<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

                Annual Report Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934

                   For the Fiscal Year Ended DECEMBER 31, 1996

                             Commission File Number
                                     2-92352

                            HOUSING PROGRAMS LIMITED
                        A CALIFORNIA LIMITED PARTNERSHIP
       (Formerly, Shearson Lehman/Coast Savings Housing Partners, Limited)

                  I.R.S. Employer Identification No. 95-3906167

       9090 WILSHIRE BLVD., SUITE 201, BEVERLY HILLS, CALIFORNIA  90211

        Registrant's Telephone Number, Including Area Code (310) 278-2191

      Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:


                                      NONE


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed with the Commission by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding twelve months (or such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.



                             Yes      X          No
                                    -----           -----


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
<PAGE>   2
PART I.

ITEM 1.  BUSINESS

Housing Programs Limited (the "Partnership") is a limited partnership which was
formed under the laws of the State of California on May 15, 1984. On September
12, 1984, the Partnership offered 3,000 units consisting of 6,000 Limited
Partnership Interests and warrants to purchase a maximum of 6,000 Additional
Limited Partnership Interests through a public offering.

The general partners of the Partnership are National Partnership Investments
Corp. ("NAPICO"), and Coast Housing Investment Associates ("CHIA") and Housing
Programs Corporation II. CHIA is a limited partnership formed under the
California Limited Partnership Act and consists of Messrs. Nicholas G. Ciriello,
an unrelated individual, as general partner and Charles H. Boxenbaum, as limited
partner. The business of the Partnership is conducted primarily by its general
partners as Housing Programs Limited has no employees of its own.

Casden Investment Corporation owns 100 percent of NAPICO's stock. The current
members of NAPICO's Board of Directors are Charles H. Boxenbaum, Bruce E.
Nelson, Alan I. Casden, Henry C. Casden and Brian D. Goldberg. LB I Group Inc.
owns all of the stock of Housing Programs Corporation II.

The Partnership holds limited partnership interests in eighteen local limited
partnerships (referred herein as the "local" or "lower-tier" limited
partnerships) as of December 31, 1996. National Partnership Investments
Associates II ("NPIA II"), a limited partnership formed under the California
Limited Partnership Act and consisting of Messrs. Charles H. Boxenbaum, general
partner, and Nicholas G. Ciriello, limited partner, hold a general partnership
interest in ten of the local limited partnerships. The remaining local
partnerships general partners are unaffiliated with the Partnership. Each of the
local partnerships owns a low income housing project which is subsidized and/or
has a mortgage note payable to or insured by agencies of the federal or local
government.

In order to stimulate private investment in low income housing, the federal
government and certain state and local agencies provided ownership incentives,
including among others, interest subsidies, rent supplements, and mortgage
insurance, with the intent of reducing certain market risks and providing
investors with certain tax benefits, plus limited cash distributions and the
possibility of long-term capital gains. There remains, however, significant
risks associated with the ownership of low income housing projects. The
long-term nature of investments in government assisted housing limits the
ability of the Partnership to vary its portfolio in response to changing
economic, financial and investment conditions; such investments are also subject
to changes in local economic circumstances and housing patterns, as well as
rising operating costs, vacancies, rent collection difficulties, energy
shortages and other factors which have an impact on real estate values. These
projects also require greater management expertise and may have higher operating
expenses than conventional housing projects.

The Partnership became the limited partner in the local limited partnerships
pursuant to arm's-length negotiations with the local limited partnerships'
general partners who are often the original project developers. In certain other
cases, the Partnership invested in newly formed local limited partnerships
which, in turn, acquired the projects. As a limited partner, the Partnership's
liability for obligations of the local limited partnership is limited to its
investment. The general partner of the local limited partnership retains
responsibility for maintaining, operating and managing the project. Under
certain circumstances, the Partnership has the right to replace the general
partner of the limited partnerships.

Although each of the partnerships in which the Partnership has invested will
generally own a project which must compete in the market place for tenants,
interest subsidies and rent supplements from governmental agencies make it
possible to offer these dwelling units to eligible "low income" tenants at a
cost significantly below the market rate for comparable conventionally financed
dwelling units in the area.
<PAGE>   3
During 1996, all of the projects in which the Partnership had invested were
substantially rented. The following is a schedule of the status, as of December
31, 1996, of the projects owned by local partnerships in which the Partnership
has invested.

                  SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                     IN WHICH HOUSING PROGRAMS LIMITED HAS AN INVESTMENT
                                      DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                       Units Authorized
                                         For Rental
                             No. of    Assistance Under      Units       Percentage of
Name & Location              Units        Section 8        Occupied       Total Units
---------------              ------    ----------------    --------      -------------

<S>                          <C>       <C>                 <C>           <C>
Bannock Arms Apts.             66            66               62              94%
  Boise, ID

Berkeley Gardens              132            26              125              95%
  Martinsburg, WV

Cape LaCroix                  125             0              118              94%
  Cape Girardeau, MO

Cloverdale                    100             0               94              94%
  Crawfordsville, IN

Cloverleaf                     94            94               94             100%
  Indianapolis, IN

Deep Lake Hermitage           144            18              137              95%
  Lake Villa, IL

Evergreen Apts                330           330              327              99%
  Oshtemo, MI

Friendship Arms               151           150              151             100%
  Hyattsville, MD

Jenny Lind Hall                78            78               78             100%
  Springfield, MO

Lancaster Heights             198             0              186              94%
  Normal, IL

Locust House                   99            98               99             100%
  Westminster, MD

Midpark Towers                202           202              200              99%
  Dallas, TX

Oxford House                  156           152              156             100%
  Decatur, IL
</TABLE>
<PAGE>   4
                  SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                     IN WHICH HOUSING PROGRAMS LIMITED HAS AN INVESTMENT
                                      DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                       Units Authorized
                                         For Rental
                            No. of     Assistance Under        Units        Percentage of
Name & Location              Units        Section 8          Occupied        Total Units
---------------             ------     ----------------      --------       -------------

<S>                         <C>        <C>                   <C>            <C>
Plaza Village                 228              114              223              98%
  Woonsocket, RI

Round Barn Manor              156              156              156             100%
  Champaign, IL

Santa Fe Towers               252              251              252             100%
  Overland Park, KS

Walnut Towers                  78               77               77              99%
  Winfield, KS

Westwood Terrace               97               97               96              99%
  Moline, IL                -----            -----            -----

     TOTAL                  2,686            1,909            2,631              98%
                            =====            =====            =====
</TABLE>
<PAGE>   5
ITEM 2.  PROPERTIES

Through its participation in local limited partnerships, the Partnership holds
interests in real estate properties. See Item 1 and Schedule XI for information
pertaining to these properties.


ITEM 3.  LEGAL PROCEEDINGS

As of December 31, 1996, NAPICO was a plaintiff or defendant in several
lawsuits. None of these suits are related to the Partnership.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.


PART II.

ITEM 5.  MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED
         SECURITY HOLDER MATTERS

The Limited Partnership Interests are not traded on a public exchange, and it is
not anticipated that any public market will develop for the purchase and sale of
any Limited Partnership Interest. Limited Partnership Interests may be
transferred only if certain requirements are satisfied. Currently, there are
2,870 registered holders of Limited Partnership Interests in the Partnership.
The Partnership has invested in certain government assisted projects under
programs which in many instances restrict the cash return available to project
owners. The Partnership was not designed to provide cash distributions to
investors in circumstances other than refinancing or dispositions of its
investments in limited partnerships.
<PAGE>   6
ITEM 6.  SELECTED FINANCIAL DATA:



<TABLE>
<CAPTION>
                                                                        Year Ended December 31,
                                  ------------------------------------------------------------------------------------------------

                                      1996                 1995                 1994                 1993                 1992
                                  ------------         ------------         ------------         ------------         ------------

<S>                               <C>                  <C>                  <C>                  <C>                  <C>
Loss From Operations              $ (1,698,332)        $ (1,727,047)        $ (1,690,366)        $ (1,699,642)        $ (1,707,285)

Distribution From Limited
   Partnerships Recognized
   as Income                           387,721              307,474              520,001              473,210              172,080

Equity in Income (Loss)
   of Limited Partnerships
   and amortization of
   acquisition costs                   142,894               87,795             (210,249)             616,683              101,166
                                  ------------         ------------         ------------         ------------         ------------

Net Loss                          $ (1,167,717)        $ (1,331,778)        $ (1,380,614)        $   (609,749)        $ (1,434,039)
                                  ============         ============         ============         ============         ============

Net Loss per Limited
   Partner Interest               $        (94)        $       (108)        $       (111)        $        (49)        $       (115)
                                  ============         ============         ============         ============         ============



Total assets                      $ 15,312,532         $ 15,191,113         $ 15,692,284         $ 15,858,598         $ 16,566,893
                                  ============         ============         ============         ============         ============

Investments in
   Limited Partnerships           $ 14,364,056         $ 14,470,783         $ 14,533,940         $ 15,184,763         $ 16,065,129
                                  ============         ============         ============         ============         ============


Notes payable                     $ 10,169,743         $ 10,169,743         $ 10,177,433         $ 10,177,433         $ 10,260,196
                                  ============         ============         ============         ============         ============

Fees and Expenses Due to
   General Partners               $  1,317,044         $    990,393         $  1,092,620         $    714,742         $  1,545,846
                                  ============         ============         ============         ============         ============
</TABLE>
<PAGE>   7
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS:

LIQUIDITY

The Partnership's primary sources of funds include interest income on money
market accounts and certificates of deposit and distributions from local
partnerships in which the Partnership has invested. It is not expected that any
of the local partnerships in which the Partnership has invested will generate
cash flow sufficient to provide for distributions to the Partnership's limited
partners in any material amount.

CAPITAL RESOURCES

The Partnership received $30,920,000 in subscriptions for units of Limited
Partnership Interests (at $5,000 per unit) during the period September 12, 1984,
to June 30, 1986, pursuant to a registration statement filed on Form S-11.

The Partnership made its capital contributions to the local limited partnerships
in stages, over a period of two to five years, with each contribution due on a
specified date, provided that certain conditions regarding construction or
operation of the project were fulfilled. The Partnership has no further capital
commitments to the local limited partnerships.

RESULTS OF OPERATIONS

The Partnership was formed to provide various benefits to its partners as
discussed in Item 1. It is anticipated that the local partnerships in which the
Partnership has invested could produce losses for as long as 20 years from the
date of the Partnership investment. Tax benefits will decline over time as the
advantages of accelerated depreciation are greatest in the earlier years, as
deductions for interest expense decrease as mortgage principal is amortized and
as the Tax Reform Act of 1986 limits the deductions available. The Partnership
has sought to defer income taxes from capital gains by generally not selling any
projects or project interests.

Each individual limited partner's situation varies and limited partners should
contact their personal tax advisors for an understanding of his or her tax
situation.

The Partnership accounts for its investments in the local limited partnerships
on the equity method, thereby adjusting its investment balance by its
proportionate share of the income or loss of the local limited partnerships.
Equity in income (loss) of limited partnerships has significantly been affected
as a result of the Partnership not recognizing losses on the limited
partnerships after their respective investment balances have been reduced to
zero, in accordance with the equity method of accounting.

Distributions received from limited partnerships are recognized as return of
capital until the investment balance has been reduced to zero or to a negative
amount equal to future capital contributions required. Subsequent distributions
received are recognized as income.

Except for certificates of deposit and money market funds, the Partnership's
investments are entirely interests in other limited partnerships owning
government assisted projects. Available cash is invested providing interest
income as reflected in the statements of operations. These funds can be
converted to cash to meet obligations as they arise. The Partnership intends to
continue investing available funds in this manner.

The Montecito local partnership had been operating at a deficit, and the General
Partner of the Montecito Local Partnership was unsuccessful in its attempt to
negotiate a mortgage modification with the lender to improve the situation. No
mortgage payments were made subsequent to May 1994 and the mortgage was in
default. On July 18, 1995, the property was foreclosed by the lender. The
Partnership's original investment in the Montecito local partnership
<PAGE>   8
represented approximately 5% of the Partnership's total capital raised. The
Partnership's financial statements reflect no investment in the Montecito Local
Partnership at December 31, 1996 and 1995.

The lower-tier partnership that owns the Deep Lake Hermitage Apartments has
entered into a contract for the sale of Deep Lake Hermitage. There is a
$1,500,000 note payable (which note matured in October, 1996) by the Partnership
to a seller of interests in the lower-tier partnership that owns the Deep Lake
Hermitage property. The total outstanding balance of the note, including accrued
interest of $1,635,346, at December 31, 1996 is approximately $3,135,346, which
is currently due and payable. Based on the current estimated value of the Deep
Lake Hermitage property, the sale will not generate sufficient funds to fully
repay the note payable. The Partnership has entered into an agreement with the
noteholders who will accept a reduced payment of $1,000,000 together with net
cash flow generated by the project since October, 1996 in full satisfaction of
all obligations in order to enable the sale of the project. The project is in
the process of being sold for $4,800,000, which is scheduled to be completed in
August, 1997. Because the note and interest payable are non-recourse
liabilities, a gain on debt forgiveness is expected to be realized by the
Partnership upon sale of the property. However, if the sale is not completed,
the assignment of the Partnership's interest in Deep Lake Hermitage Apartments
will be delivered to the noteholders, resulting in the loss of the Partnership's
interest in the Deep Lake Local Partnership. The Partnership's carrying value of
the investment in the Deep Lake Local Partnership is approximately $980,000.

A recurring Partnership expense is the asset management fee, which is payable
monthly to the general partners of the Partnership and is calculated as a
percentage of the Partnership's invested assets. The management fee is paid to
the general partners for their continuing management of Partnership affairs. The
fee is payable beginning with the month following the Partnership's initial
investment in a local partnership. As of December 31, 1996 and 1995, $1,317,000
and $990,000 respectively, is owed to the general partners.

Operating expenses of the Partnership consist substantially of professional fees
for services rendered to the Partnership, management fees payable to the general
partners and accrued interest on the notes payable. Operating expenses have
remained relatively consistent for 1996, 1995 and 1994, except for legal fees
which increased as a result of the Montecito foreclosure.

The Partnership, as a Limited Partner in the local partnerships in which it has
invested, is subject to the risks incident to the construction, management, and
ownership of improved real estate. The Partnership investments are also subject
to adverse general economic conditions, and, accordingly, the status of the
national economy, including substantial unemployment and concurrent inflation,
could increase vacancy levels, rental payment defaults, and operating expenses,
which in turn, could substantially increase the risk of operating losses for the
projects.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:

The Financial Statements and Supplementary Data are listed under Item 14.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE:

Not applicable.
<PAGE>   9
                           HOUSING PROGRAMS LIMITED
                      (a California limited partnership)

                             FINANCIAL STATEMENTS,
                         FINANCIAL STATEMENT SCHEDULES
                 AND REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                               DECEMBER 31, 1996
<PAGE>   10
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
Housing Programs Limited
(A California limited partnership)

We have audited the accompanying balance sheets of Housing Programs Limited (a
California limited partnership) as of December 31, 1996 and 1995, and the
related statements of operations, partners' equity (deficiency) and cash flows
for each of the three years in the period ended December 31, 1996. Our audits
also included the financial statement schedules listed in the index on item 14.
These financial statements and financial statement schedules are the
responsibility of the management of the Partnership. Our responsibility is to
express an opinion on these financial statements and financial statement
schedules based on our audits. We did not audit the financial statements of
certain limited partnerships, the investments in which are reflected in the
accompanying financial statements using the equity method of accounting. The
investments in these limited partnerships represent 27 percent and 30 percent of
total assets as of December 31, 1996 and 1995, respectively, and the equity in
income (loss) of these limited partnerships represent 23 percent, 15 percent and
11 percent of the total net loss of the Partnership for the years ended December
31, 1996, 1995 and 1994, respectively, and represent a substantial portion of
the investee information in Note 2 and the financial statement schedules. The
financial statements of these limited partnerships are audited by other
auditors. Their reports have been furnished to us and our opinion, insofar as it
relates to the amounts included for these limited partnerships, is based solely
on the reports of the other auditors.

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

In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Housing Programs Limited as of December 31, 1996 and
1995, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1996 in conformity with generally
accepted accounting principles. Also, in our opinion, based on our audits and
the reports of other auditors, such financial statement schedules, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.



DELOITTE & TOUCHE LLP

Los Angeles, California
March 26, 1997
<PAGE>   11
                                 [LOGO]
                [Altschuler, Melvoin and Glasser LLP Letterhead]

          INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
                      ADDITIONAL FINANCIAL DATA REQUIRED BY
              THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

To the Partners of
Bannock Arms Second Limited Partnership

We have audited the accompanying balance sheets of BANNOCK ARMS SECOND LIMITED
PARTNERSHIP, FHA Project No. 124-35019-PM (the "Partnership") as of December 31,
1996 and 1995, and the related statements of income, changes in partners' equity
and cash flows for the years 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 audits.

We conducted our audits in accordance with generally accepted auditing standards
and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bannock Arms Second Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations,
changes in its partners' equity, and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
<PAGE>   12
Our audits were conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying 1996 additional financial data
shown on pages 13 through 20 are presented for purposes of additional analysis
and are not a required part of the financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the 1996
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.

/s/ ALTSCHULER, MELVOIN AND GLASSER LLP

Los Angeles, California
February 17, 1997
<PAGE>   13
[LOGO]
[Reznick Fedder & Silverman Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Berkeley Gardens Limited Partnership

         We have audited the accompanying balance sheet of Berkeley Gardens
Limited Partnership as of December 31, 1996, and the related statements of
profit and loss (on HUD Form No. 92410), partners' equity 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 generally accepted auditing
standards and 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. 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 Berkeley Gardens
Limited Partnership as of December 31, 1996, and the results of its operations,
the changes in partners' equity and cash flows for the year then ended, in
conformity with generally accepted accounting principles.

         Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 19
through 24 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 audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
<PAGE>   14
         In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
January 28, 1997 on our consideration of Berkeley Gardens Limited Partnership
internal control structure and on its compliance with specific requirements
applicable to major and nonmajor HUD programs, affirmative fair housing, and
laws and regulations applicable to the financial statements.

/s/ REZNICK FEDDER & SILVERMAN

Bethesda, Maryland
January 28, 1997
<PAGE>   15
[LOGO]
[LANDSMAN, FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

To the Partners
Cape La Croix Apts., Ltd.
(A Missouri Limited Partnership)

         We have audited the accompanying balance sheets of Cape La Croix Apts.,
Ltd. (A Missouri Limited Partnership), FHA Project Number 08544015-LDP, as of
December 31, 1996 and 1995, and the related statements of operations, changes in
partners' deficiency and cash flows for the years 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 audits.

         We conducted our audits in accordance with generally accepted auditing
standards and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cape La Croix Apts.,
Ltd. (A Missouri Limited Partnership) as of December 31, 1996 and 1995, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
<PAGE>   16
         In accordance with Government Auditing Standards, we have also issued a
report dated January 23, 1997 on our consideration of the Partnership's internal
control structure and reports dated January 23, 1997 on its compliance with
specific requirements applicable to major HUD programs and affirmative fair
housing.

         Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information (shown on pages 13 through 20) 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 financial statements
taken as a whole.

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California
January 23, 1997
<PAGE>   17
[LOGO]
[LANDSMAN, FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

To the Partners
Cloverdale Heights Apts., Ltd.
(An Indiana Limited Partnership)

         We have audited the accompanying balance sheets of Cloverdale Heights
Apts., Ltd. (An Indiana Limited Partnership), FHA Project Number 073-44131-LDP,
as of December 31, 1996 and 1995, and the related statements of operations,
changes in partners' deficiency and cash flows for the years 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 audits.

         We conducted our audits in accordance with generally accepted auditing
standards and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cloverdale Heights
Apts., Ltd. (An Indiana Limited Partnership) as of December 31, 1996 and 1995,
and the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
<PAGE>   18
         In accordance with Government Auditing Standards, we have also issued a
report dated January 23, 1997 on our consideration of the Partnership's internal
control structure and reports dated January 23, 1997 on its compliance with
specific requirements applicable to major and nonmajor HUD programs and
affirmative fair housing.

         Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information (shown on pages 13 through 22) 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 financial statements
taken as a whole.

/s/ LANDSMAN FRANK AND BLOCH


Beverly Hills, California
January 23, 1997
<PAGE>   19
[LOGO]
[LANDSMAN, FRANK AND BLOCH LETTERHEAD]
Independent Auditors' Report

To the Partners
Cloverleaf Apts., Ltd.
(An Indiana Limited Partnership)

         We have audited the accompanying balance sheets of Cloverleaf Apts.,
Ltd. (An Indiana Limited Partnership), FHA Project Number 07335092-PM, as of
December 31, 1996 and 1995, and the related statements of operations, changes in
partners' deficiency and cash flows for the years 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 audits.

         We conducted our audits in accordance with generally accepted auditing
standards and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cloverleaf Apts.,
Ltd. (An Indiana Limited Partnership) as of December 31, 1996 and 1995, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
<PAGE>   20
         In accordance with Government Auditing Standards, we have also issued a
report dated January 23, 1997 on our consideration of the Partnership's internal
control structure and reports dated January 23, 1997 on its compliance with
specific requirements applicable to major HUD programs and affirmative fair
housing.

         Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information (shown on pages 12 through 19) 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 financial statements
taken as a whole.

/s/ LANDSMAN, FRANK AND BLOCH


Beverly Hills, California
January 23, 1997
<PAGE>   21
[LOGO]
[NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]

                      INDEPENDENT AUDITORS' REPORT ON FINANCIAL
                      STATEMENTS AND ADDITIONAL FINANCIAL DATA


To the Partners of
Deep Lake Shores Associates

We have audited the accompanying balance sheets of DEEP LAKE SHORES ASSOCIATES
(an Illinois limited partnership), FHA Project No. 071-35320-PM-L8 (the
"Partnership") as of December 31, 1996 and 1995, and the related statements of
operations, changes in partners' equity and cash flows for the years 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 audits.

We conducted our audits in accordance with generally accepted auditing standards
and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Deep Lake Shores Associates at
December 31, 1996 and 1995, and the results of its operations, changes in its
partners' equity, and its cash flows for the years then ended, in conformity
with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
<PAGE>   22
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying additional 1996
financial data shown on pages 13 through 20 are presented for purposes of
additional analysis and are not a required part of the financial statements.
Such information has been subjected to the auditing procedures applied in the
audit of the 1996 financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.

/s/ NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP

February 17, 1997
<PAGE>   23
[LOGO]
[Coopers & Lybrand Letterhead]

Report of Independent Accountants

To the Partners of
Oshtemo Limited Dividend
Housing Association:

We have audited the accompanying balance sheet of Oshtemo Limited Dividend
Housing Association (a Michigan limited partnership), MSHDA Development No. 544,
as of December 31, 1996 and the related statements of profit and loss, partners'
equity, 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 generally accepted auditing standards
and 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. 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 Oshtemo Limited Dividend
Housing Association, as of December 31, 1996 and the results of its operations
and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 1997 on our consideration of Oshtemo Limited Dividend Housing
Association's internal control structure and a report dated January 31, 1997 on
its compliance with laws and regulations.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included on pages
13 and 14 is presented for purposes of additional analysis and is not a required
part of the basic financial statements of Oshtemo Limited Dividend Housing
Association. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated, in all material respects, in relation to the basic financial
statements taken as a whole.
<PAGE>   24
We have previously audited and expressed an unqualified opinion on the financial
statements of Oshtemo Limited Dividend Housing Association for the years 1990
through 1995. In our opinion, the supplemental data included on page 15,
relating to the years 1990 through 1996, is fairly stated, in all material
respects, in relation to the basic financial statements from which it has been
derived. The data on page 15 for the years 1983 through 1989 was not audited by
us and, accordingly, we do not express an opinion on such data. That data was
audited by other auditors who have ceased operation and whose report, dated
January 24, 1990, stated that such information was fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.

/s/ COOPER & LYBRAND LLP

Detroit, Michigan
January 31, 1997
<PAGE>   25
[LOGO]
[Reznick Fedder & Silverman Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Hyattsville Housing Associates

         We have audited the accompanying balance sheet of Hyattsville Housing
Associates as of December 31, 1996, and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
movement. Our responsibility is to express an opinion on these financial
statements bow on our audit.

         We conducted our audit in accordance with generally accepted auditing
standards and 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. 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 Hyattsville Housing
Associates as of December 31, 1996, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.

         Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page 19
through 30 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information, except for
that portion marked "unaudited", on which we express no opinion, has been
subjected to the audit procedure applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
<PAGE>   26
         In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs, we have also issued reports dated
January 17, 1997m, on our consideration of Hyattsville Housing Associates'
internal control structure and on its compliance with specific requirements
applicable to the financial statements.

/s/ RESNICK FEDDER & SILVERMAN

Baltimore, Maryland
January 17, 1997
<PAGE>   27
[LOGO]
[LANDSMAN, FRANK & BLOCH LETTERHEAD]

Independent Auditors' Report

To the Partners
Jenny Lind Hall Second Limited Partnership

         We have audited the accompanying balance sheets of Jenny Lind Hall
Second Limited Partnership, FHA Project Number 084-35127-L8-PM-WAH, as of
December 31, 1996 and 1995, and the related statements of operations, changes in
partners' deficiency and cash flows for the years 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 audits.

         We conducted our audits in accordance with generally accepted auditing
standards and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Jenny Lind Hall
Second Limited Partnership as of December 31, 1996 and 1995, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
<PAGE>   28
         In accordance with Government Auditing Standards, we have also issued a
report dated January 29, 1997 on our consideration of the Partnership's internal
control structure and reports dated January 29, 1997 on its compliance with
specific requirements applicable to major and nonmajor HUD programs and
affirmative fair housing.

         Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information (shown on pages 12 through 21) 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 financial statements
taken as a whole.

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California
January 29, 1997
<PAGE>   29
                                [LOGO]
                 [Altschuler, Melvin and Glasser LLP Letterhead]

              INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
             AND ADDITIONAL FINANCIAL DATA REQUIRED BY THE ILLINOIS
              HOUSING DEVELOPMENT AUTHORITY AND THE U.S. DEPARTMENT
                        OF HOUSING AND URBAN DEVELOPMENT

To the Partners of
Lancaster Heights Associates

We have audited the accompanying balance sheets of LANCASTER HEIGHTS ASSOCIATES
(an Illinois limited partnership), IHDA Project No. ML-7 (the "Partnership") as
of December 31, 1996 and 1995, and the related statements of operations, changes
in partners' deficiency and cash flows for the years 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 audits.

We conducted our audits in accordance with generally accepted auditing standards
and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lancaster Heights Associates as
of December 31, 1996 and 1995, and the results of its operations, changes in its
partners' deficiency, and its cash flows for the years then ended in conformity
with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
<PAGE>   30
Our audits were conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying additional 1996 financial data
shown on pages 16 through 20 are presented for purposes of additional analysis
and are not a required part of the financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the 1996
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.

/s/ ALTSCHULER, MELVOIN AND GLASSER LLP

Los Angeles, California
February 17, 1997
<PAGE>   31
[LOGO]
[Reznick Fedder & Silverman Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Locust House Associates

         We have audited the accompanying balance sheet of Locust House
Associated as of December 31, 1996, and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity 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 generally accepted auditing
standards and 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. 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 Hyattsville Housing
Associates as of December 31, 1996, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.

         Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page 19
through 30 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information, except for
that portion marked "unaudited", on which we express no opinion, has been
subjected to the audit procedure applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
<PAGE>   32
         In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs, we have also issued reports dated
January 8, 1997, on our consideration of Locust House Associates' internal
control structure and on its compliance with specific requirements applicable to
CDA programs, affirmative fair housing, and laws and regulations applicable to
the financial statements.

/s/ REZNICK FEDDER & SILVERMAN

Baltimore, Maryland
January 8, 1997
<PAGE>   33
[LOGO]
[LANDSMAN, FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

To the Partners
Midpark Towers Second Limited Partnership

         We have audited the accompanying balance sheets of Midpark Towers
Second Limited Partnership, FHA Project Number 112-38010-PM-L8, as of December
31, 1996 and 1995, and the related statements of operations, changes in
partners' deficiency and cash flows for the years 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 audits.

         We conducted our audits in accordance with generally accepted auditing
standards and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Midpark Towers
Second Limited Partnership as of December 31, 1996 and 1995, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
<PAGE>   34
         In accordance with Government Auditing Standards, we have also issued a
report dated January 29, 1997 on our consideration of the Partnership's internal
control structure and reports dated January 29, 1997 on its compliance with
specific requirements applicable to major HUD programs and affirmative fair
housing.

         Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information (shown on pages 12 through 20) 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 financial statements
taken as a whole.

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California
January 29, 1997
<PAGE>   35
                                   [LOGO]
                      [ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
            INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
  ADDITIONAL FINANCIAL DATA REQUIRED BY THE ILLINOIS HOUSING DEVELOPMENT
     AUTHORITY AND THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

To the Partners of
OHA Associates

We have audited the accompanying balance sheets of OHA ASSOCIATES (an Illinois
limited partnership), IHDA Project No. ML-99 (the "Partnership"), as of December
31, 1996 and 1995, and the related statements of income, changes in partners'
deficiency and cash flows for the years 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 audits.

We conducted our audits in accordance with generally accepted auditing standards
and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of OHA Associates as of December
31, 1996 and 1995, and the results of its operations, changes in its partners'
deficiency, and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
<PAGE>   36
Our audits were conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying additional 1996 financial data
shown on pages 16 through 20 are presented for purposes of additional analysis
and are not a required part of the basic financial statements of the
Partnership. 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 basic financial
statements taken as a whole.

/s/ ALTSCHULER, MELVOIN AND GLASSER LLP

Los Angeles, California
February 17, 1997
<PAGE>   37
[LOGO]
[PEAT MARWICK LLP LETTERHEAD]

The Partners
Plaza Village Group:

                          Independent Auditors' Report

We have audited the accompanying balance sheet of Plaza Village Group (the
"Partnership"), FHA Project No. 016-44076-LDT-SUP as of December 31, 1996, and
the related statements of profit and loss (on HUD Form 92410), changes in
partners' equity 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 generally accepted auditing standards
and 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. 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 the Partnership as of December
31, 1996, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued reports
dated January 24, 1997 on: our consideration of the Partnership's internal
control structure, the Partnership's compliance with specific requirements
applicable to major HUD programs, and the Partnership's compliance with specific
requirements applicable to affirmative fair housing.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information included in Schedules
1 through 7 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 audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

/s/ PEAT MARWICK

January 24, 1997
<PAGE>   38
                                     [LOGO]
                 [Altschuler, Melvin and Glasser LLP Letterhead]

To the Partners of
Round Barn Manor Associates

We have audited the accompanying balance sheets of ROUND BARN MANOR ASSOCIATES
(an Illinois limited partnership), IHDA Project No. ML-86 (the "Partnership") as
of December 31, 1996 and 1995, and the related statements of income, changes in
partners' deficiency and cash flows for the years 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 audits.

We conducted our audits in accordance with generally accepted auditing standards
and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Round Barn Manor Associates as
of December 31, 1996 and 1995, and the results of its operations, changes in its
partners' deficiency and its cash flows for the years then ended in conformity
with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
<PAGE>   39
Our audits were conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying additional 1996 financial data
shown on pages 16 through 20 are presented for purposes of additional analysis
and are not a required part of the financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the 1996
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.

/s/ ALTSCHULER, MELVOIN AND GLASSER LLP

Los Angeles, California
February 17, 1997
<PAGE>   40
[LOGO]
[LANDSMAN, FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

To the Partners
Santa Fe Towers Second Limited Partnership

         We have audited the accompanying balance sheets of Santa Fe Towers
Second Limited Partnership, FHA Project Number 084-35180-L8-PM-WAH, as of
December 31, 1996 and 1995, and the related statements of operations, changes in
partners' deficiency and cash flows for the years 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 audits.

         We conducted our audits in accordance with generally accepted auditing
standards and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Santa Fe Towers
Second Limited Partnership as of December 31, 1996 and 1995, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
<PAGE>   41
         In accordance with Government Auditing Standards, we have also issued a
report dated January 29, 1997 on our consideration of the Partnership's internal
control structure and reports dated January 29, 1997 on its compliance with
specific requirements applicable to major HUD programs and affirmative fair
housing.

         Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information (shown on pages 12 through 20) 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 financial statements
taken as a whole.

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California
January 29, 1997
<PAGE>   42
[LOGO]
[LANDSMAN, FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

To the Partners
Walnut Towers Second Limited Partnership

         We have audited the accompanying balance sheets of Walnut Towers Second
Limited Partnership, FHA Project Number 102-35090-L8-PM-WAH, as of December 31,
1996 and 1995, and the related statements of operations, changes in partners'
deficiency and cash flows for the years 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 audits.

         We conducted our audits in accordance with generally accepted auditing
standards and 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Walnut Towers Second Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
<PAGE>   43
         In accordance with Government Auditing Standards, we have also issued a
report dated January 29, 1997 on our consideration of the Partnership's internal
control structure and reports dated January 29, 1997 on its compliance with
specific requirements applicable to major and nonmajor HUD programs and
affirmative fair housing.

         Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information t shown on pages 12 through 20) 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 financial statements
taken as a whole.

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California
January 29, 1997
<PAGE>   44
                                 [LOGO]
                      [Altschuler, Melvoin and Glasser LLP Letterhead]

             INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
                    ADDITIONAL FINANCIAL DATA REQUIRED BY THE
               U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT AND
                    THE ILLINOIS HOUSING DEVELOPMENT AUTHORITY

To the Partners of
Westwood Terrace Second Limited Partnership

We have audited the balance sheets of WESTWOOD TERRACE SECOND LIMITED
PARTNERSHIP, IHDA Project No. ML-100, as of December 31, 1996 and 1995, and the
statements of operations, changes in partners' deficit and cash flows for the
years 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 audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management as well as evaluating the overall financial statement
presentation. We believe our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Westwood Terrace Second Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations,
changes in partners' deficit and cash flows for the years then ended in
conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 31, 1997, on its compliance with
laws and regulations.
<PAGE>   45
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The additional financial data on pages 16 through
19 are presented for purposes of additional analysis and are not a required part
of the financial statements. This information has been subjected to the
procedures applied in the audits of the financial statements and, in our
opinion, is stated fairly in all material respects in relation to the financial
statements taken as a whole.

/s/ ALTSCHULER, MELVOIN AND GLASSER LLP

Chicago, Illinois
January 31, 1997
<PAGE>   46
                            HOUSING PROGRAMS LIMITED
                       (a California limited partnership)

                                 BALANCE SHEETS

                           DECEMBER 31, 1996 AND 1995

                                     ASSETS

<TABLE>
<CAPTION>
                                                           1996                1995
                                                       ------------        ------------
<S>                                                    <C>                 <C>         
INVESTMENTS IN LIMITED PARTNERSHIPS
    (Notes 1 and 2)                                    $ 14,364,056        $ 14,470,783

CASH AND CASH EQUIVALENTS (Note 1)                          948,476             595,330

SHORT TERM INVESTMENTS (Note 1)                                  --             125,000
                                                       ------------        ------------
          TOTAL ASSETS                                 $ 15,312,532        $ 15,191,113
                                                       ============        ============

                      LIABILITIES AND PARTNERS' DEFICIENCY

LIABILITIES:
     Notes payable (Notes 3 and 7)                     $ 10,169,743        $ 10,169,743
     Accrued fees and expenses due general
         partners (Note 4)                                1,317,044             990,393
     Accrued interest payable (Notes 3 and 7)            10,811,557           9,864,545
     Accounts payable                                        30,905              15,432
                                                       ------------        ------------

                                                         22,329,249          21,040,113
                                                       ------------        ------------

COMMITMENTS AND CONTINGENCIES (Notes 2, 4 and 6)

PARTNERS' EQUITY (DEFICIENCY):
     General partners                                      (320,913)           (309,236)
     Limited partners                                    (6,695,804)         (5,539,764)
                                                       ------------        ------------

                                                         (7,016,717)         (5,849,000)
                                                       ------------        ------------
           TOTAL LIABILITIES AND PARTNERS'
                DEFICIENCY                             $ 15,312,532        $ 15,191,113
                                                       ============        ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

<PAGE>   47

                            HOUSING PROGRAMS LIMITED
                       (a California limited partnership)

                            STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
                                                        1996              1995               1994
                                                     -----------       -----------       -----------
<S>                                                  <C>               <C>               <C>        
INTEREST INCOME                                      $    39,934       $    44,144       $    26,370
                                                     -----------       -----------       -----------
OPERATING EXPENSES:
     Management fees - general partner (Note 4)          526,651           547,773           568,896
     General and administrative (Note 4)                  59,324            86,350            88,393
     Legal and accounting (Note 4)                       124,958           125,941            93,321
     Interest (Notes 3 and 4)                          1,027,333         1,011,127           966,126
                                                     -----------       -----------       -----------
       Total operating expenses                        1,738,266         1,771,191         1,716,736
                                                     -----------       -----------       -----------
LOSS FROM OPERATIONS                                  (1,698,332)       (1,727,047)       (1,690,366)

DISTRIBUTIONS FROM LIMITED
     PARTNERSHIPS RECOGNIZED
     AS INCOME                                           387,721           307,474           520,001

EQUITY IN INCOME (LOSS) OF LIMITED
     PARTNERSHIPS AND AMORTIZATION
     OF ACQUISITION COSTS (Note 2)                       142,894            87,795          (210,249)
                                                     -----------       -----------       -----------
NET LOSS                                             $(1,167,717)      $(1,331,778)      $(1,380,614)
                                                     ===========       ===========       ===========
NET LOSS PER LIMITED PARTNERSHIP
     INTEREST                                        $       (94)      $      (108)      $      (111)
                                                     ===========       ===========       ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

<PAGE>   48

                            HOUSING PROGRAMS LIMITED
                       (a California limited partnership)

                   STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
                                     General           Limited
                                     Partners          Partners           Total
                                   -----------       -----------       -----------
<S>                                <C>                <C>               <C>        
DEFICIENCY, January 1, 1994        $  (282,112)       (2,854,496)       (3,136,608)

    Net loss, 1994                     (13,806)       (1,366,808)       (1,380,614)
                                   -----------       -----------       -----------
DEFICIENCY, December 31, 1994         (295,918)       (4,221,304)       (4,517,222)

    Net loss, 1995                     (13,318)       (1,318,460)       (1,331,778)
                                   -----------       -----------       -----------
DEFICIENCY, December 31, 1995         (309,236)       (5,539,764)       (5,849,000)

    Net loss, 1996                     (11,677)       (1,156,040)       (1,167,717)
                                   -----------       -----------       -----------

DEFICIENCY, December 31, 1996      $  (320,913)      $(6,695,804)      $(7,016,717)
                                   ===========       ===========       ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

<PAGE>   49

                            HOUSING PROGRAMS LIMITED
                       (a California limited partnership)

                            STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
                                                                   1996              1995              1994
                                                                -----------       -----------       -----------
<S>                                                             <C>               <C>               <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net  loss                                                   $(1,167,717)      $(1,331,778)      $(1,380,614)
    Adjustments to reconcile net loss to net cash
       provided by (used in) operating activities:
           Equity in loss (income) of limited partnerships         (181,384)         (126,285)          171,759
           Amortization of acquisition costs                         38,490            38,490            38,490
           Increase in accrued interest payable                     947,012           947,014           819,138
           Increase (decrease) in accrued fees and
              expenses due general partners                         326,651          (102,227)          377,878
           Increase (decrease) in accounts payable                   15,473            (6,490)           17,284
                                                                -----------       -----------       -----------
                 Net cash provided by (used in)
                    operating activities                            (21,475)         (581,276)           43,935
                                                                -----------       -----------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital contributions to limited partnerships                  (915,568)         (671,865)       (1,391,975)
    Distributions from limited partnerships
       recognized as a return of capital                          1,165,189           822,817         1,832,549
    Decrease (increase) in short term investments                   125,000           408,409          (408,409)
                                                                -----------       -----------       -----------
                Net cash  provided by investing activities          374,621           559,361            32,165
                                                                -----------       -----------       -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Payment of notes payable                                             --            (7,690)               --
                                                                -----------       -----------       -----------
NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS                                            353,146           (29,605)           76,100

CASH AND CASH EQUIVALENTS,
    beginning of year                                               595,330           624,935           548,835
                                                                -----------       -----------       -----------
CASH AND CASH EQUIVALENTS,
    end of year                                                 $   948,476       $   595,330       $   624,935
                                                                ===========       ===========       ===========
SUPPLEMENTAL DISCLOSURE OF
   CASH FLOW INFORMATION
      Cash paid during the year for interest                    $    80,321       $    64,113       $   146,986
                                                                ===========       ===========       ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

<PAGE>   50

                            HOUSING PROGRAMS LIMITED
                       (a California limited partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1996

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Organization

         Housing Programs Limited (the "Partnership"), formed under the
         California Uniform Limited Partnership Act, was organized on May 15,
         1984. The Partnership was formed to invest primarily in other limited
         partnerships which own or lease and operate federal, state or local
         government-assisted housing projects. The general partners of the
         Partnership are National Partnership Investments Corp. (NAPICO), and
         Coast Housing Investment Associates (CHIA), a limited partnership and
         Housing Programs Corporation II. Casden Investment Corp. owns 100
         percent of NAPICO's stock. The limited partner of CHIA is an officer of
         NAPICO.

         The Partnership offered and issued 6,184 units of limited partnership
         interests through a public offering. Each unit was comprised of two
         limited partnership interests and one warrant, which entitled the
         investor two additional limited partnership interests. An additional
         6,184 of interests were issued from the exercise of warrants and the
         sale of interests associated with warrants not exercised. The general
         partners have a 1 percent interest in profits and losses of the
         Partnership. The limited partners have the remaining 99 percent
         interest in proportion to their respective investments.

         The Partnership shall be dissolved only upon the expiration of 50
         complete calendar years (December 31, 2034) from the date of the
         formation of the Partnership or upon the occurrence of various other
         events as described in the terms of the Partnership agreement.

         Upon total or partial liquidation of the Partnership or the disposition
         or partial disposition of a project or project interest and
         distribution of the proceeds, the general partners will be entitled to
         a liquidation fee as stipulated in the Partnership agreement. The
         limited partners will have a priority return equal to their invested
         capital attributable to the project(s) or project interest(s) sold and
         shall receive from the sale of the project(s) or project interest(s) an
         amount sufficient to pay state and federal income taxes, if any,
         calculated at the maximum rate then in effect. The general partners'
         liquidation fee may accrue but shall not be paid until the limited
         partners have received distributions equal to 100 percent of their
         capital contributions.

         Use of Estimates

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and reported amounts of revenues and
         expenses during the reporting period. Actual results could differ from
         those estimates.

         Method of Accounting for Investments in Limited Partnerships

         The investments in local limited partnerships are accounted for on the
         equity method. Acquisition, selection and other costs related to the
         acquisition of the projects have been capitalized to the investment


                                       5
<PAGE>   51

                            HOUSING PROGRAMS LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         account and are being amortized on a straight line basis over the
         estimated lives of the underlying assets, which is generally 30 years.

         Net Loss Per Limited Partnership Interest

         Net loss per limited partnership interest was computed by dividing the
         limited partners' share of net loss by the number of limited
         partnership interests outstanding during the year. The number of
         limited partnership interests was 12,368 for all years presented.

         Cash and Cash Equivalents

         Cash and cash equivalents consist of cash and bank certificates of
         deposit with an original maturity of three months or less. The
         Partnership has its cash and cash equivalents on deposit primarily with
         one money market mutual fund. Such cash and cash equivalents are
         uninsured.

         Short Term Investments

         Short term investments consist of bank certificates of deposit and
         other securities with original maturities ranging from more than three
         months to twelve months. The fair value of these securities, which have
         been classified as held for sale, approximates their carrying value.

         Impairment of Long-Lived Assets

         The Partnership reviews long-lived assets to determine if there has
         been any permanent impairment whenever events or changes in
         circumstances indicate that the carrying amount of the asset may not be
         recoverable. If the sum of the expected future cash flows is less than
         the carrying amount of the assets, the Partnership recognizes an
         impairment loss.

2.       INVESTMENTS IN LIMITED PARTNERSHIPS

         The Partnership now holds limited partnership interests in 18 limited
         partnerships. The partnerships own residential rental projects
         consisting of 2,686 apartment units. The mortgage loans of these
         projects are insured by various governmental agencies.

         The Partnership, as a limited partner, is entitled to 99 percent of the
         profits and losses of the limited partnerships.

         Equity in losses of limited partnerships is recognized in the financial
         statements until the limited partnership investment account is reduced
         to a zero balance. Losses incurred after the investment account is
         reduced to zero are not recognized. The cumulative amount of
         unrecognized equity in losses of certain limited partnerships was
         approximately $11,603,000 and $10,273,000 as of December 31, 1996 and
         1995, respectively.


                                       6
<PAGE>   52

                            HOUSING PROGRAMS LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996


2.       INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

         Distributions from the limited partnerships are recognized as a
         reduction of capital until the investment balance has been reduced to
         zero or to a negative amount equal to further capital contributions
         required. Subsequent distributions are recognized as income.

         The following is a summary of the investments in limited partnerships
         and reconciliation to the limited partnership accounts:

<TABLE>
<CAPTION>
                                                                1996               1995
                                                            ------------       ------------
<S>                                                         <C>                <C>         
Investment balance, beginning of year                       $ 14,470,783       $ 14,533,940
Equity in income of limited partnerships                         181,384            126,285
Amortization of capitalized acquisition costs and fees           (38,490)           (38,490)
Capital Contributions                                            915,568            671,865
Distributions recognized as a return of capital               (1,165,189)          (822,817)
                                                            ------------       ------------
Investment balance, end of year                             $ 14,364,056       $ 14,470,783
                                                            ============       ============
</TABLE>

         The difference between the investment per the accompanying balance
         sheets at December 31, 1996 and 1995, and the equity per the limited
         partnerships' combined financial statements is due primarily to
         cumulative unrecognized equity in losses of certain limited
         partnerships, costs capitalized to the investment account and
         cumulative distributions recognized as income.

         Selected financial information from the combined financial statements
         of the limited partnerships at December 31, 1996 and 1995 and for each
         of the three years in the period ended December 31, 1996 is as follows:

                                 Balance Sheets

<TABLE>
<CAPTION>
                                                       1996              1995
                                                     --------          --------
                                                          (in thousands)
<S>                                                  <C>               <C>     
Land and buildings, net                              $ 57,726          $ 60,660
                                                     ========          ========
Total assets                                         $ 77,431          $ 79,347
                                                     ========          ========
Mortgages payable                                    $ 56,826          $ 57,914
                                                     ========          ========
Total liabilities                                    $ 79,446          $ 79,556
                                                     ========          ========
Equity of Housing Programs Limited                   $ (1,640)         $    145
                                                     ========          ========
Deficiency of other partners                         $   (375)         $   (354)
                                                     ========          ========
</TABLE>


                                       7
<PAGE>   53

                            HOUSING PROGRAMS LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996


2.       INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

                            Statements of Operations

<TABLE>
<CAPTION>
                                              1996           1995           1994
                                            --------       --------       --------
                                                         (in thousands)
<S>                                         <C>            <C>            <C>     
Total revenues                              $ 17,935       $ 17,132       $ 16,817
                                            ========       ========       ========
Interest expense                            $  3,634       $  3,706       $  3,772
                                            ========       ========       ========
Depreciation                                $  3,532       $  3,524       $  3,508
                                            ========       ========       ========
Total expenses                              $ 19,091       $ 18,525       $ 18,439
                                            ========       ========       ========
Net loss                                    $ (1,156)      $ (1,393)      $ (1,622)
                                            ========       ========       ========
Net loss allocable to Housing Programs
  Limited                                   $ (1,148)      $ (1,379)      $ (1,606)
                                            ========       ========       ========
</TABLE>

         An affiliate of NAPICO is the general partner in 10 of the limited
         partnerships included above and another affiliate of NAPICO receives
         property management fees of approximately 5 to 6 percent of revenues
         from five of these partnerships. The affiliate received property
         management fees of $244,827, $234,903 and $236,149 in 1996, 1995 and
         1994, respectively. The following sets forth the significant data for
         these partnerships, reflected in the accompanying financial statements
         using the equity method of accounting:

<TABLE>
<CAPTION>
                                              1996           1995           1994
                                            --------       --------       -------- 
                                                        (in thousands)
<S>                                         <C>            <C>            <C>     
Total assets                                $ 40,380       $ 41,816
                                            ========       ========
Total liabilities                           $ 49,766       $ 50,007
                                            ========       ========
Deficiency of Housing Programs Limited      $ (9,151)      $ (7,971)
                                            ========       ======== 
Deficiency of other partners                $   (235)      $   (220)
                                            ========       ======== 
Total revenue                               $  9,741       $  9,283       $  9,116
                                            ========       ========       ========
Net loss                                    $   (686)      $   (828)      $ (1,079)
                                            ========       ========       ======== 
</TABLE>

         The Montecito local partnership had been operating at a deficit, and
         the general partner was unsuccessful in its attempt to negotiate a
         mortgage modification with the lender to improve the situation. No
         mortgage


                                       8
<PAGE>   54

                            HOUSING PROGRAMS LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996


2.       INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

         payments to the lender were made subsequent to May 1994 and the
         mortgage was in default. On July 18, 1995, the property was foreclosed
         by the lender. The Partnership's original investment in the Montecito
         local partnership represents approximately 5% of the Partnership's
         total capital raised. The Partnership's financial statements reflect no
         investment in Montecito at December 31, 1996 and 1995.

3.       NOTES PAYABLE

         Certain of the Partnership's investments involved purchases of
         partnership interests from partners who subsequently withdrew from the
         operating partnership. The Partnership is obligated for non-recourse
         notes payable of $10,169,743 to the sellers of the partnership
         interests, bearing interest at 9.5 percent through December 31, 1994.
         Effective January 1, 1995, the interest rate for two notes totaling
         $1,500,000 changed to 12.5 percent per terms of the note. The notes
         have principal maturity dates ranging from October 31, 1996 to December
         2001 or upon sale or refinancing of the underlying partnership
         properties. These obligations and the related interest are
         collateralized by the Partnership's investment in the investee limited
         partnerships and are payable only out of cash distributions from the
         investee partnerships, as defined in the notes. Unpaid interest is due
         at maturity of the notes.

         The lower-tier partnership that owns the Deep Lake Hermitage Apartments
         has entered into a contract for the sale of Deep Lake Hermitage. There
         is a $1,500,000 note payable (which note matured in October, 1996) by
         the Partnership to a seller of interests in the lower-tier partnership
         that owns the Deep Lake Hermitage property. The total outstanding
         balance of the note, including accrued interest of $1,635,346, at
         December 31, 1996 is approximately $3,135,346, which is currently due
         and payable. Based on the current estimated value of the Deep Lake
         Hermitage property, the sale will not generate sufficient funds to
         fully repay the note payable. The Partnership has entered into an
         agreement with the noteholders who will accept a reduced payment of
         $1,000,000 together with net cash flow generated by the project since
         October, 1996 in full satisfaction of all obligations in order to
         enable the sale of the project. The project is in the process of being
         sold for $4,800,000, which is scheduled to be completed in August,
         1997. Because the note and interest payable are non-recourse
         liabilities, a gain on debt forgiveness is expected to be realized by
         the Partnership upon sale of the property. However, if the sale is not
         completed, the assignment of the Partnership's interest in Deep Lake
         Hermitage Apartments will be delivered to the noteholders, resulting in
         the loss of the Partnership's interest in the Deep Lake Local
         Partnership. The Partnership's carrying value of the investment in the
         Deep Lake Local Partnership is approximately $980,000.


                                       9
<PAGE>   55

                            HOUSING PROGRAMS LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996


3.       NOTES PAYABLE (CONTINUED)

         Maturity dates on the notes and related accrued interest payable are as
         follows:

<TABLE>
<CAPTION>
                                                 Accrued
Years Ending December 31,     Notes              Interest               Total
-------------------------  -----------          -----------          -----------
<S>                        <C>                  <C>                  <C>        
             1997          $ 1,500,000          $ 1,635,346          $ 3,135,346
             1998
             1999            7,669,743            8,064,092           15,733,835
             2000
             2001            1,000,000            1,112,119            2,112,119
                           -----------          -----------          -----------
                           $10,169,743          $10,811,557          $20,981,300
                           ===========          ===========          ===========
</TABLE>

4.       FEES AND EXPENSES DUE GENERAL PARTNERS

         Under the terms of the Restated Certificate and Agreement of the
         Limited Partnership, the Partnership is obligated to the general
         partners for an annual asset management fee equal to .5% of the
         original invested assets of the limited partnerships. Invested assets
         is defined as the costs of acquiring project interests including the
         proportionate amount of the mortgage loans related to the Partnership's
         interest in the capital accounts of the respective limited
         partnerships.

         As of December 31, 1996, the fees and expenses due the general partners
         exceeded the Partnership's cash. The general partners, during the
         forthcoming year, will not demand payment of amounts due in excess of
         such cash or such that the Partnership would not have sufficient
         operating cash; however, the Partnership will remain liable for all
         such amounts.

         The Partnership reimburses NAPICO for certain expenses. The
         reimbursement to NAPICO was $9,948, $29,845 and $28,764 in 1996, 1995
         and 1994, respectively, and is included in operating expenses.

         Pursuant to a Memorandum of Understanding entered into on August 11,
         1995, the Partnership paid $16,207 in interest on May 1, 1996 to an
         affiliate of NAPICO, that served as the management company for
         properties owned by the Partnership. The interest relates to funds
         advanced to the Partnership by the master disbursement account
         maintained by the management company. In addition, the Partnership on
         May 1, 1996 reimbursed Housing Programs Corporation II $15,000 for
         professional fees, which were paid on behalf of the Partnership in
         connection with issues raised in the Memorandum of Understanding.


                                       10
<PAGE>   56

                            HOUSING PROGRAMS LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1996

5.       INCOME TAXES

         No provision has been made for income taxes in the accompanying
         financial statements since such taxes, if any, are the liability of the
         individual partners. The major differences in tax and financial
         reporting result from the use of different bases and depreciation
         methods for the properties held by the limited partnerships.
         Differences in tax and financial reporting also arise as losses are not
         recognized for financial reporting purposes when the investment balance
         has been reduced to zero or to a negative amount equal to further
         capital contributions required.

6.       CONTINGENCIES

         NAPICO is a plaintiff in various lawsuits and has also been named as a
         defendant in other lawsuits arising from transactions in the ordinary
         course of business. In the opinion of management and NAPICO, the claims
         will not result in any material liability to the Partnership.

7.       FAIR VALUE OF FINANCIAL INSTRUMENTS

         Statement of Financial Accounting Standards No. 107, "Disclosure about
         Fair Value of Financial Instruments," requires disclosure of fair value
         information about financial instruments, when it is practicable to
         estimate that value. The notes payable are collateralized by the
         Partnership's investments in investee limited partnerships and are
         payable only out of cash distributions from the investee

7.       FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

         partnerships. The operations generated by the investee limited
         partnerships, which account for the Partnership's primary source of
         revenues, are subject to various government rules, regulations and
         restrictions which make it impracticable to estimate the fair value of
         the notes payable and related accrued interest. The carrying amount of
         other assets and liabilities reported on the balance sheets that
         require such disclosure approximates fair value due to their short-term
         maturity.

8.       FOURTH-QUARTER ADJUSTMENT

         The Partnership's policy is to record its equity in the loss of limited
         partnerships on a quarterly basis using estimated financial information
         furnished by the various local operating general partners. The equity
         in income (loss) of limited partnerships reflected in the accompanying
         financial statements is based primarily upon audited financial
         statements of the investee limited partnerships. The difference,
         $28,893, between the estimated nine-month equity in income and the
         actual 1996 year-to-date equity in loss has been recorded in the fourth
         quarter.


                                       11
<PAGE>   57

                                                                        SCHEDULE

                                                  HOUSING PROGRAMS LIMITED
                                          INVESTMENTS IN LIMITED PARTNERSHIPS
                            FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
                                         Year Ended December 31, 1996
                     -----------------------------------------------------------------
                                                   Cash
                       Balance                   Distri-                    Balance
                       January      Capital      butions       Equity in    December
Limited Partnerships   1, 1996   Contributions   Received    Income/(Loss)  31, 1996
-------------------- -----------  -----------   -----------   -----------  -----------
<S>                  <C>          <C>           <C>           <C>          <C>        
Bannock Arms         $   553,880  $   157,898   $  (193,780)  $   120,497  $   638,495

Berkeley Gardens         419,312                                 (102,783)     316,529

Cape La Croix                           5,957        (5,957)

Cloverdale

Cloverleaf                              4,394        (4,394)

Deep Lake Hermitage    1,057,356                    (84,178)        6,698      979,876

Evergreen Apts         8,384,177                    (77,702)      456,029    8,762,504

Friendship Arms        2,340,564                    (35,183)     (116,316)   2,189,065

Jenny Lind Hall                        55,300       (55,300)

Lancaster Heights                      22,079       (21,858)         (221)

Locust House           1,137,223                    (16,897)      (87,807)   1,032,519

Midpark Towers                        446,072      (446,072)

Montecito Apts 

Oxford Towers

Plaza Village            578,271                                 (133,203)     445,068

Round Barn Manor

Santa Fe Towers                        96,484       (96,484)

Walnut Towers                          96,143       (96,143)

Westwood Terrace                       31,241       (31,241)
                     -----------  -----------   -----------   -----------  -----------
                     $14,470,783  $   915,568   $(1,165,189)  $   142,894  $14,364,056
                     ===========  ===========   ===========   ===========  ===========
</TABLE>
<PAGE>   58
                                                                SCHEDULE
                                                               (CONTINUED)


                            HOUSING PROGRAMS LIMITED
                       INVESTMENTS IN LIMITED PARTNERSHIPS
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994


<TABLE>
<CAPTION>                                                        Cash
                         Balance                                 Distri-                                Balance
                         January           Capital               butions         Equity in              December
Limited Partnerships     1, 1995        Contributions           Received        Income/(Loss)           31, 1995
--------------------     -------        -------------           --------        -------------           --------
<S>                     <C>             <C>                     <C>             <C>                   <C>
Bannock Arms            $   490,588     $184,684                $(229,495)      $ 108,103              $   553,880
Berkeley Gardens            497,349                                               (78,037)                 419,312
Cape La Croix                              6,405                   (6,405)
Cloverdale
Cloverleaf                                 6,517                   (6,517)
Deep Lake Hermitage       1,189,101                                              (131,745)               1,057,356
Evergreen Apts.           7,971,008                               (77,702)        490,871                8,384,177
Friendship Arms           2,364,500                               (35,183)         11,247                2,340,564
Jenny Lind Hall                           45,504                  (45,504)
Lancaster Heights                         24,881                  (24,881)
Locust House              1,221,828                               (16,897)        (67,708)               1,137,223
Midpark Towers                           184,124                 (184,124)
Montecito Apts.                           23,641                                  (23,641)
Oxford Towers
Plaza Village               799,566                                              (221,295)                 578,271
Round Barn Manor
Santa Fe Towers                           92,250                  (95,250)
Walnut Towers                             69,618                  (69,618)
Westwood Terrace                          31,241                  (31,241)
                        -----------     --------                ---------       ----------             -----------
                        $14,533,940     $671,865                $(822,817)      $  87,795              $14,470,783
                        ===========     ========                =========       ==========             ===========
</TABLE>
<PAGE>   59
                                                                SCHEDULE
                                                             (CONTINUED)

                            HOUSING PROGRAMS LIMITED
                      INVESTMENTS IN LIMITED PARTNERSHIPS
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>

                                                        Year Ended December 31, 1994
                        ----------------------------------------------------------------------------------
                                                         Cash
                        Balance                         Distri-                         Balance         Future Capital
                        January            Capital      butions           Equity in     December        Contributions
Limited Partnerships    1, 1994         Contributions   Received        Income/(Loss)   31, 1994          Payable
--------------------    -------         -------------   --------        -------------   --------          -------
<S>                     <C>             <C>             <C>             <C>             <C>             <C>
Bannock Arms            $  474,615      $  334,142      $  (428,773)    $ 110,604       $   490,588     $

Berkeley Gardens           802,066                                       (304,717)          497,349

Cape La Croix                                8,169           (8,169)                    

Cloverdale                                   1,163           (1,163)                    

Cloverleaf                                  11,079          (11,079)                    

Deep Lake Hermitage      1,383,038                          (21,022)     (172,915)        1,189,101

Evergreen Apts.          7,625,595                          (77,702)      423,115         7,971,008

Friendship Arms          2,479,083                          (35,183)      (79,400)        2,364,500

Jenny Lind Hall                            150,862         (150,862)                    

Lancaster Heights                           18,836          (18,836)                    

Locust House             1,330,089                          (16,897)      (91,364)        1,221,828

Midpark Towers                             430,033         (430,033)                    

Montecito Apts.                                                                                            90,453

Oxford Towers                                               (19,775)       19,775       

Plaza Village            1,090,277                         (136,256)     (154,455)          799,566

Round Barn Manor                                            (39,108)       39,108       

Santa Fe Towers                            247,823         (247,823)                    

Walnut Towers                              165,284         (165,284)                    

Westwood Terrace                            24,584          (24,584)                    
                       -----------      ----------      -----------     ---------       -----------     ---------
                       $15,184,763      $1,391,975      $(1,832,549)    $(210,249)      $14,533,940     $  90,453
                       ===========      ==========      ===========     =========       ===========     =========
</TABLE>
<PAGE>   60
                                                                        SCHEDULE
                                                                     (CONTINUED)

                            HOUSING PROGRAMS LIMITED
                       INVESTMENTS IN LIMITED PARTNERSHIPS
                               FOR THE YEARS ENDED
                        DECEMBER 31, 1996, 1995 AND 1994

NOTES:   1.       Equity in income (losses) of the limited partnerships
                  represents the Partnership's allocable share of the net income
                  (loss) from the limited partnerships for the year. Equity in
                  losses of the limited partnerships will be recognized until
                  the investment balance is reduced to zero or below zero to an
                  amount equal to future capital contributions to be made by the
                  Partnership.

         2.       Cash distributions from the limited partnerships will be
                  treated as a return on the investment and will reduce the
                  investment balance until such time as the investment is
                  reduced to an amount equal to additional contributions.
                  Distributions subsequently received will be recognized as
                  income.

<PAGE>   61
                                                                    SCHEDULE III

                            HOUSING PROGRAMS LIMITED
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                 OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
                         IN WHICH H P L HAS INVESTMENTS
                                DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                                               Buildings, Furnishings
                                                                    & Equipment
                            Number      Outstanding               Amount Carried
                             of          Mortgage                   at Close of                Accumulated
Partnership/Location        Apts.          Loan          Land         Period        Total      Depreciation
--------------------     ------------  ------------  ------------  ------------  ------------  ------------
<S>                      <C>           <C>           <C>           <C>           <C>           <C>         
Bannock Arms                       66  $  1,477,852  $     78,000  $  2,865,472  $  2,943,472  $  1,194,346
     Boise, ID
Deep Lake Hermitage               144  $  3,457,363       360,000     6,363,923     6,723,923     2,668,885
     Lake Villa, IL
Jenny Lind Hall                    78     1,428,686       111,000     2,729,647     2,840,647     1,167,297
     Springfield, MO
Lancaster Heights                 198     2,236,403       200,000     4,585,123     4,785,123     1,879,788
     Normal, IL
Midpark Towers                    202     4,184,955       532,593     8,729,209     9,261,802     3,842,417
     Dallas, TX
Oxford House                      156     5,022,864       300,000     4,796,928     5,096,928     2,029,448
     Decatur, IL
Round Barn Manor                  156     5,318,660       200,000     5,070,844     5,270,844     2,098,783
     Champaign, IL
Santa Fe Towers                   252     6,053,581       316,724    11,480,545    11,797,269     4,900,178
     Overland Park, KS
Walnut Towers                      78     1,434,925        85,229     3,056,802     3,142,031     1,297,970
     Winfield, KS
Westwood Terrace                   97     2,987,122       109,200     4,230,113     4,339,313     2,423,476
     Moline, IL
Friendship Arms                   151     4,048,767       262,879     7,775,040     8,037,919     3,855,585
     Hyattsville, Mo
Locust House                       99     2,190,778       201,113     4,559,474     4,760,587     2,357,836
     Westminster, Mo
Berkeley Gardens                  132     1,512,934       149,071     3,789,810     3,938,881     2,292,853
     Martinsburg, WV
Cape La Croix                     125     1,421,011       169,000     2,484,615     2,653,615     1,093,039
     Cape Girardeau, MO
Cloverdale                        100     1,036,414       100,000     2,051,596     2,151,596       883,055
     Crawfordsville, IN
Cloverleaf                         94       948,582       123,000     1,927,274     2,050,274       843,526
     Indianapolis, IN
Evergreen Apts                    330     8,636,572       617,369    15,126,411    15,743,780     6,110,848
     Oshtemo, MI
Plaza Village                     228     3,428,110       369,700     7,042,252     7,411,952     4,285,095
     Woonsocket, RI
                         ------------  ------------  ------------  ------------  ------------  ------------
                                2,686  $ 56,825,579  $  4,284,878  $ 98,665,078  $102,949,956  $ 45,224,425
                         ============  ============  ============  ============  ============  ============
</TABLE>

<PAGE>   62

                                                                    SCHEDULE III
                                                                     (CONTINUED)

                            HOUSING PROGRAMS LIMITED
              REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
                       HELD BY LOCAL LIMITED PARTNERSHIPS
                          IN WHICH HPL HAS INVESTMENTS
                                DECEMBER 31, 1996


NOTES:   1.       Each local limited partnership has developed, owns and
                  operates the housing project. Substantially all project costs,
                  including construction period interest expense, were
                  capitalized by the local limited partnerships.

         2.       Depreciation is provided for by various methods over the
                  estimated useful lives of the projects. The estimated
                  composite useful lives of the buildings are from 25 to 40
                  years.

         3.       Investments in property and equipment - limited partnerships:

<TABLE>
<CAPTION>
                                                     Buildings,
                                                   Furnishings,
                                       Land       and Equipment       Total
                                  -------------   -------------   -------------
<S>                               <C>             <C>             <C>          
Balance, January 1, 1994          $   4,917,424   $ 104,830,723   $ 109,748,147

Adjustment for foreclosure
of Montecito Property                  (632,546)     (8,060,272)     (8,692,818)

Net additions in 1994                        --         814,875         814,875
                                  -------------   -------------   -------------
Balance, December 31, 1994            4,284,878      97,585,326     101,870,204

Net additions in 1995                        --         543,225         543,225
                                  -------------   -------------   -------------
Balance, December 31, 1995            4,284,878      98,128,551     102,413,429

Net additions in 1996                        --         536,527         536,527
                                  -------------   -------------   -------------
Balance, December 31, 1996        $   4,284,878   $  98,665,078   $ 102,949,956
                                  =============   =============   =============
</TABLE>

<PAGE>   63

                                                                    SCHEDULE III
                                                                     (CONTINUED)

                            HOUSING PROGRAMS LIMITED
              REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
                       HELD BY LOCAL LIMITED PARTNERSHIPS
                          IN WHICH HPL HAS INVESTMENTS
                                DECEMBER 31, 1996

<TABLE>
<CAPTION>
                                                                    Buildings,
                                                                   Furnishings,
Accumulated Depreciation:                                         and Equipment
------------------------                                           ------------
<S>                                                                <C>         
Balance, January 1, 1994                                           $ 36,673,161

Adjustment for foreclosure
of Montecito Property                                                (1,805,052)

Net additions for 1994                                                3,645,567
                                                                   ------------
Balance, December 31, 1994                                           38,513,676

Net additions for 1995                                                3,239,884
                                                                   ------------
Balance, December 31, 1995                                           41,753,560

Net additions for 1996                                                3,470,865
                                                                   ------------
Balance, December 31, 1996                                         $ 45,224,425
                                                                   ============
</TABLE>

<PAGE>   64

PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:

HOUSING PROGRAMS LIMITED (the "Partnership") has no directors or executive
officers of its own.

The general partners of the Partnership are National Partnership Investments
Corp. ("NAPICO"), Coast Housing Investments Associates (an affiliate of NAPICO)
and Housing Programs Corporation II. NAPICO is a wholly-owned subsidiary of
Casden Investment Company, an affiliate of The Casden Company. Housing Programs
Corporation II is a wholly-owned subsidiary of LB I Group Inc. The following
biographical information is presented for the directors and executive officers
of NAPICO and officers of Housing Programs Corporation II with principal
responsibility for the Partnership's affairs.

CHARLES H. BOXENBAUM, 67, Chairman of the Board of Directors and Chief Executive
Officer of NAPICO.

Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was a
real estate broker with the Beverly Hills firm of Carl Rhodes Company.

Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate Association,
National Institute of Real Estate Brokers, Appraisal Institute, various mortgage
banking seminars, and the North American Property Forum held in London, England.
In 1963, he was the winner of the Snyder Award, the highest annual award offered
by the National Association of Real Estate Boards for Best Exchange. He is one
of the founders and a past director of the First Los Angeles Bank, organized in
November 1974. Mr. Boxenbaum was a member of the Board of Directors of the
National Housing Council. Mr. Boxenbaum received his Bachelor of Arts degree
from the University of Chicago.

BRUCE E. NELSON, 45, President and a director of NAPICO.

Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved in
the identification, analysis, and negotiation of real estate investments.

From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time Mr. Nelson was engaged in
the private practice of law in Los Angeles. Mr. Nelson received his Bachelor of
Arts degree from the University of Wisconsin and is a graduate of the University
of Colorado School of Law. He is a member of the State Bar of California and is
a licensed real estate broker in California and Texas.

ALAN I. CASDEN, 51, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.

Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Corporation. Prior to
that, he was the president and chairman of Mayer Group, Inc., which he joined in
1975. He is also chairman of Mayer Management, Inc., a real estate management
firm.

Mr. Casden has been involved in approximately $3 billion of real estate
financings and sales and has been responsible for the development and
construction of more than 12,000 apartment units and 5,000 single-family homes
and condominiums.

<PAGE>   65

Mr. Casden is a member of the American Institute of Certified Public Accountants
and of the California Society of Certified Public Accountants. Mr. Casden is a
member of the advisory board of the National Multi-Family Housing Conference,
the Multi-Family Housing Council, and the President's Council of the California
Building Industry Association. He also serves on the advisory board to the
School of Accounting of the University of Southern California. He holds a
Bachelor of Science and a Masters in Business Administration degree from the
University of Southern California.

HENRY C. CASDEN, 53, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.

Mr. Casden has been President and Chief Operating Officer of The Casden Company,
as well as a director of NAPICO since February 1988. He became secretary of both
companies in late 1994. From 1982 to 1988, Mr. Casden was of counsel and a
partner in the Los Angeles law firm of Troy, Casden & Gould. From 1978 to 1981,
he was of counsel and a partner in the Los Angeles law firm of Loeb & Loeb. From
1972 to 1978, Mr. Casden was a member of the Beverly Hills law firm of Fink &
Casden, Professional Corporation.

Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.

BRIAN D. GOLDBERG, 33, Chief Financial Officer of The Casden Company and a
director of NAPICO.

Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and
became Chief Financial Officer in March 1991. Prior to joining The Casden
Company, Mr. Goldberg was with Arthur Andersen & Co., an international public
accounting firm, from August 1985 until July 1990 in their Los Angeles office.
He received his bachelor of science degree in Accounting from the University of
Denver. Mr. Goldberg is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.

SHAWN HORWITZ, 37, Executive Vice President and Chief Financial Officer.

Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs
of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining
NAPICO, Mr. Horwitz was President of Star Sub Shops, Inc. a corporation engaged
in the business of selling fast food franchises, for approximately one year, was
an audit manager in the real estate industry group for Altschuler, Melvoin &
Glasser for six years, and was an auditor with Arthur Young & Co. for 3 years.

Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes
University in South Africa and is a member of the Illinois Society of Certified
Public Accountants, the American Institute of Certified Public Accountants and
the South African Institute of Chartered Accountants.

BOB SCHAFER, 55, Senior Vice President and Corporate Controller.

Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the Company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years. Mr.
Schafer is a member of the California Society of Certified Public Accountants.
He holds a Bachelor of Science degree in accounting from Woodbury University,
Los Angeles.

<PAGE>   66

PATRICIA W. TOY, 67, Senior Vice President - Communications and Assistant
Secretary.

Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.

MARK L. WALTHER, 36, Executive Vice President, General Counsel and Assistant
Secretary.

Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr. Walther
worked in the San Francisco law firm of Browne and Kahn which specialized in
construction litigation. Mr. Walther received his Bachelor of Arts Degree in
Political Science from the University of California, Santa Barbara and is a
graduate of the University of California, Davis, School of Law. He is a member
of the State Bar of Hawaii.

ROCCO F. ANDRIOLA, 38, serves as President and Chief Financial Officer of
Housing Programs Corporation II and Managing Director of Lehman Brothers Inc. in
its Diversified Asset Group. He has held such position with Lehman since October
1996. Since joining Lehman in 1986, Mr. Andriola has been involved in a wide
range of restructuring and asset management activities involving real estate and
other direct investment transactions. From June 1991 through September 1996, Mr.
Andriola held the position of Senior Vice President in Lehman's Diversified
Asset Group. From June 1989 through May 1991, Mr. Andriola held the position of
First Vice President in Lehman's Capital Preservation and Restructuring Group.
From November 1986 through May 1989, Mr. Andriola held the position of Vice
President in the Corporate Transactions Group of Shearson Lehman Brothers,
Office of the General Counsel. From September 1982 through October 1986, Mr.
Andriola was employed by the law firm of Donovan Leisure Newton & Irvine as a
corporate and securities attorney. Mr. Andriola graduated summa cum laude from
Fordham University in 1979 with a B.A. degree in Economics and Political
Science. Mr. Andriola received a J.D. degree and an LL.M degree in Corporate Law
from New York University School of Law in 1982 and 1986, respectively.

JOHN H. NG, 46, is a Vice President of Housing Programs Corporation II and Vice
President of Lehman Brothers Inc. He has been employed by Lehman since November
1977. He is an asset manager of the Diversified Asset Group of Lehman and has
held such position since 1985. From 1980 to 1985, Mr. Ng served as Senior
Financial Analyst in the Corporate Planning and Development Department and from
1977 to 1980 he was an analyst in the Controller's Department. Prior to joining
Lehman, he served as a Teaching Assistant in Finance and Economics at the
University of Minnesota. Mr. Ng received an M.B.A. with a concentration in
Corporate Finance from the University of Minnesota in 1977 and a B.A. magna cum
laude in Economics with a specialization in Monetary Economics from Moorhead
State University in 1975.

MARK J. MARCUCCI, 34, is a Vice President of Housing Programs Corporation II and
Vice President of Lehman Brothers Inc. in its Diversified Asset Group. Since
joining Lehman Brothers in 1988, Mr. Marcucci's responsibilities have been
concentrated in the restructuring, asset management, leasing, financing,
refinancing and disposition of commercial office and residential real estate.
Prior to joining Lehman Brothers, Mr. Marcucci was employed in a corporation
lending capacity at Republic National Bank of New York. Mr. Marcucci received a
B.B.A. in Finance from Hofstra University and a Master of Science in Real Estate
from New York University. In addition, Mr. Marcucci holds both Series 7 and
Series 63 securities licenses.

<PAGE>   67

ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS:

Housing Programs Limited has no officers, employees, or directors. However,
under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to pay the general partners an annual
management fee. The annual management fee is approximately equal to .5% of the
invested assets, including the Partnership's allocable share of the mortgages
related to real estate properties held by local limited partnerships. The fee is
earned beginning in the month the Partnership makes its initial contribution to
the local partnership. In addition, the Partnership reimburses NAPICO for
certain expenses.

An affiliate of NAPICO is responsible for the on-site property management for
certain properties owned by the limited partnerships in which the Partnership
has invested.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:

(a)      Security Ownership of Certain Beneficial Owners

         The general partners own all of the outstanding general partnership
         interests of Housing Programs Limited. No person is known to own
         beneficially in excess of 5% of the outstanding limited partnership
         interests.

(b)      With the exception of the Initial Limited Partner, Bruce Nelson, who is
         an officer of NAPICO, none of the officers or directors of NAPICO own
         directly or beneficially any limited partnership interests in the
         Partnership.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:

The Partnership has no officers, directors or employees of its own. All of its
affairs are managed by the general partners. The transactions with the general
partners are primarily in the form of fees paid by the Partnership to the
general partners for services rendered to the Partnership, as discussed in Item
11 and in the notes to the accompanying financial statements.

<PAGE>   68

ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORT ON FORM 8-K:

FINANCIAL STATEMENTS

Reports of Independent Public Accountants.

Balance Sheets as of December 31, 1996 and 1995.

Statements of Operations for the years ended December 31, 1996, 1995 and 1994.

Statements of Partners' Equity (Deficiency) for the years ended December 31,
1996, 1994 and 1993.

Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994.

Notes to Financial Statements.

FINANCIAL STATEMENT SCHEDULES
APPLICABLE TO HOUSING PROGRAMS LIMITED AND LIMITED PARTNERSHIPS IN WHICH HOUSING
PROGRAMS LIMITED HAS INVESTMENTS

Schedule - Investments in Limited Partnerships for the years ended December 31,
1996, 1995 and 1994.

Schedule III - Real Estate and Accumulated Depreciation of Property Held by
Local Limited Parnterships, December 31, 1996.

The remaining schedules are omitted because the required information is included
in the financial statements and notes thereto or they are not applicable or not
required.

EXHIBITS

(3)      Articles of incorporation and bylaws: The registrant is not
         incorporated. The Partnership Agreement was filed with Form S-11
         #2-92352 incorporated herein by reference.

(10)     Material contracts: The registrant is not party to any material
         contracts, other than the Restated Certificate and Agreement of Limited
         Partnership dated May 15, l984, and the nineteen contracts representing
         the partnership's investment in local limited partnerships as
         previously filed at the Securities Exchange Commission, File #2-92352
         which is hereby incorporated by reference.

(13)     Annual report to security holders: Pages ____ to ____.

Reports on Form 8-K

No reports on Form 8K were filed during the year ended December 31, 1996.

<PAGE>   69

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Los Angeles,
State of California.


HOUSING PROGRAMS LIMITED

By:            NATIONAL PARTNERSHIP INVESTMENTS CORP.
               The General Partner


----------------------------------------
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer


----------------------------------------
Bruce E. Nelson
Director and President


----------------------------------------
Alan I. Casden
Director


----------------------------------------
Henry C. Casden
Director


----------------------------------------
Brian D. Goldberg
Director


----------------------------------------
Shawn D. Horwitz
Executive Vice President and
Chief Financial Officer


----------------------------------------
Bob E. Schafer
Senior Vice President and Corporate Controller