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.

                                                                   /s/ Jack Gilk
                                                                   -------------
March 7, 2007                                                         33-0724657

<PAGE>
<TABLE>
<CAPTION>

                                 BLESSED ROCK OF EL MONTE
                            (A California Limited Partnership)
------------------------------------------------------------------------------------------
                        BALANCE SHEETS, DECEMBER 31, 2005 AND 2006
------------------------------------------------------------------------------------------


                                        A S S E T S


                                                            2006               2005
                                                       -------------      -------------
<S>                                                    <C>                <C>
Current Assets:
   Operating cash and equivalents                      $     584,149      $     459,783
   Security deposit cash                                      25,522             25,801
   Tenant accounts receivable                                  1,625                370
   Other accounts receivable                                   6,281              6,281
   Prepaid expenses                                           51,682             61,945
                                                       -------------      -------------
         Total current assets                                669,259            554,180
                                                       -------------      -------------

Property, Building, and Equipment, At Cost:
   Land                                                    1,271,162          1,271,162
   Building and improvements                               8,030,159          7,992,586
   Equipment                                                  54,657             54,657
                                                       -------------      -------------
                                                           9,355,978          9,318,405
   Accumulated depreciation                              ( 1,933,378 )      ( 1,728,013 )
                                                       -------------      -------------
         Property, building, and equipment - net           7,422,600          7,590,392
                                                       -------------      -------------

Other Assets:
   Replacement reserve                                       134,830            156,909
   Tax and insurance restricted accounts                      33,152             22,073
                                                       -------------      -------------
         Total other assets                                  167,982            178,982
                                                       -------------      -------------

                                                       $   8,259,841      $   8,323,554
                                                       =============      =============



                    See the accompanying notes to financial statements.
------------------------------------------------------------------------------------------
                                            2


<PAGE>

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      $      46,361
   Accounts payable                                           11,556              6,667
   Security trust liability                                   23,635             23,635
   Accrued interest                                           14,175             14,175
   Accrued asset management fees                              17,810             32,880
   Other accruals                                             37,712              6,025
   Unearned rental income                                        696              1,054
                                                       -------------      -------------
         Total current liabilities                           155,321            130,797
                                                       -------------      -------------

Long-term Debt:
   Mortgage payable, less current portion
       included above                                      2,363,046          2,412,783
   Notes payable                                             681,525            681,525
   Accrued interest payable                                  230,335            199,995
   Grant loan payable                                        400,000            400,000
                                                       -------------      -------------
         Total long-term debt                              3,674,906          3,694,303
                                                       -------------      -------------

Partners' equity                                           4,429,614          4,498,454
                                                       -------------      -------------

                                                       $   8,259,841      $   8,323,554
                                                       =============      =============


                    See the accompanying notes to financial statements.
------------------------------------------------------------------------------------------
                                             3

<PAGE>

                                 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      $     745,260
   Excess rents                                              149,429            117,337
   Less vacancies                                              ( 918 )          ( 1,442 )
                                                        ------------      -------------
   Net rental income                                         872,081            861,155
   Laundry and vending                                         9,684             13,410
   Tenant charges                                              2,040              1,482
   Interest income                                             3,488              2,490
   Other income                                                    -                886
                                                        ------------      -------------
         Total revenues                                      887,293            879,423
                                                        ------------      -------------

Expenses:
   Administrative                                            211,138            200,758
   Utilities                                                  80,904             74,145
   Operating and maintenance                                 106,694            128,436
   Taxes and insurance                                        53,138             56,579
   Interest                                                  202,230            204,853
   Depreciation and amortization                             205,365            204,844
                                                       -------------      -------------
         Total expenses                                      859,469            869,615
                                                       -------------      -------------

Net income (loss)                                             27,824              9,808

Partners' equity - beginning                               4,498,454          4,510,646

Partners' distributions                                     ( 96,664 )         ( 22,000 )
                                                       -------------      -------------

Partners' equity - ending                              $   4,429,614      $   4,498,454
                                                       =============      =============


                    See the accompanying notes to financial statements.
------------------------------------------------------------------------------------------
                                             4

<PAGE>

                                 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     $     848,544
   Operating interest receipts                                 2,261             1,704
   Other operating receipts                                   11,724            90,578
   Payments to suppliers and employees:
       Administrative expenses                              ( 91,469 )        ( 47,918 )
       Management fees                                      ( 37,407 )        ( 99,011 )
       Utilities                                            ( 79,498 )        ( 71,596 )
       Salaries and wages                                   ( 35,402 )        ( 43,358 )
       Operating and maintenance                            ( 94,059 )       ( 115,758 )
       Real estate taxes                                     ( 7,371 )         ( 7,643 )
       Payroll taxes                                         ( 5,371 )         ( 5,062 )
       Property insurance                                   ( 36,328 )        ( 45,120 )
       Miscellaneous taxes and insurance                    ( 17,257 )        ( 17,907 )
       Interest on mortgage                                ( 175,545 )       ( 171,384 )
       Funding security deposit account                          279                33
                                                       -------------     -------------
         Net cash provided by operating activities           292,737           316,102
                                                       -------------     -------------

Cash flows from investing activities:
   Net tax and insurance impounds                           ( 11,079 )           1,843
   Net reserve activity, including interest                   22,079          ( 21,330 )
   Reserve interest                                            1,227               786
   Capital expenditures                                     ( 37,573 )               -
                                                       -------------     -------------
       Net cash used in investing activities                ( 25,346 )        ( 18,701 )
                                                       -------------     -------------

Cash flows from financing activities:
   Mortgage principal payments                              ( 46,361 )        ( 43,214 )
   Partner distributions                                    ( 96,664 )        ( 22,000 )
                                                       -------------     -------------
       Net cash used in financing activities               ( 143,025 )        ( 65,214 )
                                                       -------------     -------------

Net increase (decrease) in cash                              124,366           232,187
Cash at beginning of year                                    459,783           227,596
                                                       -------------     -------------

Cash at end of year                                    $     584,149     $     459,783
                                                       =============     =============


                    See the accompanying notes to financial statements.
------------------------------------------------------------------------------------------
                                            5

<PAGE>

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         $     9,808
Adjustments to reconcile net income (loss) to net cash
   Provided by operating activities:
       Depreciation and amortization                            205,365             204,844
       Decrease (increase) in:
         Security deposit cash                                      279                 168
         Receivables                                            ( 1,255 )            74,430
         Prepaids                                                10,263            ( 10,048 )
       Increase (decrease) in:
         Payables                                                 8,543             ( 1,522 )
         Security deposit liability                                   -               ( 135 )
         Accrued expenses                                        43,303              39,296
         Unearned rental income                                   ( 358 )                47
       Reserve interest earned                                  ( 1,227 )             ( 786 )
                                                            -----------         -----------

Net cash provided by operating activities                   $   292,737         $   316,102
                                                            ===========         ===========




                       See the accompanying notes to financial statements.
------------------------------------------------------------------------------------------------
                                               6
</TABLE>

<PAGE>

                            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.

--------------------------------------------------------------------------------
                                       7
<PAGE>

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

--------------------------------------------------------------------------------
                                       8
<PAGE>

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
                                                                    ============


--------------------------------------------------------------------------------
                                       9
<PAGE>

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.


--------------------------------------------------------------------------------
                                       10
<PAGE>

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.







--------------------------------------------------------------------------------
                                       11
<PAGE>

                            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      $    30,830
Manager's rent-free apartment                          12,288           12,288
Management fee                                         43,333           43,206
Reporting/asset management fee                         68,823           63,329
Audit fee                                               6,700            6,000
Legal fees                                                  -              424
Telephone and answering service                         5,675            4,731
Office supplies                                         4,050            4,528
Educational and social programs                         8,640           11,520
Health insurance and other employee benefits            4,226            4,349
Payroll taxes                                           5,371            5,062
Workers' compensation                                   8,029            8,536
Other administration                                    9,976            5,955
                                                  -----------      -----------
       Subtotal administrative expenses               211,138          200,758
                                                  -----------      -----------

Electricity                                            30,475           22,412
Water and sewer                                        23,862           23,294
Fuel                                                   20,816           24,196
Garbage and trash removal                               5,751            4,243
                                                  -----------      -----------
       Subtotal utilities                              80,904           74,145
                                                  -----------      -----------

Maintenance and repairs payroll                        12,785           12,528
Maintenance and repairs supply                          8,715            7,472
Maintenance and repairs contract                       29,582           19,337
Painting and decorating                                17,753           25,216
Grounds                                                 8,693           10,519
Services                                                1,430            2,195
Furniture and furnishings replacement                  27,736           51,169
                                                  -----------      -----------
       Subtotal maintenance expenses                  106,694          128,436
                                                  -----------      -----------

Property taxes                                          7,371            7,644
Other taxes and licenses                                3,930            3,995
Property and liability insurance                       40,765           43,913
Other insurance                                         1,072            1,027
                                                  -----------      -----------
       Subtotal tax and insurance                      53,138           56,579
                                                  -----------      -----------

Interest                                              202,230          204,853
                                                  -----------      -----------

Depreciation and amortization                         205,365          204,844
                                                  -----------      -----------

       Total expenses                             $   859,469      $   869,615
                                                  ===========      ===========

--------------------------------------------------------------------------------
                                       12
<PAGE>


                                    CONTENTS

                                                                           Page
                                                                           ----

INDEPENDENT AUDITOR'S REPORT                                                  1
FINANCIAL STATEMENTS:
   Balance Sheets                                                           2-3
   Statements of Operations and Changes in Partners' Equity                   4
   Statements of Cash Flows                                                 5-6
   Notes to Financial Statements                                           7-11
SUPPLEMENTARY INFORMATION:
   Supplemental Schedule of Expenses                                         12
   Supplemental Schedule of Changes in Partners' Equity                      13





--------------------------------------------------------------------------------
                                       13
<PAGE>


<TABLE>
<S>            <C>

                                                BLESSED ROCK OF EL MONTE
                                           (A California Limited Partnership)
-------------------------------------------------------------------------------------------------------------------------
                                  SUPPLEMENTAL SCEHDULE OF CHANGES IN PARTNERS' EQUITY
                                     FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2006


                                 WNC Housing    WNC Housing
                                  Tax Credit     Tax Credit        WNC                           Comm
                                 Fund V, L.P.   Fund V. L.P.     Housing         Everland       Housing
                                   Series 3       Series 4         L.P.            Inc.       Assist. Prog.       Total
                                  ----------     ----------     ----------      ----------     ----------      ----------

Balance - December 31, 2004       $2,263,832     $2,263,832     $      (49)     $  (16,977)    $        8      $4,510,646

Net Income - 2005                      4,854          4,854              1              98              1           9,808

Partner's Distribution - 2005        (11,000)       (11,000)            --              --             --         (22,000)
                                  ----------     ----------     ----------      ----------     ----------      ----------

Balance - December 31, 2005        2,257,686      2,257,686            (48)        (16,879)             9       4,498,454

Net Income - 2006                     13,771         13,771              3             276              3          27,824

Partner's Distribution - 2006        (14,697)       (14,697)          (850)        (64,433)        (1,987)        (96,664)
                                  ----------     ----------     ----------      ----------     ----------      ----------

Balance - December 31, 2006       $2,256,760     $2,256,760     $     (895)     $  (81,036)    $   (1,975)     $4,429,614
                                  ==========     ==========     ==========      ==========     ==========      ==========

Profit and loss percentage
  at December 31, 2006                49.495%        49.495%         0.010%          0.990%         0.010%        100.000%
                                  ==========     ==========     ==========      ==========     ==========      ==========

</TABLE>