follows:



|Buildings               | 27.5 - 40 years | Straight-Line
|----------------------- | --------------- | -------------
|Land Improvements       | 15 - 20 years   | Straight-Line
|Furnishings & Equipment | 5 - 10 years    | Straight-Line



Impairment of Long-Lived Assets



In accordance with Accounting Standards
Codification 360-10-05-4, Accounting for the Impairment or Disposal of Long-Lived Assets, the partnership reviews its rental
property for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recovered.
If the fair value is less than the carrying amount for the asset, an impairment loss is recognized for the difference. No impairment
loss has been recognized during the year ended December 31, 2010.



Other Assets



Financing costs are amortized over
the term of the mortgage loan using the straight-line method. Generally accepted accounting principles require that the effective
yield method be used to amortize financing costs; however, the effect of using the straight-line method is not material to the
financial statements for the year ended December 31, 2010.



Property Taxes



Property taxes are expensed in the
year of lien on the property such that twelve months of expense is charged to operations each period.



F-9







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2010



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)



Rental Income



Rental income is recognized as rentals
become due. Rental payments received in advance are deferred until earned. All leases between the Partnership and the tenants of
the property are operating leases.



Fair Value



In 2009, the Partnership adopted
the Fair Value Measurement topic of the FASB Accounting Standards Codification(ASC) 820 which provides guidance for assets
and liabilities which are required to be measured at fair value and requires expanded disclosure for fair value measurement. The
standard applies whenever other standards require or permit assets or liabilities to be measured at fair value and does not require
any new fair value measurements. The implementation of Fair Value Measurement did not have a material impact on the Partnership’s
financial statements for the year ended December 31, 2010.



The standard establishes a fair
value hierarchy based on three levels:



|● | Level 1- Quoted prices in active markets for identical assets or liabilities.                   
|- | ------------------------------------------------------------------------------------------------
|● | Level 2- Quoted prices for similar assets or liabilities in active markets.                     
|● | Level 3- Unobservable inputs for the asset or liability based on the best available information.



Affordable housing projects operate
in a heavily regulated environment which typically includes restrictions such as land use restrictions, rent restrictions, government
subsidies in the form of rental assistance through either rent subsidy or tenant vouchers, subsidized interest mortgage interest
rates, and restrictions on selling or transferring the projects.



A summary of the methods and significant
assumptions used to estimate the fair values of financial instruments is as follows:



Short-term financial instruments
- The fair value of short-term financial instruments, including cash and cash equivalents, accounts receivable, accounts payable
and accrued liabilities approximate the carrying value in the accompanying financial statements due to the short maturity of such
instruments.



Long-term liabilities - The fair
value of long-term liabilities approximates the carrying value in the accompanying financial statements based on current borrowing
rates.



F-10







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2010



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)



Income Taxes



Income taxes on Partnership income
are levied on the partners at the partner level. Accordingly, all profits and losses of the Partnership are recognized by each
partner on its respective tax return. The Partnership has adopted provisions of FASB Accounting Standards Codification Topic ASC
740-10 (previously Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes), on January 1, 2009. The implementation
of this standard had no impact on the financial statements. As of both the date of adoption, and as of December 31, 2010, the unrecognized
tax benefit accrual was zero. The Partnership will recognize future accrued interest and penalties related to unrecognized tax
benefits in income tax expense, if incurred. The Partnership’s tax filings are subject to audit by various taxing authorities,
and the open audit periods are 2007 through 2009.



Use of Estimates



The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ
from those estimates.



Concentration of Credit Risk



The Partnership deposits its cash
in financial institutions. At times, the account balances may exceed the institution’s federally insured limits. The Partnership
has not experienced any losses in such accounts.



The Partnership’s sole asset
is the apartment complex. The Partnership’s operations are concentrated in the affordable housing real estate market. In
addition, the Partnership operates in a heavily regulated environment. The operations of the Partnership are subject to the administrative
directives, rules and regulations of federal, state and local regulatory agencies. Such administrative directives, rules and regulations
are subject to change by an act of Congress. Such changes may occur with little notice or inadequate funding to pay for the related
cost, including the additional administrative burden, to comply with a change.



F-11







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2010



NOTE C - INTANGIBLE ASSETS



Intangible assets at December 31,
2010 consist of financing costs which were net of accumulated amortization of $90,958. Amortization expense for the same year ended
was $6,899. Estimated aggregated amortization expense for each of the next three years is:



| | 2011  |  |  | $ | 6,899  | 
| | ----- |  |  | - | ------ | 
| | 2012  |  |  |   | 6,899  | 
| | 2013  |  |  |   | 1,285  | 
| |       |  |  |   |        | 
| | Total |  |  | $ | 15,083 | 



NOTE D - MORTGAGE PAYABLE



The Partnership has entered into
a mortgage loan agreement in the original amount of $2,720.000. The terms are set forth below:



|a. |  | An interest rate of 7.05% per annum;
|-- |  | ------------------------------------

|b. |  | Monthly principal and interest payments of $18,188;
|-- |  | ---------------------------------------------------

|c. |  | A balloon payment of $2,017,000 payable June 1, 2013;
|-- |  | -----------------------------------------------------

|d. |  | A maturity date of June 1, 2013; and
|-- |  | ------------------------------------

|e. |  | The funding of a reserve fund for replacing assets of the Project.
|-- |  | ------------------------------------------------------------------



Mortgage loan principal payments
for each of the next three years are estimated as follows:



| | 2011 |  |  | $ | 65,887    | 
| | ---- |  |  | - | --------- | 
| | 2012 |  |  |   | 70,686    | 
| | 2013 |  |  |   | 2,054,453 | 
| |      |  |  |   |           | 
| |      |  |  | $ | 2,191,026 | 



The liability of the Partnership
under the mortgage loan is limited to the underlying value of the property and equipment collateral in addition to other amounts
deposited with the lender. For the year ended December 31, 2010, interest expense was $156,477 and accrued interest was $12,872.



Replacement Reserve



In accordance with the Partnership
Agreement, the Partnership is required to establish and maintain a replacement reserve account for the purpose of capital improvements.
The reserve account is to be funded in the amount of $20,544 per year. As of December 31, 2010, the balance of the replacement
reserve was $185,580.



F-12







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2010



NOTE E - NOTES PAYABLE



Notes payable at December 31, 2010
consist of the following:



A 4% note payable in the amount
of $250,878 with a term of 15 years, is payable to El Monte Community Redevelopment Agency (“RDA”), secured by a deed
of trust and rents from the Project. Payments of interest and principal are made annually beginning on April 1, 2003, and thereafter
each April 1, until the outstanding principal balance of note and all accrued interest are paid in full. Payments are to be paid
from 50% of the residual rental income, as defined in the promissory note agreement. Payments, if any, are applied first to accrued
interest and second to principal on the note. During 2010, all accrued interest and principal was paid in full. As of December
31, 2010, the balance of the note payable and the accrued interest on the note was $0.



A 1% note payable in the amount
of $430,647 with a term of 30 years beginning April 3, 1996, is 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 each April 3 for the following six succeeding
years, payments of $4,239 were due. Payments increase to $8,478 April 3, 2004 and continue for the next seven succeeding years.
On April 3, 2012, payments increase to $32,534 and continue for 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 are applied first to interest. As
of December 31, 2010, the balance of the development fee note payable was $251,515. At December 31, 2010, accrued interest on the
note was $0.



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. The 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, 2010 was $236,000.



NOTE F - RELATED PARTY TRANSACTIONS



Operational Asset Management
Fee



The Partnership Agreement provides
for an asset management fee equal to $10 per unit per month, to accrue to the Managing General Partner and is payable based on
the cash flow provisions of the Partnership Agreement. The fee to be paid is cumulative if not paid each year. During the year
ended December 31, 2010, an operational asset management fee of $16,440 was expensed, of which $8,220 remained payable at year-end.



F-13







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2010



NOTE F - RELATED PARTY TRANSACTIONS
(CONTINUED)



Asset Management Fee



The Partnership Agreement provides
for am asset management fee equal to 30% of Remaining Cash, as defined, to accrue to the Limited Partner and is payable based on
the cash flow provisions of the Partnership Agreement. The fee is cumulative if not paid each year. No asset management fee was
expensed and paid during the year ended December 31, 2010.



Incentive Management Fee



The Partnership shall pay to the
General Partner an incentive management fee equal to 40% of Remaining Cash, as defined. The incentive management fee shall be paid
from available cash flow and does not accrue from year to year. For the year ended December 31, 2010, an incentive management fee
of $45,700 was expensed and paid.



Reporting Fee



The Partnership shall pay to the
Limited Partner a reporting fee equal to 15% of the Cash Flow from Operations, as defined, but should not be less than $6,000 for
each Limited Partner. The reporting fee shall be paid from available cash flow and accrued from year to year. During the year ended
December 31, 2010, a reporting fee of $20,162 was earned and paid.



Property Tax Exemption Compliance
Fee



Pursuant to the Partnership Agreement,
the Partnership shall pay to the Managing General Partner an annual fee of $1,500 for ensuring the Partnership is in compliance
with the Property Tax Exemption requirements. The annual fee shall be increased by 3% each year, beginning in 2007 and continuing
each year thereafter. For the year ended December 31, 2010, $1,639 was expensed of which $0 remained payable at year-end.



NOTE G - MANAGEMENT FEE



Effective July 19, 2007, the Partnership
entered into an agreement with Professional Property Management, LLC (“PPM”), an unrelated party, in connection with
the management of the Project’s rental operations. In accordance with the management agreement, PPM earns fees of 5% of monthly
gross collections. Fees earned for services rendered in connection with the leasing and operation of the Project amounted to $48,614
for the year ended December 31, 2010. At December 31, 2010, $4,043 in management fees remained payable.



F-14







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2010





NOTE H - PROFITS, LOSSES AND
DISTRIBUTIONS



In general, income (loss), tax credits
and cash flow from operations are allocated 98.99% to the Limited Partners, .01% to the Special Limited Partner, .99% to the General
Partner and .01% to the Managing General Partner.



Income (loss) and cash flow from
sources other than operations will be allocated pursuant to the terms of the Partnership Agreement regarding such.



NOTE I – ADVERTISING



The Partnership expenses advertising
costs as they are incurred. Advertising expenses for the year ended December 31, 2010 amounted to $840.



NOTE J – CONTINGENCIES



Housing Tax Credits



As incentive for investment equity,
the Partnership applied for and received an allocation certificate for housing tax credits established by the Tax Reform Act of
1986. To qualify for the tax credits, the Partnership must meet certain requirements, including attaining a qualified basis sufficient
to support the credit allocation. In addition, tenant eligibility and rental charges are restricted in accordance with Internal
Revenue Code Section 42. Management has certified that each tax credit unit has met these qualifications to allow the credits allocated
to each unit to be claimed. Compliance with these regulations must be maintained in each of the ten consecutive years of the compliance
period. Failure to maintain compliance with occupant eligibility, unit gross rent, or to correct noncompliance within a reasonable
time period could result in recapture of previously claimed tax credits plus interest.



NOTE K - SUBSEQUENT EVENTS



FASB ASC 855, Subsequent Events,
addresses events which occur after the balance sheet date but before the issuance of financial statements. An entity must record
the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose
but not record the effects of subsequent events which provide evidence about conditions that existed after the balance sheet date.
Additionally, Topic 855 requires disclosure relative to the date through which subsequent events have been evaluated and whether
that is the date on which the financial statements were issued or were available to be issued. Management evaluated the activity
of Blessed Rock of El Monte through February 4, 2011, the date the financial statements were issued, and concluded that no subsequent
events have occurred that would require recognition in the Financial Statements or disclosure in the Notes to the Financial Statements.



F-15



































ACCOMPANYING INFORMATION































F-16











INDEPENDENT
AUDITOR’S REPORT ON INFORMATION

ACCOMPANYING
THE BASIC FINANCIAL STATEMENTS



To the Partners

Blessed Rock of El Monte



Our audit of the 2010
financial statements presented in the preceding section of this report was for the purpose of forming an opinion on such financial
statements taken as a whole. The accompanying information shown on the following pages is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation
to the 2010 basic financial statements taken as a whole.



|                     | 
|-------------------- | 
|Metairie Louisiana   | 
|February
    4, 2011 | 



3421 N. Causeway
Blvd., Suite 701. Metairie, LA 70002 Telephone (504) 837-0770 . Fax (504) 837-7102

Member of

IGAF Worldwide
- Member Firms in Principal Cities . PCAOB - Public Company Accounting Oversight Board

AICPA Centers
.. Center for Public Company Audit Firms (SEC)

Governmental Audit Quality Center
.. Private Companies Practice Section (PCPS)



F-17







BLESSED
ROCK OF EL MONTE



SUPPLEMENTAL
INFORMATION



FOR THE
YEAR ENDED DECEMBER 31, 2010



|A. SCHEDULES OF EXPENSES    |  |   |         | 
|--------------------------- |  | - | ------- | 
|                            |  |   | 2010    | 
|                            |  |   |         | 
|General and Administrative: |  |   |         | 
|Administrative - Salaries   |  | $ | 35,260  | 
|Marketing and advertising   |  |   | 840     | 
|Audit Expense               |  |   | 6,033   | 
|Training                    |  |   | 152     | 
|Credit Reports              |  |   | 274     | 
|Office Supplies             |  |   | 7,030   | 
|Telephone Expenses          |  |   | 9,405   | 
|Social Programming          |  |   | 13,492  | 
|Bad Debts                   |  |   | 185     | 
|Miscellaneous               |  |   | 32      | 
|                            |  |   |         | 
|Total                       |  | $ | 72,703  | 
|                            |  |   |         | 
|Utilities:                  |  |   |         | 
|Electricity                 |  | $ | 18,535  | 
|Gas                         |  |   | 16,481  | 
|Water & Sewer               |  |   | 29,895  | 
|                            |  |   |         | 
|Total                       |  | $ | 64,911  | 
|                            |  |   |         | 
|Repairs and Maintenance:    |  |   |         | 
|Maintenance - Contracts     |  | $ | 50,054  | 
|Maintenance - Salaries      |  |   | 15,992  | 
|Maintenance - Supplies      |  |   | 12,322  | 
|Painting and Decorating     |  |   | 31,481  | 
|Garbage and Trash Removal   |  |   | 17,395  | 
|Exterminating               |  |   | 1,750   | 
|Grounds Maintenance         |  |   | 18,713  | 
|                            |  |   |         | 
|Total                       |  | $ | 147,707 | 



F-18







BLESSED
ROCK OF EL MONTE



SUPPLEMENTAL
INFORMATION



FOR THE
YEAR ENDED DECEMBER 31, 2010



|                                             |  | 2010 |        
|-------------------------------------------- |  | ---- | -------
|Tax and Insurance:                           |  |      |        
|Real Estate Taxes                            |  | $    | 25,423 
|Property & Liability Insurance               |  |      | 42,499 
|Payroll Taxes                                |  |      | 9,937  
|Worker’s Compensation                        |  |      | 10,146 
|Health Insurance and other Employee Benefits |  |      | 2,858  
|Other Taxes and Insurance                    |  |      | 2,424  
|                                             |  |      |        
|Total                                        |  | $    | 93,287 
|                                             |  |      |        
|Financial Expenses:                          |  |      |        
|Interest on Mortgages                        |  | $    | 175,068
|Service Charges                              |  |      | 748    
|Bank Fees                                    |  |      | 87     
|Reporting Fee                                |  |      | 20,162 
|Operational Asset Management Fee             |  |      | 16,440 
|Property Tax Exemption Compliance Fee        |  |      | 1,639  
|Partnership Management Fee                   |  |      | 45,700 
|                                             |  |      |        
|Total                                        |  | $    | 259,844





F-19







FINANCIAL STATEMENTS AND

INDEPENDENT AUDITOR’S REPORT



BLESSED ROCK OF EL MONTE



DECEMBER 31, 2011











BLESSED ROCK OF EL MONTE



TABLE OF CONTENTS



|                                                                                        |  | PAGE
|--------------------------------------------------------------------------------------- |  | ----
|                                                                                        |  |     
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                 |  | F-2 
|                                                                                        |  |     
|FINANCIAL STATEMENTS:                                                                   |  |     
|                                                                                        |  |     
|BALANCE SHEET                                                                           |  | F-3 
|                                                                                        |  |     
|STATEMENT OF OPERATIONS                                                                 |  | F-5 
|                                                                                        |  |     
|STATEMENT OF CHANGES IN PARTNERS’ CAPITAL                                               |  | F-6 
|                                                                                        |  |     
|STATEMENT OF CASH FLOWS                                                                 |  | F-7 
|                                                                                        |  |     
|NOTES TO FINANCIAL STATEMENTS                                                           |  | F-8 
|                                                                                        |  |     
|ACCOMPANYING INFORMATION:                                                               |  |     
|                                                                                        |  |     
|INDEPENDENT AUDITOR’S REPORT ON INFORMATION ACCOMPANYING THE BASIC FINANCIAL STATEMENTS |  | F-17
|                                                                                        |  |     
|SUPPLEMENTAL INFORMATION                                                                |  | F-18



F-1











REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM



To the Partners 
Blessed Rock of El Monte



We have audited the
accompanying balance sheet of Blessed Rock of El Monte, a California Limited Partnership, as of December 31, 2011 and the related
statements of operations, changes in partners’ capital and cash flows for the year then ended. These financial statements
are the responsibility of the partnership’s management. Our responsibility is to express an opinion on these financial statements
based on our audit.



We conducted our audit
in accordance with the Standards of the Public Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.



In our opinion, the
financial statements referred to above present fairly, in all material respects, the financial position of Blessed Rock of El Monte
as of December 31, 2011 and the results of its operations, changes in partners’ capital and cash flows for the year then
ended in conformity with accounting principles generally accepted in the United States of America.







Metairie, Louisiana

January 27, 2012



3421 N. Causeway Blvd., Suite 701. Metairie,
LA 70002 Telephone (504) 837-0770 . Fax (504) 837-7102

Member of

IGAF Worldwide - Member Firms in Principal
Cities . PCAOB - Public Company Accounting Oversight Board
 AICPA Centers . Center for Public Company Audit Firms (SEC)
 Governmental
Audit Quality Center . Private Companies Practice Section (PCPS)



F-2







BLESSED ROCK OF EL MONTE



BALANCE SHEET



DECEMBER 31, 2011



|ASSETS                                    |  |   |            |  
|----------------------------------------- |  | - | ---------- | -
|                                          |  |   |            |  
|Current Assets                            |  |   |            |  
|Cash                                      |  | $ | 504,935    |  
|Prepaid Operational Asset Management Fees |  |   | 8,220      |  
|Total Current Assets                      |  |   | 513,155    |  
|                                          |  |   |            |  
|Restricted Reserves and Escrows           |  |   |            |  
|Tax and Insurance Escrow                  |  |   | 51,562     |  
|Replacement Reserve                       |  |   | 156,955    |  
|Tenant Security Deposits                  |  |   | 24,208     |  
|Total Restricted Reserves and Escrows     |  |   | 232,725    |  
|                                          |  |   |            |  
|Property and Equipment                    |  |   |            |  
|Land and Improvements                     |  |   | 1,333,738  |  
|Buildings                                 |  |   | 8,158,505  |  
|Furniture and Equipment                   |  |   | 229,170    |  
|Total Property and Equipment              |  |   | 9,721,413  |  
|Less: Accumulated Depreciation            |  |   | (3,059,645 | )
|Property and Equipment, Net               |  |   | 6,661,768  |  
|                                          |  |   |            |  
|Other Assets                              |  |   |            |  
|Deferred Fees, Net                        |  |   | 8,184      |  
|                                          |  |   |            |  
|TOTAL ASSETS                              |  | $ | 7,415,832  |  



See auditor’s report and accompanying notes to the
financial statements.



F-3







BLESSED ROCK OF EL MONTE



BALANCE SHEET



DECEMBER 31, 2011



|LIABILITIES AND PARTNERS’ CAPITAL       |  |   |           |  
|--------------------------------------- |  | - | --------- | -
|Current Liabilities                     |  |   |           |  
|Accounts Payable                        |  | $ | 3,231     |  
|Accrued Management Fees                 |  |   | 4,071     |  
|Accrued Interest                        |  |   | 12,485    |  
|Accrued Expenses                        |  |   | 13,700    |  
|Current Portion Mortgage Payable        |  |   | 70,686    |  
|Prepaid Rents                           |  |   | 742       |  
|Total Current Liabilities               |  |   | 104,915   |  
|                                        |  |   |           |  
|Deposits & Prepayment Liabilities       |  |   |           |  
|Tenants’ Security Deposits              |  |   | 24,032    |  
|                                        |  |   |           |  
|Long Term Liabilities                   |  |   |           |  
|Mortgage Payable                        |  |   | 2,125,140 |  
|Less: Current Portion                   |  |   | (70,686   | )
|Notes Payable                           |  |   | 79,225    |  
|Grant Payable                           |  |   | 400,000   |  
|Accrued Interest, Long Term             |  |   | 252,000   |  
|Total Long Term Liabilities             |  |   | 2,785,679 |  
|                                        |  |   |           |  
|Total Liabilities                       |  |   | 2,914,626 |  
|                                        |  |   |           |  
|Partners’ Equity                        |  |   |           |  
|Partners’ Equity                        |  |   | 4,501,206 |  
|                                        |  |   |           |  
|TOTAL LIABILITIES AND PARTNERS’ CAPITAL |  | $ | 7,415,832 |  



See auditor’s report and accompanying notes to the
financial statements.



F-4







BLESSED ROCK OF EL MONTE



STATEMENT OF OPERATIONS



DECEMBER 31, 2011



|Revenue                               |  |   |          |  
|------------------------------------- |  | - | -------- | -
|Rental Income                         |  | $ | 973,875  |  
|Tenant Charges                        |  |   | 1,410    |  
|Laundry and Vending                   |  |   | 11,549   |  
|Total Revenue                         |  |   | 986,834  |  
|Operating expenses                    |  |   |          |  
|General and administrative            |  |   | 130,360  |  
|Utilities                             |  |   | 64,585   |  
|Repairs and maintenance               |  |   | 160,813  |  
|Tax and insurance                     |  |   | 97,331   |  
|Interest on financing                 |  |   | 168,816  |  
|Total Operating Expenses              |  |   | 621,905  |  
|Operating Income (Loss)               |  |   | 364,929  |  
|Other Income and (Expenses)           |  |   |          |  
|Interest income                       |  |   | 268      |  
|Depreciation and amortization         |  |   | (237,808 | )
|Operational asset management fee      |  |   | (16,440  | )
|Property tax exemption compliance fee |  |   | (1,688   | )
|Reporting fee                         |  |   | (21,140  | )
|Incentive management fee              |  |   | (12,000  | )
|Net Other Income and (Expenses)       |  |   | 288,808  |  
|Net Income (Loss)                     |  | $ | 76,121   |  



See auditor’s report and accompanying
notes to the financial statements.



F-5







BLESSED ROCK OF EL MONTE



STATEMENT OF CHANGES IN PARTNERS’
CAPITAL



DECEMBER 31, 2011



|                            |  | General Partners |         |   | Limited Partners |   |           | Total Partners’ Capital | 
|--------------------------- |  | ---------------- | ------- | - | ---------------- | - | --------- | ----------------------- | 
|Balance - January 1, 2011   |  | $                | (74,583 | ) |                  | $ | 4,531,378 |                         | 
|                            |  |                  |         |   |                  |   |           |                         | 
|Net Income (Loss)           |  |                  | 761     |   |                  |   | 75,360    |                         | 
|                            |  |                  |         |   |                  |   |           |                         | 
|Distributions to Members    |  |                  | (15,855 | ) |                  |   | (15,855   | )                       | 
|                            |  |                  |         |   |                  |   |           |                         | 
|Balance - December 31, 2011 |  | $                | (89,677 | ) |                  | $ | 4,590,883 |                         | 
|                            |  |                  |         |   |                  |   |           |                         | 
|Percentages                 |  |                  | 1       | % |                  |   | 99        | %                       | 



See auditor’s report and accompanying notes
to the financial statements.



F-6







BLESSED ROCK OF EL MONTE



STATEMENT OF CASH FLOWS



DECEMBER 31, 2011



|Cash flows from operating activities:                                                    |  |   |          |  
|---------------------------------------------------------------------------------------- |  | - | -------- | -
|Net Income (Loss)                                                                        |  | $ | 76,121   |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |   |          |  
|Depreciation and amortization                                                            |  |   | 237,808  |  
|(Increase) decrease in prepaid expenses                                                  |  |   | 40,979   |  
|Increase (decrease) in accounts payable                                                  |  |   | 169      |  
|Increase (decrease) in security deposits payable                                         |  |   | 77       |  
|Increase (decrease) in accrued management fee                                            |  |   | 28       |  
|Increase (decrease) in prepaid rent                                                      |  |   | 678      |  
|Increase (decrease) in accrued interest payable                                          |  |   | 16,451   |  
|Total adjustments                                                                        |  |   | 296,190  |  
|Net cash provided (used) by operating activities                                         |  |   | 372,311  |  
|Cash flows from investing activities:                                                    |  |   |          |  
|Purchase of property and equipment                                                       |  |   | (49,966  | )
|(Deposit) withdrawal tax and insurance escrows                                           |  |   | (40,944  | )
|(Deposit) withdrawal reserve                                                             |  |   | 28,625   |  
|(Deposit) withdrawal security deposit account                                            |  |   | (99      | )
|Net cash provided (used) by investing activities                                         |  |   | (62,384  | )
|Cash flows from financing activities:                                                    |  |   |          |  
|Principal payments on mortgage payable                                                   |  |   | (65,886  | )
|Principal payments on notes payable                                                      |  |   | (172,290 | )
|Accrued interest payment - notes payable                                                 |  |   | (838     | )
|Distributions                                                                            |  |   | (31,710  | )
|Net cash provided (used) by financing activities                                         |  |   | (270,724 | )
|Net increase (decrease) in cash and equivalents                                          |  |   | 39,203   |  
|Cash and equivalents, beginning of year                                                  |  |   | 465,732  |  
|Cash and equivalents, end of year                                                        |  | $ | 504,935  |  
|Supplemental disclosures of cash flow information:                                       |  |   |          |  
|Cash paid during the year for: Interest Expense                                          |  | $ | 153,204  |  



See auditor’s report and accompanying
notes to the financial statements.



F-7







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2011



NOTE A - NATURE OF OPERATIONS



Blessed Rock of El Monte, a California
Limited Partnership, (“the Partnership”) was organized on February 14, 1996 to acquire, construct, own and operate
a 137-unit apartment project known as Blessed Rock of El Monte (“the Project”) located in El Monte, California (“the
Project”). The term of the Partnership shall extend until December 31, 2047, unless sooner terminated as provided in the
Partnership Agreement.



The Project is eligible and qualifies for
low-income housing tax credits in accordance with Section 42 of the Internal Revenue Code of 1986. Generally, the low-income housing
credit is computed as a percentage of the qualified basis of the property including rehabilitation and is allowed annually during
a period of ten years commencing with the years the building is placed into service. In addition, in order to qualify for the credit,
the Partnership must conform with certain occupancy standards as set forth in the Code.



The General Partner is Everland, Inc. The
Managing General Partner is Community Housing Assistance Program, Inc., a non-profit corporation. The Limited Partners are WNC
Housing Tax Credit Fund V, L.P., Series 3, and WNC Housing Tax Credit Fund V, L.P., Series 4. The Special Limited Partner is WNC
Housing, L.P.



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES



Basis of Accounting



The Partnership prepares its financial
statements on the accrual basis of accounting consistent with accounting principles generally accepted in the United States of
America.



Cash and Cash Equivalents



Cash and cash equivalents include all cash
balances and highly liquid investments with a maturity of three months or less at the acquisition date. At December 31, 2011, cash
and cash equivalents consist of two unrestricted checking accounts and a petty cash fund. Restricted cash is not considered cash
equivalents.



Tenant Accounts Receivable and Bad
Debt Expense



Tenant rent charges for the current month
are due on the first of the month. Tenants who are evicted or move-out are charged with damages or cleaning fees, if applicable.
Tenant receivable consists of amounts due from rental income, security deposit or the charges for damages and cleaning fees. The
Partnership does not accrue interest on the tenant receivable balances.



F-8







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2011



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)



Tenant receivables are charged to
bad debt expense when they are determined to be uncollectible based upon a periodic review or the accounts by management. Accounting
principles generally accepted in the United States of America require that the allowance method be used to recognize bad debts;
however, the effect of using the direct write-off method is not materially different from the results that would have been obtained
under the allowance method. Bad debts expensed for the year ended December 31, 2011 totaled $433.



Property and Equipment



Property and equipment are recorded
at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated
service lives using the straight-line method. Maintenance and repairs are charged to expense as incurred; major renewals and betterments
are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed
from the accounts, and any gain or loss is included in income. The rental property is depreciated over estimated service lives
as follows:



|Buildings               | 27.5 - 40 years | Straight-Line
|----------------------- | --------------- | -------------
|Land Improvements       | 15 - 20 years   | Straight-Line
|Furnishings & Equipment | 5 - 10 years    | Straight-Line



Impairment of Long-Lived Assets



In accordance with Accounting Standards
Codification 360-10-05-4,Accounting for the Impairment or Disposal of Long-Lived Assets, the partnership reviews its rental
property for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recovered.
If the fair value is less than the carrying amount for the asset, an impairment loss is recognized for the difference. No impairment
loss has been recognized during the year ended December 31, 2011.



Other Assets



The Partnership incurred financing
costs in connection with the mortgage. These costs have been capitalized and are being amortized using the straight-line method
over the 16-year terms of the mortgages. In addition, the Partnership incurred costs in connection with obtaining the tax credits,
which are being amortized over a term of 15 years. Generally accepted accounting principles require that the effective yield method
be used to amortize financing costs; however, the effect of using the straight-line method is not material to the financial statements
for the year ended December 31, 2011.



Property Taxes



Property taxes are expensed in the
year of lien on the property such that twelve months of expense is charged to operations each period.



F-9







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2011



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)



Rental Income



Rental income is recognized as rentals
become due. Rental payments received in advance are deferred until earned. All leases between the Partnership and the tenants of
the property are operating leases.



Income Taxes



The Partnership has elected to be treated
as a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable income,
deductions and tax credits are passed through to and are reported by its owners on their respective income tax returns. The Partnership’s
federal tax status as a pass-through entity is based on its legal status as a Partnership. Accordingly, the Partnership is required
to file and does file tax returns with the Internal Revenue Service and other taxing authorities. Accordingly, these financial
statements do not reflect a provision for income taxes and the Partnership has not other tax positions which it must consider for
disclosure. There has been no interest or penalties recognized in the statement of income or balance sheet for the year ended December
31, 2011. The Partnership’s tax filings are subject to audit by various taxing authorities, and the open audit periods are
2008 through 2010.



Fair Value



In 2009, the Partnership adopted the Fair
Value Measurement topic of the FASBAccounting Standards Codification (ASC) 820 which provides guidance for assets and liabilities
which are required to be measured at fair value and requires expanded disclosure for fair value measurement. The standard applies
whenever other standards require or permit assets or liabilities to be measured at fair value and does not require any new fair
value measurements. The implementation of Fair Value Measurement did not have a material impact on the financial statements for
the year ended December 31, 2011.



Accounting Standards Codification



The Financial Accounting Standards Board
(“FASB ASC”) became the sole authoritative source of generally accepted accounting principles in the United States
of America for periods ending after September 15, 2009. The FASB ASC incorporates all authoritative literature previously issued
by a standard setter. Adoption of the FASB ASC has no effect on the Partnership’s financial position, results from operations,
partners’ equity, or cash flows. References to the authoritative accounting literature in the notes to the financial statements
are to the FASB ASC.



Use of Estimates



The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ
from those estimates.



F-10







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2011



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)



Concentration of Credit Risk



The Partnership deposits its cash in financial
institutions. At times, the account balances may exceed the institution’s federally insured limits. The Partnership has not
experienced any losses in such accounts.



The Partnership’s sole asset is the
apartment complex. The Partnership’s operations are concentrated in the affordable housing real estate market. In addition,
the Partnership operates in a heavily regulated environment. The operations of the Partnership are subject to the administrative
directives, rules and regulations of federal, state and local regulatory agencies. Such administrative directives, rules and regulations
are subject to change by an act of Congress. Such changes may occur with little notice or inadequate funding to pay for the related
cost, including the additional administrative burden, to comply with a change.



NOTE C - INTANGIBLE ASSETS



Intangible assets are amortized over the
term of the mortgage loan using the straight line method and, at December 31, 2011, were net of accumulated amortization of $97,857.
Amortization expense for the same year ended was $6,899. Estimated aggregated amortization expense for each of the next two years
is:



|2012  |  | $ | 6,899 | 
|----- |  | - | ----- | 
|2013  |  |   | 1,285 | 
|Total |  | $ | 8,184 | 



NOTE D - MORTGAGE PAYABLE



The Partnership has entered into a mortgage
loan agreement in the original amount of $2,720.000. The terms are set forth below:



| | a. | An interest rate of 7.05% per annum;                              
| | -- | ------------------------------------------------------------------
| | b. | Monthly principal and interest payments of $18,188;               
| | c. | A balloon payment of $2,017,000 payable June 1, 2013;             
| | d. | A maturity date of June 1, 2013; and                              
| | e. | The funding of a reserve fund for replacing assets of the Project.



F-11







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2011



NOTE D - MORTGAGE PAYABLE (CONTINUED)



Mortgage loan principal payments for
each of the next two years are estimated as follows:



|2012 |  | $ | 70,686    | 
|---- |  | - | --------- | 
|2013 |  |   | 2,054,454 | 
|     |  | $ | 2,125,140 | 



The liability of the Partnership under
the mortgage loan is limited to the underlying value of the property and equipment collateral in addition to other amounts deposited
with the lender. For the year ended December 31, 2011, interest expense was $151,978 and accrued interest was $12,485.



Replacement Reserve



In accordance with the Partnership Agreement,
the Partnership is required to establish and maintain a replacement reserve account for the purpose of capital improvements. The
reserve account is to be funded in the amount of $20,544 per year. As of December 31, 2011, the balance of the replacement reserve
was $156,955.



NOTE E - NOTES PAYABLE



Notes payable at December 31, 2011
consist of the following:



A 4% note payable in the
amount of $250,878 with a term of 15 years, is payable to El Monte Community Redevelopment Agency (“RDA”),
secured by a deed of trust and rents from the Project. Payments of interest and principal are made annually beginning on
April 1, 2003, and thereafter each April 1, until the outstanding principal balance of note and all accrued interest are paid
in full. Payments are to be paid from 50% of the residual rental income, as defined in the promissory note agreement.
Payments, if any, are applied first to accrued interest and second to principal on the note. During 2010, all accrued
interest and principal was paid in full.



A 1% note payable in the amount of $430,647
with a term of 30 years beginning April 3, 1996, is 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 each April 3 for the following six succeeding years, payments
of $4,239 were due. Payments increase to $8,478 April 3, 2004 and continue for the next seven succeeding years. On April 3, 2012,
payments increase to $32,534 and continue for 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 are applied first to interest. As of December 31,
2011, the balance of the development fee note payable was $79,225. At December 31, 2011, accrued interest on the note was $0.



F-12







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2011



NOTE E - NOTES PAYABLE (CONTINUED)



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. The 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, 2011 was $252,000.



NOTE F - RELATED PARTY TRANSACTIONS



Operational Asset Management Fee



The Partnership Agreement provides for
an asset management fee equal to $10 per unit per month, to accrue to the Managing General Partner and is payable based on the
cash flow provisions of the Partnership Agreement. The fee to be paid is cumulative if not paid each year. During the year ended
December 31, 2011, an operational asset management fee of $16,440 was expensed and paid. $8,220 remained prepaid at year-end.



Incentive Management Fee



The Partnership shall pay to the General
Partner an incentive management fee equal to 40% of Remaining Cash, as defined. The incentive management fee shall be paid from
available cash flow and does not accrue from year to year. For the year ended December 31, 2011, an incentive management fee of
$12,000 was expensed and paid. No incentive management fee was payable at year-end.



Reporting Fee



The Partnership shall pay to the Limited
Partner a reporting fee equal to 15% of the Cash Flow from Operations, as defined, but should not be less than $6,000 for each
Limited Partner. The reporting fee shall be paid from available cash flow and accrued from year to year. During the year ended
December 31, 2011, a reporting fee of $21,140 was earned and paid, and $0 was payable at year-end.



Property Tax Exemption Compliance
Fee



Pursuant to the Partnership Agreement,
the Partnership shall pay to the Managing General Partner an annual fee of $1,500 for ensuring the Partnership is in compliance
with the Property Tax Exemption requirements. The annual fee shall be increased by 3% each year, beginning in 2007 and continuing
each year thereafter. For the year ended December 31, 2011, $1,688 was expensed and paid, and $0 was payable at year-end.



F-13







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2011



NOTE G - MANAGEMENT FEE



Effective July 19, 2007, the Partnership
entered into an agreement with Professional Property Management, LLC (“PPM”), an unrelated party, in connection with
the management of the Project’s rental operations. In accordance with the management agreement, PPM earns fees of 5% of monthly
gross collections. Fees earned for services rendered in connection with the leasing and operation of the Project amounted to $48,405
for the year ended December 31, 2011. At December 31, 2011, $4,071 in management fees remained payable.



NOTE H - PROFITS, LOSSES AND DISTRIBUTIONS



In general, income (loss), tax credits
and cash flow from operations are allocated 98.99% to the Limited Partners, .01% to the Special Limited Partner, .99% to the General
Partner and .01% to the Managing General Partner.



Income (loss) and cash flow from sources
other than operations will be allocated pursuant to the terms of the Partnership Agreement regarding such.



NOTE I - ADVERTISING



The Partnership expenses advertising costs
as they are incurred. Advertising expenses for the year ended December 31, 2011 amounted to $804.



NOTE J - CONTINGENCIES



Housing Tax Credits



As incentive for investment equity, the
Partnership applied for and received an allocation certificate for housing tax credits established by the Tax Reform Act of 1986.
To qualify for the tax credits, the Partnership must meet certain requirements, including attaining a qualified basis sufficient
to support the credit allocation. In addition, tenant eligibility and rental charges are restricted in accordance with Internal
Revenue Code Section 42. Management has certified that each tax credit unit has met these qualifications to allow the credits allocated
to each unit to be claimed. Compliance with these regulations must be maintained in each of the ten consecutive years of the compliance
period. Failure to maintain compliance with occupant eligibility, unit gross rent, or to correct noncompliance within a reasonable
time period could result in recapture of previously claimed tax credits plus interest.



F-14







BLESSED ROCK OF EL MONTE



NOTES TO FINANCIAL STATEMENTS



DECEMBER 31, 2011



NOTE K - SUBSEQUENT EVENTS



FASB ASC 855,Subsequent Events,
addresses events which occur after the balance sheet date but before the issuance of financial statements. An entity must record
the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose
but not record the effects of subsequent events which provide evidence about conditions that existed after the balance sheet date.
Additionally, Topic 855 requires disclosure relative to the date through which subsequent events have been evaluated and whether
that is the date on which the financial statements were issued or were available to be issued. Management evaluated the activity
of Blessed Rock of El Monte through January 27, 2012, the date the financial statements were issued, and concluded that no subsequent
events have occurred that would require recognition in the Financial Statements or disclosure in the Notes to the Financial Statements.



F-15



































ACCOMPANYING INFORMATION































F-16











INDEPENDENT
AUDITOR’S REPORT ON INFORMATION

ACCOMPANYING
THE BASIC FINANCIAL STATEMENTS



To the Partners

Blessed Rock of El Monte



Our audit of the 2011
financial statements presented in the preceding section of this report was for the purpose of forming an opinion on such financial
statements taken as a whole. The accompanying information shown on the following pages is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation
to the 2011 basic financial statements taken as a whole.



|                    | 
|------------------- | 
|Metairie, Louisiana | 
|January 27, 2012    | 



3421 N. Causeway
Blvd., Suite 701. Metairie, LA 70002 Telephone (504) 837-0770 . Fax (504) 837-7102

Member of

IGAF Worldwide
- Member Firms in Principal Cities . PCAOB - Public Company Accounting Oversight Board

AICPA Centers
.. Center for Public Company Audit Firms (SEC)

Governmental Audit Quality Center
.. Private Companies Practice Section (PCPS)



F-17







BLESSED
ROCK OF EL MONTE



SUPPLEMENTAL
INFORMATION



FOR THE
YEAR ENDED DECEMBER 31, 2011



|A. SCHEDULES OF EXPENSES    |  |   |         | 
|--------------------------- |  | - | ------- | 
|                            |  |   | 2011    | 
|General and Administrative: |  |   |         | 
|Administrative - Salaries   |  | $ | 35,246  | 
|Management Fee              |  |   | 48,805  | 
|Marketing and Advertising   |  |   | 804     | 
|Legal Fees                  |  |   | 1,679   | 
|Audit Expense               |  |   | 6,154   | 
|Training                    |  |   | 2,271   | 
|Credit Reports              |  |   | 324     | 
|Office Supplies             |  |   | 8,748   | 
|Bank Fees                   |  |   | 2,084   | 
|Telephone Expenses          |  |   | 9,789   | 
|Social Programming          |  |   | 13,871  | 
|Bad Debts                   |  |   | 433     | 
|Miscellaneous               |  |   | 152     | 
|                            |  |   |         | 
|Total                       |  | $ | 130,360 | 
|                            |  |   |         | 
|Utilities:                  |  |   |         | 
|Electricity                 |  | $ | 18,571  | 
|Gas                         |  |   | 16,535  | 
|Water & Sewer               |  |   | 29,479  | 
|                            |  |   |         | 
|Total                       |  | $ | 64,585  | 
|                            |  |   |         | 
|Repairs and Maintenance:    |  |   |         | 
|Maintenance - Contracts     |  | $ | 68,193  | 
|Maintenance - Salaries      |  |   | 17,358  | 
|Maintenance - Supplies      |  |   | 18,095  | 
|Painting and Decorating     |  |   | 17,708  | 
|Garbage and Trash Removal   |  |   | 17,596  | 
|Exterminating               |  |   | 2,230   | 
|Grounds Maintenance         |  |   | 19,633  | 
|                            |  |   |         | 
|Total                       |  | $ | 160,813 | 



F-18







BLESSED
ROCK OF EL MONTE



SUPPLEMENTAL
INFORMATION



FOR THE
YEAR ENDED DECEMBER 31, 2011



|                                             |  | 2011 |       
|-------------------------------------------- |  | ---- | ------
|Tax and Insurance:                           |  |      |       
|Real Estate Taxes                            |  | $    | 26,570
|Property & Liability Insurance               |  |      | 42,364
|Payroll Taxes                                |  |      | 9,279 
|Worker’s Compensation                        |  |      | 10,146
|Health Insurance and other Employee Benefits |  |      | 5,357 
|Other Taxes and Insurance                    |  |      | 3,615 
|Total                                        |  | $    | 97,331



F-19







FINANCIAL STATEMENTS
AND

INDEPENDENT
AUDITOR’S REPORT



BLESSED ROCK
OF EL MONTE

DECEMBER 31, 2012











BLESSED ROCK OF EL MONTE



TABLE OF CONTENTS



|                                                                                        |  | PAGE
|--------------------------------------------------------------------------------------- |  | ----
|                                                                                        |  |     
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                 |  | F-1 
|                                                                                        |  |     
|FINANCIAL STATEMENTS:                                                                   |  |     
|                                                                                        |  |     
|BALANCE SHEET                                                                           |  | F-2 
|                                                                                        |  |     
|STATEMENT OF OPERATIONS                                                                 |  | F-4 
|                                                                                        |  |     
|STATEMENT OF CHANGES IN PARTNERS’ CAPITAL                                               |  | F-5 
|                                                                                        |  |     
|STATEMENT OF CASH FLOWS                                                                 |  | F-6 
|                                                                                        |  |     
|NOTES TO FINANCIAL STATEMENTS                                                           |  | F-7 
|                                                                                        |  |     
|ACCOMPANYING INFORMATION:                                                               |  |     
|                                                                                        |  |     
|INDEPENDENT AUDITOR’S REPORT ON INFORMATION ACCOMPANYING THE BASIC FINANCIAL STATEMENTS |  | F-16
|                                                                                        |  |     
|SUPPLEMENTAL INFORMATION                                                                |  | F-17



F-1











REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM



To the Partners

Blessed Rock of El Monte



We have audited the accompanying
financial statements of Blessed Rock of El Monte, as of December 31, 2012 and the related statements of operations, changes in
partners’ equity and cash flows for the year ended December 31, 2012. Blessed Rock of El Monte’s management is responsible
for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.



In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of Blessed Rock of El Monte as of December 31,
2012 and the result of its operations and its cash flows for the year ended December 31, 2012 in conformity with accounting principles
generally accepted in the United States of America.



|                    | 
|------------------- | 
|Metairie, Louisiana | 
|January 25, 2013    | 







F-2







BLESSED ROCK
OF EL MONTE



BALANCE SHEET



DECEMBER
31, 2012



|ASSETS                                    |  |   |            |  
|----------------------------------------- |  | - | ---------- | -
|Current Assets                            |  |   |            |  
|Cash                                      |  | $ | 555,742    |  
|Accounts Receivable, Tenants              |  |   | 43         |  
|Accounts Receivable, Other                |  |   | 1,380      |  
|Prepaid Operational Asset Management Fees |  |   | 8,220      |  
|                                          |  |   |            |  
|Total Current Assets                      |  |   | 565,385    |  
|                                          |  |   |            |  
|Restricted Reserves and Escrows           |  |   |            |  
|Tax and Insurance Escrow                  |  |   | 52,655     |  
|Replacement Reserve                       |  |   | 177,578    |  
|Tenant Security Deposits                  |  |   | 23,959     |  
|                                          |  |   |            |  
|Total Restricted Reserves and Escrows     |  |   | 254,192    |  
|                                          |  |   |            |  
|Property and Equipment                    |  |   |            |  
|Land and Improvements                     |  |   | 1,333,738  |  
|Buildings                                 |  |   | 8,235,645  |  
|Furniture and Equipment                   |  |   | 229,170    |  
|Total Property and Equipment              |  |   | 9,798,553  |  
|Less: Accumulated Depreciation            |  |   | (3,304,124 | )
|                                          |  |   |            |  
|Property and Equipment, Net               |  |   | 6,494,429  |  
|                                          |  |   |            |  
|Other Assets                              |  |   |            |  
|                                          |  |   |            |  
|Deferred Fees, Net                        |  |   | 1,285      |  
|                                          |  |   |            |  
|TOTAL ASSETS                              |  | $ | 7,315,291  |  



See auditor’s
report and accompanying notes to the financial statements.



F-3







BLESSED ROCK
OF EL MONTE



BALANCE SHEET



DECEMBER
31, 2012



|LIABILITIES AND PARTNERS’ CAPITAL       |  |   |           | 
|--------------------------------------- |  | - | --------- | 
|Current Liabilities                     |  |   |           | 
|Accrued Management Fees                 |  | $ | 4,113     | 
|Accrued Interest                        |  |   | 12,070    | 
|Accrued Expenses                        |  |   | 13,700    | 
|Current Portion Mortgage Payable        |  |   | 2,054,455 | 
|Prepaid Rents                           |  |   | 104       | 
|                                        |  |   |           | 
|Total Current Liabilities               |  |   | 2,084,442 | 
|                                        |  |   |           | 
|Deposits & Prepayment Liabilities       |  |   |           | 
|Tenants’ Security Deposits              |  |   | 23,897    | 
|                                        |  |   |           | 
|Long Term Liabilities                   |  |   |           | 
|Grant Payable                           |  |   | 400,000   | 
|Accrued Interest, Long Term             |  |   | 268,000   | 
|                                        |  |   |           | 
|Total Long Term Liabilities             |  |   | 668,000   | 
|                                        |  |   |           | 
|Total Liabilities                       |  |   | 2,776,339 | 
|                                        |  |   |           | 
|Partners’ Equity                        |  |   |           | 
|Partners’ Equity                        |  |   | 4,538,952 | 
|                                        |  |   |           | 
|TOTAL LIABILITIES AND PARTNERS’ CAPITAL |  | $ | 7,315,291 | 



See auditor’s
report and accompanying notes to the financial statements.



F-4







BLESSED ROCK
OF EL MONTE



STATEMENT
OF OPERATIONS



DECEMBER
31, 2012



|Revenue                               |  |   |          |  
|------------------------------------- |  | - | -------- | -
|Rental Income                         |  | $ | 986,848  |  
|Tenant Charges                        |  |   | 2,130    |  
|Laundry and Vending                   |  |   | 9,805    |  
|Miscellaneous Revenue                 |  |   | 356      |  
|                                      |  |   |          |  
|Total Revenue                         |  |   | 999,139  |  
|                                      |  |   |          |  
|Operating expenses                    |  |   |          |  
|General and administrative            |  |   | 133,508  |  
|Utilities                             |  |   | 69,276   |  
|Repairs and maintenance               |  |   | 149,901  |  
|Tax and insurance                     |  |   | 98,451   |  
|Interest on financing                 |  |   | 163,152  |  
|                                      |  |   |          |  
|Total Operating Expenses              |  |   | 614,288  |  
|                                      |  |   |          |  
|Operating Income (Loss)               |  |   | 384,851  |  
|                                      |  |   |          |  
|Other Income and (Expenses)           |  |   |          |  
|Interest income                       |  |   | 122      |  
|Depreciation and amortization         |  |   | (251,378 | )
|Operational asset management fee      |  |   | (16,440  | )
|Property tax exemption compliance fee |  |   | (1,739   | )
|Reporting fee                         |  |   | (26,268  | )
|Incentive management fee              |  |   | (12,000  | )
|                                      |  |   |          |  
|Net Other Income and (Expenses)       |  |   | 307,703  |  
|                                      |  |   |          |  
|Net Income (Loss)                     |  | $ | 77,148   |  



See auditor’s
report and accompanying notes to the financial statements.



F-5







BLESSED ROCK
OF EL MONTE



STATEMENT
OF CHANGES IN PARTNERS’ CAPITAL



DECEMBER
31, 2012



|                            |  | General
 Partners |          |   | Limited
 Partners |   |           | Total
Partners’
 Capital | 
|--------------------------- |  | ----------------- | -------- | - | ----------------- | - | --------- | ------------------------ | 
|Balance - January 1, 2012   |  | $                 | (89,677  | ) |                   | $ | 4,590,883 |                          | 
|                            |  |                   |          |   |                   |   |           |                          | 
|Net Income (Loss)           |  |                   | 772      |   |                   |   | 76,376    |                          | 
|                            |  |                   |          |   |                   |   |           |                          | 
|Distributions to Members    |  |                   | (19,701  | ) |                   |   | (19,701   | )                        | 
|                            |  |                   |          |   |                   |   |           |                          | 
|Balance - December 31, 2012 |  | $                 | (108,606 | ) |                   | $ | 4,647,558 |                          | 
|                            |  |                   |          |   |                   |   |           |                          | 
|Percentages                 |  |                   | 1        | % |                   |   | 99        | %                        | 



See auditor’s
report and accompanying notes to the financial statements.



F-6







BLESSED ROCK
OF EL MONTE



STATEMENT
OF CASH FLOWS



DECEMBER
31, 2012



|Cash flows from operating activities:                  |  |   |          |  
|------------------------------------------------------ |  | - | -------- | -
|Net Income (Loss)                                      |  | $ | 77,148   |  
|Adjustments to reconcile net income (loss) to net cash |  |   |          |  
|provided by operating activities:                      |  |   |          |  
|Depreciation and amortization                          |  |   | 251,378  |  
|(Increase) decrease in accounts receivable             |  |   | (1,423   | )
|Increase (decrease) in accounts payable                |  |   | (3,231   | )
|Increase (decrease) in security deposits payable       |  |   | (135     | )
|Increase (decrease) in accrued management fee          |  |   | 42       |  
|Increase (decrease) in prepaid rent                    |  |   | (638     | )
|Increase (decrease) in accrued interest payable        |  |   | 15,585   |  
|Total adjustments                                      |  |   | 261,578  |  
|Net cash provided (used) by operating activities       |  |   | 338,726  |  
|                                                       |  |   |          |  
|Cash flows from investing activities:                  |  |   |          |  
|Purchase of property and equipment                     |  |   | (77,140  | )
|(Deposit) withdrawal tax and insurance escrows         |  |   | (1,093   | )
|(Deposit) withdrawal reserve                           |  |   | (20,623  | )
|(Deposit) withdrawal security deposit account          |  |   | 249      |  
|Net cash provided (used) by investing activities       |  |   | (98,607  | )
|                                                       |  |   |          |  
|Cash flows from financing activities:                  |  |   |          |  
|Principal payments on mortgage payable                 |  |   | (70,685  | )
|Principal payments on notes payable                    |  |   | (79,225  | )
|Distributions                                          |  |   | (39,402  | )
|Net cash provided (used) by financing activities       |  |   | (189,312 | )
|                                                       |  |   |          |  
|Net increase (decrease) in cash and equivalents        |  |   | 50,807   |  
|Cash and equivalents, beginning of year                |  |   | 504,935  |  
|                                                       |  |   |          |  
|Cash and equivalents, end of year                      |  | $ | 555,742  |  
|                                                       |  |   |          |  
|Supplemental disclosures of cash flow information:     |  |   |          |  
|Cash paid during the year for:                         |  |   |          |  
|Interest Expense                                       |  | $ | 147,567  |  



See auditor’s
report and accompanying notes to the financial statements.



F-7







BLESSED ROCK
OF EL MONTE



NOTES TO
FINANCIAL STATEMENTS



DECEMBER
31, 2012



NOTE A - NATURE OF OPERATIONS



Blessed Rock of El Monte, a California
Limited Partnership, (“the Partnership”) was organized on February 14, 1996 to acquire, construct, own and operate
a 137-unit apartment project known as Blessed Rock of El Monte (“the Project”) located in El Monte, California (“the
Project”). The term of the Partnership shall extend until December 31, 2047, unless sooner terminated as provided in the
Partnership Agreement.



The Project is eligible and qualifies
for low-income housing tax credits in accordance with Section 42 of the Internal Revenue Code of 1986 (“the Code”).
Generally, the low-income housing credit is computed as a percentage of the qualified basis of the property including rehabilitation
and is allowed annually during a period of ten years commencing with the years the building is placed into service. In addition,
in order to qualify for the credit, the Partnership must conform with certain occupancy standards as set forth in the Code.



The General Partner is Everland,
Inc. The Managing General Partner is Community Housing Assistance Program, Inc., a non-profit corporation. The Limited Partners
are WNC Housing Tax Credit Fund V, L.P., Series 3, and WNC Housing Tax Credit Fund V, L.P., Series 4. The Special Limited Partner
is WNC Housing, L.P.



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES



Basis of Accounting



The Partnership prepares its financial
statements on the accrual basis of accounting consistent with accounting principles generally accepted in the United States of
America.



Cash and Cash Equivalents



Cash and cash equivalents include
all cash balances and highly liquid investments with a maturity of three months or less at the acquisition date. At December 31,
2012, cash and cash equivalents consist of two unrestricted checking accounts and a petty cash fund. Restricted cash is not considered
cash equivalents.



Tenant Accounts Receivable and
Bad Debt Expense



Tenant rent charges for the current
month are due on the first of the month. Tenants who are evicted or move-out are charged with damages or cleaning fees, if applicable.
Tenant receivable consists of amounts due from rental income, security deposit or the charges for damages and cleaning fees. The
Partnership does not accrue interest on the tenant receivable balances.



F-8







BLESSED ROCK
OF EL MONTE



NOTES TO
FINANCIAL STATEMENTS



DECEMBER
31, 2012



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)



Tenant receivables are charged to
bad debt expense when they are determined to be uncollectible based upon a periodic review or the accounts by management. Accounting
principles generally accepted in the United States of America require that the allowance method be used to recognize bad debts;
however, the effect of using the direct write-off method is not materially different from the results that would have been obtained
under the allowance method. Bad debts expensed for the year ended December 31, 2012 totaled $56.



Property and Equipment



Property and equipment are recorded
at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated
service lives using the straight-line method. Maintenance and repairs are charged to expense as incurred; major renewals and betterments
are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed
from the accounts, and any gain or loss is included in income. The rental property is depreciated over estimated service lives
as follows:



|Buildings               | 27.5 - 40 years | Straight-Line
|----------------------- | --------------- | -------------
|Land Improvements       | 15 - 20 years   | Straight-Line
|Furnishings & Equipment | 5 - 10 years    | Straight-Line



Impairment of Long-Lived Assets



In accordance with Accounting Standards
Codification 360-10-05-4, Accounting for the Impairment or Disposal of Long-Lived Assets, the partnership reviews its rental
property for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recovered.
If the fair value is less than the carrying amount for the asset, an impairment loss is recognized for the difference. No impairment
loss has been recognized during the year ended December 31, 2012.



Other Assets



The Partnership incurred financing
costs in connection with the mortgage. These costs have been capitalized and are being amortized using the straight-line method
over the 16-year terms of the mortgages. In addition, the Partnership incurred costs in connection with obtaining the tax credits,
which are being amortized over a term of 15 years. Generally accepted accounting principles require that the effective yield method
be used to amortize financing costs; however, the effect of using the straight-line method is not material to the financial statements
for the year ended December 31, 2012.



Property Taxes



Property taxes are expensed in the
year of lien on the property such that twelve months of expense is charged to operations each period.



F-9







BLESSED ROCK
OF EL MONTE



NOTES TO
FINANCIAL STATEMENTS



DECEMBER
31, 2012



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)



Rental Income



Rental income is recognized as rentals
become due. Rental payments received in advance are deferred until earned. All leases between the Partnership and the tenants of
the property are operating leases.



Income Taxes



The Partnership has elected to be
treated as a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable
income, deductions and tax credits are passed through to and are reported by its owners on their respective income tax returns.
The Partnership’s federal tax status as a pass-through entity is based on its legal status as a Partnership. Accordingly,
the Partnership is required to file and does file tax returns with the Internal Revenue Service and other taxing authorities. Accordingly,
these financial statements do not reflect a provision for income taxes and the Partnership has not other tax positions which it
must consider for disclosure. There has been no interest or penalties recognized in the statement of income or balance sheet for
the year ended December 31, 2012. The Partnership’s tax filings are subject to audit by various taxing authorities, and the
open audit periods are 2009 through 2011.



Fair Value



In 2009, the Partnership adopted
the Fair Value Measurement topic of the FASB Accounting Standards Codification(ASC) 820 which provides guidance for assets
and liabilities which are required to be measured at fair value and requires expanded disclosure for fair value measurement. The
standard applies whenever other standards require or permit assets or liabilities to be measured at fair value and does not require
any new fair value measurements. The implementation of Fair Value Measurement did not have a material impact on the Partnership’s
financial statements for the year ended December 31, 2012.



Accounting Standards Codification



The Financial Accounting Standards
Board (“FASB ASC”) became the sole authoritative source of generally accepted accounting principles in the United States
of America for periods ending after September 15, 2009. The FASB ASC incorporates all authoritative literature previously issued
by a standard setter. Adoption of the FASB ASC has no effect on the Partnership’s financial position, results from operations,
partners’ equity, or cash flows. References to the authoritative accounting literature in the notes to the financial statements
are to the FASB ASC.



Use of Estimates



The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ
from those estimates.



F-10







BLESSED ROCK
OF EL MONTE



NOTES TO
FINANCIAL STATEMENTS



DECEMBER
31, 2012



NOTE B - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)



Concentration of Credit Risk



The Partnership maintains its cash
balances and reserve balances in bank deposits that at times may exceed federally insured limits. The Partnership has not experienced
any losses associated with these deposits. The Partnership believes it is not exposed to any significant credit risk on cash and
cash equivalents.



The Partnership’s sole asset
is the apartment complex. The Partnership’s operations are concentrated in the affordable housing real estate market. In
addition, the Partnership operates in a heavily regulated environment. The operations of the Partnership are subject to the administrative
directives, rules and regulations of federal, state and local regulatory agencies. Such administrative directives, rules and regulations
are subject to change by an act of Congress. Such changes may occur with little notice or inadequate funding to pay for the related
cost, including the additional administrative burden, to comply with a change.



NOTE C - INTANGIBLE ASSETS



Intangible assets are amortized
over the term of the mortgage loan using the straight line method and, at December 31, 2012, were net of accumulated amortization
of $104,756. Amortization expense for the same year ended was $6,899.



Estimated aggregated amortization
expense for 2013 is $1,285.



NOTE D - MORTGAGE PAYABLE



The Partnership has entered into
a mortgage loan agreement in the original amount of $2,720.000. The loan agreement provides, among other things, for the following:



| | a. | An interest rate of 7.05% per annum;                              
| | -- | ------------------------------------------------------------------
| | b. | Monthly principal and interest payments of $18,188;               
| | c. | A balloon payment of $2,017,000 payable June 1, 2013;             
| | d. | A maturity date of June 1, 2013; and                              
| | e. | The funding of a reserve fund for replacing assets of the Project.



The mortgage loan matures in 2013
and all principal is due.



The liability of the Partnership
under the mortgage loan is limited to the underlying value of the property and equipment collateral in addition to other amounts
deposited with the lender. For the year ended December 31, 2012, interest expense was $147,152 and accrued interest was $12,070.



F-11







BLESSED ROCK
OF EL MONTE



NOTES TO
FINANCIAL STATEMENTS



DECEMBER
31, 2012



NOTE D - MORTGAGE PAYABLE (CONTINUED)



Replacement Reserve



In accordance with the Partnership
Agreement, the Partnership is required to establish and maintain a reserve for replacements account for the purpose of capital
improvements. The reserve account is to be funded in the amount of $20,544 per year. As of December 31, 2012, the balance of the
replacement reserve was $177,578.



NOTE E - OTHER LONG TERM LIABILITIES



Note payable



The Partnership entered into a 1%
note payable in the amount of $430,647 with a term of 30 years beginning April 3, 1996, payable to El Monte Redevelopment Agency
(“RDA”) for various development fees, secured by a deed of trust and rents from the Project. Commencing April 3, 1997,
and thereafter on each April 3 for the following six succeeding years, payments of $4,239 were due. Payments increased to $8,478
on April 3, 2004 and continued for the next seven succeeding years. On April 3, 2012, payments increased to $32,534 and were to
continue for the next 14 succeeding years, or until paid in full. Payments were to be paid from 50% of residual rental income,
as defined in the promissory note agreement, applied first to interest. As of December 31, 2012, the balance of the development
fee note payable was $0. At December 31, 2012, accrued interest on the note was $0.



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. The 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. For the year ended December 31, 2012, interest expense was $16,000.
Accrued interest at December 31, 2012 was $268,000.



NOTE F - RELATED PARTY TRANSACTIONS



Operational Asset Management
Fee



The Partnership Agreement provides
for an asset management fee equal to $10 per unit per month, to accrue to the Managing General Partner and is payable based on
the cash flow provisions of the Partnership Agreement. The fee to be paid is cumulative if not paid each year. During the year
ended December 31, 2012, an operational asset management fee of $16,440 was expensed and paid and $8,220 remained prepaid at year-end.



F-12







BLESSED ROCK
OF EL MONTE



NOTES TO
FINANCIAL STATEMENTS



DECEMBER
31, 2012



NOTE F - RELATED PARTY TRANSACTIONS
(CONTINUED)



Incentive Management Fee



The Partnership shall pay to the
General Partner an incentive management fee equal to 40% of Remaining Cash, as defined. The incentive management fee shall be paid
from available cash flow and does not accrue from year to year. For the year ended December 31, 2012, an incentive management fee
of $12,000 was expensed and paid. No incentive management fee was payable at year-end.



Reporting Fee



The Partnership shall pay to the
Limited Partner a reporting fee equal to 15% of the Cash Flow from Operations, as defined, but should not be less than $6,000 for
each Limited Partner. It shall be paid from available cash flow and accrued from year to year. During the year ended December 31,
2012, a reporting fee of $26,268 was earned and paid. No reporting fee was payable at year-end.



Property Tax Exemption Compliance
Fee



Pursuant to the Partnership Agreement,
the Partnership shall pay to the Managing General Partner an annual fee of $1,500 for ensuring the Partnership is in compliance
with the Property Tax Exemption requirements. The annual fee shall be increased by 3% each year, beginning in 2007 and continuing
each year thereafter. For the year ended December 31, 2012, $1,739 was expensed and paid. No property tax exemption compliance
fee was payable at year-end.



NOTE G - MANAGEMENT FEE



Effective July 19, 2007, the Partnership
entered into an agreement with Professional Property Management, LLC (“PPM”), an unrelated party, in connection with
the management of the Project’s rental operations. In accordance with the management agreement, PPM earns fees of 5% of monthly
gross collections. Fees earned for services rendered in connection with the leasing and operation of the Project amounted to $49,438
for the year ended December 31, 2012. At December 31, 2012, $4,113 in management fees remained payable.



NOTE H - ADVERTISING



The Partnership expenses advertising
costs as they are incurred. Advertising expenses for the year ended December 31, 2012 amounted to $868.



F-13







BLESSED ROCK
OF EL MONTE



NOTES TO
FINANCIAL STATEMENTS



DECEMBER
31, 2012



NOTE I - PROFITS, LOSSES AND
DISTRIBUTIONS



In general, income (loss), tax credits
and cash flow from operations are allocated 98.99% to the Limited Partners, .01% to the Special Limited Partner, .99% to the General
Partner and .01% to the Managing General Partner.



Income (loss) and cash flow from
sources other than operations will be allocated pursuant to the terms of the Partnership Agreement regarding such.



NOTE J - CONTINGENCIES



Housing Tax Credits



As incentive for investment equity,
the Partnership applied for and received an allocation certificate for housing tax credits established by the Tax Reform Act of
1986. To qualify for the tax credits, the Partnership must meet certain requirements, including attaining a qualified basis sufficient
to support the credit allocation. In addition, tenant eligibility and rental charges are restricted in accordance with Internal
Revenue Code Section 42. Management has certified that each tax credit unit has met these qualifications to allow the credits allocated
to each unit to be claimed. Compliance with these regulations must be maintained in each of the ten consecutive years of the compliance
period. Failure to maintain compliance with occupant eligibility, unit gross rent, or to correct noncompliance within a reasonable
time period could result in recapture of previously claimed tax credits plus interest.



Mortgage Maturity



The Project’s senior debt
matures during 2013. Ownership has not discussed a plan for refinancing this debt as of the reporting date of this financial statement.



NOTE K - SUBSEQUENT EVENTS



FASB ASC 855, Subsequent Events,
addresses events which occur after the balance sheet date but before the issuance of financial statements. An entity must record
the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose
but not record the effects of subsequent events which provide evidence about conditions that existed after the balance sheet date.
Additionally, Topic 855 requires disclosure relative to the date through which subsequent events have been evaluated and whether
that is the date on which the financial statements were issued or were available to be issued. Management evaluated the activity
of Blessed Rock of El Monte through January 25, 2013, the date the financial statements were issued, and concluded that no subsequent
events have occurred that would require recognition in the Financial Statements or disclosure in the Notes to the Financial Statements.



F-14



































ACCOMPANYING INFORMATION































F-15











INDEPENDENT
AUDITOR’S REPORT ON INFORMATION

ACCOMPANYING THE BASIC FINANCIAL STATEMENTS



To the Partners

Blessed Rock
of El Monte



We have audited the
financial statements of Blessed Rock of El Monte as of and for the year ended December 31, 2012, and our report thereon dated January
25, 2013, which expressed an unmodified opinion on those financial statements, appears on page 3. Our audit was conducted for the
purpose of forming an opinion on the financial statements as a whole. The Supplemental Schedule of Expenses are presented for purposes
of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management
and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements.
The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to
prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all
material respects in relation to the financial statements as a whole.



|                    | 
|------------------- | 
|Metairie, Louisiana | 
|January 25, 2013    | 







F-16







BLESSED
ROCK OF EL MONTE



SUPPLEMENTAL
INFORMATION



FOR THE
YEAR ENDED DECEMBER 31, 2012



|A. SCHEDULES OF EXPENSES    |  |   |         | 
|--------------------------- |  | - | ------- | 
|                            |  |   | 2012    | 
|                            |  |   |         | 
|General and Administrative: |  |   |         | 
|Site Management Payroll     |  | $ | 35,582  | 
|Management Fee              |  |   | 49,348  | 
|Marketing and Advertising   |  |   | 868     | 
|Legal Fees                  |  |   | 910     | 
|Audit Expense               |  |   | 6,216   | 
|Training                    |  |   | 5,839   | 
|Credit Reports              |  |   | 132     | 
|Office Supplies             |  |   | 9,112   | 
|Bank Fees                   |  |   | 1,143   | 
|Telephone Expenses          |  |   | 10,214  | 
|Social Programming          |  |   | 14,067  | 
|Bad Debts                   |  |   | 56      | 
|Miscellaneous               |  |   | 21      | 
|                            |  |   |         | 
|Total                       |  | $ | 133,508 | 
|                            |  |   |         | 
|Utilities:                  |  |   |         | 
|Electricity                 |  | $ | 18,192  | 
|Gas                         |  |   | 13,099  | 
|Water & Sewer               |  |   | 37,985  | 
|                            |  |   |         | 
|Total                       |  | $ | 69,276  | 
|                            |  |   |         | 
|Repairs and Maintenance:    |  |   |         | 
|Maintenance - Contracts     |  | $ | 54,913  | 
|Maintenance - Salaries      |  |   | 16,728  | 
|Maintenance - Supplies      |  |   | 20,013  | 
|Painting and Decorating     |  |   | 15,384  | 
|Garbage and Trash Removal   |  |   | 18,043  | 
|Exterminating               |  |   | 2,430   | 
|Grounds Maintenance         |  |   | 22,390  | 
|                            |  |   |         | 
|Total                       |  | $ | 149,901 | 



F-17







BLESSED
ROCK OF EL MONTE



SUPPLEMENTAL
INFORMATION



FOR THE
YEAR ENDED DECEMBER 31, 2012



|                                             |  | 2012 |       
|-------------------------------------------- |  | ---- | ------
|Tax and Insurance:                           |  |      |       
|Real Estate Taxes                            |  | $    | 26,816
|Property & Liability Insurance               |  |      | 42,496
|Payroll Taxes                                |  |      | 8,726 
|Worker’s Compensation                        |  |      | 10,488
|Health Insurance and other Employee Benefits |  |      | 6,310 
|Other Taxes and Insurance                    |  |      | 3,615 
|                                             |  |      |       
|Total                                        |  | $    | 98,451



F-18