June 29, 2000




Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

       Boston Financial Qualified Housing Tax Credits L.P. V
       Annual Report on Form 10-K for the Year Ended March 31, 2000
       File Number 0-19706


Dear Sir / Madam:

Pursuant to the requirements of section 15(d) of the Securities  Exchange Act of
1934, filed herewith is one copy of subject report.

Very truly yours,



/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller



QH510K-K


<PAGE>

                                                        UNITED STATES
                                             SECURITIES AND EXCHANGE COMMISSION
                                                       Washington, D.C. 20549

                                                            FORM 10-K

(Mark One)

[ X ]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

For the fiscal year ended                  March 31, 2000
                          -------------------------------------------

                                                         OR

[  ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

For the transition period from                     to

                                           Commission file number 0-19706

                  Boston  Financial Qualified Housing Tax Credits L.P. V
                 (Exact name of registrant as specified in its charter)

                      Massachusetts                              04-3054464
             (State or other jurisdiction of                 (I.R.S. Employer
              incorporation or organization)                 Identification No.)

               101 Arch Street, Boston, MA                         02110-1106
             (Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code            (617) 439-3911
                                                   --------------------------

Securities registered pursuant to Section 12(b) of the Act:
                                                       Name of each exchange on
          Title of each class                               which registered

                None                                                None

Securities registered pursuant to Section 12(g) of the Act:

                                      UNITS OF LIMITED PARTNERSHIP INTEREST
                                                   (Title of Class)
                                                       100,000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                                                 Yes X No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (Subsection  229.405 of this chapter) 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. [ X ]

State the aggregate sales price of partnership  units held by  non-affiliates of
the registrant.

                       $60,904,650 as of March 31, 2000


<PAGE>





DOCUMENTS  INCORPORATED  BY  REFERENCE:  LIST THE  FOLLOWING  DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED:  (1) ANY ANNUAL REPORT TO SECURITY HOLDERS: (2) ANY PROXY OR
INFORMATION  STATEMENT:  AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b)
OR (c) UNDER THE SECURITIES ACT OF 1933.
<TABLE>
<CAPTION>

                                                                        Part of Report on
                                                                        Form 10-K into
                                                                        Which the Document
Documents incorporated by reference                                     is Incorporated


<S>                                                                     <C>
Post-effective amendments No. 1 - 5 to the
Form S-11 Registration Statement, File # 33-29935                       Part I, Item 1

Acquisition Reports                                                     Part I, Item 1

Post-effective amendment No. 6 to the Registration
Statement on Form S-11, File # 33-29935                                 Part III, Item 12

Prospectus - Sections Entitled:

     "Investment objectives and Policies -
      Principal Investment Policies"                                    Part I, Item 1

     "Estimated Use of Proceeds"                                        Part III, Item 13

     "Management Compensations and Fees"                                Part III, Item 13

     "Profits and Losses for Tax Purposes, Tax
      Credits and Cash Distributions"                                   Part III, Item 13


</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                                                     BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                                                    (A Limited Partnership)

                                                                  ANNUAL REPORT ON FORM 10-K
                                                               FOR THE YEAR ENDED MARCH 31, 2000


                                                                       TABLE OF CONTENTS


                                                                            Page No.

PART I

<S>                                                                             <C>
     Item 1       Business                                                      K-3
     Item 2       Properties                                                    K-6
     Item 3       Legal Proceedings                                             K-12
     Item 4       Submission of Matters to a Vote of
                  Security Holders                                              K-12

PART II

     Item 5       Market for the Registrant's Units and
                  Related Security Holder Matters                               K-13
     Item 6       Selected Financial Data                                       K-14
     Item 7       Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                 K-14
     Item 7A.     Quantitative and Qualitative Disclosures about
                  Market Risk                                                   K-17
     Item 8       Financial Statements and Supplementary Data                   K-17
     Item 9       Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosure                        K-17

PART III

     Item 10      Directors and Executive Officers
                  of the Registrant                                             K-17
     Item 11      Management Remuneration                                       K-19
     Item 12      Security Ownership of Certain Beneficial
                  Owners and Management                                         K-19
     Item 13      Certain Relationships and Related Transactions                K-19

PART IV

     Item 14      Exhibits, Financial Statement Schedules and
                  Reports on Form 8-K                                           K-22

SIGNATURES                                                                      K-23


</TABLE>


<PAGE>


                         PART I

Item 1.  Business

Boston Financial  Qualified Housing Tax Credits L.P. V (the  "Partnership") is a
Massachusetts  limited partnership formed on June 16, 1989 under the laws of the
State of Massachusetts.  The Partnership's  partnership agreement  ("Partnership
Agreement")  authorized  the sale of up to 100,000 units of Limited  Partnership
Interest  ("Units")  at $1,000 per Unit,  adjusted  for certain  discounts.  The
Partnership raised  $68,928,650  ("Gross  Proceeds"),  net of discounts of $350,
through the sale of 68,929 Units. Such amounts exclude five  unregistered  Units
previously acquired for $5,000 by the Initial Limited Partner, which is also one
of the General Partners. The offering of Units terminated on August 31, 1991. No
further sale of Units is expected.

The  Partnership  is engaged  solely in the business of real estate  investment.
Accordingly,  a  presentation  of  information  about  industry  segments is not
applicable and would not be material to an  understanding  of the  Partnership's
business taken as a whole.

The Partnership has invested as a limited partner in other limited  partnerships
("Local  Limited  Partnerships")  which own and  operate  residential  apartment
complexes  ("Properties") some of which benefit from some form of federal, state
or local assistance programs and all of which qualify for the low-income housing
tax credits ("Tax Credits")  added to the Internal  Revenue Code (the "Code") by
the Tax Reform Act of 1986. The investment objectives of the Partnership include
the  following:  (i) to provide  current tax benefits in the form of Tax Credits
which  qualified  limited  partners may use to offset their  federal  income tax
liability;  (ii) to preserve  and protect the  Partnership's  capital;  (iii) to
provide  limited  cash  distributions  from  property  operations  which are not
expected  to  constitute  taxable  income  during the  expected  duration of the
Partnership's  operations;  and (iv) to provide cash  distributions from sale or
refinancing  transactions.  There cannot be any assurance  that the  Partnership
will  attain  any  or all  of  these  investment  objectives.  A  more  detailed
discussion  of these  investment  objectives,  along with the risks in achieving
them,  is  contained  in the  section  of the  prospectus  entitled  "Investment
Objectives  and  Policies  -  Principal  Investment  Policies"  which is  herein
incorporated by this reference.

Table A on the following  page lists the Properties  originally  acquired by the
Local Limited Partnerships in which the Partnership has invested. Item 7 of this
Report contains other significant  information with respect to the Local Limited
Partnerships.  As required by applicable  rules, the terms of the acquisition of
each Local Limited  Partnership  interest have been  described in supplements to
the   Prospectus  and  collected  in  the   post-effective   amendments  to  the
Registration  Statement  listed  in Part IV of this  Report  (collectively,  the
"Acquisition  Reports");  such  descriptions  are  incorporated  herein  by this
reference.





<PAGE>

<TABLE>
<CAPTION>

                                                                            TABLE A

                                                                    SELECTED LOCAL LIMITED
                                                                       PARTNERSHIP DATA


                                                                                                 Date
   Properties Owned by Local                                                                   Interest
     Limited Partnerships                                Location                              Acquired
--------------------------------                   ----------------------                    --------------

<S>                                               <C>                                         <C>
Strathern Park/Lorne Park (1)*                    Los Angeles, CA                             07/05/90
Park Caton                                        Catonsville, MD                             08/17/90
Cedar Lane I                                      London, KY                                  09/10/90
Silver Creek II                                   Berea, KY                                   08/15/90
Rosecliff                                         Sanford, FL                                 09/18/90
Brookwood                                         Ypsilanti, MI                               10/01/90
Oaks of Dunlop                                    Colonial Heights, VA                        01/01/91
Water Oak                                         Orange City, FL                             01/01/91
Yester Oaks                                       Lafayette, GA                               01/01/91
Ocean View                                        Fernandina Beach, FL                        01/01/91
Wheeler House (2)                                 Nashua, NH                                  01/01/91
Archer Village                                    Archer, FL                                  01/01/91
Timothy House                                     Towson, MD                                  03/05/91
Westover Station                                  Newport News, VA                            03/30/91
Carib III                                         St. Croix, VI                               03/21/91
Carib II                                          St. Croix, VI                               03/01/91
Whispering Trace                                  Woodstock, GA                               05/01/91
New Center                                        Detroit, MI                                 06/27/91
Huguenot Park*                                    New Paltz, NY                               06/26/91
Hillwood Pointe                                   Jacksonville, FL                            07/19/91
Pinewood Pointe                                   Jacksonville, FL                            07/31/91
Westgate*                                         Bismark, ND                                 07/25/91
Woodlake Hills                                    Pontiac, MI                                 08/01/91
Bixel House                                       Los Angeles, CA                             07/31/91
Magnolia Villas                                   North Hollywood, CA                         07/31/91
Schumaker Place                                   Salisbury, MD                               09/20/91
Circle Terrace                                    Lansdowne, MD                               12/06/91
</TABLE>

*    The  Partnership's  interest  in profits  and losses of each Local  Limited
     Partnership  arising  from  normal  operations  is  99%,  except  for a 95%
     interest in Strathern  Park/Lorne  Park  Apartments,  an 88.55% interest in
     Huguenot Park, and a 49.5% interest in Westgate. Profits and losses arising
     from sale or refinancing  transactions are allocated in accordance with the
     respective Local Limited Partnership Agreements.

(1)  On January 1, 1994,  Lorne Park  merged into  Strathern  Park in a business
     combination  accounted  for as a pooling of  interests.  Lorne Park's total
     assets,  liabilities and partners' equity were combined with Strathern Park
     at their existing book value, and neither partnership  recognized a gain or
     loss on the merger.

(2)  In January 2000, the lender for Wheeler House foreclosed on the property
     and the Partnership transferred its interest.


<PAGE>


Although the  Partnership's  investments in Local Limited  Partnerships  are not
subject to seasonal  fluctuations,  the Partnership's  equity in losses of Local
Limited  Partnerships,  to the extent it reflects the  operations  of individual
Properties, may vary from quarter to quarter based upon changes in occupancy and
operating expenses as a result of seasonal factors.

Each Local Limited  Partnership  has, as its general  partners  ("Local  General
Partners"),  one or  more  individuals  or  entities  not  affiliated  with  the
Partnership  or  its  General  Partners.  In  accordance  with  the  partnership
agreements under which such entities are organized  ("Local Limited  Partnership
Agreements"),  the  Partnership  depends on the Local  General  Partners for the
management  of each  Local  Limited  Partnership.  As of  March  31,  2000,  the
following  Local Limited  Partnerships  have a common Local  General  Partner or
affiliated  group  of  Local  General  Partners  accounting  for  the  specified
percentage  of the capital  contributions  to Local  Limited  Partnerships:  (i)
Timothy House and Maidens Choice,  representing 10.07%, have Shelter Development
Corp.  as Local  General  Partner;  (ii) Hillwood  Pointe,  Pinewood  Pointe and
Whispering Trace,  representing  11.92%, have Flournoy  Development Co. as Local
General  Partner;  (iii) Silver Creek and Cedar Lane,  representing  .87%,  have
Robinson A. Williams as Local General  Partner;  (iv) Water Oak, Yester Oaks and
Ocean View,  representing 1.71%, have Seals & Associates,  Inc. & E. Lamar Seals
as Local General Partners; (v) Bixel House and Harmony Apartments,  representing
7.07%,  have Julian Weinstock  Construction  Co., Inc. as Local General Partner;
and (vi) Carib Villas II and Carib Villas III,  representing  1.21%,  have First
Centrum  Corp.  as Local  General  Partner.  The Local  General  Partners of the
remaining Local Limited  Partnerships are identified in the Acquisition Reports,
which are incorporated herein by this reference.

The Properties owned by the Local Limited  Partnerships in which the Partnership
has invested are, and will continue to be, subject to competition  from existing
and future apartment  complexes in the same areas. The continued  success of the
Partnership  will depend on many outside  factors,  most of which are beyond the
control of the  Partnership  and cannot be predicted at this time.  Such factors
include general economic and real estate market  conditions,  both on a national
basis and in those areas where the Properties are located,  the availability and
cost of borrowed funds, real estate tax rates, operating expenses,  energy costs
and  government  regulations.  In addition,  other risks inherent in real estate
investment may influence the ultimate success of the Partnership, including: (i)
possible  reduction  in rental  income  due to an  inability  to  maintain  high
occupancy  levels or adequate  rental levels;  (ii) possible  adverse changes in
general  economic   conditions  and  local   conditions,   such  as  competitive
over-building,  or a decrease in  employment  or adverse  changes in real estate
laws,  including  building codes; and (iii) the possible future adoption of rent
control  legislation  which would not permit  increased costs to be passed on to
the tenants in the form of rent increases,  or which suppress the ability of the
Local Limited  Partnerships to generate  operating cash flow.  Since most of the
Properties benefit from some form of government  assistance,  the Partnership is
subject  to the risks  inherent  in that  area  including  decreased  subsidies,
difficulties  in finding  suitable  tenants and  obtaining  permission  for rent
increases. In addition, any Tax Credits allocated to investors with respect to a
Property are subject to recapture to the extent that the Property or any portion
thereof  ceases to qualify for the Tax Credits.  Other future changes in federal
and  state  income  tax  laws  affecting   real  estate   ownership  or  limited
partnerships  could have a material  and adverse  affect on the  business of the
Partnership.

The Partnership is managed by Arch Street V, Inc., the Managing  General Partner
of the Partnership.  The other General Partner of the Partnership is Arch Street
V Limited  Partnership.  The  Partnership,  which  does not have any  employees,
reimburses  Lend  Lease  Real  Estate  Investments,  Inc.,  ("Lend  Lease"),  an
affiliate of the General  Partner for certain  expenses and  overhead  costs.  A
complete discussion of the management of the Partnership is set forth in Item 10
of this Report.



<PAGE>


Item 2.  Properties

The Partnership owns limited  partnership  interests in twenty-six Local Limited
Partnerships which own and operate  Properties,  some of which benefit from some
form of federal, state or local assistance programs and all of which qualify for
the  Tax  Credits  added  to the  Code  by the  Tax  Reform  Act  of  1986.  The
Partnership's  ownership interest in each Local Limited Partnership is generally
99%, except for Strathern Park/Lorne Park, Westgate and Huguenot Park, where the
Partnership's ownership interests are 95%, 49.5% and 88.55%, respectively.

Each of the Local Limited Partnerships has received an allocation of Tax Credits
from its relevant state tax credit agency.  In general,  the Tax Credit runs for
ten years from the date the Property is placed in service.  The required holding
period (the  "Compliance  Period") of the  properties is fifteen  years.  During
these fifteen  years,  the  properties  must satisfy rent  restrictions,  tenant
income  limitations  and other  requirements,  as  promulgated  by the  Internal
Revenue  Service,  in order to  maintain  eligibility  for the Tax Credit at all
times during the Compliance Period.  Once a Local Limited Partnership has become
eligible for the Tax Credits,  it may lose such  eligibility and suffer an event
of  recapture  if  its  property   fails  to  remain  in  compliance   with  the
requirements.  To date, none of the Local Limited  Partnerships have suffered an
event of recapture of Tax Credits.

In  addition,  some of the Local  Limited  Partnerships  have  obtained one or a
combination  of different  types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable  terms;  and iii) loans that have repayment
terms that are based on a percentage of cash flow.

The schedules on the  following  pages provide  certain key  information  on the
Local Limited Partnership interests acquired by the Partnership.


<PAGE>
<TABLE>
<CAPTION>



                                                    Capital Contributions
                                                   Total               Paid        Mortgage loans                       Occupancy
Local Limited Partnership            Number      Committed at          through      payable at            Type             at
Property Name                          of          March 31,          March 31,     December 31,          of            March 31,
Property Location                 Apt. Units         2000               2000           1999             Subsidy*          2000
-------------------------------  -------------- -----------------  ------------- ----------------     -------------    -------------

Strathern Park/Lorne Park, a
 California Limited Partnership (1)
Strathern Park/Lorne Park
<S>                                 <C>              <C>             <C>              <C>                  <C>                <C>
Los Angeles, CA                     241              $8,418,667      $8,418,667       $17,356,140          None               100%

Maiden Choice Limited
 Partnership
Park Caton
Catonsville, MD                     101               2,513,300       2,513,300         4,005,020          None               100%

Cedar Lane I, Ltd.
Cedar Lane I
London, KY                           36                 288,587         288,587         1,100,004          None               100%

Silver Creek II, Ltd.
Silver Creek II
Berea, KY                            24                 193,278         193,278           766,558          None               100%

Tompkins/Rosecliff, Ltd.
Rosecliff
Sanford, FL                         168               3,604,720       3,604,720         5,531,104          None                98%

Brookwood L.D.H.A.
Brookwood
Ypsilanti, MI                        81               2,373,295       2,373,295         2,996,929          None                91%

Water Oak Apartment, L.P.
Water Oak
Orange City, FL                      40                 293,519         293,519         1,252,979          None               100%
</TABLE>



<PAGE>
<TABLE>
<CAPTION>



                                                      Capital Contributions
                                               Total                 Paid          Mortgage loans                      Occupancy
Local Limited Partnership          Number   Committed at           through           payable at          Type             at
Property Name                       of        March 31,            March 31,         December 31,         of           March 31,
Property Location              Apt. Units       2000                 2000               1999            Subsidy*          2000
------------------------------ ----------- -----------------   ----------------- -------------------- -------------   -------------

Yester Oaks, L.P.
Yester Oaks
<S>                                <C>          <C>                    <C>             <C>                    <C>          <C>
Lafayette, GA                      44           319,254                319,254         1,283,141              FmHA         97%

Ocean View Apartments, L.P.
Ocean View
Fernandina Beach, FL               42           334,177                334,177         1,363,339              None         95%

Burbank Limited Partnership I (2)
Wheeler House
Nashua, NH

Archer Village, Ltd.
Archer Village
Archer, FL                         24           171,380                171,380           706,791              FmHA         100%

The Oaks of Dunlop Farms, L.P.
Oaks of Dunlop
Colonial Heights, VA               144        2,791,280              2,791,280         4,413,492              None         100%

Timothy House Limited
 Partnership
Timothy House
Towson, MD                         112        3,064,250              3,064,250         2,039,244              None         91%

Westover Station Associates, L.P.
Westover Station
Newport News, VA                   108        1,972,947              1,972,947         2,653,568              None         100%
</TABLE>



<PAGE>
<TABLE>
<CAPTION>



                                                     Capital Contributions
                                                     Total            Paid          Mortgage loans                        Occupancy
Local Limited Partnership             Number        Committed at      through          payable at             Type            at
Property Name                          of            March 31,       March 31,         December 31,            of         March 31,
Property Location                    Apt. Units         2000            2000             1999              Subsidy*         2000
---------------------------------  --------------  ------------  ---------------     ------------------- ------------  -------------

Christiansted Limited Dividend
 Housing Association
Carib III
<S>                                    <C>            <C>               <C>                  <C>               <C>            <C>
St. Croix, VI                          24             322,260           322,260              1,478,494         FmHA           75%

St. Croix II Limited Partnership
Carib II
St. Croix, VI                          20             347,680           347,680              1,399,088         FmHA           90%

Whispering Trace Apartments,
 A Limited Partnership
Whispering Trace
Woodstock, GA                          40           1,093,330         1,093,330              1,358,987         None           91%

Historic New Center Apartments
 Limited Partnership
New Center
Detroit, MI                            104           3,077,187        3,077,187              2,913,936       Section 8        87%

Huguenot Park Associates, L.P.
Huguenot Park
New Paltz, NY                          24             982,358           982,358              1,400,000         None          100%

Cobblestone Place Townhomes,
 A Limited Partnership
Hillwood Pointe
Jacksonville, FL                       100           2,356,133        2,356,133              2,888,685         None           95%

Kensington Place Townhomes,
 A Limited Partnership
Pinewood Pointe
Jacksonville, FL                       136           3,153,173        3,153,173              3,911,198         None           96%


</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                                                                     Capital Contributions
                                                       Total            Paid      Mortgage loans                         Occupancy
Local Limited Partnership              Number        Committed at     through       payable at            Type               at
Property Name                           of            March 31,       March 31,     December 31,           of            March 31,
Property Location                    Apt. Units          2000           2000            1999             Subsidy*           2000
--------------------------------- --------------  ----------------- ------------ ----------------     -------------    ------------

Westgate Apartments Limited
 Partnership
Westgate
<S>                                    <C>                <C>            <C>          <C>                    <C>               <C>
Bismark, ND                            60                 935,893        935,893      1,351,284              None              96%

Woodlake Hills Limited
 Partnership
Woodlake Hills
Pontiac, MI                           144               4,154,667      4,154,667      3,774,677              None              91%

Bixel House, a California
 Limited Partnership
Bixel House
Los Angeles, CA                        76                 710,677        710,677      1,162,940            Section 8           92%

Harmony Apartments, a California
 Limited Partnership
Magnolia Villas
North Hollywood, CA                    65               3,203,996      3,203,996      2,206,214              None             100%

Schumaker Place Associates, L.P.
Schumaker Place
Salisbury, MD                          96               2,910,453     2,910,453       2,896,834              None              97%

Circle Terrace Associates Limited
 Partnership
Circle Terrace
Lansdowne, MD                         303               5,811,237      5,811,237      8,573,318            Section 8           97%
                                   -------            ------------  ------------  -------------
                                    2,357            $ 55,397,698   $ 55,397,698  $  80,783,964
                                   =======            ============  ============   =============


</TABLE>

<PAGE>



*  FmHA           This  subsidy,  which is  authorized  under  Section 515 of
                  the Housing Act of 1949,  can be one or a  combination  of
                  different  types of financing.  For instance,  FmHA may
                  provide:  1) direct  below-market-rate  mortgage loans for
                  rural rental housing;  2) mortgage  interest subsidies which
                  effectively  lower the interest rate of the loan to 1%; 3) a
                  rental assistance  subsidy to tenants which allows them to pay
                  no more than 30% of their monthly income as rent with the
                  balance paid by the federal government; or 4) a combination of
                  any of the above.

   Section 8      This subsidy,  which is authorized  under Section 8 of Title
                  II of the  Housing  and  Community  Development  Act of  1974,
                  allows  qualified  low-income  tenants  to pay  30%  of  their
                  monthly  income as rent with the  balance  paid by the federal
                  government.

                  (1) On January 1, 1994,  Lorne Park merged into Strathern Park
                      in a business  combination  accounted  for as a pooling of
                      interests.  Lorne Park's  total  assets,  liabilities  and
                      partners'  equity were  combined  with  Strathern  Park at
                      their  existing  book  value,   and  neither   partnership
                      recognized  a gain  or loss on the  merger.  The  combined
                      Partnerships  constructed  a 241  Unit  apartment  project
                      (Lorne Park: 72 Units, Strathern Park: 169 Units) for
                      tenants whose income is very low to moderate.

                  (2) In January 2000, the lender of Wheeler House foreclosed on
                      the   property.   This   Partnership   had  total  capital
                      contributions and mortgage payable amounts of $300,531 and
                      $674,021, respectively as of the foreclosure date.








<PAGE>





Two Local Limited  Partnerships  invested in by the  Partnership  each represent
more than 10% of the total  capital  contributions  to be made to Local  Limited
Partnerships  by the  Partnership.  The first is  Strathern  Park/Lorne  Park, a
California Limited Partnership.  Strathern Park/Lorne Park,  representing 15.20%
of the total capital contributions to Local Limited Partnerships,  is a 241-unit
apartment complex located in Los Angeles, California.

Strathern  Park/Lorne  Park is financed by a  combination  of private and public
sources,  including  a first  mortgage at 9.41%  interest  and 30 year term with
California Community Reinvestment Corporation,  a consortium of private lenders.
Secondary  financing  has a term of 40 years and is  provided  by the  Community
Redevelopment  Agency of the City of Los  Angeles  and a U.S.  Housing and Urban
Development  Action Grant,  with payments made from the residual receipts of the
project.

The other Local Limited  Partnership which represents more than 10% of the total
capital  contributions  made to Local  Limited  Partnerships  is Circle  Terrace
Associates Limited Partnership. Circle Terrace, representing 10.49% of the total
capital  contributions  to  Local  Limited  Partnerships,   is  a  substantially
renovated  303-unit  apartment  complex  located in Lansdowne,  Maryland with 23
garden-style buildings and a newly-constructed community building.

All of the units at Circle  Terrace  benefit from Section 8 Loan  Management Set
Aside Program.  Additionally,  Circle Terrace assumed a HUD Section 236 mortgage
and financing by Crestar of Richmond Virginia, Inc. and by Maryland's Department
of Housing and Community  Rental Housing  Program.  The Property also has a loan
financed by Baltimore County's Community Development Block Grant program, and it
received weatherization funds from the U.S. Department of Energy.

Duration of leases for  occupancy in the  Properties  described  above is six to
twelve months.  The Managing  General Partner  believes the described herein are
adequately covered by insurance.

Additional  information  required  under  this  Item,  as  it  pertains  to  the
Partnership, is contained in Items 1, 7 and 8 of this Report.

Item 3.  Legal Proceedings

The  Partnership  is  not  a  party  to  any  pending  legal  or  administrative
proceeding. However, Tompkins/Rosecliff,  Ltd. which owns a property in Sanford,
Florida,  had been  involved  in  certain  litigation  with an  entity  formerly
affiliated  with this  Partnership  and its previous  local general  partner.  A
settlement  agreement was agreed upon in July 1999 totaling  $200,000,  of which
the Partnership's share was $100,000. In the opinion of Management,  this was an
appropriate settlement, which it believes will eliminate the risk of foreclosure
and recapture posed by this litigation.

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

None.



<PAGE>


                                PART II


Item 5.  Market for the Registrant's Units and Related Security Holder Matters

There is no public  market for the Units,  and it is not expected  that a public
market will develop.  If a Limited Partner  desires to sell Units,  the buyer of
those Units will be required to comply with the minimum  purchase and  retention
requirements and investor suitability standards imposed by applicable federal or
state  securities  laws and the  minimum  purchase  and  retention  requirements
imposed by the  Partnership.  The price to be paid for the Units, as well as the
commissions to be received by any participating broker-dealers,  will be subject
to negotiation by the Limited Partner seeking to sell his Units.  Units will not
be redeemed or repurchased by the Partnership.

The  Partnership  Agreement  does not impose on the  Partnership  or its General
Partners any  obligation to obtain  periodic  appraisals of assets or to provide
Limited Partners with any estimates of the current value of Units.

As of  June  15,  2000,  there  were  3,241  record  holders  of  Units  of  the
Partnership.

Cash distributions, when made, are paid annually.  No cash distributions were
paid for the years ended March 31, 2000, 1999 and 1998.



<PAGE>


Item 6.  Selected Financial Data

The following  table sets forth  selected  financial  information  regarding the
Partnership's  financial position and operating results. This information should
be read in conjunction  with  Management's  Discussion and Analysis of Financial
Condition  and Results of  Operations  and the  Financial  Statements  and Notes
thereto,  which are  included in Items 7 and 8 of this Report.  Certain  amounts
have been restated to conform with current year presentation.
<TABLE>
<CAPTION>

                                           March 31,     March 31,       March 31,       March 31,      March 31,
                                             2000           1999           1998            1997           1996

<S>                                     <C>            <C>             <C>            <C>            <C>
Revenue                                 $     235,508  $      281,041  $     222,072  $     204,683  $      224,012
Equity in losses of Local Limited
     Partnerships                          (2,576,356)     (2,932,545)    (4,921,903)    (4,044,413)     (4,695,617)
Net loss                                   (3,006,310)     (3,371,589)    (5,794,498)    (4,337,761)     (4,952,448)
     Per Limited Partnership Unit (A)          (43.18)        (48.42)         (83.22)        (62.30)         (71.13)
Cash and cash equivalents                     523,352         449,931        239,708        449,567         243,644
Marketable securities                       2,332,268       2,666,281      3,064,717      2,840,127       3,099,255
Investment in Local Limited
     Partnerships                          18,818,290      21,538,791     24,748,484     30,531,768      34,878,562
Total assets (B)                           21,702,984      24,862,400     28,092,950     33,871,495      38,246,869
Total liabilities                             295,987         405,479        286,362        298,276         318,728
Other data:
Passive loss (C)                           (4,835,075)     (5,120,476)    (5,324,956)    (5,154,301)     (5,187,774)
     Per Limited Partnership Unit (A,C)        (69.44)         (73.54)       (76.48)         (74.03)        (74.51)
 Portfolio income (C)                         325,210         340,850        361,519        281,707         350,417
     Per Limited Partnership Unit (A,C)          4.67            4.90           5.19           4.05            5.03
Low-Income Housing Tax Credit (C)          10,510,853      10,405,744     10,512,076     10,512,996      10,506,229
     Per Limited Partnership Unit (A,C)        150.96          150.97         150.98         150.99          150.90
Local Limited Partnership interests
     owned at end of period (D, E)                 26              27             27             27              27
</TABLE>

(A) Per Limited Partnership Unit data is based upon 68,929 outstanding Units.

(B) Total assets include the net investment in Local Limited Partnerships.

(C) Income tax information is as of December 31, the year end of the Partnership
for income tax purposes.

(D) On January 1, 1994, Strathern Park and Lorne Park merged.

(E) In January 2000,  the  Partnership  wrote off the  foreclosed  Wheeler House
property.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

Certain matters  discussed herein constitute  forward-looking  statements within
the  meaning  of the  Private  Securities  Litigation  Reform  Act of 1995.  The
Partnership  intends such  forward-looking  statements to be covered by the safe
harbor  provisions  for  forward-looking  statements,  and  are  including  this
statement for purposes of complying with these safe harbor provisions.  Although
the Partnership believes the forward-looking  statements are based on reasonable
assumptions,  the Partnership can give no assurance that their expectations will
be attained. Actual results and timing of certain events could differ materially
from those projected in or contemplated by the forward-looking statements due to
a number of factors,  including,  without limitation,  general economic and real
estate conditions, and interest rates.
<PAGE>

Liquidity and Capital Resources

At March 31, 2000, the  Partnership  had cash and cash  equivalents of $523,352,
compared  with  $449,931 at March 31,  1999.  The  increase is  attributable  to
proceeds  from  sales  and   maturities  of  marketable   securities   and  cash
distributions received from Local Limited Partnerships,  partially offset by net
cash  used for  operations,  investments  in  Local  Limited  Partnerships,  and
purchases of marketable securities.

Approximately  $2,231,000  of  marketable  securities  has  been  designated  as
Reserves by the Managing  General  Partner.  The Reserves were established to be
used for working  capital of the Partnership  and  contingencies  related to the
ownership of Local Limited Partnership  interests.  Management believes that the
investment income earned on the Reserves, along with cash distributions received
from Local Limited Partnerships,  to the extent available, will be sufficient to
fund the Partnership's  ongoing operations and any contingencies that may arise.
Reserves may be used to fund  Partnership  operating  deficits,  if the Managing
General Partner deems funding appropriate.

In the  event a Local  Limited  Partnership  encounters  operating  difficulties
requiring  additional funds, the Partnership might deem it in its best interests
to provide such funds, voluntarily, in order to protect its investment. To date,
the   Partnership   has  advanced   approximately   $303,000  to  Local  Limited
Partnerships to fund operating deficits.

Since the  Partnership  invests as a limited  partner,  the  Partnership  has no
contractual  duty to  provide  additional  funds to Local  Limited  Partnerships
beyond its specified investment. Thus, at March 31, 2000, the Partnership had no
contractual or other obligation to any Local Limited Partnership,  which had not
been paid or provided for.

Cash Distributions

No cash  distributions  were made during the years ended March 31, 2000, 1999 or
1998. It is not expected that cash available for  distribution,  if any, will be
significant  during  the  2000  calendar  year.  Based  on the  results  of 1999
operations,  the Local  Limited  Partnerships  are not  expected  to  distribute
significant  amounts of cash to the  Partnership  because  such  amounts will be
needed to fund Property  operating  costs.  In addition,  many of the Properties
benefit from some type of federal or state  subsidy and, as a  consequence,  are
subject to restrictions on cash distributions.

Results of Operations

2000 versus 1999

The  Partnership's  results  of  operations  for the year ended  March 31,  2000
resulted in a net loss of $3,006,310 as compared to a net loss of $3,371,589 for
the same period in 1999. The decrease in net loss is primarily  attributable  to
decreases  in equity in losses of Local  Limited  Partnerships  and  general and
administrative  expenses.  These effects were partially offset by provisions for
valuation of  investments in Local Limited  Partnerships  related to advances to
two Local Limited Partnerships  recorded in 2000, as well as a decrease in other
revenue.  Equity in losses of Local Limited Partnerships decreased primarily due
to an increase  in  unrecognized  losses for Local  Limited  Partnerships  whose
carrying values have been reduced to zero.

1999 versus 1998

The  Partnership's  results  of  operations  for the year ended  March 31,  1999
resulted in a net loss of $3,371,589 as compared to a net loss of $5,794,498 for
the same period in 1998. The decrease in net loss is primarily attributable to a
decrease in equity in losses of Local Limited  Partnerships  and a provision for
valuation of  Investment in Local  Limited  Partnership  in 1998 not required in
1999.  The  decrease  was  partially  offset  by  an  increase  in  general  and
administrative  expenses.   Equity  in  losses  of  Local  Limited  Partnerships
decreased  primarily due to an increase in unrecognized losses for Local Limited
Partnerships whose carrying values have been reduced to zero.
<PAGE>

Low-Income Housing Tax Credits

The 2000, 1999, and 1998 Tax Credits per Unit were $150.96, $150.97 and $150.98,
respectively.  The Tax Credit per Limited Partnership Unit stabilized in 1993 at
approximately  $151.00  per Unit.  The credits  are  expected  to remain  stable
through  the year  2000 and  then  they are  expected  to  decrease  as  certain
properties  reach the end of the ten year credit  period.  However,  because the
compliance  periods  extend  significantly  beyond the tax credit  periods,  the
Partnership  is expected to retain most of its  interests  in the Local  Limited
Partnerships for the foreseeable future, which is well beyond 2000.

Property Discussions

Historic New Center in Detroit,  Michigan has been generating operating deficits
due to low occupancy and collection  problems.  However, as previously reported,
the Managing General Partner was successful in finalizing the negotiations  with
the lenders for a loan  modification.  This loan  modification  should allow the
property to meet debt  service  coverage  and provide  capital for the  physical
improvements. In addition, a new property manager was hired in October 1998. The
new property  manager is focusing on  implementing a new marketing  strategy and
improving  rent  collections.  As of March 31, 2000,  occupancy for Historic New
Center  remained at 87%,  the same as last  quarter.  However,  bad debt expense
continues  to be high as a result  of poor  collections.  The  Managing  General
Partner continues to meet with property management on a monthly basis to monitor
this issue.

Westgate,  located in North Dakota, had been experiencing operating deficits due
to occupancy issues.  Occupancy as of March 31, 2000 was 96%.  Affiliates of the
Managing General Partner have been working with the Local General  Partner,  who
has raised some concerns over the long-term financial health of the property. In
response to these  concerns and to reduce  possible  future  risk,  the Managing
General Partner consummated the transfer of 50% of the Partnership's capital and
profits  in the  properties  to an  affiliate  of the Local  General  Partner in
November 1997.  Subsequently,  the Local General  Partner  transferred  both its
general partner interest and 48.5% of its partnership  interest in Westgate to a
non profit general partner effective June 17, 1999. The Managing General Partner
has the right to transfer the Partnership's  remaining interest to the new Local
General  Partner any time after one year from June 17,  1999.  Further,  the new
Local General Partner has the right to call the remaining interest after the tax
credit period has expired.

As previously  reported,  in 1997, the Local General Partner,  of Wheeler House,
located in Nashua, New Hampshire was removed due to financial  insolvency and an
affiliate of the Managing  General Partner stepped in as temporary Local General
Partner. As the new Local General Partner, the affiliate of the Managing General
Partner  negotiated  with the lender on temporary debt  restructuring  to reduce
interest rates and extend the due date of the loan to 1998. However, in December
1999, the Lender began foreclosure proceedings. The foreclosure was completed in
early  January,  2000.  The  foreclosure  will result in recapture of credits of
approximately  $3.70 per unit,  which will be on the 2000 Schedule K-1 that will
be filed in April of 2001.  In  addition,  the  foreclosure  will  result in the
allocation  of taxable  income to the  Partnership  and loss of future  benefits
associated with this property. Since the property's carrying value was zero, the
transaction had no financial statement impact.

The Partnership has implemented  policies and practices for assessing  potential
impairment of its investments in Local Limited Partnerships. The investments are
analyzed by real estate experts to determine if impairment  indicators exist. If
so,  the  carrying  value is  compared  to the  undiscounted  future  cash flows
expected to be derived from the asset.  If there is a significant  impairment in
carrying  value,  a  provision  to write  down the asset to fair  value  will be
recorded in the Partnership's financial statements.

Inflation and Other Economic Factors

Inflation had no material impact on the operations or financial condition of the
Partnership for the years ended March 31, 2000, 1999 and 1998.
<PAGE>
Since some of the  properties  benefit from some form of government  assistance,
the  Partnership  is  subject  to the  risks  inherent  in that  area  including
decreased  subsidies,  difficulties  in finding  suitable  tenants and obtaining
permission  for rent  increases.  In  addition,  any Tax  Credits  allocated  to
investors with respect to a property are subject to recapture to the extent that
the property or any portion thereof ceases to qualify for the Tax Credits.

Certain of the  Properties  in which the  Partnership  invests may be located in
areas suffering from poor economic  conditions.  Such  conditions  could have an
adverse  effect on rent or occupancy  levels at such  properties.  Nevertheless,
management believes that the generally high demand for below market rate housing
will tend to negate such  factors.  However,  no assurance  can be given in this
regard.

Other Development

Lend Lease Real Estate  Investments,  Inc. ("Lend Lease"),  the U.S.  subsidiary
of Lend Lease  Corporation  and the leading U.S.  institutional  real estate
advisor, as ranked by assets under management, acquired The Boston Financial
Group Limited Partnership ("Boston Financial") on November 3, 1999.

Headquartered  in New York and  Atlanta,  Lend Lease  Corporation  has  regional
offices in 12 cities  nationwide.  The company ranks as the leading U.S. manager
of tax-exempt assets invested in real estate. Lend Lease is a subsidiary of Lend
Lease  Corporation,  an international  real estate and financial  services group
listed on the  Australian  Stock  Exchange.  Worldwide,  Lend Lease  Corporation
operates from more than 30 cities on five  continents:  North  America,  Europe,
Asia,  Australia and South America. In addition to real estate investments,  the
Lend  Lease  Group  operates  in the  areas  of  property  development,  project
management and construction, and capital services (infrastructure).

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The  Partnership  has  invested in  marketable  securities  with a fair value of
$2,332,268 at March 31, 2000; these securities, with rates ranging from 4.88% to
8.50%,  do not subject the  Partnership  to  significant  market risk because of
their short term maturities and high liquidity.

The  Partnership has no other exposure to market risk associated with activities
in derivative financial instruments,  derivative commodity instruments, or other
financial instruments.

Item 8.  Financial Statements and Supplementary Data

Information  required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.


Item 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.
                                       PART III

Item 10.  Directors and Executive Officers of the Registrant

The  Managing  General  Partner of the  Partnership  is Arch  Street V, Inc.,  a
Massachusetts corporation (the "Managing General Partner"), an affiliate of Lend
Lease Real Estate Investments, Inc. ("Lend Lease"). The Managing General Partner
was  incorporated  in June 1989.  Randolph G.  Hawthorne is the Chief  Operating
Officer of the Managing General Partner and had the primary  responsibility  for
evaluating,  selecting and  negotiating  investments  for the  Partnership.  The
Investment  Committee of the Managing  General Partner approved all investments.
The names and  positions  of the  principal  officers  and the  directors of the
Managing General Partner are set forth below.
<PAGE>
     Name                                           Position

Jenny Netzer                           President, Managing Director
Michael H. Gladstone                   Vice President, Managing Director
Randolph G. Hawthorne                  Vice President, Managing Director
Paul F. Coughlan                       Vice President
William E. Haynsworth                  Vice President

The  other  General  Partner  of  the  Partnership  is  Arch  Street  V  Limited
Partnership,  a Massachusetts  limited partnership ("Arch Street L.P.") that was
organized in June 1989.  Arch Street,  Inc. is the managing  general  partner of
Arch Street L.P.

The Managing General Partner provides day-to-day  management of the Partnership.
Compensation is discussed in Item 11 of this report. Such day-to-day  management
does not include the management of the Properties.

The business  experience of each of the persons listed above is described below.
There is no family  relationship  between any of the persons listed in this
section.

Jenny Netzer,  age 44,  Principal,  Head of Housing and Community  Investing.  -
Responsible for tax credit investment programs to institutional clients.  Joined
Lend Lease through its 1999 acquisition of Boston Financial, started with Boston
Financial in 1987.  Previously,  led Boston Financial's new business initiatives
and managed firm's Asset Management division, responsible for performance of 750
properties and providing  service to 35,000  investors.  Prior to joining Boston
Financial,  served as Deputy Budget Director for Commonwealth of  Massachusetts,
responsible for Commonwealth's health care and public pension program's budgets,
served as Assistant Controller at Yale University and former member of Watertown
Zoning Board of Appeals Officer of Affordable  Housing Tax Credit  Coalition and
frequent  speaker on  affordable  housing  and tax credit  industry  issues,  BA
Harvard  University;  Master's  in Public  Policy  Harvard's  Kennedy  School of
Government.

Michael H. Gladstone,  age 43, Principal,  Legal - Responsible for legal work in
the areas of affordable and  conventional  housing and  investment  products and
services.  Joined Lend Lease through its 1999  acquisition of Boston  Financial,
started with Boston Financial in 1985;  served as firm's General Counsel.  Prior
to joining Boston Financial, associated with law firm of Herrick & Smith, served
on  advisory  board of Housing  and  Development  Reporter.  Lectured at Harvard
University on affordable housing matters, Member, The National Realty Committee,
Cornell Real Estate  Council,  National  Association  of Real Estate  Investment
Managers  and  Massachusetts  Bar,  BA  Emory  University;   JD  &  MBA  Cornell
University.

Randolph G.  Hawthorne,  age 50,  Principal,  Housing and Community  Investing -
Responsible for structuring and acquiring real estate  investments.  Joined Lend
Lease  through its 1999  acquisition  of Boston  Financial,  started with Boston
Financial in 1973.  Previously,  served as Boston  Financial's  Treasurer,  Past
Chairman of the Board of the National  Multi Housing  Council,  having served on
the board since 1989, Past President of the National Housing and  Rehabilitation
Association,  Member, Multifamily Council of the Urban Land Institute,  Frequent
speaker at industry conferences.  Serves on the Editorial Advisory Boards of the
Tax Credit  Advisor  and  Multi-Housing  News,  BS  Massachusetts  Institute  of
Technology; MBA Harvard Graduate School of Business. Board of Directors National
Housing Conference. Graduated MIT 1971, HBS 1973.

Paul  F.  Coughlan,  age  56,  Principal,  Housing  and  Community  Investing  -
Responsible  for marketing and sales of  institutional  tax credit  investments.
Joined Lend Lease through its 1999 acquisition of Boston Financial, started with
Boston  Financial  in 1975.  Previously,  served  as sales  manager  for  Boston
Financial's retail tax credit fund, AB Brown University.

William E.  Haynsworth,  age 60,  Principal,  Housing and Community  Investing -
Responsible for the  structuring of real estate  investments and the acquisition
of property interests.  Joined Lend Lease through its 1999 acquisition of Boston
Financial,  started  with  Boston  Financial  in 1977.  Prior to joining  Boston
Financial,  Acting Executive  Director and General Counsel of the  Massachusetts
Housing Finance Agency. Served as Director of Non-Residential Development of the
Boston  Redevelopment  Authority and Associate of Goodwin,  Proctor & Hoar, Past
President and current  Chairman of the Board of Directors of Affordable  Housing
Tax Credit Coalition, BA Dartmouth College; LLB and LLM Harvard Law School.
<PAGE>
Item 11.  Management Remuneration

Neither the  directors nor officers of Arch Street,  Inc.,  the partners of Arch
Street  L.P.  nor any  other  individual  with  significant  involvement  in the
business of the Partnership  receives any current or proposed  remuneration from
the Partnership.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

As of March 31, 2000, the following is the only entity known to the Partnership
to be the  beneficial  owner of more than 5% of the total number of Units
outstanding:
<TABLE>
<CAPTION>
                                                                                   Amount
           Title of        Name and Address                                     Beneficially        Percent of
             Class       of Beneficial Owner                                        Owned             Class

<S>                                                                             <C>                    <C>
       Limited Oldham Institutional Tax Credits LLC                             8,024 Units            11.64%
       Partner 101 Arch Street
                         Boston, MA
</TABLE>

Oldham Institutional Tax Credits LLC is an affiliate of Arch Street V, Inc., the
Managing General Partner.

The equity  securities  registered by the Partnership under Section 12(g) of the
Act consist of 100,000 Units,  68,929 of which had been sold to the public as of
March  31,  2000.  The  remaining  Units  were  deregistered  in  Post-Effective
Amendment No. 6, dated January 21, 1992, herein  incorporated by this reference.
Holders of Units are permitted to vote on matters affecting the Partnership only
in certain unusual  circumstances and do not generally have the right to vote on
the operation or management of the Partnership.

Arch Street L.P. owns five (unregistered) Units not included in the 68,929 Units
sold to the public. Additionally, five registered Units were sold to an employee
of an affiliate of the Managing  General Partner of the  Registrant.  Such Units
were sold at a discount of 7% of the Unit price for a total discount of $350 and
a total purchase price of $4,650.

Except as described in the preceding paragraphs, neither Arch Street, Inc., Arch
Street L.P., Lend Lease nor any of their executive officers, directors, partners
or  affiliates  is the  beneficial  owner of any  Units.  None of the  foregoing
persons possesses a right to acquire beneficial ownership of Units.

The Partnership does not know of any existing  arrangement that might at a later
date result in a change in control of the Partnership.

Item 13.  Certain Relationships and Related Transactions

The  Partnership  paid certain fees to and  reimbursed  certain  expenses of the
Managing  General Partner or its affiliates in connection with the  organization
of the Partnership and the offering of Units.  The Partnership was also required
to pay certain fees to and reimburse  certain  expenses of the Managing  General
Partner  or  its  affiliates  in  connection  with  the  administration  of  the
Partnership  and its acquisition and disposition of investments in Local Limited
Partnerships.  In  addition,  the  General  Partners  are  entitled  to  certain
Partnership distributions under the terms of the Partnership Agreement. Also, an
affiliate  of the General  Partners  will receive up to $10,000 from the sale or
refinancing  proceeds of each Local Limited Partnership if it is still a limited
partner  at the  time  of  such a  transaction.  All  such  fees,  expenses  and
distributions  are  more  fully  described  in the  sections  of the  Prospectus
entitled  "Estimated Use of Proceeds",  "Management  Compensation  and Fees" and
"Profits and Losses for Tax Purposes, Tax Credits and Cash Distributions".  Such
sections are incorporated  herein by reference.  In addition,  affiliates of the
Managing  General  Partner serve as property  management  agents for New Center,
Carib II, Carib III and Woodlake Hills.
<PAGE>
The Partnership is permitted to enter into transactions  involving affiliates of
the Managing General Partner,  subject to certain limitations established in the
Partnership Agreement.

Information regarding the fees paid and expense reimbursements made in the three
ended March 31, 2000 is presented below.

Organizational fees and expenses

In accordance  with the Partnership  Agreement,  the Partnership was required to
pay certain fees to and reimburse expenses of the General Partners and others in
connection  with the  organization  of the  Partnership  and the offering of its
Limited Partnership Units.  Selling  commissions,  fees and accountable expenses
related to the sale of the Units totaling  $9,499,984 have been charged directly
to Limited  Partners'  equity.  In connection  therewith,  $5,858,935 of selling
expenses  and  $3,641,049  of  offering  expenses  incurred  on  behalf  of  the
Partnership  have  been  paid  to an  affiliate  of the  General  Partners.  The
Partnership  was  required  to  pay  a  non-accountable  expense  allowance  for
marketing expenses equal to a maximum of 1% of Gross Proceeds;  this is included
in total  offering  expenses.  The  Partnership  has  capitalized  an additional
$50,000  which was  reimbursed  to an affiliate of the General  Partners.  Total
organization and offering expenses,  exclusive of selling  commissions,  did not
exceed 5.5% of the Gross  Proceeds and  organizational  and  offering  expenses,
inclusive of selling commissions did not exceed 14.0% of the Gross Proceeds.  No
organizational fees and expenses and selling expenses were paid during the three
years ended March 31, 2000.

Acquisition fees and expenses

In accordance  with the Partnership  Agreement,  the Partnership was required to
pay  acquisition  fees to and  reimburse  acquisition  expenses of the  Managing
General  Partner  or its  affiliates  for  selecting,  evaluating,  structuring,
negotiating  and  closing  the   Partnership's   investments  in  Local  Limited
Partnerships.  Acquisition  fees  totaled  7% of the  gross  offering  proceeds.
Acquisition  expenses,  which  include such expenses as legal fees and expenses,
travel and  communications  expenses,  costs of appraisals,  accounting fees and
expenses,  were  expected to total 1.5% of the gross  offering  proceeds.  As of
March 31, 2000,  acquisition  fees  totaling  $4,825,005  for the closing of the
Partnership's  Local  Limited  Partnership  Investments  have  been  paid  to an
affiliate  of  the  Managing  General  Partner.  Acquisition  expenses  totaling
$899,430  at March  31,  2000  were  incurred  and have  been  reimbursed  to an
affiliate of the Managing General Partner.  No acquisition fees or expenses were
paid during the three years ended March 31, 2000.

Asset Management Fees

In  accordance  with the  Partnership  Agreement,  an  affiliate of the Managing
General Partner is paid an Asset  Management Fee for services in connection with
the  administration of the affairs of the Partnership.  The affiliate  currently
receives  the base  amount of .365% (as  adjusted  by the CPI  factor)  of Gross
Proceeds annually as the Asset Management Fee. Asset Management Fees incurred in
each of the three years ended March 31, 2000 are as follows:
<TABLE>
<CAPTION>

                                                                    2000          1999            1998
                                                                 ----------     ----------      ----------

<S>                                                            <C>            <C>             <C>
     Asset Management Fees                                     $   247,331    $   243,169     $   238,087



</TABLE>
<PAGE>
Salaries and benefits expense reimbursements

An affiliate of the Managing  General  Partner is reimbursed for the cost of the
Partnership's  salaries and benefits expenses. The reimbursements are based upon
the size and complexity of the Partnership's operations.  Reimbursements paid or
payable in each of the three years ended March 31, 2000 are as follows:
<TABLE>
<CAPTION>
                                                                    2000          1999           1998
                                                               -----------    -----------     --------

<S>                                                            <C>            <C>             <C>
   Salaries and benefits expense reimbursements                $   139,757    $   109,845     $   127,926
</TABLE>

Property Management Fees

Affiliates of the Managing General Partner are management  agents for four Local
Limited  Partnerships.  Fees charged in each of the two years ended December 31,
1999 are as follows:
<TABLE>
<CAPTION>

                                                                    1999          1998           1997
                                                               -----------    -----------     --------

<S>                                                            <C>            <C>             <C>
   Property Management Fees                                    $    84,640    $    80,455     $    77,858
</TABLE>

Cash distributions paid to the General Partners

In  accordance  with the  Partnership  Agreement,  the  General  Partners of the
Partnership, Arch Street V, Inc. and Arch Street V Limited Partnership,  receive
1% of cash  distributions  paid to partners.  No cash distributions were paid to
the General Partners in the three years ended March 31, 2000.

Additional  information  concerning  cash  distributions  and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Lend Lease and its affiliates for the three years
ended March 31, 2000 is presented in Note 5 to the Financial Statements.


<PAGE>


                               PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)(1) and (a)(2) Documents filed as a part of this Report

In  response to this  portion of Item 14, the  financial  statements,  financial
statement  schedule and the auditors' report relating thereto are submitted as a
separate section of this Report.  See Index to the Financial  Statements on page
F-1 hereof.

The reports of auditors of the Local Limited Partnerships relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
28.1 of this Report.

All other financial statement schedules and exhibits for which provision is made
in  the  applicable  accounting  regulations  of  the  Securities  and  Exchange
Commission are not required under related  instructions or are  inapplicable and
therefore have been omitted.

(a)(3)  See Exhibit Index contained herein.

(a)(3)(b)  Reports on Form 8-K:
          No  reports on Form 8-K were  filed  during  the year ended  March 31,
2000.

(a)(3)(c)  Exhibits

Number and Description in Accordance with
  Item 601 of Regulation S-K


    18.   Letter on Change in Accounting Principle

    27.  Financial Data Schedule

    28.  Additional Exhibits

         (a)   28.1 Reports of Other Independent Auditors

         (b)   Audited financial statements of Local Limited Partnerships

               Strathern Park/Lorne Park
               Circle Terrace

(a)(3)(d)  None.



<PAGE>


                                                          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.

     BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V

     By:   Arch Street V, Inc.
           its Managing General Partner



     By:   /s/Randolph G. Hawthorne                Date:    June 29, 2000
           ------------------------                          -------------
           Randolph G. Hawthorne,
           Managing Director, Vice President and
           Chief Operating Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been  signed by the  following  persons  on behalf of the  Managing  General
Partner of the Partnership and in the capacities and on the dates indicated:



     By:   /s/Randolph G.  Hawthorne                  Date:    June 29, 2000
           ------------------------------                     -------------
           Randolph G. . Hawthorne,
           Managing Director, Vice President and
           Chief Operating Officer




     By:   /s/Michael H. Gladstone                    Date:    June 29, 2000
           -----------------------                              -------------
           Michael H. Gladstone,
           Managing Director, Vice President
<PAGE>
Item 8.  Financial Statements and Supplementary Data
<TABLE>
<CAPTION>


                                                    BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                                                   (A Limited Partnership)

                                                                 Annual Report on Form 10-K
                                                              For The Year Ended March 31, 2000
                                                                            Index



                                                                              Page No.

Report of Independent Accountants
<S>                                                                             <C>
    For the years ended March 31, 2000, 1999 and 1998                           F-2

Financial Statements

    Balance Sheets - March 31, 2000 and 1999                                    F-3

    Statements of Operations - Years Ended
       March 31, 2000, 1999 and 1998                                            F-4

    Statements of Changes in Partners' Equity (Deficiency) -
       Years Ended March 31, 2000, 1999 and 1998                                F-5

    Statements of Cash Flows - Years Ended
       March 31, 2000, 1999 and 1998                                            F-6

    Notes to the Financial Statements                                           F-7

Financial Statement Schedule

    Schedule III - Real Estate and Accumulated Depreciation                     F-16


See also Index to  Exhibits  on Page K-22 for the  financial  statements  of the
Local Limited Partnerships  included as a separate exhibit in this Annual Report
on Form 10-K.

Other  schedules  have been  omitted  as they are  either  not  required  or the
information  required to be  presented  therein is  available  elsewhere  in the
financial statements and the accompanying notes and schedules.

</TABLE>


<PAGE>



                          REPORT OF INDEPENDENT ACCOUNTANTS


To the Partners
Boston Financial Qualified Housing Tax Credits L.P. V:

In our  opinion,  based on our audits and the  reports  of other  auditors,  the
financial  statements  listed in the accompanying  index present fairly,  in all
material respects,  the financial position of Boston Financial Qualified Housing
Tax  Credits  L.P. V (the  "Fund") at March 31,  2000 and 1999,  and the results
of its  operations  and its cash flows for each of the three years in the period
ended March 31, 2000, in conformity with accounting  principles  generally
accepted in the United States. In addition, in our opinion, the financial
statement schedule listed in the accompanying index presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related financial statements. These  financial statements and financial
statement schedule are the  responsibility  of the Fund's  management;  our
responsibility is to express an opinion on these financial  statements  based
on our  audits.  We did not  audit  the  financial statements of certain  local
limited  partnerships  for which  $35,175,229  and $32,930,842 of cumulative
equity in losses are included in the balance sheet as of  March  31,  2000  and
1999,  respectively,  and for  which  net  losses  of $2,576,356,   $2,932,545,
and  $4,921,903  are  included  in  the  accompanying financial  statements for
the  years  ended  March  31,  2000, 1999, 1998, respectively.  Those statements
were audited by other  auditors whose reports thereon have been furnished to us,
and our opinion expressed herein,  insofar as it relates to the amounts included
for the Local Limited Partnerships,  is based solely on the reports of the other
auditors.  We conducted  our audits of these financial  statements in accordance
with auditing standard generally accepted in the United  States,  which  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,  assessing  the accounting  principles  used and
significant  estimates made by management, and evaluating the overall  financial
statement  presentation.  We believe that our audits and the  reports of other
auditors  provide a  reasonable  basis for the opinions expressed above.

As  discussed in Note 2 to the  financial  statements,  in 2000 the  Partnership
changed the basis of  presentation  of its financial  statements from a combined
basis to a stand-alone  basis. The 1999 financial  statements have been restated
to show the effects of this change in reporting entity.





/S/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
June 22, 2000
Boston, Massachusetts



<PAGE>
<TABLE>
<CAPTION>


                                                    BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                                                   (A Limited Partnership)

                                                                       BALANCE SHEETS
                                                                   March 31, 2000 and 1999



                                                                                                 1999
                                                                              2000            (Restated)
Assets

<S>                                                                      <C>                 <C>
Cash and cash equivalents                                                $     523,352       $     449,931
Accounts receivable from affiliates                                                  -             174,739
Investments in Local Limited Partnerships, net (Note 4)                     18,818,290          21,538,791
Marketable securities, at fair value (Note 3)                                2,332,268           2,666,281
Other assets                                                                    29,074              32,658
                                                                         -------------       -------------
   Total Assets                                                          $  21,702,984       $  24,862,400
                                                                         =============       =============

Liabilities and Partners' Equity

Accounts payable to affiliates (Note 5)                                  $     121,184       $     143,443
Accounts payable and accrued expenses                                           43,605             115,218
Deferred revenue (Note 6)                                                      131,198             146,818
                                                                         -------------       -------------
   Total Liabilities                                                           295,987             405,479
                                                                         -------------       -------------

General, Initial and Investor Limited Partners' Equity                      21,443,142          24,449,452
Net unrealized gains (losses) on marketable securities                         (36,145)              7,469
                                                                         ----------------    -------------
   Total Partners' Equity                                                   21,406,997          24,456,921
                                                                         -------------       -------------
   Total Liabilities and Partners' Equity                                $  21,702,984       $  24,862,400
                                                                         =============       =============


The accompanying notes are an integral part of these financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                                              BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                                                   (A Limited Partnership)

                                                                  STATEMENTS OF OPERATIONS
                                                      For the Years Ended March 31, 2000, 1999 and 1998


                                                                           1999                1998
                                                        2000            (Restated)          (Restated)
Revenue:
<S>                                                <C>                 <C>                <C>
   Investment                                      $     156,312       $     158,954      $      179,908
   Other                                                  79,196             122,087              42,164
                                                   -------------       -------------      --------------
     Total Revenue                                       235,508             281,041             222,072
                                                   -------------       -------------      --------------

Expenses:
   General and administrative
     (includes reimbursements to an affiliate
     in the amounts of $139,757, $109,845
     and $127,926 in 2000, 1999 and 1998,
     respectively) (Note 5)                              219,794             453,057             237,092
   Asset management fees, related party (Note 5)         247,331             243,169             238,087
   Provision for valuation of investment in
       Local Limited Partnership                         174,739                   -             590,197
   Amortization                                           23,598              23,859              29,291
                                                   -------------       -------------      --------------
     Total Expenses                                      665,462             720,085           1,094,667
                                                   -------------       -------------      --------------

Loss before equity in losses of Local Limited
   Partnerships                                         (429,954)           (439,044)           (872,595)

Equity in losses of Local Limited
   Partnerships (Note 4)                              (2,576,356)         (2,932,545)         (4,921,903)
                                                   -------------       -------------      --------------


Net Loss                                           $  (3,006,310)      $  (3,371,589)     $   (5,794,498)
                                                   =============       =============      ==============

Net Loss allocated:
   General Partners                                $     (30,063)      $     (33,716)     $      (57,945)
   Limited Partners                                   (2,976,247)         (3,337,873)         (5,736,553)
                                                   -------------       -------------      --------------
                                                   $  (3,006,310)      $  (3,371,589)     $   (5,794,498)
                                                   =============       =============      ==============

Net Loss per Limited Partnership
   Unit (68,929 Units)                             $      (43.18)      $      (48.42)     $       (83.22)
                                                   =============       =============      ==============

</TABLE>

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

<PAGE>
<TABLE>
<CAPTION>

                                              BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                                                   (A Limited Partnership)

                                                   STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
                                                      For the Years Ended March 31, 2000, 1999 and 1998


                                       Net
                                                    Initial         Investor       Unrealized
                                   General          Limited          Limited          Gains
                                   Partners         Partner         Partners        (Losses)           Total

<S>                             <C>              <C>             <C>              <C>             <C>
Balance at March 31, 1997       $   (255,951)    $      5,000    $ 33,866,490     $    (42,320)   $ 33,573,219
                                ------------     ------------    ------------     ------------    ------------

Comprehensive Income (Loss):
   Change in net unrealized
     losses on marketable securities
     available for sale                    -                -               -           27,867          27,867
   Net Loss                          (57,945)               -      (5,736,553)               -      (5,794,498)
                                ------------     ------------    ------------     ------------    ------------
Comprehensive Income (Loss)          (57,945)               -      (5,736,553)          27,867      (5,766,631)
                                ------------     ------------    ------------     ------------    ------------

Balance at March 31, 1998
   (restated)                       (313,896)           5,000      28,129,937          (14,453)     27,806,588
                                ------------     ------------    ------------     ------------    ------------

Comprehensive Income (Loss):
   Change in net unrealized
     losses on marketable securities
     available for sale                    -                -               -           21,922          21,922
   Net Loss                          (33,716)               -      (3,337,873)               -      (3,371,589)
                                ------------     ------------    ------------     ------------    ------------
Comprehensive Income (Loss)          (33,716)               -      (3,337,873)          21,922      (3,349,667)
                                ------------     ------------    ------------     ------------    ------------

Balance at March 31, 1999
   (restated)                       (347,612)           5,000      24,792,064            7,469      24,456,921
                                ------------     ------------    ------------     ------------    ------------

Comprehensive Loss:
   Change in net unrealized
     gains on marketable securities
     available for sale                    -                -               -          (43,614)        (43,614)
   Net Loss                          (30,063)               -      (2,976,247)               -      (3,006,310)
                                ------------     ------------    ------------     ------------    ------------
Comprehensive Loss                   (30,063)               -      (2,976,247)         (43,614)     (3,049,924)
                                ------------     ------------    ------------     ------------    ------------

Balance at March 31, 2000       $   (377,675)    $      5,000    $ 21,815,817      $   (36,145)    $21,406,997
                                ============     ============    ============     ============    ============

</TABLE>

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

<PAGE>
<TABLE>
<CAPTION>

                                                 BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                                                   (A Limited Partnership)

                                                                  STATEMENTS OF CASH FLOWS
                                                      For the Years Ended March 31, 2000, 1999 and 1998


                                                                                1999             1998
                                                              2000           (Restated)       (Restated)

Cash flows from operating activities:
<S>                                                       <C>              <C>               <C>
   Net loss                                               $  (3,006,310)   $  (3,371,589)    $  (5,794,498)
   Adjustments to reconcile net loss to net
     cash used for operating activities:
     Equity in losses of Local Limited Partnerships           2,576,356        2,932,545         4,921,903
     Provision for valuation of Investment in Local
       Limited Partnership                                      174,739                -           590,197
     Amortization                                                23,598           23,859            29,291
     (Gain) Loss on sales and maturities of
       marketable securities                                     (2,498)          14,790            (1,154)
     Cash distribution income included in cash
       Distributions received from Local Limited
       Partnerships                                              (5,132)         (65,089)                -
     Increase (decrease) in cash arising from changes
       in operating assets and liabilities:
       Other assets                                               3,584            6,383            10,992
       Accounts payable to affiliate                            (22,259)          64,233            (9,017)
       Accounts payable and accrued expenses                    (71,613)          47,527            31,999
       Deferred revenue                                         (15,620)           7,357           (34,896)
                                                          -------------    -------------     -------------
Net cash used for operating activities                         (345,155)        (339,984)         (255,183)
                                                          -------------    -------------     -------------

Cash flows from investing activities:
   Investments in Local Limited Partnerships                   (127,767)         (50,420)                -
   Purchases of marketable securities                        (1,067,998)      (2,523,829)       (2,889,608)
   Proceeds from sales and maturities of
     marketable securities                                    1,360,895        2,929,397         2,694,039
   Cash distributions received from Local Limited
     Partnerships                                               253,446          368,798           241,893
   Advances to Local Limited Partnerships                      (188,700)        (173,739)           (1,000)
   Repayment of advances to Local Limited
     Partnerships                                               188,700                -                 -
                                                          -------------    -------------     -------------
Net cash provided by investing activities                       418,576          550,207            45,324
                                                          -------------    -------------     -------------


Net increase (decrease) in cash and
   cash equivalents                                              73,421          210,223          (209,859)

Cash and cash equivalents, beginning                            449,931          239,708           449,567
                                                          -------------    -------------     -------------

Cash and cash equivalents, ending                         $     523,352    $     449,931     $     239,708
                                                          =============    =============     =============

The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>




                       BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                        (A Limited Partnership)

                               Notes to the Financial Statements


1.   Organization

Boston Financial  Qualified  Housing Tax Credits L.P. V ("the  Partnership") was
formed on June 16,  1989  under the laws of the State of  Massachusetts  for the
primary  purpose  of  investing,   as  a  limited  partner,   in  other  limited
partnerships  ("Local  Limited  Partnerships"),  some of which  own and  operate
apartment  complexes  benefiting  from  some  form of  federal,  state  or local
assistance,  and each of which qualifies for low-income housing tax credits. The
Partnership's objectives are to: (i) provide current tax benefits in the form of
tax credits which qualified investors may use to offset their federal income tax
liability;  (ii) preserve and protect the Partnership's  capital;  (iii) provide
limited cash  distributions  from property  operations which are not expected to
constitute taxable income during Partnership  operations;  and (iv) provide cash
distributions from sale or refinancing transactions. The General Partners of the
Partnership are Arch Street V, Inc., a Massachusetts  corporation,  which serves
as the  Managing  General  Partner,  and Arch  Street V Limited  Partnership,  a
Massachusetts  Limited Partnership whose general partner consists of Arch Street
V, Inc., which also serves as the Initial Limited  Partner.  Both of the General
Partners  are  affiliates  of Lend Lease Real Estate  Investments,  Inc.  ("Lend
Lease"). The fiscal year of the Partnership ends on March 31.

The Partnership's partnership agreement (the "Partnership Agreement") authorized
the sale of up to 100,000  units of limited  partnership  interest  ("Units") at
$1,000  per Unit,  adjusted  for  certain  discounts.  On August 31,  1991,  the
Partnership held its final investor closing. In total, the Partnership  received
$68,928,650 of capital contributions,  net of discounts, from investors admitted
as Limited Partners for 68,929 Units.

Generally,  profits,  losses,  tax  credits and cash flows from  operations  are
allocated  99% to the  Limited  Partners  and 1% to the  General  Partners.  Net
proceeds  from a sale  or  refinancing  will  be  allocated  95% to the  Limited
Partners and 5% to the General Partners after certain priority payments.

Under  the  terms  of  the  Partnership  Agreement,  the  Partnership  initially
designated  4% of the Gross  Proceeds  from the sale of Units as a  reserve  for
working  capital of the Partnership  and  contingencies  related to ownership of
Local Limited Partnership  interests.  The Managing General Partner may increase
or decrease such Reserves from time to time, as it deems  appropriate.  At March
31, 2000, the Managing General Partner has designated  approximately  $2,231,000
of marketable securities as such Reserves.

2.   Significant Accounting Policies

Basis of Presentation

The Partnership accounts for its investments in Local Limited Partnerships using
the equity method of accounting  because the  Partnership  does not have control
over  the  major   operating  and  financial   policies  of  the  Local  Limited
Partnerships  in which it invests.  Under the equity  method,  the investment is
carried at cost,  adjusted for the Partnership's  share of income or loss of the
Local Limited  Partnerships,  additional  investments in and cash  distributions
from the  Local  Limited  Partnerships.  Equity  in  income or loss of the Local
Limited   Partnerships  is  included  in  the  Partnership's   operations.   The
Partnership  has  no  obligation  to  fund  liabilities  of  the  Local  Limited
Partnerships  beyond its investment and therefore a Local Limited  Partnership's
investment  will not be carried below zero. To the extent that equity losses are
incurred when a Local Limited  Partnership's  respective  investment balance has
been reduced to zero,  the losses will be  suspended  to be used against  future
income.  Distributions received from Local Limited Partnerships whose respective
investment balance has been reduced to zero are included in income.

Excess investment costs over the underlying net assets acquired have arisen from
acquisition   fees  paid  and  expenses   reimbursed  to  an  affiliate  of  the
Partnership.   These  fees  and  expenses  are  included  in  the  Partnership's
Investments  in  Local  Limited  Partnerships  and  are  being  amortized  on  a
straight-line basis over 35 years.


<PAGE>
                  BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                               (A Limited Partnership)

                      NOTES TO THE FINANCIAL STATEMENTS (continued)


2.  Significant Accounting Policies (continued)

Basis of Presentation (continued)

The General  Partners  have  decided to report the results of the Local  Limited
Partnerships on a 90-day lag basis because the Local Limited Partnerships report
their results on a calendar year basis.  Accordingly,  the financial information
of the Local Limited Partnerships that is included in the accompanying financial
statements is as of December 31, 1999, 1998 and 1997.

The general partner of Wheeler House  Apartments,  Ltd.  ("Wheeler House") Local
Limited  Partnership  and the General  Partner of the Partnership are affiliated
entities.  In prior periods,  the Partnership  combined its financial statements
with those of Wheeler House. During 2000, the General Partner concluded that the
presentation  of  the  financial  position  and  results  of  operations  of the
Partnership,  with Wheeler House accounted for using the equity method, resulted
in a more  meaningful  presentation.  All prior period  financial  data has been
restated to reflect the change in reporting entity.

The Partnership recognizes a decline in the carrying value of its investments in
Local Limited Partnerships when there is evidence of a non-temporary  decline in
the  recoverable  amount  of the  investment.  There is a  possibility  that the
estimates  relating to reserves for non-temporary  declines in carrying value of
investments in Local Limited  Partnerships  may be subject to material near term
adjustments.

The  Partnership,  as a limited  partner in the Local Limited  Partnerships,  is
subject to risks  inherent in the  ownership  of  property  which are beyond its
control,  such as  fluctuations  in  occupancy  rates  and  operating  expenses,
variations in rental schedules, proper maintenance and continued eligibility for
tax  credits.  If the cost of  operating a property  exceeds  the rental  income
earned thereon,  the Partnership may deem it in its best interest to voluntarily
provide funds in order to protect its investment.

Cash Equivalents

Cash equivalents  consist of short-term  money market  instruments with original
maturities of ninety days or less at acquisition and approximate fair value.

Marketable Securities

Marketable  securities  consists  primarily  of U.S.  Treasury  instruments  and
various   asset-backed   investment  vehicles.   The  Partnership's   marketable
securities are classified as "Available for Sale" securities and are reported at
fair value as reported by the brokerage  firm at which the  securities are held.
Realized gains and losses from the sales of securities are based on the specific
identification  method.  Unrealized  gains and losses are excluded from earnings
and reported as a separate component of partners' equity.

Use of Estimates

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

Income Taxes

No provision  for income taxes has been made as the  liability for such taxes is
an obligation of the partners of the Partnership.



<PAGE>
                    BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                 (A Limited Partnership)

                           NOTES TO THE FINANCIAL STATEMENTS (continued)


2.   Significant Accounting Policies (continued)

Fair Value of Financial Instruments

Statements  of  Financial   Accounting  Standards  No.  107  ("SFAS  No.  107"),
Disclosures About Fair Value of Financial  Instruments,  requires disclosure for
the fair value of most on- and off-balance sheet financial instruments for which
it is  practicable  to estimate  that value.  The scope of SFAS No. 107 excludes
certain financial  instruments,  such as trade receivables and payables when the
carrying value approximates the fair value,  investments accounted for under the
equity  method,  and all  nonfinancial  assets  such as  real  property.  Unless
otherwise described, the fair values of the Partnership's assets and liabilities
which  qualify as financial  instruments  under SFAS No. 107  approximate  their
carrying amounts in the accompanying balance sheets.

Reclassifications

Certain reclassifications have been made to prior years' financial statements to
conform to the current year presentation.

3.   Marketable Securities

A summary of marketable securities is as follows:
<TABLE>
<CAPTION>
                                                                 Gross             Gross
                                                              Unrealized        Unrealized              Fair
                                                 Cost            Gains            Losses             Value
Debt securities issued by the US
   Treasury and other US
<S>                                         <C>               <C>               <C>              <C>
   government corporations and agencies     $  2,046,494      $     1,407       $  (26,680)      $ 2,021,221

Mortgage backed securities                       321,919               95          (10,967)          311,047
                                            ------------      -----------       ----------      ------------

Marketable securities at March 31, 2000     $  2,368,413      $     1,502       $  (37,647)     $  2,332,268
                                            ============      ===========       ==========      ============

A summary of marketable securities is as follows:
                                                                 Gross             Gross
                                                              Unrealized        Unrealized              Fair
                                                 Cost            Gains            Losses             Value

Debt securities issued by the US
   Treasury and other US
   government corporations and agencies     $  2,347,480      $    11,715       $   (4,787)     $  2,354,408

Mortgage backed securities                       311,332            1,865           (1,324)          311,873
                                            ------------      -----------       ----------      ------------

Marketable securities at March 31, 1999     $  2,658,812      $    13,580       $   (6,111)     $  2,666,281
                                            ============      ===========       ==========      ============
</TABLE>

The contractual maturities at March 31, 2000 are as follows:
<TABLE>
<CAPTION>
                                                                                               Fair
                                                                            Cost                Value

<S>                                                                      <C>                 <C>
Due in less than one year                                                $   998,056         $   994,143
Due in one year to five years                                              1,048,438           1,027,078
Mortgage backed securities                                                   321,919             311,047
                                                                         -----------         -----------
                                                                         $ 2,368,413         $ 2,332,268
                                                                         ===========         ===========
</TABLE>

<PAGE>
                BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                (A Limited Partnership)

                       NOTES TO THE FINANCIAL STATEMENTS (continued)


3.   Marketable Securities (continued)

Actual maturities may differ from contractual  maturities because some borrowers
have the  right to call or  prepay  obligations.  Proceeds  from the  sales  and
maturities of marketable  securities were approximately  $493,000,  $451,000 and
$1,792,000  during the years ended March 31, 2000, 1999 and 1998,  respectively.
Proceeds  from  the  maturities  of  marketable  securities  were  approximately
$868,000,  $2,479,000 and $902,000  during the years ended March 31, 2000,  1999
and 1998, respectively. Included in investment income are gross gains of $2,617,
$4,895  and  $7,205  and gross  losses of $119,  $19,685  and  $6,051  that were
realized  on the sales  during the years ended  March 31,  2000,  1999 and 1998,
respectively.

4.   Investments in Local Limited Partnerships

The  Partnership  uses the equity  method to  account  for its  limited  partner
interest in twenty-six Local Limited  Partnerships.  Each of these Local Limited
Partnerships owns and operates multi-family housing complexes, most of which are
government-assisted.  The  Partnership,  as Investor Limited Partner pursuant to
the various Local Limited Partnership Agreements which contain certain operating
and  distribution  restrictions,  has  generally  acquired a 99% interest in the
profits, losses, tax credits and cash flows from operations of each of the Local
Limited   Partnerships,   with  the  exception  of  Strathern   Park/Lorne  Park
Apartments,  Westgate  and  Huguenot  Park,  which are 95%,  49.5%  and  88.55%,
respectively.  Upon dissolution,  proceeds will be distributed according to each
respective partnership agreement.

 The  following is a summary of  Investments  in Local Limited  Partnerships  at
March 31:
<TABLE>
<CAPTION>

                                                                                  1999             1998
                                                                2000           (Restated)       (Restated)
Capital  contributions  and  advances  paid to
   Local Limited Partnerships and purchase price
   paid to withdrawing partners of Local Limited
<S>                                                         <C>              <C>               <C>
   Partnerships                                             $ 55,571,437     $  55,570,462     $  55,520,042

Cumulative equity in losses of Local Limited Partnerships
   (excluding cumulative unrecognized losses of $2,566,642,
   $1,290,733 and $177,371 in 2000, 1999 and
   1998, respectively)                                        (35,175,229)     (32,930,842)      (30,063,386)

Cumulative cash distributions received
   from Local Limited Partnerships                             (1,594,323)      (1,341,854)         (973,056)
                                                            -------------    -------------     -------------

Investments in Local Limited Partnerships
  before adjustment                                            18,801,885       21,297,766        24,483,600

Excess of investment cost over the underlying net assets acquired:

    Acquisition fees and expenses                               1,006,357        1,039,751         1,039,751

    Accumulated amortization of acquisition
    fees and expenses                                            (226,016)        (208,529)         (184,670)
                                                            -------------    -------------     -------------

Investments in Local Limited Partnerships                      19,582,226       22,128,988        25,338,681

Reserve for valuation of Investment in Local
   Limited Partnership                                           (763,936)        (590,197)         (590,197)
                                                            -------------    -------------     -------------
                                                            $ 18,818,290     $  21,538,791     $  24,748,484
                                                            =============    =============     =============
</TABLE>
<PAGE>



               BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                 (A Limited Partnership)

                  NOTES TO THE FINANCIAL STATEMENTS (continued)





4.    Investments in Local Limited Partnerships (continued)

The  Partnership has provided a reserve for valuation for one of its investments
in Local Limited Partnerships, Westgate Apartments, because there is evidence of
a non-temporary decline in the recoverable amount of the investment.

The lender for Wheeler House  foreclosed  on the property in January  2000.  The
Partnership does not anticipate any further obligations,  receipts or operations
relative to this  property.  As no material  gain or loss is  expected,  and the
Partnership's net investment is zero, all capital accounts have been written off
and excluded from the above investment amounts as of March 31, 2000.

Summarized financial  information as of December 31, 1999, 1998 and 1997 (due to
the  Partnership's  policy of reporting the financial  information  of its Local
Limited  Partnership  interests  on a 90 day lag  basis)  of all  Local  Limited
Partnerships  in  which  the  Partnership  has  invested  as of that  date is as
follows:

Summarized Balance Sheets - as of December 31,
<TABLE>
<CAPTION>
                                                                            1998                1997
                                                         1999            (Restated)          (Restated)
Assets:
<S>                                                 <C>                 <C>                 <C>
   Investment property, net                         $ 105,177,955       $  109,435,843      $  113,801,556
   Current assets                                        3,101,609           3,057,635           3,323,600
   Other assets                                          5,902,390           5,871,685           5,952,402
                                                    --------------      --------------      --------------
     Total Assets                                   $ 114,181,954       $  118,365,163      $  123,077,558
                                                    =============       ==============      ==============

Liabilities and Partners' Equity:
   Long-term debt, net of current portion           $   81,383,935      $   82,067,318      $   84,748,636
   Current liabilities (including current portion
     of long-term debt)                                  2,803,716           9,399,982           8,071,988
   Other liabilities                                     9,502,115           2,206,860           1,480,334
                                                    --------------      --------------      --------------
     Total Liabilities                                  93,689,766          93,674,160          94,300,958

Partnership's Equity                                    15,351,058          19,610,331          23,844,561
Other Partners' Equity                                   5,141,130           5,080,672           4,932,039
                                                    --------------      --------------      --------------
     Total Liabilities and Partners' Equity         $  114,181,954      $  118,365,163      $  123,077,558
                                                    ==============      ==============      ==============

Summarized Income Statements - for the years ended
December 31,

Rental and other income:                            $   15,034,859      $   14,644,117      $   14,408,684
                                                    --------------      --------------      --------------

Expenses:
   Operating                                             8,504,043           7,852,719           7,812,411
   Interest                                              5,762,221           5,916,749           5,983,954
   Depreciation and amortization                         4,760,003           4,940,971           5,822,201
                                                    --------------      --------------      --------------
     Total Expenses                                     19,026,267          18,710,439          19,618,566
                                                    --------------      --------------      --------------

     Net Loss                                       $   (3,991,408)     $   (4,066,322)     $   (5,209,882)
                                                    ==============      ==============      ==============

Partnership's  share of Net Loss (1999 and 1998
   include  adjustments  from prior
   years of $(25,790)
   and $(12,175), respectively)                     $   (3,927,947)     $   (3,980,818)     $   (5,097,131)
                                                    ==============      ==============      ==============

Other partners' share of Net Loss                   $      (89,251)     $      (97,679)     $     (112,751)
                                                    ==============      ==============      ==============
</TABLE>
<PAGE>
             BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                (A Limited Partnership)

                   NOTES TO THE FINANCIAL STATEMENTS (continued)


4.   Investments in Local Limited Partnerships (continued)

For the years ended  March 31,  2000,  1999 and 1998,  the  Partnership  has not
recognized  $1,351,591,  $1,048,273  and  $175,228,  respectively,  of equity in
losses  of  Local  Limited  Partnerships   relating  to  several  Local  Limited
Partnerships where cumulative equity in losses exceeded its total investments in
these Local Limited Partnerships.

The  Partnership's  equity as reflected  by the Local  Limited  Partnerships  of
$15,351,058  differs  from  the  Partnership's   Investments  in  Local  Limited
Partnerships  before  adjustment  of  $18,801,885  principally  because:  a) the
Partnership  has not  recognized  $2,566,642  of equity in losses of eight Local
Limited  Partnerships  whose equity in losses exceeded its total investment;  b)
distributions made by Local Limited  Partnerships during the quarter ended March
31, 2000 are not reflected in the December 31, 1999 balance  sheets of the Local
Limited  Partnerships;  and c)  syndication  costs  charged to equity by a Local
Limited  Partnership  are not reflected in the  Partnership's  investment in the
Local Limited Partnership.

5.   Transactions with Affiliates

An affiliate of the Managing General Partner currently  receives the base amount
of 0.365 (as adjusted by the CPI factor) of Gross Proceeds annually as the Asset
Management  Fee  for  administering  the  affairs  of  the  Partnership.   Asset
Management  Fees for the years ended March 31, 2000, 1999 and 1998 are $247,331,
$243,169 and $238,087,  respectively.  Included in accounts payable to affiliate
at March 31,  2000 and 1999 are  $62,841 and  $122,057,  respectively,  of Asset
Management Fees due to an affiliate of the Managing General Partner.

An affiliate of the Managing  General  Partner is reimbursed for the actual cost
of the Partnership's operating expenses.  Included in general and administrative
expenses  for the  years  ended  March  31,  2000,  1999 and 1998 are  $139,757,
$109,845 and $127,926, respectively, that the Partnership has paid or is payable
as  reimbursement  for salaries and benefits  expenses.  The amounts payable for
salaries  and  benefits  at March 31,  2000 and 1999 are  $58,343  and  $21,386,
respectively.

Affiliates of the Managing  General  Partner are the management  agents for four
Local Limited Partnerships in which the Partnership has invested. The management
fee charged to each property is equal to 4% of property gross revenues. Included
in  operating  expenses in the  summarized  income  statements  in Note 4 to the
financial  statements  are  $84,640,  $80,455  and  $77,858  of fees paid to the
affiliates for the years ended December 31, 1999, 1998 and 1997, respectively.

6.   Deferred Revenue

Under the terms of a Local Limited  Partnership  Agreement,  the Partnership was
required to fund a Supplemental Reserve in the amount of $196,000.  The original
purpose of the  contribution  was to fund the development  expenses of the Local
Limited  Partnership.  In lieu of transferring the  Supplemental  Reserve to the
Local Limited Partnership,  the Partnership  designated $196,000 of its cash and
cash  equivalents for this purpose.  Since the funds were not needed,  the Local
Limited Partnership Agreement allows that the established  Supplemental Reserve,
along with the interest earned,  are available to pay the Partnership its annual
priority  distribution.  As of March 31, 2000, $121,000 has been released to the
Partnership.  The  balance of the  Supplemental  Reserve is included in cash and
cash equivalents.  This balance,  along with the accrued interest  thereon,  has
also been accounted for as deferred revenue,  as it represents the future annual
priority distributions to be released to the Partnership from this Reserve.


<PAGE>
                BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                  (A Limited Partnership)

                   NOTES TO THE FINANCIAL STATEMENTS (continued)


7.   Litigation

The  Partnership  is  not  a  party  to  any  pending  legal  or  administrative
proceeding. However, Tompkins/Rosecliff,  Ltd. which owns a property in Sanford,
Florida,  had been  involved  in  certain  litigation  with an  entity  formerly
affiliated  with this  partnership  and its previous  local general  partner.  A
settlement agreement was agreed upon in July 1999 totaling $200,000 of which the
Partnership's  share was  $100,000.  In the opinion of  Management,  this was an
appropriate settlement, which it believes will eliminate the risk of foreclosure
and recapture posed by this litigation.

8.   Transfer of Interest in Local Limited Partnership

On November  10, 1997,  the  Managing  General  Partner  transferred  50% of its
interest  in capital  and  profits of  Westgate  to the local  general  partner.
Included in this  transfer is a put option.  The put option  grants the Managing
General  Partner the right to put the  Partnership's  remaining  interest to the
local  general  partner  any time  after  one year has  elapsed.  For  financial
reporting  purposes,  the  Partnership  has written down the remaining  carrying
value of this  investment in Local Limited  Partnership  to zero,  because it is
unknown as to whether  the  Partnership  will be able to recover  its  remaining
invested  balance.  The  Partnership  will  retain its full share of tax credits
until such time as the remaining interest is put to the local general partner.

9.   Federal Income Taxes

The following  schedule  reconciles the reported  financial  statement loss for
the fiscal years ended March 31, 2000,  1999 and 1998 to the loss reported on
Form 1065, U.S. Partnership Return of Income for the years ended December 31,
1999, 1998 and 1997:
<TABLE>
<CAPTION>
                                                                                 1999            1998
                                                               2000           (Restated)       (Restated)

<S>                                                       <C>              <C>               <C>
Net Loss per financial statements                         $  (3,006,310)   $  (3,371,589)    $  (5,794,498)

   Adjustment for equity in losses of Local Limited
     Partnerships for tax purposes in excess of
     equity in losses for financial reporting purposes          (76,548)        (341,051)       (1,419,314)

   Equity in losses of Local Limited Partnerships not
     recognized for financial reporting purposes             (1,356,723)      (1,113,362)         (175,228)

   Adjustment to reflect March 31 fiscal year end
     to December 31 tax year end                               (137,842)          31,950            31,986

   Related party expenses not currently deductible for
     tax purposes                                                     -           60,556                 -

   Related party expenses paid in current year but
     expensed for financial reporting purposes in
     prior year                                                 (60,556)               -          (114,572)

   Amortization of acquisition fees and expenses
     for tax purposes in excess of amortization
     for financial reporting purposes                           (13,964)         (13,703)           (8,383)

   Provision for valuation of investment in Local
     Limited Partnership not deductible for
     tax purposes                                               174,739                -           590,197

   Cash distribution included in loss for financial
     reporting purposes                                         (32,662)         (32,427)                -
                                                          -------------    -------------     -------------

Net Loss per tax return                                   $  (4,509,866)   $  (4,779,626)    $  (6,889,812)
                                                          ==============   =============     =============
</TABLE>
<PAGE>
                BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                    (A Limited Partnership)


                          NOTES TO THE FINANCIAL STATEMENTS (continued)


9.   Federal Income Taxes (continued)

The  differences in the assets and  liabilities of the Partnership for financial
reporting  purposes and tax reporting purposes for the year ended March 31, 2000
are as follows:
<TABLE>
<CAPTION>

                                                             Financial           Tax
                                                             Reporting        Reporting
                                                             Purposes         Purposes       Differences

<S>                                                       <C>              <C>              <C>
Investments in Local Limited Partnerships                 $  18,818,290    $  14,081,467    $  4,736,823
                                                          ==============   ==============   ============
Other assets                                              $   2,884,694    $  12,765,769    $ (9,881,075)
                                                          ==============   ==============   =============
Liabilities                                               $     295,987    $     201,859    $     94,128
                                                          ==============   ==============   ============
</TABLE>

The  differences  in assets and  liabilities  of the  Partnership  for financial
reporting and tax purposes are  primarily  attributable  to: (i) the  cumulative
equity in loss from Local Limited  Partnerships  for tax  reporting  purposes is
approximately   $5,508,000  greater  than  for  financial   reporting  purposes,
including approximately  $2,567,000 of losses the Partnership has not recognized
relating to eight Local Limited  Partnerships  whose cumulative equity in losses
exceeded its total investment;  (ii) the cumulative  amortization of acquisition
fees  for  tax  reporting  purposes  exceeds  financial  reporting  purposes  by
approximately   $85,000;  (iii)  approximately  $60,000  of  cash  distributions
received from Local Limited Partnerships during the quarter ended March 31, 2000
are not included in the Partnership's  Investments in Local Limited Partnerships
for tax reporting  purposes at December 31, 1999;  and (iv)  organizational  and
offering costs of  approximately  $9,500,000 that have been  capitalized for tax
reporting  purposes,  are  charged to  Limited  Partners'  equity for  financial
reporting purposes.

The  differences in the assets and  liabilities of the Partnership for financial
reporting  purposes and tax reporting purposes for the year ended March 31, 1999
are as follows:
<TABLE>
<CAPTION>

                                                             Financial           Tax
                                                             Reporting        Reporting
                                                             Purposes         Purposes       Differences

<S>                                                       <C>              <C>              <C>
Investments in Local Limited Partnerships                 $  21,538,791    $  18,320,798    $  3,217,993
                                                          =============    ==============   ============
Other assets                                              $   3,323,609    $  13,039,165    $ (9,715,556)
                                                          =============    =============    ============
Liabilities                                               $     405,479    $     204,721    $    200,758
                                                          =============    =============    ============
</TABLE>

The  differences  in assets and  liabilities  of the  Partnership  for financial
reporting  purposes are primarily  attributable to: (i) the cumulative equity in
loss from Local Limited Partnerships for tax reporting purposes is approximately
$3,743,000   greater   than  for   financial   reporting   purposes,   including
approximately  $1,291,000 of losses the Partnership has not recognized  relating
to five Local Limited  Partnerships  whose cumulative  equity in losses exceeded
its total investment;  (ii) the cumulative  amortization of acquisition fees for
tax reporting  purposes exceeds  financial  reporting  purposes by approximately
$64,000;  (iii) approximately $50,000 of cash distributions  received from Local
Limited Partnerships during the quarter ended March 31, 1999 are not included in
the  Partnership's  Investments in Local Limited  Partnerships for tax reporting
purposes at December 31, 1998;  and (iv)  organizational  and offering  costs of
approximately  $9,500,000 that have been capitalized for tax reporting purposes,
are charged to Limited Partners' equity for financial reporting purposes.


<PAGE>






June 29, 2000

Boston Financial Qualified Housing Tax Credits L.P. V
101 Arch Street
Boston, MA 02110-1106

To the Partners of
Boston Financial Qualified Housing Tax Credits L.P. V:

We are  providing  this letter to you for  inclusion  as an exhibit to your Form
10-K filing pursuant to Item 601 of Regulation S-K.

We have audited the financial  statements included in Boston Financial Qualified
Housing Tax Credits L.P. V's (the "Partnership")  Annual Report on Form 10-K for
the year ended March 31, 2000 and issued our report thereon dated June 22, 2000.
Note 2 to the financial statements describes a change in reporting entity from a
combined basis  presentation to a stand-alone basis  presentation.  It should be
understood  that  the  preferability  of one  acceptable  method  of  presenting
entities  under  common  control  over  another  has not been  addressed  in any
authoritative accounting literature,  and in expressing our concurrence below we
have relied on management's  determination  that this change in reporting entity
is  preferable.  Based  on  our  reading  of  management's  stated  reasons  and
justification  for this  change in  reporting  entity in the Form 10-K,  and our
discussions  with  management as to their judgment  about the relevant  business
planning and legal  factors  relating to the change,  we concur with  management
that such change represents, in the Partnership's circumstances, the adoption of
a preferable accounting principle in conformity with Accounting Principles Board
Opinion No. 20.


Very truly yours,


/S/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
<PAGE>

Boston Financial Qualified Housing Tax Credits L. P. V
Schedule III - Real Estate and  Accumulated  Depreciation  of Property  Owned by
Local Limited Partnerships in which Registrant has invested at March 31, 2000

<TABLE>
<CAPTION>

                                                   COST OF INTEREST AT ACQUISITION
                                                                 DATE
                                                  -----------------------------------
                                                                                       NET IMPROVEMENTS
                         NUMBER        TOTAL                                              CAPITALIZED
                           OF         ENCUM-                        BUILDING AND         SUBSEQUENT TO
     DESCRIPTION         UNITS       BRANCES *         LAND         IMPROVEMENTS          ACQUISITION

Low and Moderate
Income Apartment Complexes

<S>                           <C>     <C>             <C>                <C>                   <C>
Strathern Park/Lorne          241     $17,356,140     $4,369,500         $10,513,639           $10,997,952
Park
  Los Angeles, CA
Maidens Choice                101       4,005,020        807,791           2,013,769             3,459,429
  Baltimore, MD
Cedar Lane                     36       1,100,004         40,000           1,375,512                11,854
  London, KY
Silver Creek                   24         766,558         20,000             946,812                     0
  Berea, KY
Rosecliff                     168       5,531,104      1,200,000           3,304,950             4,578,797
  Orlando, FL
Brookwood                      81       2,996,929         91,470             344,580             4,578,953
  Ypsilanti Township, MI
Water Oak                      40       1,252,979         98,058           1,467,944                 5,638
  Orange City, FL
Yester Oaks                    44       1,283,141         47,105           1,574,145                 2,489
  Lafayette, GA
Ocean View                     42       1,363,339        112,620           1,600,421                28,592
  Ferandina Beach, FL
Wheeler House                  17         674,021         42,000           1,139,412             (133,840)
  Nashua, NH
Archer Village                 24         706,791         40,000             861,288                38,869
  Archer, FL
Oaks of Dunlop                144       4,413,492        631,959           6,492,444               156,533
  Colonial Heights, VA
Timothy House                 112       2,039,244         11,638           6,344,664               457,230
  Towson, MD
Westover Station              108       2,653,568        305,645           4,299,613                 7,924
  Newport News, VA
Carib Villas III               24       1,478,494        107,582           1,802,466                 5,614
  St. Croix, VI
Carib Villas II                20       1,399,088         57,720           1,787,528                 5,614
  St. Croix, VI
Whispering Trace               40       1,358,987        218,000           2,413,145             (447,564)
  Woodstock, GA
New Center                    104       2,913,936         79,652           3,534,776             2,934,509
  Detroit, MI
Huguenot Park                  24       1,400,000         83,000           2,088,664                     0
  New Paltz, NY
Hillwood Pointe               100       2,888,685        454,185           5,103,711               130,945
  Jacksonville, FL
Pinewood Pointe               136       3,911,198        555,093           6,809,808               663,311
  Jacksonville, FL
Westgate                       60       1,351,284        215,168           2,152,519                24,702
  Bismark, ND
Woodlake Hills                144       3,774,677        233,690           6,481,250             2,392,831
  Pontiac, MI
Bixel House                    76       1,162,940        190,746           2,294,879                51,935
  Los Angeles, CA
Harmony                        65       2,206,214              0           7,020,696               117,827
  North Hollywood, CA
Schumaker Place                96       2,896,834        531,776           1,627,716             3,609,531
  Salisbury, MD
Circle Terrace                303       8,573,318              0           7,884,733             8,635,332
  Lansdown, MD
                       ------------------------------------------------------------------------------------

        TOTAL               2,374     $81,457,985    $10,544,398         $93,281,084           $42,315,007
                       ====================================================================================
</TABLE>
<TABLE>
<CAPTION>


                           GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1999
                       -----------------------------------------------------------              LIFE ON
                                                                                                  WHICH
                                                                                              DEPRECIATION
                                   BUILDING AND                    ACCUMULATED       DATE      IS COMPUTED     DATE
     DESCRIPTION          LAND       IMPROVEMENTS      TOTAL       DEPRECIATION      BUILT       (YEARS)     ACQUIRED
     -----------          ----       ------------      -----       ------------      -----       -------     --------

Low and Moderate
Income Apartment Complexes

<S>                     <C>             <C>          <C>               <C>           <C>                     <C>   <C>
Strathern Park/Lorne    $5,889,320      $19,991,771  $25,881,091       $6,666,393    1991        various     07/05/90
Park
  Los Angeles, CA
Maidens Choice             807,791        5,473,198    6,280,989        1,896,164    1991        various     08/17/90
  Baltimore, MD
Cedar Lane                  40,000        1,387,366    1,427,366          368,886    1991        various     09/10/90
  London, KY
Silver Creek                20,000          946,812      966,812          257,716    1990        various     08/15/90
  Berea, KY
Rosecliff                1,120,000        7,963,747    9,083,747        2,728,299    1991        various     09/18/90
  Orlando, FL
Brookwood                  522,673        4,492,330    5,015,003        1,277,101    1992        various     10/01/90
  Ypsilanti Township, MI
Water Oak                   98,058        1,473,582    1,571,640          470,013    1991        various     01/01/91
  Orange City, FL
Yester Oaks                 47,105        1,576,634    1,623,739          518,600    1991        various     01/01/91
  Lafayette, GA
Ocean View                 112,620        1,629,013    1,741,633          544,244    1991        various     01/01/91
  Ferandina Beach, FL
Wheeler House               42,000        1,005,572    1,047,572          322,159    1991        various     01/01/91
  Nashua, NH
Archer Village              40,000          900,157      940,157          302,483    1991        various     01/01/91
  Archer, FL
Oaks of Dunlop             631,958        6,648,978    7,280,936        2,496,547    1991        various     01/01/91
  Colonial Heights, VA
Timothy House               11,638        6,801,894    6,813,532        1,548,601    1992        various     03/05/91
  Towson, MD
Westover Station           305,645        4,307,537    4,613,182        1,113,634    1991        various     03/30/91
  Newport News, VA
Carib Villas III           239,009        1,676,653    1,915,662          612,095    1992        various     03/21/91
  St. Croix, VI
Carib Villas II            197,195        1,653,667    1,850,862          594,608    1991        various     03/01/91
  St. Croix, VI
Whispering Trace           218,000        1,965,581    2,183,581          794,669    1990        various     05/01/91
  Woodstock, GA
New Center                  96,116        6,452,821    6,548,937        1,870,814    1992        various     06/27/91
  Detroit, MI
Huguenot Park               83,000        2,088,664    2,171,664          662,875    1991        various     06/26/91
  New Paltz, NY
Hillwood Pointe            454,185        5,234,656    5,688,841        1,750,566    1991        various     07/19/91
  Jacksonville, FL
Pinewood Pointe            555,093        7,473,119    8,028,212        2,473,232    1991        various     07/31/91
  Jacksonville, FL
Westgate                   238,920        2,153,469    2,392,389          664,844    1991        various     07/25/91
  Bismark, ND
Woodlake Hills             187,588        8,920,183    9,107,771        2,389,145    1992        various     08/01/91
  Pontiac, MI
Bixel House                190,746        2,346,814    2,537,560        1,015,434    1991        various     07/31/91
  Los Angeles, CA
Harmony                          0        7,138,523    7,138,523        2,303,749    1991        various     07/31/91
  North Hollywood, CA
Schumaker Place          1,029,027        4,739,996    5,769,023        1,245,007    1992        various     09/20/91
  Salisbury, MD
Circle Terrace           1,104,269       15,415,796   16,520,065        4,074,656    1993        various     12/06/91
  Lansdown, MD
                       -----------------------------------------------------------

        TOTAL          $14,281,956     $131,858,533 $146,140,489      $40,962,534
                       ===========================================================
</TABLE>


(1) The  aggregate  cost for  Federal  Income Tax  purposes is  approximately
    $127,178,000.


                     * Mortgage notes payable generally  represent  non-recourse
                       financing of  low-income  housing  projects  payable with
                       terms of up to 40 years  with  interest  payable at rates
                       ranging  from  8.00%  to  11%.  The  Partnership  has not
                       guaranteed any of these mortgage notes payable.



Summary of property owned and accumulated depreciation:


<TABLE>
<CAPTION>


Property Owned December 31, 1999                                              Accumulated Depreciation December 31,
                                                                              1999
------------------------------------------------------------------            ---------------------------------------
<S>                                                  <C>                                                  <C>
Balance at beginning of period                       $145,851,429             Balance at beginning of     36,683,600
                                                                              period
  Additions during period:                                                      Additions during period:
     Other acquisitions                    46,195
     Improvements etc.                    242,865                                  Depreciation            4,278,934
                                  ----------------                                                       ------------
                                                          289,060             Balance at close of period $40,962,534
                                                                                                         ============
  Deductions during period:
     Cost of real estate sold                   0
     Impairment of Assets                       0
                                  ----------------
                                                                0
                                                  ----------------
Balance at close of period                           $146,140,489
                                                  ================




Property Owned December 31, 1998                                              Accumulated Depreciation December 31,
                                                                              1998
------------------------------------------------------------------            ---------------------------------------
Balance at beginning of period                       $145,480,348             Balance at beginning of     31,678,791
                                                                              period
  Additions during period:                                                      Additions during period:
     Other acquisitions                    95,346                                  Depreciation            5,004,809
                                                                                                         ------------
     Improvements etc.                    275,735                             Balance at close of period $36,683,600
                                  ----------------                                                       ============
                                                          371,081
  Deductions during period:
     Cost of real estate sold                   0
     Impairment of Assets                       0
                                  ----------------
                                                                0
                                                  ----------------
Balance at close of period                           $145,851,429
                                                  ================




Property Owned December 31, 1997                                              Accumulated Depreciation December 31,
                                                                              1997
------------------------------------------------------------------            ---------------------------------------
Balance at beginning of period                       $145,480,438             Balance at beginning of     26,076,146
                                                                              period
  Additions during period:                                                      Additions during period:
     Other acquisitions                   125,851                                  Depreciation            5,602,645
                                                                                                         ------------
     Improvements etc.                     34,059                             Balance at close of period $31,678,791
                                  ----------------                                                       ============
                                                          159,910
  Deductions during period:
     Cost of real estate sold                   0
     Impairment of Assets (1)           (160,000)
                                  ----------------
                                                        (160,000)
                                                  ----------------
Balance at close of period                           $145,480,348
                                                  ================


</TABLE>

(1) During  the year ended  December  31,  1997,  Wheeler  House  recognized  an
impairment loss on its rental property in the net amount of $160,000
      as a result of applying FASB 121,  Accounting  for the  Impairment of Long
Lived Assets and for Long Lived Assets to be Disposed of.



<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS V
              (A Limited Partnership)

             Annual Report on form 10-K
           For The Year Ended March 31, 2000
            Reports of Independent Auditors


Woodlake Hills

[Letterhead]

[LOGO]
JOHN J. LEHOTAN, C.P.A.
4385 W. Main Street
Brown City,  MI  48416

To The Partners of Woodlake Hills
Limited Partnership
Dearborn, Michigan 48124

Independent Auditor's Report

I have  audited  the  accompanying  balance  sheet  of  Woodlake  Hills  Limited
Partnership,  a Michigan  limited  partnership  as of December  31, 1999 and the
related  statements of profit and loss,  partners'  equity and cash flow for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  My  responsibility is to express an opinion on these
financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial positions of Woodlake Hills Limited Partnership
as of December 31, 1999 and the results of its  operations and its cash flow for
the year then ended in conformity with generally accepted accounting principles.

/s/John J. Lehotan
Certified Public Accountant
February 1, 2000

<PAGE>




Woodlake Hills

[Letterhead]

[LOGO]
JOHN J. LEHOTAN, C.P.A.
4385 W. Main Street
Brown City,  MI  48416

To The Partners of Woodlake Hills
Limited Partnership
Dearborn, Michigan 48124

Independent Auditor's Report

I have  audited  the  accompanying  balance  sheet  of  Woodlake  Hills  Limited
Partnership,  a Michigan  limited  partnership  as of December  31, 1998 and the
related  statements of profit and loss,  partners'  equity and cash flow for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  My  responsibility is to express an opinion on these
financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial positions of Woodlake Hills Limited Partnership
as of December 31, 1998 and the results of its  operations and its cash flow for
the year then ended in conformity with generally accepted accounting principles.

/s/John J. Lehotan
Certified Public Accountant
February 10, 1999

<PAGE>

Woodlake Hills

[Letterhead]

[LOGO]
JOHN J. LEHOTAN, C.P.A.
4385 W. Main Street
Brown City,  MI  48416

To The Partners of Woodlake Hills
Limited Partnership
Detroit, Michigan

Independent Auditor's Report

I have  audited  the  accompanying  balance  sheet  of  Woodlake  Hills  Limited
Partnership,  a Michigan  limited  partnership  as of December  31, 1997 and the
related  statements of profit and loss,  partners'  equity and cash flow for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  My  responsibility is to express an opinion on these
financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial positions of Woodlake Hills Limited Partnership
as of December 31, 1997 and the results of its  operations and its cash flow for
the year then ended in conformity with generally accepted accounting principles.

/s/John J. Lehotan
Certified Public Accountant, C.P.A.
February 5, 1998


<PAGE>

Strathern Park

[Letterhead]

[LOGO]

NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
9454  Wilshire Boulevard, Suite 405
Beverly Hills, California  90212-2907

Independent Auditors' Report

The Partners
Strathern Park
Los Angeles, California

We have audited the  accompanying  balance sheet of Strathern Park (a California
limited  partnership),  as of December  31, 1999 and the related  statements  of
operations,  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.
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 Strathern Park as of December
31, 1999, and the results of its operations 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 additional  information on Schedules I, II and
III is presented for the 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/Nanas, Stern, Biers, Neinstein and Co., LLP
NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
January 26, 2000

<PAGE>

Strathern Park

[Letterhead]

[LOGO]

NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
9454  Wilshire Boulevard, Suite 405
Beverly Hills, California  90212-2907

Independent Auditors' Report

The Partners
Strathern Park
Los Angeles, California

We have audited the  accompanying  balance sheet of Strathern Park (a California
limited  partnership),  as of December  31, 1998 and the related  statements  of
operations,  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.
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 Strathern Park as of December
31, 1998, and the results of its operations 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 additional  information on Schedules I, II and
III is presented for the 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/Nanas, Stern, Biers, Neinstein and Co., LLP
NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
February 3, 1999

<PAGE>

Strathern Park

[LOGO]
NANAS, STERN, BIERS, NEINSTEIN AND CO.LLP 9454 Wilshire Boulevard Beverly Hills,
California 90212-2907

Independent Auditors' Report

The Partners
Strathern Park
Los Angeles, California

We have audited the  accompanying  balance sheet of Strathern Park (a California
limited  partnership),  as of December  31, 1997 and the related  statements  of
operations,  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.
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 Strathern Park as of December
31, 1997, and the results of its operations 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 additional  information on Schedules I, II and
III is presented for the 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/Nanas, Stern, Biers, Neinstein and Co., LLP
NANAS, STERN, BIERS, NEINSTEIN AND CO.
January 28, 1998


<PAGE>
Maiden Choice Limited Partnership

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Maiden Choice Limited Partnership

We have audited the accompanying balance sheet of Maiden Choice Limited
Partnership as of December 31, 1999,  and the related  statements of operations,
partners'  equity  (deficit)  and cash  flows  for the year  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with 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  Maiden  Choice  Limited
Partnership  as of December 31,  1999,  and the results of its  operations,  the
changes  in  partners'  equity  (deficit)  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 pages 21 through 30
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 audit
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>

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs",  we have also issued reports dated January 8,
2000, on our  consideration  of Maiden  Choice  Limited  Partnership's  internal
control  and  on  its  compliance  with  specific  requirements   applicable  to
DHCD-assisted  programs,  fair  housing  and  non-discrimination,  and  laws and
regulations applicable to the financial statements.

/s/Reznick Fedder & Silverman
Baltimore, Maryland           Federal Employer Identification Number:
                                                          52-1088612
Audit Principal: William T. Riley, Jr.
January 8, 2000

<PAGE>

Maiden Choice Limited Partnership

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Maiden Choice Limited Partnership

We have  audited  the  accompanying  balance  sheet  of  Maiden  Choice  Limited
Partnership  as of December 31, 1998,  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  Maiden  Choice  Limited
Partnership  as of December 31,  1998,  and the results of its  operations,  the
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 pages 22 through 27
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 audit
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>

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs",  we have also issued reports dated January 6,
1999, on our  consideration  of Maiden  Choice  Limited  Partnership's  internal
control  and  on  its  compliance  with  specific  requirements   applicable  to
DHCD-assisted  programs,  fair  housing  and  non-discrimination,  and  laws and
regulations applicable to the financial statements.

/s/Reznick Fedder & Silverman
Baltimore, Maryland           Federal Employer Identification Number:
                                                          52-1088612
Audit Principal: William T. Riley, Jr.
January 6, 1999


<PAGE>

Maiden Choice Limited Partnership

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Maiden Choice Limited Partnership


We have  audited  the  accompanying  balance  sheet  of  Maiden  Choice  Limited
Partnership  as of December 31, 1997,  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  Maiden  Choice  Limited
Partnership as of December 31, 1997, 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 pages 21 through 33
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 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>

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs,  we have also issued  reports dated January 6,
1998, on our  consideration  of Maiden  Choice  Limited  Partnership's  internal
control and on its  compliance  with  specific  requirements  applicable  to CDA
programs,  fair  housing  and  non-discrimination,   and  laws  and  regulations
applicable to the financial statements.

/s/Reznick Fedder & Silverman
Baltimore, Maryland           Federal Employer Identification Number:
                                                          52-1088612
Audit Principal: William T. Riley, Jr.
January 6, 1998

<PAGE>

Cedar Lane I, Ltd.

[Letterhead]

[LOGO]
Miller, Mayer, Sullivan & Stevens LLP

INDEPENDENT AUDITORS' REPORT

To the Partners                                         Rural Development
Cedar Lane I, Ltd.                                  London, Kentucky


We have  audited  the  accompanying  balance  sheets of Cedar Lane I,  Ltd.,  (a
limited partnership) Case No. 20-063-621358072, as of December 31, 1999 and 1998
and the related statements of operations, changes in partners' equity (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 audits.

We conducted our audits in accordance with generally accepted auditing standards
and  the  standards  for  financial  audits  contained  in  Government  Auditing
Standards  issued  by the  Comptroller  General  of  the  United  States.  Those
standards  require  that we plan and  perform  the  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 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 Cedar Lane I, Ltd.  as of
December 31, 1999 and 1998, and the results of its operations 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 our report
dated  January 27, 2000 on our  consideration  of Cedar Lane I, Lts.'s  internal
control over financial  reporting and our tests of its  compliance  with certain
provisions of laws, regulations, contracts and grants.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial  statements taken as a whole.  The supplemental  data included in this
report 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 presented fairly, in all material respects,  in relation
to the basic financial statements taken as a whole.


/s/Miller, Mayerm Sullivan & Stevens, LLP
Lexington, Kentucky
January 27, 2000


<PAGE>

Cedar Lane I, Ltd.

[Letterhead]

[LOGO]
Miller, Mayer, Sullivan & Stevens LLP

INDEPENDENT AUDITORS' REPORT

To the Partners                                         Rural Development
Cedar Lane I, Ltd.                                  London, Kentucky


We have  audited  the  accompanying  balance  sheets of Cedar Lane I,  Ltd.,  (a
limited partnership) Case No. 20-063-621358072, as of December 31, 1998 and 1997
and the related statements of operations, changes in partners' equity (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 audits.

We conducted our audits in accordance with generally accepted auditing standards
and  the  standards  for  financial  audits  contained  in  Government  Auditing
Standards  issued  by the  Comptroller  General  of  the  United  States.  Those
standards  require  that we plan and  perform  the  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 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 Cedar Lane I, Ltd.  as of
December 31, 1998 and 1997, and the results of its operations 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 our report
dated February 11, 1999 on our  consideration  of Cedar Lane I, Lts.'s  internal
control over financial  reporting and our tests of its  compliance  with certain
provisions of laws, regulations, contracts and grants.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial  statements taken as a whole.  The supplemental  data included in this
report 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 presented fairly, in all material respects,  in relation
to the basic financial statements taken as a whole.


/s/Miller, Mayerm Sullivan & Stevens, LLP
Lexington, Kentucky
February 11, 1999

<PAGE>

Silver Creek II, Ltd.

[Letterhead]

[LOGO]
Miller, Mayer, Sullivan & Stevens LLP

INDEPENDENT AUDITORS' REPORT

To the Partners
Silver Creek II, Ltd.


We have audited the  accompanying  balance  sheets of Silver Creek II, Ltd.,  (a
limited  partnership),  as of  December  31,  1999  and  1998,  and the  related
statements of operations,  changes in partners' equity (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 audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. 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 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 Silver Creek II, Ltd. as of
December 31, 1999 and 1998 and the results of its  operations and its cash flows
for the years  then  ended in  conformity  with  generally  accepted  accounting
principles.

Our  audits  was  conducted  for the  purpose of forming an opinion on the basic
financial  statements taken as a whole.  The supplemental  data included in this
report 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 presented fairly in all material respects, in relation to
the basic financial statements taken as a whole.


/s/Miller, Mayerm Sullivan & Stevens, LLP
Lexington, Kentucky
January 27, 2000

<PAGE>
Silver Creek II, Ltd.

[Letterhead]

[LOGO]
Miller, Mayer, Sullivan & Stevens LLP

INDEPENDENT AUDITORS' REPORT

To the Partners
Silver Creek II, Ltd.


We have audited the  accompanying  balance  sheets of Silver Creek II, Ltd.,  (a
limited  partnership),  as of  December  31,  1998  and  1997,  and the  related
statements of operations,  changes in partners' equity (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 audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. 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 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 Silver Creek II, Ltd. as of
December 31, 1998 and 1997 and the results of its  operations and its cash flows
for the years  then  ended in  conformity  with  generally  accepted  accounting
principles.

Our  audits  was  conducted  for the  purpose of forming an opinion on the basic
financial  statements taken as a whole.  The supplemental  data included in this
report 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 presented fairly in all material respects, in relation to
the basic financial statements taken as a whole.


/s/Miller, Mayerm Sullivan & Stevens, LLP
Lexington, Kentucky
January 2, 1999

<PAGE>

Tomkins/Rosecliff, Ltd.:

 [Letterhead]

[LOGO]
Deloitte & Touche LLP
Suite 1800
200 South Orange Avenue
Orlando, Florida  32801

INDEPENDENT AUDITORS' REPORT

To the General Partner and Limited Partners of
Tomkins/Rosecliff, Ltd.:

We have audited the  accompanying  balance sheet of  Tomkins/Rosecliff,  Ltd. (a
Florida Limited Partnership) as of December 31, 1999, and the related statements
of operations,  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.
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  Tomkins/Rosecliff,  Ltd. (a
Florida  Limited  Partnership)  as of December 31, 1999,  and the results of its
operations  and its cash  flows  for the year  then  ended  in  conformity  with
generally accepted accounting principles.


/s/Deloitte & Touche LLP
January 21, 2000

<PAGE>
Tomkins/Rosecliff, Ltd.:

 [Letterhead]

[LOGO]
Deloitte & Touche LLP
Suite 1800
200 South Orange Avenue
Orlando, Florida  32801

INDEPENDENT AUDITORS' REPORT

To the General Partner and Limited Partners of
Tomkins/Rosecliff, Ltd.:

We have audited the  accompanying  balance sheet of  Tomkins/Rosecliff,  Ltd. (a
Florida Limited Partnership) as of December 31, 1998, and the related statements
of operations,  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.
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  Tomkins/Rosecliff,  Ltd. (a
Florida  Limited  Partnership)  as of December 31, 1998,  and the results of its
operations  and its cash  flows  for the year  then  ended  in  conformity  with
generally accepted accounting principles.


/s/Deloitte & Touche LLP
January 29, 1999

<PAGE>

Tomkins/Rosecliff, Ltd.:

[Letterhead]

[LOGO]
Deloitte & Touche LLP
Suite 1800
200 South Orange Avenue
Orlando, Florida  32801

INDEPENDENT AUDITORS' REPORT

To the General Partner and Limited Partners of
Tomkins/Rosecliff, Ltd.:


We have audited the  accompanying  balance sheet of  Tomkins/Rosecliff,  Ltd. (a
Florida Limited Partnership) as of December 31, 1997, and the related statements
of operations,  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.
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  Tomkins/Rosecliff,  Ltd. (a
Florida  Limited  Partnership)  as of December 31, 1997,  and the results of its
operations  and its cash  flow  for the  year  then  ended  in  conformity  with
generally accepted accounting principles.


/s/Deloitte & Touche LLP
January 24, 1998

<PAGE>

Brookwood L.D.H.A

[Letterhead]

[LOGO]
Follmer, Rudzewicz & Co., P.C.

INDEPENDENT AUDITORS' REPORT

To the Partners of:
Brookwood L.D.H.A. Limited Partnership
28388 Franklin Road
Southfield, Michigan 48034

We have audited the  accompanying  balance sheet of Brookwood  L.D.H.A.  Limited
Partnership (a Michigan limited  partnership),  MSHDA  Development No. 832 as of
December 31, 1999 and the related  statement  of profit and loss,  changes in
accumulated  earnings  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,  such  financial  statements  present  fairly,  in all material
respects,  the financial  position of Brookwood  L.D.H.A.  Limited  Partnership,
MSHDA No. 832 as of December 31, 1999,  and the results of its  operations,  the
changes in its  cumulative  income and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The additional  information of Brookwood
L.D.H.A. Limited Partnership,  MSHDA No. 832 on pages 13 through 18 is presented
for the purpose of  additional  analysis and is not a required part of the basic
financial statements.  This additional  information is the responsibility of the
partnership's  management.  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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January  24,  2000 on our  consideration  of the  partnership's  internal
control structure and on its compliance with laws and regulations.

/s/Follmer, Rudzewicz & Co., P.C.
Follmer,Rudzewicz & Co. P.C.
Certified Public Accountants
Southfield, Michigan
38-1910111

<PAGE>

Brookwood L.D.H.A

[Letterhead]

[LOGO]
Follmer, Rudzewicz & Co., P.C.

INDEPENDENT AUDITORS' REPORT

To the Partners of:
Brookwood L.D.H.A. Limited Partnership
28388 Franklin Road
Southfield, Michigan 48034

We have audited the  accompanying  balance sheet of Brookwood  L.D.H.A.  Limited
Partnership (a Michigan limited  partnership),  MSHDA  Development No. 832 as of
December 31, 1998 and the related  statement  of profit and loss,  changes in
accumulated  earnings  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,  such  financial  statements  present  fairly,  in all material
respects,  the financial  position of Brookwood  L.D.H.A.  Limited  Partnership,
MSHDA No. 832 as of December 31, 1998,  and the results of its  operations,  the
changes in its  cumulative  income and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The additional  information of Brookwood
L.D.H.A. Limited Partnership,  MSHDA No. 832 on pages 11 through 14 is presented
for the purpose of  additional  analysis and is not a required part of the basic
financial statements.  This additional  information is the responsibility of the
partnership's  management.  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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January  22,  1999 on our  consideration  of the  partnership's  internal
control structure and on its compliance with laws and regulations.

/s/Follmer, Rudzewicz & Co., P.C.
Follmer,Rudzewicz & Co. P.C.
Certified Public Accountants
Southfield, Michigan
38-1910111


<PAGE>

Brookwood L.D.H.A.
[Letterhead]
[LOGO]
Follmer, Rudzewicz & Co., P.C.


INDEPENDENT AUDITORS' REPORT

To the Partners of:
Brookwood L.D.H.A. Limited Partnership
28388 Franklin Road
Southfield, Michigan 48034

We have audited the  accompanying  Balance sheet of Brookwood  L.D.H.A.  Limited
Partnership (a Michigan limited  partnership),  MSHDA  Development No. 832 as of
December 31, 1997 and the related  Statement  of Profit and Loss,  changes in in
accumulated  earnings  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,  such  financial  statements  present  fairly,  in all material
respects,  the financial  position of Brookwood  L.D.H.A.  Limited  Partnership,
MSHDA No. 832 as of December 31, 1997,  and the results of its  operations,  the
changes in its  cumulative  income and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The additional  information of Brookwood
L.D.H.A. Limited Partnership,  MSHDA No. 832 on pages 11 through 14 is presented
for the purpose of  additional  analysis and is not a required part of the basic
financial statements.  This additional  information is the responsibility of the
partnership's  management.  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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January  22,  1998 on our  consideration  of the  partnership's  internal
control  structure  and a report dated January 22, 1998 on its  compliance  with
laws and regulations.

/s/Follmer, Rudzewicz & Co., P.C.
Follmer,Rudzewicz & Co. P.C.
Certified Public Accountants
Southfield, Michigan
38-1910111

<PAGE>

Burbank Limited Partnership I

[Letterhead]
              Otis, Atwell & Timberlake
         Professional Association

The Partners
Burbank Limited Partnership I

      We  have  audited  the  accompanying  balance  sheet  of  Burbank  Limited
Partnership  I as of December 31, 1999 and 1998,  and the related  statements of
income,  partners'  equity  (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 audits.

       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 statements 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 Burbank  Limited
Partnership
I as of December 31, 1999 and 1998, and the results of its  operations,  changes
in  partners'  equity  (deficit)  and cash  flows  for the year then  ended,  in
conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue as a going  concern.  As  discussed in Note 2 to the
financial statements,  the Partnership's first mortgage note has matured and has
not yet been refinanced,  which raises substantial doubt about the Partnership's
ability to continue as a going concern.  The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/Otis, Atwell & Timberlake, P.A.
Certified Public Accountants

January 19, 2000
Portland, Maine

<PAGE>

Burbank Limited Partnership I

[Letterhead]
              BILLIE J. BURNETT,CPA
              5 Benton Drive
              Nashua, NH 03060
              (603) 883-4230

To The Partners
Burbank Limited Partnership I

      I  have  audited  the  accompanying  balance  sheets  of  Burbank  Limited
Partnership  I as of December 31, 1997,  and the related  statements  of income,
partners'  equity  and  cash  flows  for the  year  then  ended.  The  financial
statements  are  the   responsibility  of  the  Partnership's   management.   My
responsibility  is to express an opinion on these financial  statements based on
my audit.

       I conducted  my audit in  accordance  with  generally  accepted  auditing
standards.  Those standards  require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. 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 statements presentation.
I believe that my audit provides a reasonable basis for my opinion.

       In my opinion, the financial statements referred to above present fairly,
in all material respects,  the financial position of Burbank Limited Partnership
I as of December 31, 1997,  and the results of its operations and its cash flows
for the year  then  ended  in  conformity  with  generally  accepted  accounting
principles.

/s/Billie J. Burnett
Billie J. Burnett
January 8, 1998


<PAGE>
Virginia Housing Development Authority

[Letterhead]

[LOGO]
Wall Einhorn & Chernitzer., P.C.
Certified Public Accountants
First Virginia Bank Tower
555 Main Street
Suite 1500
Post Office Box 3610
Norfolk, Virginia 23514
Alvin A. Wall, CPA                           Telephone (757)625-4700
Martin A. Einhorn, CPA, CVA          Telephone (757)625-0527
Jeffrey S. Chernitzer, CPA

          INDEPENDENT AUDITORS' REPORT

To the Partners           Virginia Housing Development Authority
The Oaks of Dunlop Farms, L. P.                  601 South Belvidere Street
(A Limited Partnership)                                 Richmond, Virginia 23220
Norfolk, Virginia


We have audited the  accompanying  balance  sheets of The Oaks of Dunlop  Farms,
L.P. (A Limited Partnership),  VHDA Project Number 90-0300-C, as of December 31,
1999 and 1998, and the related  statements of operations , partners' equity, and
cash  flows  for the  years  then  ended.  These  financial  statements  are the
responsibility of the project'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. 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 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 VHDA Project Number 90-0300-C
as of December 31, 1999 and 1998, and the results of its operations,  changes in
partners'  equity,  and cash flows for the years then ended in  conformity  with
generally accepted accounting principles.

  The  accompanying  supplementary  information  (shown  on  pages  10 to 17) is
presented for the 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
basic financial statements taken as a whole.

/s/Wall, Einhorn & Chernitzer, P.C.
Norfolk, Virginia
January 26, 2000

<PAGE>

Virginia Housing Development Authority

[Letterhead]

[LOGO]
Wall Einhorn & Chernitzer., P.C.
Certified Public Accountants
First Virginia Bank Tower
555 Main Street
Suite 1500
Post Office Box 3610
Norfolk, Virginia 23514
Alvin A. Wall, CPA                           Telephone (757)625-4700
Martin A. Einhorn, CPA, CVA          Telephone (757)625-0527
Jeffrey S. Chernitzer, CPA

          INDEPENDENT AUDITORS' REPORT

To the Partners           Virginia Housing Development Authority
The Oaks of Dunlop Farms, L. P.                  601 South Belvidere Street
(A Limited Partnership)                                 Richmond, Virginia 23220
Norfolk, Virginia


We have audited the  accompanying  balance  sheets of The Oaks of Dunlop  Farms,
L.P. (A Limited Partnership),  VHDA Project Number 90-0300-C, as of December 31,
1998 and 1997, and the related  statements of operations , partners' equity, and
cash  flows  for the  years  then  ended.  These  financial  statements  are the
responsibility of the project'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. 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 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 VHDA Project Number 90-0300-C
as of December 31, 1998 and 1997, and the results of its operations,  changes in
partners'  equity,  and cash flows for the years then ended in  conformity  with
generally accepted accounting principles.

  The  accompanying  supplementary  information  (shown  on  pages  10 to 17) is
presented for the 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
basic financial statements taken as a whole.

/s/Wall, Einhorn & Chernitzer, P.C.
Norfolk, Virginia
February 1, 1999


<PAGE>
Timothy House Limited Partnership

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Timothy House Limited Partnership

We have  audited  the  accompanying  balance  sheet  of  Timothy  House  Limited
Partnership  as of December 31, 1999 and the related  statements of  operations,
partners'  equity  (deficit)  and cash  flows  for the year  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with 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  Timothy  House  Limited
Partnership  as of December 31,  1999,  and the results of its  operations,  the
changes  in  partners'  equity  (deficit)  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 pages 21 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 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>

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 18,
2000,  on our  consideration  of Timothy House  Limited  Partnership's  internal
control  structure  and  on  its  compliance  with  requirements  applicable  to
DHCD-assisted  programs,  fair  housing  and  non-discrimination,  and  laws and
regulations applicable to the financial statements.

 /s/Reznick Fedder & Silverman
Baltimore, Maryland                Federal Employer
January 18, 2000                         Identification Number:
                                                     52-1088612
Audit Principal:  William T. Riley, Jr.

<PAGE>

Timothy House Limited Partnership

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Timothy House Limited Partnership

We have  audited  the  accompanying  balance  sheet  of  Timothy  House  Limited
Partnership  as of December  31, 1998 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  Timothy  House  Limited
Partnership  as of December 31,  1998,  and the results of its  operations,  the
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 pages 22 through 27
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 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>

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 13,
1999,  on our  consideration  of Timothy House  Limited  Partnership's  internal
control  structure  and  on  its  compliance  with  requirements  applicable  to
DHCD-assisted  programs,  fair  housing  and  non-discrimination,  and  laws and
regulations applicable to the financial statements.

 /s/Reznick Fedder & Silverman
Baltimore, Maryland                Federal Employer
January 13, 1999                         Identification Number:
                                                     52-1088612
Audit Principal:  William T. Riley, Jr.

<PAGE>

Timothy House Limited Partnership

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Timothy House Limited Partnership

We have  audited  the  accompanying  balance  sheet  of  Timothy  House  Limited
Partnership  as of December  31, 1997 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  Timothy  House  Limited
Partnership as of December 31, 1997, 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 pages 21 through 33
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 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>

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs,  we have also issued reports dated January 10,
1998,  on our  consideration  of Timothy House  Limited  Partnership's  internal
control  structure and on its  compliance  with  requirements  applicable to CDA
programs,  fair housing,  and laws and  regulations  applicable to the financial
statements.

 /s/Reznick Fedder & Silverman
Baltimore, Maryland                Federal Employer
January 10, 1998                         Identification Number:
                                                     52-1088612
Audit Principal:  William T. Riley, Jr.

<PAGE>

Westover Station Associates, L.P.

[Letterhead]

Wilfore & Wynn
A Professional Corporation
Certified Public Accountants

INDEPENDENT AUDITORS' REPORT

The Partners                                        Virginia Housing Development
Westover Station Associates, L.P.                             Authority
(A Limited Partnership)                              601 South Belvidere Street
Newport News, Virginia                               Richmond, Virginia 23220

We have audited the accompanying  balance sheets of Westover Station Associates,
L.P.,  VHDA Project Number  90-0303-C,  as of December 31, 1999 and 1998 and the
related statements of operations,  partners' capital and cash flows for the year
then  ended.   These  financial   statements  are  the   responsibility  of  the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
and the  Virginia  Housing  Development  Authority's  Mortgagor/Grantee's  Audit
Guide.
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 Westover Station  Associates,
L.P. at December 31, 1999 and 1998,  and the results of its  operations  and its
cash flows for the years then  ended,  in  conformity  with  generally  accepted
accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The supplemental  schedules  included in
the report are  presented  for  purposes of  additional  analysis  and are not a
required part of the basic financial  statements of Westover Station Associates,
L.P. Such information has been subjected to the auditing  procedures  applied in
the audit of the basis  financial  statements  and,  in our  opinion,  is fairly
stated in all material respects in relation to the financial statements taken as
a whole.

/s/Wilfore & Wynn
Wilfore & Wynn
Virginia Beach, Virginia
February 9, 2000

4530 Professional Circle  Virginia Beach, Virginia 23455-6498
Telephone (757)456-0111 Fax (757)473-1095

<PAGE>

Westover Station Associates, L.P.

[Letterhead]

Wilfore & Wynn
A Professional Corporation
Certified Public Accountants

INDEPENDENT AUDITORS' REPORT

The Partners                                        Virginia Housing Development
Westover Station Associates, L.P.                             Authority
(A Limited Partnership)                              601 South Belvidere Street
Newport News, Virginia                               Richmond, Virginia 23220

We have audited the accompanying  balance sheets of Westover Station Associates,
L.P.,  VHDA Project Number  90-0303-C,  as of December 31, 1998 and 1997 and the
related statements of operations,  partners' capital and cash flows for the year
then  ended.   These  financial   statements  are  the   responsibility  of  the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
and the  Virginia  Housing  Development  Authority's  Mortgagor/Grantee's  Audit
Guide.
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 Westover Station  Associates,
L.P. at December 31, 1998 and 1997,  and the results of its  operations  and its
cash flows for the years then  ended,  in  conformity  with  generally  accepted
accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The supplemental  schedules  included in
the report are  presented  for  purposes of  additional  analysis  and are not a
required part of the basic financial  statements of Westover Station Associates,
L.P. Such information has been subjected to the auditing  procedures  applied in
the audit of the basis  financial  statements  and,  in our  opinion,  is fairly
stated in all material respects in relation to the financial statements taken as
a whole.

/s/Wilfore & Wynn
Wilfore & Wynn
Virginia Beach, Virginia
February 3, 1999

4530 Professional Circle  Virginia Beach, Virginia 23455-6498
Telephone (757)456-0111 Fax (757)473-1095

<PAGE>

Christiansted Limited Dividend Housing

[Letterhead]

Kirschner Hutton Perlin, P.C.
Certified Public Accountants

               26913 Northwestern Hwy. Suite 510
               Southfield, Michigan 48034-8444
                Telephone: (248) 356-3880
                Facsimile: (248) 356-3885

Independent Auditors' Report
                  January 18, 2000

Partners
Christiansted Limited Dividend Housing
     Association Limited Partnership


We have audited the accompanying balance sheet of Christiansted Limited Dividend
Housing  Association  Limited  Partnership as of December 31, 1999 and 1998, and
the related  statements of operations,  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 audits.

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 that our audits 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 Christiansted Limited Dividend
Housing  Association  Limited  Partnership as of December 31, 1999 and 1998, and
the  results  of its  operations  and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

/s/Kirshner Huton Perlin, P.C.


<PAGE>

Christiansted Limited Dividend Housing

[Letterhead]

Kirschner Hutton Perlin, P.C.
Certified Public Accountants

               26913 Northwestern Hwy. Suite 510
               Southfield, Michigan 48034-8444
                Telephone: (248) 356-3880
                Facsimile: (248) 356-3885

Independent Auditors' Report
                  January 23, 1999

Partners
Christiansted Limited Dividend Housing
     Association Limited Partnership


We have audited the accompanying balance sheet of Christiansted Limited Dividend
Housing  Association  Limited  Partnership as of December 31, 1998 and 1997, and
the related  statements of operations,  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.  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 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 Christiansted Limited Dividend
Housing  Association  Limited  Partnership as of December 31, 1998 and 1997, and
the  results  of its  operations  and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

/s/Kirshner Huton Perlin, P.C.


<PAGE>

St. Croix II. Limited Partnership

[Letterhead]

Kirschner Hutton Perlin, P.C.
Certified Public Accountants

               26913 Northwestern Hwy. Suite 510
               Southfield, Michigan 48034-8444
                Telephone: (248) 356-3880
                Facsimile: (248) 356-3885

Independent Auditors' Report
                       January 17, 2000

Partners
St. Croix II. Limited Partnership

We have  audited  the  accompanying  balance  sheet  of St.  Croix  II,  Limited
Partnership  as of December  31, 1999 and 1998,  and the related  statements  of
operations,  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 audits.

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 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  St.  Croix  II,  Limited
Partnership  as of December 31, 1999 and 1998, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Kirshner Huton Perlin, P.C.

<PAGE>

St. Croix II. Limited Partnership

[Letterhead]

Kirschner Hutton Perlin, P.C.
Certified Public Accountants

               26913 Northwestern Hwy. Suite 510
               Southfield, Michigan 48034-8444
                Telephone: (248) 356-3880
                Facsimile: (248) 356-3885

Independent Auditors' Report
                       January 20, 1999

Partners
St. Croix II. Limited Partnership

We have  audited  the  accompanying  balance  sheet  of St.  Croix  II,  Limited
Partnership  as of December  31, 1998 and 1997,  and the related  statements  of
operations,  partners' equity (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 audits.

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 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  St.  Croix  II,  Limited
Partnership  as of December 31, 1998 and 1997, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Kirshner Huton Perlin, P.C.

<PAGE>



Kensignton Place Townhomes,

Letterhead]

[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA  30308

           Independent Auditors' Report

The Partners
Kensignton Place Townhomes,
A Limited Partnership:

We have audited the accompanying balance sheets of Kensignton Place Townhomes, A
Limited Partnership as of December 31, 1999 and 1998, and the related statements
of loss,  partners'  capital,  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.  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 Kensignton Place Townhomes,  A
Limited  Partnership  as of December  31, 1999 and 1998,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
February 25, 2000

<PAGE>

Kensignton Place Townhomes,

Letterhead]

[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA  30308

           Independent Auditors' Report

The Partners
Kensignton Place Townhomes,
A Limited Partnership:

We have audited the accompanying balance sheets of Kensignton Place Townhomes, A
Limited Partnership as of December 31, 1998 and 1997, and the related statements
of loss,  partners'  capital,  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.  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 Kensignton Place Townhomes,  A
Limited  Partnership  as of December  31, 1998 and 1997,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
February 26, 1999

<PAGE>

Cobblestone Place Townhomes,

[Letterhead]

[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA  30308

           Independent Auditors' Report

The Partners
Cobblestone Place Townhomes,
A Limited Partnership:


We have audited the accompanying  balance sheets of Cobblestone Place Townhomes,
A  Limited  Partnership  as of  December  31,  1999 and  1998,  and the  related
statements of loss,  partners' capital, 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.  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 Cobblestone Place Townhomes, A
Limited  Partnership  as of December  31, 1999 and 1998,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
February 25, 2000

<PAGE>

Cobblestone Place Townhomes,

[Letterhead]

[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA  30308

           Independent Auditors' Report

The Partners
Cobblestone Place Townhomes,
A Limited Partnership:


We have audited the accompanying  balance sheets of Cobblestone Place Townhomes,
A  Limited  Partnership  as of  December  31,  1998 and  1997,  and the  related
statements of loss,  partners' capital, 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.  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 Cobblestone Place Townhomes, A
Limited  Partnership  as of December  31, 1998 and 1997,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
February 26, 1999

<PAGE>

Whispering Trace Apartments

[Letterhead]

[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA  30308

           Independent Auditors' Report

The Partners
Whispering Trace Apartments,
A Limited Partnership:


We have audited the accompanying  balance sheets of Whispering Trace Apartments,
A  Limited  Partnership  as of  December  31,  1999 and  1998,  and the  related
statements of loss,  partners' capital  (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 audits.

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 statements 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 Whispering Trace Apartments,  A
Limited  Partnership  as of December  31, 1999 and 1998,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
February 25, 2000

<PAGE>


Whispering Trace Apartments

[Letterhead]

[LOGO]
KPMG Peat Marwick LLP 303 Peachtree Street, N.E.
Suite 2000
Atlanta, GA  30308

           Independent Auditors' Report

The Partners
Whispering Trace Apartments,
A Limited Partnership:


We have audited the accompanying  balance sheets of Whispering Trace Apartments,
A  Limited  Partnership  as of  December  31,  1998 and  1997,  and the  related
statements of loss,  partners' capital  (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 audits.

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 statements 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 Whispering Trace Apartments,  A
Limited  Partnership  as of December  31, 1998 and 1997,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
February 26, 1999
<PAGE>
Huguenot Park Associates, L.P.

[letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS REPORT

To the Partners
Huguenot Park Associates, L.P.

We have audited the accompanying balance sheet of Huguenot Park Associates, L.P.
as of December  31, 1999 and 1998,  and the related  statements  of  operations,
partners'  capital  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.  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 Huguenot Park Associates,  L.P.
as of December 31, 1999 and 1998, and the results of its operations, the changes
in partners'  capital and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

/s/Reznick Fedder & Silverman
Bethesda, Maryland
February 7, 2000



<PAGE>

Huguenot Park Associates, L.P.

[letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS REPORT

To the Partners
Huguenot Park Associates, L.P.

We have audited the accompanying balance sheet of Huguenot Park Associates, L.P.
as of December  31, 1999 and 1998,  and the related  statements  of  operations,
partners'  capital  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.  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 Huguenot Park Associates,  L.P.
as of December 31, 1999 and 1998, and the results of its operations, the changes
in partners'  capital and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

/s/Reznick Fedder & Silverman
Bethesda, Maryland
January 20, 2000


<PAGE>

Huguenot Park Associates, L.P.

[letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS REPORT

To the Partners
Huguenot Park Associates, L.P.

We have audited the accompanying balance sheet of Huguenot Park Associates, L.P.
as of December  31, 1998 and 1997,  and the related  statements  of  operations,
partners'  capital  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.  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 Huguenot Park Associates,  L.P.
as of December 31, 1998 and 1997, and the results of its operations, the changes
in partners'  capital and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

/s/Reznick Fedder & Silverman
Bethesda, Maryland
January 20, 1999

<PAGE>

Westgate Apartments Limited Partnesrhip

[Letterhead]

[LOGO]
EideBailly LLP
Consultants, Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT

The Partners
Westgate Apartments Limited Partnesrhip
Wahpeton, North Dakota

We have audited the accompanying  balance sheets of Westgate  Apartments Limited
Partnership  as of December  31, 1999 and 1998,  and the related  statements  of
operations,  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.  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 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 Westgate  Apartments Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations,
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/EideBailly LLP
Fargo, North Dakota
January 21, 2000

<PAGE>

Westgate Apartments Limited Partnesrhip

[Letterhead]

[LOGO]
EideBailly LLP
Consultants, Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT

The Partners
Westgate Apartments Limited Partnesrhip
Wahpeton, North Dakota

We have audited the accompanying  balance sheets of Westgate  Apartments Limited
Partnership  as of December  31, 1998 and 1997,  and the related  statements  of
operations,  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.  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 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 Westgate  Apartments Limited
Partnership as of December 31, 1998 and 1997, and the results of its operations,
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/EideBailly LLP
Fargo, North Dakota
January 22, 1999, except for Note 10,
as to which the date is January 25, 1999

<PAGE>


Bixel House

[Letterhead]

              SUAREZ ACCOUNTANCY CORPORATION
              150 W. Seventh Street Suite 100
              San Pedro, CA 90731                     Richard Suarez, Jr., CPA
              Telephone (310) 832-7887
                 Fax (310) 832-6563

     Independent Auditor's Report

To The Partners of
Bixel House
Los Angeles, California

      I have  audited  the  accompanying  balance  sheet  of  Bixel  House as of
December  31,  1999,  and the  related  statements  of  operations,  changes  in
partners'  capital,  and cash  flows for the year then  ended.  These  financial
statements  are  the   responsibility  of  the  Partnership's   management.   My
responsibility  is to express an opinion on these financial  statements based on
my audit.

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

       In my opinion, the financial statements referred to above present fairly,
in all material respects,  the financial position of Bixel House at December 31,
1999,  and the results of its operations and cash flows for the year then ended,
in conformity with generally accepted accounting principles.

/s/Suarez Accountancy Corporation
San Pedro, California
February 8, 2000

<PAGE>

Bixel House

[Letterhead]

              SUAREZ ACCOUNTANCY CORPORATION
              150 W. Seventh Street Suite 100
              San Pedro, CA 90731                     Richard Suarez, Jr., CPA
              Telephone (310) 832-7887
                 Fax (310) 832-6563

     Independent Auditor's Report

To The Partners of
Bixel House
Los Angeles, California

      I have  audited  the  accompanying  balance  sheet  of  Bixel  House as of
December  31,  1998,  and the  related  statements  of  operations,  changes  in
partners'  capital,  and cash  flows for the year then  ended.  These  financial
statements  are  the   responsibility  of  the  Partnership's   management.   My
responsibility  is to express an opinion on these financial  statements based on
my audit.

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

       In my opinion, the financial statements referred to above present fairly,
in all material respects,  the financial position of Bixel House at December 31,
1998,  and the results of its operations and cash flows for the year then ended,
in conformity with generally accepted accounting principles.

/s/Suarez Accountancy Corporation
San Pedro, California
February 28, 1999


<PAGE>

Bixel House

[Letterhead]

              SUAREZ ACCOUNTANCY CORPORATION
              150 W. Seventh Street Suite 100
              San Pedro, CA 90731                     Richard Suarez, Jr., CPA
              Telephone (310) 832-7887
                 Fax (310) 832-6563

     Independent Auditor's Report

To The Partners of
Bixel House
Los Angeles, California

      I have  audited  the  accompanying  balance  sheet  of  Bixel  House as of
December  31,  1997,  and the  related  statements  of  operations,  changes  in
partners'  capital,  and cash  flows for the year then  ended.  These  financial
statements  are  the   responsibility  of  the  Partnership's   management.   My
responsibility  is to express an opinion on these financial  statements based on
my audit.

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

       In my opinion, the financial statements referred to above present fairly,
in all material respects,  the financial position of Bixel House at December 31,
1997,  and the results of its operations and cash flows for the year then ended,
in conformity with generally accepted accounting principles.

/s/Suarez Accountancy Corporation
San Pedro, California
January 15, 1998

<PAGE>

Harmony Apartments

[Letterhead]
              SUAREZ ACCOUNTANCY CORPORATION
              150 W. Seventh Street Suite 100
              San Pedro, CA 900731                     Richard Suarez
              Telephone (310) 832-7887
                 Fax (310) 832-6563

     Independent Auditor's Report

To The Partners of
Harmony Apartments
Los Angeles, California

      I have audited the accompanying  balance sheet of Harmony Apartments as of
December  31,  1999,  and the  related  statements  of  operations,  changes  in
partners'  capital,  and cash flows for the year ended December 31, 1999.  These
financial statements are the responsibility of the Partnership's  management. My
responsibility  is to express an opinion on these financial  statements based on
my audit.

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

       In my opinion, the financial statements referred to above present fairly,
in all  material  respects,  the  financial  position of Harmony  Apartments  at
December 31, 1999, and the results of its operations and cash flows for the year
ended  December  31,  1999 in  conformity  with  generally  accepted  accounting
principles.

/s/Suarez Accountancy Corporation
San Pedro, California
February 8, 2000


<PAGE>

Harmony Apartments

[Letterhead]
              SUAREZ ACCOUNTANCY CORPORATION
              150 W. Seventh Street Suite 100
              San Pedro, CA 900731                     Richard Suarez
              Telephone (310) 832-7887
                 Fax (310) 832-6563

     Independent Auditor's Report

To The Partners of
Harmony Apartments
Los Angeles, California

      I have audited the accompanying  balance sheet of Harmony Apartments as of
December  31,  1998,  and the  related  statements  of  operations,  changes  in
partners'  capital,  and cash flows for the year ended December 31, 1998.  These
financial statements are the responsibility of the Partnership's  management. My
responsibility  is to express an opinion on these financial  statements based on
my audit.

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

       In my opinion, the financial statements referred to above present fairly,
in all  material  respects,  the  financial  position of Harmony  Apartments  at
December 31, 1998, and the results of its operations and cash flows for the year
ended  December  31,  1998 in  conformity  with  generally  accepted  accounting
principles.

/s/Suarez Accountancy Corporation
San Pedro, California
February 28, 1999
<PAGE>

Harmony Apartments

[Letterhead]
              SUAREZ ACCOUNTANCY CORPORATION
              150 W. Seventh Street Suite 100
              San Pedro, CA 900731                     Richard Suarez
              Telephone (310) 832-7887
                 Fax (310) 832-6563

     Independent Auditor's Report

To The Partners of
Harmony Apartments
Los Angeles, California

      I have audited the accompanying  balance sheet of Harmony Apartments as of
December  31,  1997,  and the  related  statements  of  operations,  changes  in
partners'  capital,  and cash flows for the year ended December 31, 1997.  These
financial statements are the responsibility of the Partnership's  management. My
responsibility  is to express an opinion on these financial  statements based on
my audit.

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

       In my opinion, the financial statements referred to above present fairly,
in all  material  respects,  the  financial  position of Harmony  Apartments  at
December 31, 1997, and the results of its operations and cash flows for the year
ended  December  31,  1997 in  conformity  with  generally  accepted  accounting
principles.

/s/Suarez Accountancy Corporation
San Pedro, California
February 11, 1998

<PAGE>

Schumaker Place Associates, L.P.

[Letterhead]

[LOGO]
Halbert, Katz & Co., P.C.
121 South Broad Street
Philadelphia, Pennsylvania  19107

INDEPENDENT AUDITORS' REPORT

To the Partners
Schumaker Place Associates, L.P.
Wilmington, Delaware

We have audited the accompanying  balance sheets of Schumaker Place  Associates,
L.P., as of December 31, 1999 and December 31, 1998, and the related  statements
of loss,  partners'  capital  (capital  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. 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 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 Schumaker Place  Associates,
L.P.,  as of December 31, 1999 and  December  31,  1998,  and the results of its
operations, changes in partners' capital (capital deficiency) and its cash flows
for the years then ended,  in  conformity  with  generally  accepted  accounting
principles.

Our audit  were  conducted  for the  purpose  of forming an opinion on the basic
financial  statements taken as a whole. The supporting  information  included in
the  report  (shown  on page 12) is  presented  for the  purpose  of  additional
analysis  and is not a  required  part  of the  basic  financial  statements  of
Schumaker  Place  Associates,  L.P. 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/Halbert Katz & Co., P.C.
January 31, 2000

<PAGE>
Schumaker Place Associates, L.P.

[Letterhead]

[LOGO]
Halbert, Katz & Co., P.C.
121 South Broad Street
Philadelphia, Pennsylvania  19107

INDEPENDENT AUDITORS' REPORT

To the Partners
Schumaker Place Associates, L.P.
Wilmington, Delaware

We have audited the accompanying  balance sheets of Schumaker Place  Associates,
L.P., as of December 31, 1998 and December 31, 1997, and the related  statements
of loss,  partners'  capital  (capital  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. 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 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 Schumaker Place  Associates,
L.P.,  as of December 31, 1998 and  December  31,  1997,  and the results of its
operations, changes in partners' capital (capital deficiency) and its cash flows
for the years then ended,  in  conformity  with  generally  accepted  accounting
principles.

Our audit  were  conducted  for the  purpose  of forming an opinion on the basic
financial  statements taken as a whole. The supporting  information  included in
the  report  (shown  on page 12) is  presented  for the  purpose  of  additional
analysis  and is not a  required  part  of the  basic  financial  statements  of
Schumaker  Place  Associates,  L.P. 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/Halbert Katz & Co., P.C.
January 29, 1999


<PAGE>

Circle Terrace Associates

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Circle Terrace Associates
 Limited Partnership

We have audited the  accompanying  balance  sheet of Circle  Terrace  Associates
Limited  Partnership  as of December 31,  1999,  and the related  statements  of
operations,  partners'  equity (deficit) and cash flows for the year then ended.
These  financial   statements  are  the   responsibility  of  the  partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with 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 Circle  Terrace  Associates
Limited  Partnership as of December 31, 1999, and the results of its operations,
the  changes  in  partners'  equity  (deficit)  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 27 through 37
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>

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD  Programs",  we have also issued reports dated March 24,
2000 on our  consideration of Circle Terrace  Associates  Limited  Partnership's
internal control and on its compliance with specific requirements  applicable to
Major HUD and fair housing and non-discrimination.

/s/Reznick Fedder & Silverman
Bethesda, Maryland                Federal Employer
March 24, 2000                         Identification Number:
                                                     52-1088612
Lead Auditor: Robert J. Denmark

<PAGE>

Circle Terrace Associates

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Circle Terrace Associates
 Limited Partnership

We have audited the  accompanying  balance  sheet of Circle  Terrace  Associates
Limited  Partnership  as of December 31,  1998,  and the related  statements  of
operations,  partners'  equity (deficit) and cash flows for the year then ended.
These  financial   statements  are  the   responsibility  of  the  partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with 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 Circle  Terrace  Associates
Limited  Partnership as of December 31, 1998, and the results of its operations,
the  changes  in  partners'  equity  (deficit)  and cash flows for the year then
ended, in conformity with generally accepted accounting principles.

The Housing  Assistance  Payment  contracts  covering  all 303 units  expired on
November 30, 1998 and November 30, 1997. It is uncertain  whether HUD will renew
these contracts  under terms that are consistent with the successful  operations
of the project (see note G).

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 28 through 37
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>

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 20,
1999 on our  consideration of Circle Terrace  Associates  Limited  Partnership's
internal control and on its compliance with specific requirements  applicable to
Major HUD and DHCD-assisted programs,  fair housing and non-discrimination,  and
laws and regulations applicable to the financial statements.

/s/Reznick Fedder & Silverman
Bethesda, Maryland                Federal Employer
January 20, 1999                         Identification Number:
                                                     52-1088612
Audit Principal:  Lester Kanis

<PAGE>

Circle Terrace Associates

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Circle Terrace Associates
 Limited Partnership

We have audited the  accompanying  balance  sheet of Circle  Terrace  Associates
Limited  Partnership  as of December 31,  1997,  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 Circle  TerraceAssociates
Limited  Partnership as of December 31, 1997, 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 25 through 37
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 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>

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 21,
1998, on our consideration of Circle Terrace  Associates  Limited  Partnership's
internal control and on its compliance with specific requirements  applicable to
Major HUD and CDA programs,  fair housing and  non-discrimination,  and laws and
regulations applicable to the financial statements.

/s/Reznick Fedder & Silverman
Baltimore, Maryland                Federal Employer
January 21, 1998                         Identification Number:
                                                     52-1088612
Audit Principal:  Lester A. Kanis

<PAGE>

Water Oaks

[Letterhead]

[LOGO]
Habif, Arogeti& Wynne, LLP

INDEPENDENT AUDITORS REPORT

To the Partners
Water Oaks Apartments, L.P.

We have audited the accompanying  balance sheet of WATER OAKS APARTMENTS,  L.P.,
RHS  Project  No.  09-64-581801555  as of  December  31,  1999  and the  related
statements of operations,  partners'  equity  (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. The financial  statements of WATER OAK
APARTMENTS,  L.P. as of December 31, 1998 were audited by other  auditors  whose
report  dated  January  28,  1999  expressed  and  unqualified  opinion on those
statements.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards,  Government Auditing Standards,  issued by the Comptroller General of
the United  States, and the U.S. Department of Agriculture, Farmers Home
Administration's Audit Program.  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  that our audits provide a
reasonable  basis for our opinion.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  January 21, 2000 on our  consideration  of WATER OAK  APARTMENTS,  L.P.'s
internal  control and on its compliance with laws and regulations  applicable to
the financial statements.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of WATER OAKS APARTMENTS, L.P., as
of December 31, 1999,  and the results of its  operations and its cash flows for
the  year  then  ended,  in  conformity  with  generally   accepted   accounting
principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information 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 basic financial statements taken as a whole.

/s/Habif, Arogeti&Wynne, LLP
Atlanta, Georgia
January 21, 2000


<PAGE>

Water Oaks

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS REPORT

To the Partners
Water Oaks Apartments, L.P.

We have audited the accompanying balance sheets of Water Oaks Apartments,  L.P.,
RHS Project No. 09-64-581801555 as of December 31, 1998 and 1997 and the related
statements of operations,  partners'  equity  (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 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 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  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 Water Oaks Apartments,  L.P.,
RHS  Project No.  09-64-581801555  as of  December  31,  1998 and 1997,  and the
results of its operations,  the changes in partners' equity  (deficit),  and its
cash  flows for the years  then  ended in  conformity  with  generally  accepted
accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 16
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 basic financial statements taken as a whole.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated January 28, 1999, on our  consideration  of Water Oak  Apartments,  L.P.'s
internal  control and on its compliance with laws and regulations  applicable to
the financial statements.

 /s/Reznick Fedder & Silverman
Atlanta, Georgia
January 28, 1999

<PAGE>

Archer Village

[Letterhead]

[LOGO]
Habif, Arogeti&Wynne, LLP

INDEPENDENT AUDITORS' REPORT

To the Partners
Archer Village, Ltd.

We have audited the  accompanying  balance sheet of ARCHER  VILLAGE,  LTD.,
 RHS Project No.:  09-001-267869575, as of December 31, 1999, and the related
statements of operations,  changes in partners'  accumulated  deficit,  and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these  financial  statements  based on our audits.  The financial  statements of
ARCHER  VILLAGE , LTD.,  as of December 31, 1998 were audited by other  auditors
whose report dated January 28, 1999 expressed and  unqualified  opinion on those
statements.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards,  Government Auditing Standards,  issued by the Comptroller General of
the  United  States,  and the  U.S.  Department  of  Agriculture,  Farmers  Home
Administration's Audit Program. 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 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 ARCHER  VILLAGE,  LTD. as of
December  31, 1999 and the results of its  operations,  its changes in partners'
accumulated  deficit  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 21, 2000 on our  consideration  of ARHCER VILLAGE,  LTD.  internal
control  and on its  compliance  with  laws and  regulations  applicable  to the
financial statements.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 13
through  18 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 basic financial statements taken as a whole.

/s/Habif Arogeti&Wynne, LLP
Atlanta, Georgia
January 21, 2000


<PAGE>
Archer Village

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Archer Village, Ltd.

We have audited the  accompanying  balance sheets of Archer  Village,  Ltd., RHS
Project No.: 09-001-267869575, as of December 31, 1998 and 1997, and the related
statements of operations,  partners'  equity  (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 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 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  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 Archer  Village,  Ltd.,  RHS
Project No.:  09-001-267869575 as of December 31, 1998 and 1997, and the results
of its operations,  the changes in partners' equity (deficit) and its cash flows
for the years then ended,  in  conformity  with  generally  accepted  accounting
principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 16
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 basic financial statements taken as a whole.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated January 28, 1999, on our consideration of Archer Village,  Ltd.'s internal
control and its compliance with laws and regulations applicable to the financial
statements.

/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 28, 1999

<PAGE>

Ocean View Apartments

[Letterhead]

[LOGO]
Habif Aroget&Wynne, LLP

INDEPENDENT AUDITORS' REPORT

To the Partners
Ocean View Apartments, L.P.

We have audited the accompanying  balance sheet of OCEAN VIEW APARTMENTS,  L.P.,
RHS  Project  No.:  09-45-581801553,  as of  December  31,  1999 and the related
statements of operations,  changes in partners'  accumulated  deficit,  and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these  financial  statements  based on our audits.  The financial  statements of
OCEAN VIEW  APARTMENTS,  L.P.  as of  December  31,  1998 were  audited by other
auditors whose report dated January 28, 1999 expressed and  unqualified  opinion
on those statements.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards,  Government Auditing Standards,  issued by the Comptroller General of
the  United  States,  and the  U.S.  Department  of  Agriculture,  Farmers  Home
Administration's Audit Program. 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 that our audits provide a reasonable  basis
for our opinion.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  January 21, 2000 on our  consideration  of OCEAN VIEW  APARTMENTS,  L.P's
internal  control and on its compliance with laws and regulations  applicable to
the financial statements.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of OCEAN VIEW APARTMENTS, L.P., as
of December 31, 1999 and the results of its operations, the changes in partners'
equity  (deficit)  and cash flows for the year then ended,  in  conformity  with
generally accepted accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 11
through 15 is  presented  for the 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/Habif Arogeti&Wynne, LLP
Atlanta, Georgia
January 21, 2000

<PAGE>

Ocean View Apartments

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Ocean View Apartments, L.P.

We have audited the accompanying balance sheets of Ocean View Apartments,  L.P.,
RHS Project  No.:  09-45-581801553,  as of December  31, 1998 and 1997,  and the
related statements of operations, changes in partners' equity (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 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 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  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 Ocean View Apartments,  L.P.,
RHS Project  No.:  09-45-581801553,  as of December  31, 1998 and 1997,  and the
results of its operations,  the changes in partners'  equity  (deficit) and cash
flows for the years then ended, in conformity with generally accepted accounting
principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 16
through 22 is  presented  for the 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.

In accordance  with  Government  Auditing  Standards we have also issued reports
dated January 28, 1999 on our  consideration  of Ocean View  Apartments,  L.P.'s
internal  control  structure  and on its  compliance  with laws and  regulations
applicable to the financial statements.

/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 9, 1999


<PAGE>

Yester Oaks

[Letterhead]

[LOGO]
Habif Arogeti&Wynne, LLP

INDEPENDENT AUDITORS' REPORT

To the Partners
Yester Oaks, L.P.

We have  audited  the  accompanying  balance  sheet of YESTER OAKS, L.P.
RHS Project No.: 11-046-581814319, as of December 31, 1999 and the related
statements  of  operations,  changes in partners'  accumulated deficit, and cash
flows for the year then ended.  These financial  statements are the
responsibility of the  Partnership's  management.  Our  responsibility is to
express an opinion on these  financial  statements  based on our audits.  The
financial  statements of YESTER OAKS,  L.P. as of December 31, 1998 were audited
by other  auditors whose report  dated  January  28,  1999  expressed  and
unqualified  opinion on those statements.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards,  Government Auditing Standards,  issued by the Comptroller General of
the  United  States,  and the  U.S.  Department  of  Agriculture,  Farmers  Home
Administration's Audit Program. 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 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 YESTER OAKS,  L.P.,  as of
December  31, 1999 and the results of its  operations,  the changes in partners'
equity  (deficit)  and 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 21, 2000 on our  consideration  of YESTER OAKS,  L.P.'s  internal
control  and on its  compliance  with  laws and  regulations  applicable  to the
financial statements.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements taken as a whole. The supplemental  information on page 12
is presented for the 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/Habif Arogeti&Wynne, LLP
Atlanta, Georgia
January 28, 2000


<PAGE>

Yester Oaks

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Yester Oaks, L.P.

We have audited the accompanying balance sheets of Yester Oaks, L.P.,RHS Project
No.:  11-046-0581814319,  as of  December  31,  1998 and 1997,  and the  related
statements of operations,  changes in partners' equity (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 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 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  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 Yester Oaks, L.P., RHS Project
No.:  11-046-0581814319 as of December 31, 1998 and 1997, and the results of its
operations,  the changes in partners' equity  (deficit),  and its cash flows for
the  years  then  ended,  in  conformity  with  generally  accepted   accounting
principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 16
through 17 is  presented  for the 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 basic financial statements taken as a whole.

In accordance with Government  Auditing  Standards,  we have also issued reports
dated  January 28, 1999,  on our  consideration  of Yester Oaks L.P.'s  internal
control  and on its  compliance  with  laws and  regulations  applicable  to the
financial statements.

/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 28, 1999

<PAGE>

HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSH

[letterhead]

Haran & Associates Ltd.

INDEPENDENT AUDITOR'S REPORT


To the Partners
HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP
Detroit, Michigan

We have audited the accompanying balance sheet of HISTORIC NEW CENTER APARTMENTS
LIMITED  PARTNERSHIP  (a Limited  Partnership)  as of December 31, 1999, and the
related statements of profit and loss, changes in partners' equity and statement
of 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.
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 HISTORIC NEW CENTER  APARTMENTS
LIMITED  PARTNERSHIP  as of December 31, 1999, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.


/s/Haran & Associates Ltd.
Certified Public Accountants
Wilmette, Illinois
Illnois Certificate No. 060-3097692
January 25, 2000


<PAGE>

HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSH

[letterhead]

Haran & Associates Ltd.

INDEPENDENT AUDITOR'S REPORT


To the Partners
HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP
Detroit, Michigan

We have audited the accompanying balance sheet of HISTORIC NEW CENTER APARTMENTS
LIMITED  PARTNERSHIP  (a Limited  Partnership)  as of December 31, 1998, and the
related statements of profit and loss, changes in partners' equity and statement
of 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.
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 HISTORIC NEW CENTER  APARTMENTS
LIMITED  PARTNERSHIP  as of December 31, 1998, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.


/s/Haran & Associates Ltd.
Certified Public Accountants
Wilmette, Illinois
Illnois Certificate No. 060-3097692
February 3, 1999


<PAGE>

HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP

[letterhead]

Haran & Associates Ltd.

INDEPENDENT AUDITOR'S REPORT


To the Partners
HISTORIC NEW CENTER APARTMENTS LIMITED PARTNERSHIP
Detroit, Michigan

We have audited the accompanying balance sheet of HISTORIC NEW CENTER APARTMENTS
LIMITED  PARTNERSHIP  as of December 31,  1997,  and the related  statements  of
profit and loss, changes in partners' equity and statement of 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.
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 HISTORIC NEW CENTER  APARTMENTS
LIMITED  PARTNERSHIP  as of December 31, 1997, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.


/s/Haran & Associates Ltd.
Certified Public Accountants
Wilmette, Illnois
Illnois Certificate No. 060-3097692
January 29, 1998






<PAGE>
STRATHERN PARK
DECEMBER 31, 1998



                          INDEPENDENT AUDITORS' REPORT


The Partners
Strathern Park
Los Angeles, California


We have audited the  accompanying  balance sheet of Strathern Park (a California
limited  partnership),  as of December  31, 1998 and the related  statements  of
operations,  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.
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 Strathern Park as of December
31, 1998, and the results of its operations 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 additional  information on Schedules I, II and
III is presented for the 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/ NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP

NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP

February 3, 1999




<PAGE>


                                                     STRATHERN PARK
                                                      BALANCE SHEET
                                                    DECEMBER 31, 1998


<TABLE>
<CAPTION>

ASSETS


<S>                                                                          <C>                  <C>
Cash and cash equivalents (Note 5)                                                                $             89,129
Receivables                                                                                                     24,068
Reserve for replacements  (Note 5)                                                                             187,249
Tenant security deposits  (Note 5)                                                                             113,365

Rental property - at cost (Note 2)
             Land                                                            $          5,889,320
             Buildings                                                                 19,042,548
             Equipment and furnishings                                                    949,223
                                                                               -------------------
                                                                                       25,881,091
             Less:  accumulated depreciation                                          (5,972,453)           19,908,638
                                                                               -------------------

Other assets
             Syndication fee  (Net of accumulated amortization
                  of $130,186)                                                                                 588,481
                                                                                                    -------------------

             TOTAL ASSETS                                                                         $         20,910,930
                                                                                                    ===================






Accounts payable and accrued expenses                                                             $             66,386
Tenant security deposits                                                                                       112,707
Accrued interest payable  (Note 2)                                                                           4,609,113
Long term debt  (Notes 2 and 5)                                                                             17,428,457
                                                                                                    -------------------

             TOTAL LIABILITIES                                                                              22,216,663

                                                                                                                15,419

                                                                                                           (1,321,152)
                                                                                                    -------------------

             TOTAL LIABILITIES AND PARTNERS' EQUITY                                               $         20,910,930
                                                                                                    ===================

See Accompanying auditors' report.
The notes are an integral part of these financial statements.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                                                     STRATHERN PARK
                                              STATEMENT OF PARTNERS' EQUITY
                                              YEAR ENDED DECEMBER 31, 1998



                                         Profit           Balance             Net            Distri-           Balance
                                        and Loss          January            Loss            butions          December
                                       Percentage         1, 1998        for the year         Paid            31, 1998
                                      --------------   --------------    --------------   --------------    --------------
GENERAL PARTNER

  Safran Associates Investment
      Partnership II, A California
<S>                                        <C>       <C>               <C>              <C>               <C>
      Limited Partnership                  1%        $      (72,184)   $      (13,008)  $         (334)   $      (85,526)


CLASS A LIMITED PARTNER

  Safran Associates Investment
      Partnership II, A California
      Limited Partnership                  4%              (296,841)          (52,032)          (1,336)         (350,209)


INVESTOR LIMITED PARTNER

  Boston Financial Qualified
      Housing Tax Credits L.P.V., A
      Massachusetts Limited
      Partnership                          95%               382,071       (1,235,763)         (31,725)         (885,417)


SPECIAL LIMITED PARTNER

  S L P  90, Inc.                          ---              ---               ---              ---               ---
                                                       --------------    --------------   --------------    --------------


                                                     $        13,046   $   (1,300,803)  $      (33,395)   $   (1,321,152)
                                                       ==============    ==============   ==============    ==============


</TABLE>

See Accompanying auditors' report.
The notes are an integral part of these financial statements.



<PAGE>


                                                      STRATHERN PARK
                                                  STATEMENT OF OPERATIONS
                                               YEAR ENDED DECEMBER 31, 1998



<TABLE>

INCOME

<S>          <C>                                                                         <C>               <C>
             Gross potential - rents                                                     $     1,574,908
             (Vacancies)                                                                        (28,013)
             Interest                                                                              8,845
             Miscellaneous                                                                        45,666
                                                                                           --------------

                          TOTAL INCOME                                                                     $      1,601,406



EXPENSES  (Note 4)

             Administrative expense                                                              187,108
             Management fees                                                                     124,605
             Utilities                                                                           154,049
             Operating and maintenance expense                                                   223,717
             Taxes and insurance                                                                 183,784
             Interest expense - Mortgage note payable                                            567,918
             Interest expense - Notes payable                                                    684,115
             Depreciation and amortization                                                       776,913
                                                                                           --------------

                          TOTAL EXPENSES                                                                          2,902,209
                                                                                                              --------------





NET LOSS                                                                                                   $    (1,300,803)
                                                                                                              ==============


</TABLE>


See Accompanying auditors' report.
The notes are an integral part of these financial statements.



<PAGE>



<TABLE>
<CAPTION>


                                                      STRATHERN PARK
                                                  STATEMENT OF CASH FLOWS
                                               YEAR ENDED DECEMBER 31, 1998


                                     INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<S>                                                                                <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES
        Net Loss                                                                                          $     (1,300,803)

        Adjustments to  reconcile  net loss to net cash  provided  by  operating
           activities:

               Depreciation and amortization                                       $         776,913

               (Increase)/Decrease in -
                           Receivables                                                         3,935
                           Tenant security deposits                                            6,977

               (Decrease)/Increase in -
                           Accounts payable and accrued expenses                             (6,435)
                           Accrued interest payable                                          668,898
                           Security deposits                                                   6,098
                           Deferred income                                                   (5,185)
                                                                                     ----------------

               Total Adjustments                                                                                  1,451,201
                                                                                                            ----------------

               Net Cash Provided by Operating Activities                                                            150,398

CASH FLOWS FROM INVESTING ACTIVITIES

        Deposits to reserve for replacements                                                (86,489)
        Releases from reserve for replacements                                                38,067
                                                                                     ----------------

               Net Cash Used in Investing Activities                                                               (48,422)

CASH FLOWS FROM FINANCING ACTIVITIES

        Principal payments on mortgage                                                      (54,502)
        Distributions paid                                                                  (33,395)
                                                                                     ----------------

               Net Cash Used in Financing Activities                                                               (87,897)
                                                                                                            ----------------

               Net Increase in Cash and Cash Equivalents                                                             14,079

Cash and cash equivalents at January 1, 1998                                                                         75,050
                                                                                                            ----------------

Cash and cash equivalents at December 31, 1998                                                            $          89,129
                                                                                                            ================

SUPPLEMENTAL DISCLOSURE OF CASH FROM INFORMATION:

Cash paid during the year for interest                                                                    $         590,181
                                                                                                            ================
See Accompanying auditors' report.
The notes are an integral part of these financial statements.

</TABLE>
<PAGE>

                                                     STRATHERN PARK
                                              NOTES TO FINANCIAL STATEMENTS
                                                    DECEMBER 31, 1998


Note 1      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            Organization -
                  Strathern Park (the  partnership) was organized  pursuant to a
                  limited partnership agreement dated March 28, 1989 as amended.
                  Effective June 1, 1990, the partnership  agreement was amended
                  with the  admission of a new limited  partner who  purchased a
                  95%  limited   partnership   interest  for  a  total   capital
                  contribution of $5,963,067.  On January 1, 1994 Lorne Park was
                  merged  into  Strathern   Park.   The  combined   partnerships
                  constructed a 241 unit apartment project (Lorne Park 72 units,
                  Strathern  Park 169 units)  located in Sun Valley,  California
                  for tenants whose income is very low to moderate.  The project
                  is   regulated   under  the  terms  of  certain  of  its  loan
                  agreements.   Such  agreements  contain  certain  restrictions
                  concerning  rental  charges,  the  number  of units  rented to
                  tenants in the very low,  low and moderate  income  levels and
                  other  matters.  Those  restrictions  of rent and income shall
                  remain in effect for a minimum of 30 years.

            Use of  Estimates in the Preparation of Financial Statements -
                  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   disclosures  of
                  contingent assets and liabilities at the date of the financial
                  statements  and the reported  amounts of revenues and expenses
                  during the reporting period.  Actual results could differ from
                  those estimates.

            Significant Accounting Policies -
                  Method of Accounting - The  partnership  books are  maintained
                  and its financial  statements  and tax returns are prepared on
                  the accrual basis.

                  Cash  Equivalents  - For  purposes  of the  statement  of cash
                  flows,  the  partnership  considers  all  highly  liquid  debt
                  instruments  purchased with a maturity date of three months or
                  less to be cash equivalents.

                  Rental Property - The partnership records property,  equipment
                  and  improvements at the cost of acquisition or  construction.
                  The cost of  maintenance  and repairs is charged to operations
                  as  incurred;   significant   renewals  and   betterments  are
                  capitalized.  Depreciation is computed using the straight line
                  method  for  financial   statement  purposes  and  accelerated
                  methods for tax purposes. Estimated useful lives for financial
                  statement purposes are as follows:

                              Classification                          Life
                           ---------------------                ---------------
                           Buildings                                27.5 Years
                           Equipment and furnishings                 5-7 Years

                  Amortization - amortization  of syndication  costs is computed
                  using the straight line method over a period of 10 years.



<PAGE>

                                 Strathern Park
                          Notes to Financial Statements
                                December 31, 1998

Note 1      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (Cont.)

            Income Taxes - The project receives  low-income tax credits provided
            under Section 42 of the Internal  Revenue  Code.  Also, no provision
            for income taxes has been  included  since the income or loss of the
            partnership  as well as the tax credits are  required to be reported
            by the respective partners on their separate income tax returns.


Note 2      LONG TERM DEBT

                  Mortgage  note  payable,  secured  by  First  Deed  of  Trust,
                  requiring monthly payments of $51,913,  including  interest at
                  9.41% per annum, maturing
<TABLE>
<CAPTION>
                  <S>                                                              <C>
                  February, 2022.                                                  $      5,804,177

                  Note payable  secured by Second Deed of Trust,  payable to the
                  Community Redevelopment Agency of the City of Los Angeles with
                  interest at 7% per annum.  Interest  accrues  from the date of
                  issuance  of the  first  certificate  of  occupancy  which  is
                  December 26, 1991. Unpaid principal  together with all accrued
                  and  unpaid  interest  are due and  payable  in full  upon the
                  maturity of the primary  permanent loan, but not later than 40
                  years from date of issuance.  Principal and interest  payments
                  may be made in annual  installments from the residual receipts
                  of the project,  as the term  residual  receipts is defined in
                  the  loan  agreement.   The  note  was  funded  by  a  Housing
                  Development Grant from the United States Department of Housing
                  and Urban Development. The terms of the Grant agreement impose
                  certain  restrictions  on the use of the  Grant  proceeds  and
                  operating  policies of the  partnership.  Accrued  interest on
                  this note at December 31, 1998 amounted
                  to $2,456,728.                                                            5,179,105

                  Note  payable  secured by Third Deed of Trust,  payable to the
                  Community  Redevelopment  Agency  of the City of Los  Angeles,
                  with interest at 5% per annum.  Interest accrues from the date
                  of issuance of the first  certificate  of  occupancy  which is
                  December 26, 1991. Unpaid principal  together with all accrued
                  and  unpaid  interest  are due and  payable  in full  upon the
                  maturity of the primary  permanent loan, but not later than 40
                  years from date of issuance.  Principal and interest  payments
                  may be made in annual  installments from the residual receipts
                  of the project,  as the term  residual  receipts is defined in
                  the loan agreement. Accrued interest on this note at
                  December 31, 1998 amounted to $2,152,385.                                 6,445,175
                                                                                         ---------------

                                                                                   $       17,428,457
                                                                                         ===============

</TABLE>

<PAGE>






                                 Strathern Park
                          Notes to Financial Statements
                                December 31, 1998




Note 2      LONG TERM DEBT  (Cont.)

            Maturities  of  long  term  debt as of  December  31,  1998  for the
succeeding five years are as follows:

                  Years ended December 31,
                           1999                                     72,337
                           2000                                     77,942
                           2001                                     87,318
                           2002                                     96,023
                           2003                                    105,596
                           Thereafter                           16,989,241
                                                             ---------------
                                                         $      17,428,457
                                                             ===============


Note 3      DISTRIBUTION TO PARTNERS

            Pursuant to the terms of the partnership agreement,  as amended, and
            the loan  agreement with the Community  Redevelopment  Agency of the
            City of Los Angeles,  distributions  are payable only from  residual
            receipts, as defined in the agreements.

            Distributions are apportioned as follows:

    1) 40% to the Community Redevelopment Agency of the City of Los Angeles(CRA)

    2) The remaining 60% is allocated as follows:
                             a)      The Investor Limited Partner (Boston) is to
                                     receive any cumulative return ($60,000
                                     annually) in arrears;
                             b)      The  next  $63,158  is  distributed  95% to
                                     Boston,  4% to the Class A Limited  Partner
                                     (SAIP  II)  and 1% to the  General  Partner
                                     (SAIP II);
                             c) Any additional cash is used to repay any partner
                             advances to the partnership; d) The next $63,158 is
                             distributed  5% to Boston,  94% to SAIP II (Limited
                             Partner)
                                     and 1% to SAIP II (General Partner);
                             e)      Thereafter,  cash  is  distributed  50%  to
                                     Boston,  49% to SAIP II  (Limited  Partner)
                                     and 1% to SAIP II (General Partner).





<PAGE>





                                 Strathern Park
                          Notes to Financial Statements
                                December 31, 1998


Note 4      RELATED PARTY TRANSACTIONS

            There were no direct  compensation  payments to the partners  during
            the year.  However,  there were  related  party  transactions  which
            occurred which are set forth below:
<TABLE>
<CAPTION>

                                                                                           (Income)           Receivable
                                                                                           Expense            (Payable)
                                                                         Account           for the           At December
                          Name                      Description            No.               Year              31, 1998
            ---------------------------------   --------------------  ---------------   ---------------     ---------------

            Thomas Safran and
              <S>                               <C>                        <C>       <C>                  <C>
              Associates, Inc.(TS&A)            Management fee             6320      $          95,685    $         (1,648)

            Apartment Investment and
            Managemet Company
            (AIMCO)/Insignia Residential
            Group, Inc. (IRG)                   Management fee             6320                 28,920                 ---
                                                                                        ---------------     ---------------

                                                                                     $         124,605    $         (1,648)
                                                                                        ===============     ===============
</TABLE>

      The general partner has a direct ownership interest in TS&A listed above.

            Thomas Safran & Associates,  Inc. (TS&A) has  subcontracted  certain
            accounting and supervisory  functions to Insignia  Residential Group
            (IRG) for a period  of two  years  commencing  August  1,  1997.  On
            October 1, 1998, IRG merged with Apartment Investment and Management
            Company (AIMCO) which took over IRG's management function. TS&A will
            continue to be the managing agent and AIMCO will report to them on a
            monthly  basis.  The  agreement  among  TS&A,  AIMCO and the Project
            provides a portion  of the  approved  management  fees to be paid to
            AIMCO for their services.


Note 5      DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

            Cash and Short Term Investments -
                  The carrying  amount  approximates  fair value  because of the
                  short maturity of those investments.

            Long Term Debt  (First Deed of Trust) -
                  The project does not have the right to prepay this debt during
                  the first ten years of the term of this note. Accordingly, the
                  carrying amount approximates its fair value.

            Long Term Debt  (Second & Third Deed of Trust) -
                  The carrying amount  approximates  fair value because there is
                  no  ready  market  for  such  debt,  repayment/refinancing  is
                  severely restricted by the CRA and HUD.


<PAGE>

                                 Strathern Park
                          Notes to Financial Statements
                                December 31, 1998


Note 5      DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Cont.)
<TABLE>
<CAPTION>

                                                                                                December 31, 1998
                                                                                        -----------------------------------
                                                                                           Carrying              Fair
                                                                                            Amount              Value

            <S>                                                                      <C>               <C>
            Cash and Short Term Investments                                          $         389,743 $           389,743
            Long Term Debt  (First Deed of Trust)                                          (5,804,177)         (5,804,177)
            Long Term Debt  (Second & Third Deed of Trust)                                (11,624,280)        (11,624,280)

</TABLE>

Note 6      YEAR 2000 ISSUE

            The General Partner has assessed the Partnership's  exposure to date
            sensitive  computer  software  programs  that  may not be  operative
            subsequent to 1999 and has implemented a requisite  course of action
            to minimize Year 2000 risk and ensure that neither significant costs
            nor  disruption  of  normal  business  operations  are  encountered.
            However,  because there is no guarantee  that all systems of outside
            vendors or other  entities  affecting the  partnership's  operations
            will be 2000  compliant,  the  Partnership  remains  susceptible  to
            consequences of the Year 2000 issue.




<PAGE>

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------
                                                      STRATHERN PARK
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                                            BOSTON FINANCIAL QUALIFIED HOUSING
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                                                   BALANCE SHEET FORMAT
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                                                     DECEMBER 31, 1998
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
   ASSETS
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       <S>       <C>                                                                  <C>                  <C>
       1110      Petty cash                                                           $            800
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       1120      Cash in bank                                                                   88,329
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       1130      Tenant accounts receivable                                                     23,200
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       1140      Other accounts receivable                                                         868
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       1191      Tenant security deposits                                                      113,365
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                              Total Current Assets                                                         $        226,562
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
RESERVES AND DEPOSITS
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       1320      Reserve for replacements                                                                           187,249
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
FIXED ASSETS
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       1410      Land                                                                        5,889,320
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       1420      Buildings                                                                  19,042,548
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       1450      Furniture                                                                     949,223
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                                                                                            25,881,091
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       4100      Less:  accumulated depreciation                                           (5,972,453)
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                              Total Fixed Assets                                                                 19,908,638
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       1820      Syndication fee  (Net of accumulated amortization
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                      of $130,186)                                                                                  588,481
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                              TOTAL ASSETS                                                                 $     20,910,930
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Accompanying auditors' report.

<PAGE>

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------
                                                      STRATHERN PARK
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                                            BOSTON FINANCIAL QUALIFIED HOUSING
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                                                   BALANCE SHEET FORMAT
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                                                     DECEMBER 31, 1998
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
      LIABILITIES AND PARTNERS' EQUITY
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       <S>       <C>                                                                  <C>                  <C>
       2110      Accounts payable                                                     $         19,354
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                 1st mortgage accrued interest payable                                          47,032
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       2191      Tenant security deposits                                                      112,707     $        179,093
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
MORTGAGE NOTE PAYABLE CURRENT PORTION
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                 1st mortgage note payable current portion                                                           72,337
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                              Total Current Liabilities                                                             251,430
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
LONG TERM LIABILITIES
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                 Accrued interest payable - notes
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                              2nd mortgage note payable                                      2,456,728
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                              3rd mortgage note payable                                      2,152,385
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                 Mortgage notes payable
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       2321                   1st mortgage note payable                                      5,731,840
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       2322                   2nd mortgage note payable                                      5,179,105
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       2323                   3rd mortgage note payable                                      6,445,175           17,356,120
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
OTHER LONG TERM LIABILITIES
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       2210      Deferred income                                                                                     15,419
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                              Total Long Term Liabilities                                                        21,980,652
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
PARTNERS'  EQUITY
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       3130      Limited partners' equity                                                  (1,235,626)
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
       3131      General partners' equity                                                     (85,526)
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                              Total Partners' Equity                                                            (1,321,152)
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
                              TOTAL LIABILITIES AND PARTNERS' EQUITY                                       $     20,910,930
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Accompanying auditors' report.


<PAGE>








                                                      STRATHERN PARK
                                           BOSTON FINANCIAL QUALIFIED HOUSING -
                                                  STATEMENT OF OPERATIONS
                                               YEAR ENDED DECEMBER 31, 1998


<TABLE>
<CAPTION>

REVENUE

              Rent revenue
<S>    <C>       <C>                                                                 <C>                 <C>
       5120      Apartments                                                          $       1,500,682
       5121      Tenant assistance payments                                                     61,056
       5130      Furniture and equipment                                                            -
       5140      Stores and commercial                                                          13,170
       5170      Garage and parking                                                                 -
       5180      Flexible subsidy income                                                            -
       5190      Miscellaneous                                                                      -
                                                                                       ----------------

                              Total rent revenue                                                         $        1,574,908

              Vacancies
       5220      Apartments                                                                   (28,013)
       5240      Stores and commercial                                                             -
       5270      Garage and parking                                                                -
       5290      Miscellaneous                                                                     -
                                                                                       ----------------

                              Total Vacancies                                                                      (28,013)
                                                                                                            ----------------


              Net Rental Revenue                                                                                  1,546,895

              Financial Revenue
       5410      Interest Income - operations                                                    2,589
       5430      Interest Income - residual receipts                                                 -
       5440      Interest income - replacement reserve                                           4,403
       5490      Interest income - miscellaneous                                                 1,853
                                                                                       ----------------

                              Total Financial Revenue                                                                 8,845

              Other Revenue
       5910      Laundry and vending                                                            31,897
       5920      NSF and late charges                                                            7,667
       5930      Damages and cleaning fees                                                       3,522
       5940      Forfeited tenant security deposit                                                 406
       5990      Other revenue                                                                   2,174
       5991      Non-cash revenue                                                                    -
                                                                                       ----------------

                              Total Other Revenue                                                                    45,666
                                                                                                            ----------------


NET REVENUE                                                                                              $        1,601,406
                                                                                                            ================
</TABLE>
See Accompanying auditors' report.
<PAGE>
                                                     STRATHERN PARK
                                          BOSTON FINANCIAL QUALIFIED HOUSING -
                                                 STATEMENT OF OPERATIONS
                                              YEAR ENDED DECEMBER 31, 1998


<TABLE>
<CAPTION>

EXPENSES
              Administrative Expenses
       <S>    <C>                                                                   <C>                 <C>
       6210      Advertising                                                        $           4,739
       6250      Other renting expense                                                          6,368
       6310      Office salaries                                                               20,650
       6311      Office supplies                                                               47,953
       6320      Management fee                                                               124,605
       6330      Manager or superintendent salary                                              55,737
       6331      Manager's rent free unit                                                           -
       6340      Legal expenses  (project)                                                      9,498
       6350      Auditing expenses  (project)                                                   9,500
       6351      Bookkeeping fees/accounting services                                               -
       6360      Telephone and answering service                                               11,496
       6370      Bad debts                                                                     21,167
       6390      Miscellaneous administrative expenses                                              -
                                                                                      ----------------

                              Total Administrative Expenses                                             $         311,713

              Utilities Expenses
       6420      Fuel oil/coal                                                                      -
       6450      Electricity                                                                   44,769
       6451      Water                                                                         69,736
       6452      Gas                                                                            7,411
       6453      Sewer                                                                         32,133
                                                                                      ----------------

                              Total Utilities Expenses                                                            154,049

              Operating & Maintenance
       6510      Janitor and cleaning payroll                                                       -
       6515      Janitor and cleaning supplies                                                  7,998
       6517      Janitor and cleaning contract                                                      -
       6519      Exterminating payroll/contract                                                 1,106
       6520      Exterminating supplies                                                             -
       6525      Garbage and trash removal                                                     16,500
       6530      Security payroll/contract                                                     19,673





</TABLE>
See Accompanying auditors' report.
<PAGE>


                                                     STRATHERN PARK
                                          BOSTON FINANCIAL QUALIFIED HOUSING -
                                                 STATEMENT OF OPERATIONS
                                              YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>


EXPENSES  (Cont.)
              Operating & Maintenance  (Cont.)
       <S>       <C>                                                                <C>                 <C>
       6535      Grounds payroll                                                    $               -
       6536      Grounds supplies                                                               5,015
       6537      Grounds contract                                                              30,839
       6540      Repairs payroll                                                               66,955
       6541      Repairs material                                                              23,209
       6542      Repairs contract                                                              23,117
       6545      Elevator maintenance/contract                                                      -
       6546      Heating/cooling repairs and maintenance                                        3,321
       6547      Swimming pool maintenance/contract                                                 -
       6548      Snow removal                                                                       -
       6560      Decorating payroll/contract                                                   18,677
       6561      Decorating supplies                                                            7,307
       6570      Other, gasoline                                                                    -
       6590      Miscellaneous operating and maintenance                                            -
                                                                                      ----------------

                              Total Operating and Maintenance                                           $         223,717

              Taxes and Insurance
       6710      Real estate taxes                                                            122,658
       6711      Payroll taxes (FICA)                                                          11,399
       6719      Miscellaneous taxes, licenses                                                  3,872
       6720      Property and liability insurance                                              27,431
       6721      Fidelity bond insurance                                                            -
       6722      Workmen's compensation                                                         5,686
       6723      Health insurance and other benefits                                           12,238
       6729      Other insurance                                                                    -
       6790      Miscellaneous taxes and insurance                                                  -
                                                                                      ----------------

                              Total Taxes and Insurance                                                           183,284

              Interest on Mortgage Notes
       6821      Interest on 1st mortgage                                                                         567,918





</TABLE>
See Accompanying auditors' report.
<PAGE>


                                                     STRATHERN PARK
                                          BOSTON FINANCIAL QUALIFIED HOUSING -
                                                 STATEMENT OF OPERATIONS
                                              YEAR ENDED DECEMBER 31, 1998


<TABLE>
<CAPTION>

EXPENSES  (Cont.)
              Other Financial Expenses
     <S>         <C>                                                                <C>                 <C>
     6690        Amortization                                                       $          17,967
     6830        Interest on notes payable (long term)                                        684,115
     6850        Mortgage insurance premium                                                         -
     6890        Miscellaneous financial expenses                                                 500
     6895        Non-cash expense                                                                   -
                                                                                      ----------------

                              Total Financial Expenses                                                  $         702,582
                                                                                                           ---------------

TOTAL EXPENSES BEFORE DEPRECIATION                                                                              2,143,263
                                                                                                           ---------------

PROFIT (LOSS) BEFORE DEPRECIATION                                                                               (541,857)

     6600        Depreciation                                                                                     758,946
                                                                                                           ---------------

OPERATING PROFIT (LOSS)                                                                                       (1,300,803)

                 Other Expenses Prior Period (Entity)                                                              ---
                                                                                                           ---------------


NET PROFIT  (LOSS)                                                                                      $     (1,300,803)
                                                                                                           ===============


                 1st mortgage principal payment                                                         $          54,502
                 2nd mortgage principal payment                                                                    ---
                 3rd mortgage principal payment                                                                    ---
                                                                                                           ---------------

                                          Total mortgage principal payments                             $          54,502
                                                                                                           ===============


                 Actual replacement reserve deposits                                                    $          86,489
                 Replacement or painting reserve releases                                               $        (38,067)
                 Cash subsidies                                                                                    ---
                 Capital improvements not expensed                                                                 ---
                 Capital contribution or disbursement                                                   $          33,395


See Accompanying auditors' report.

</TABLE>
<PAGE>



                                                      STRATHERN PARK
                                             COMPUTATION OF RESIDUAL RECEIPTS
                                                     DECEMBER 31, 1998


<TABLE>
<CAPTION>


<S>                                                                                   <C>                  <C>
Net income (loss) as of December 31, 1998                                                                  $    (1,300,803)


ADD:          Depreciation                                                            $        758,946
              Amortization                                                                      17,967
              Community Redevelopment Agency loan interest                                     322,258
              Housing Development Grant loan interest                                          361,857
              Approved releases from reserve for replacements                                   ---
              Releases from reserve for replacements                                            38,067            1,499,095
                                                                                         --------------      ---------------

                                                                                                                    198,292

LESS:         Principal payments on mortgage                                                  (54,502)
              Deposits to reserve for replacements                                            (86,489)
              Payments for capital expenditures                                                 ---               (140,991)
                                                                                         --------------      ---------------




RESIDUAL RECEIPTS, as defined in the partnership agreement
     at December 31, 1998                                                                                  $         57,301
                                                                                                             ===============


</TABLE>

See Accompanying auditors' report.

<PAGE>


                            FINANCIAL STATEMENTS AND
                          INDEPENDENT AUDITORS' REPORT

                            CIRCLE TERRACE ASSOCIATES
                               LIMITED PARTNERSHIP
                         HUD PROJECT NO.: 052-44056-LDP
                           CDA PROJECT NO.: 28.04.0010

                                DECEMBER 31, 1997


<PAGE>









                                         TABLE OF CONTENTS - CONTINUED

                                  Circle Terrace Associates Limited Partnership
                                         HUD Project No.: 052-44056-LDP
                                          CDA Project No.: 28.04.0010



                                                                           PAGE

MORTGAGOR'S CERTIFICATION                                                     4
MANAGING AGENT'S CERTIFICATION                                                5
INDEPENDENT AUDITORS' REPORT                                                  6
FINANCIAL STATEMENTS
BALANCE SHEET                                                                 8
STATEMENT OF PROFIT AND LOSS                                                 10
STATEMENT OF PARTNERS' EQUITY                                                12
STATEMENT OF CASH FLOWS                                                      13
NOTES TO FINANCIAL STATEMENTS                                                15
SUPPLEMENTAL INFORMATION
ACCOUNTS AND NOTES RECEIVABLE                                                25
CONTRIBUTIONS DUE                                                            25
MORTGAGE ESCROW DEPOSITS                                                     25
TENANT SECURITY DEPOSITS                                                     26
RESERVE FOR REPLACEMENTS                                                     26
RESIDUAL RECEIPTS                                                            26
PAINTING RESERVE                                                             26
ACCOUNTS PAYABLE                                                             27
ACCRUED TAXES                                                                27
LETTERS OF CREDIT                                                            27
LOANS AND NOTES PAYABLE                                                      27
MORTGAGES PAYABLE                                                            28
MORTGAGES PAYABLE FROM SURPLUS CASH                                          28
COMPENSATION OF PARTNERS                                                     28
UNAUTHORIZED DISTRIBUTIONS OF
  PROJECT INCOME TO PARTNERS                                                 28
IDENTITY OF INTEREST COMPANIES AND ACTIVITIES                                29
NON-REVENUE PRODUCING UNITS                                                  29
DECLARATION OF OWNERSHIP - UNAUDITED                                         29
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND
  RESIDUAL RECEIPTS                                                          30
CHANGES IN FIXED ASSET ACCOUNTS                                              31
COMPARISON OF BUDGET TO ACTUAL INCOME AND EXPENSES                           32
MONTHLY INCOME AND EXPENSE STATEMENT - CASH BASIS                            35
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL                             38
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
  SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD AND
  CDA PROGRAMS                                                               40
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC
  REQUIREMENTS APPLICABLE TO FAIR HOUSING AND
  NON-DISCRIMINATION                                                         42
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH LAWS AND
   REGULATIONS APPLICABLE TO THE FINANCIAL STATEMENTS                        43
SCHEDULE OF FINDINGS AND QUESTIONED COSTS                                    45
ANNUAL AUDIT QUESTIONNAIRE                                                   46


<PAGE>






                                                  December 31, 1997

                                  Circle Terrace Associates Limited Partnership
                                           HUD Project No.: 052-44056-LDP
                                             CDA Project No.: 28.04.0010




                                                      - 24 -




                                              MORTGAGOR'S CERTIFICATION


         I  hereby  certify  that I have  examined  the  accompanying  financial
statements  and  supplemental   data  of  Circle  Terrace   Associates   Limited
Partnership  and, to the best of my knowledge  and belief,  the same is complete
and accurate.




                                                     GENERAL PARTNER



                                         ---------------------------------------
                           Judith Siegel                                   Date


                                                     Partnership Employer
                             Identification Number:
                                   05-0461953


<PAGE>





                                           MANAGING AGENT'S CERTIFICATION


         I  hereby  certify  that I have  examined  the  accompanying  financial
statements  and  supplemental   data  of  Circle  Terrace   Associates   Limited
Partnership  and, to the best of my knowledge  and belief,  the same is complete
and accurate.




                                                     MANAGING AGENT

                            Rental Housing Management
                                                       Partnership



                                      ---------------------------------------
                         Eric Richelson                                  Date


David Staley                                         Managing Agent Employer
Property Manager                                       Identification Number:
                                                       13-3580730


<PAGE>



                                            INDEPENDENT AUDITORS' REPORT


To the Partners
Circle Terrace Associates
  Limited Partnership

         We have  audited  the  accompanying  balance  sheet of  Circle  Terrace
Associates  Limited  Partnership  as of  December  31,  1997,  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 Circle  Terrace
Associates  Limited  Partnership as of December 31, 1997, 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 25
through  37 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 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>



         In accordance with Government  Auditing Standards and the "Consolidated
Audit  Guide for Audits of HUD  Programs,"  we have also  issued  reports  dated
January 21,  1998 on our  consideration  of Circle  Terrace  Associates  Limited
Partnership's  internal control and on its compliance with specific requirements
applicable to major HUD and CDA programs,  fair housing and  non-discrimination,
and laws and regulations applicable to the financial statements.





Bethesda, Maryland                                   Federal Employer
January 21, 1998                                       Identification Number:
                                                       52-1088612



Audit Principal:  Lester A. Kanis


<PAGE>

                                                  BALANCE SHEET

                                                 DECEMBER 31, 1997
                                                      ASSETS



CURRENT ASSETS

1110  Petty cash                                               $          1,400
1120 Cash in bank                                                       143,737
1121 Cash - partnership                                                 247,311
1130 Tenant accounts receivable                                          11,720
1131 Accounts receivable - HUD                                          178,313
1240 Prepaid property insurance                                          37,733
1250 Prepaid mortgage insurance                                          16,332
1270 Prepaid real estate taxes                                           34,169
                                                              -----------------

         Total current assets                                           670,715

DEPOSITS HELD IN TRUST - FUNDED
1191 Tenant security deposits                                            40,834

RESTRICITAD DEPOSITS AND FUNDED RESERVES
1310 Mortgage escrow deposits                                    $      108,992
1320 Reserve for replacements                                           486,850
1330 Painting reserve                                                   123,993
                                                                ---------------
                                                                        719,835
RENTAL PROPERTY
1410 Land                                                             1,104,269
1420 Buildings and improvements                                      15,214,660
1440 Building equipment - fixed                                          34,325
1440 Building equipment - portable                                       18,164
1450 Personal property                                                   18,440
1460 Furnishings                                                          8,378
                                                                 --------------
                                                                     16,398,236
1495 Less accumulated depreciation                                    2,929,726
                                                                    -----------
                                                                     13,468,510
OTHERASSETS
1901 Mortgage costs, less accumulated
         amortization of $85,191                                        221,729
                                                                        =======
                                                                $    15,121,623

<PAGE>






                                            NOTES TO FINANCIAL STATEMENTS

                                                  December 31, 1997

                                   Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010


                                              BALANCE SHEET-Continued

                                                 DECEMBER 31, 1997

                                         LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES
2110 Accounts payable                                             $      23,487
2130 Accrued interest payable                                            34,763
2150 Accrued P.I.L.O.T.                                                  91,140
2190 Accrued management fees                                             22,482
2210 Rent deferred credits                                                  675
2320 Current maturities of long term debt                               283,526
                                                                        -------

Total Current Liabilities                                               456,073

DEPOSITS LIABILITIES
2191 Tenant security deposits (contra)                                   34,440

LONG TERM LIABILITIES
2320 Long term debt, net of current maturities                      $ 9,435,867
2335 Accrued interest                                                   103,030
                                                                  -------------

                                                                      9,538,897
CONTINGENCY                                                                   -
3130 PARTNERS' EQUITY                                                 5,092,113
                                                                  -------------
                                                                    $15,121,523












                                           STATEMENT OF PROFIT AND LOSS

                                                 DECEMBER 31, 1997
<TABLE>



RENTAL INCOME

<S>                                                                             <C>               <C>
5120 Apartments or member carrying charges (Coops)                              $     305,325
5121 Tenant assistance payments                                                     1,988,739
                                                                                      -------


     Total rent revenue potential at 100% occupancy                                                $2,294,064

VACANCIES
5220 Apartments                                                                        (7,223)
                                                                                --------------

     Total vacancies                                                                                   (7,223)

     Net rental revenue                                                                             2,286,841

FINANCIAL REVENUE
5410 Interest Income -project operations                                                6,619
5440 Income from investments - reserve for replacement                                 12,093
                                                                                        -----

     Total financial revenue                                                                           18,712

OTHER REVENUE
5910 Laundry and vending                                                                9,482
5920 NSF and late charges                                                               4,117
                                                                                        -----

     Total other revenue                                                                               13,599

     Total revenue                                                                                  2,319,152


</TABLE>

<PAGE>


                                     STATEMENT OF PROFIT AND LOSS (continued)

                                                 DECEMBER 31, 1997

<TABLE>

ADMINISTRATIVE EXPENSES

<S>                                                                                       <C>     <C>
6210 Advertising and marketing                                                            8,719
6250 Other renting expenses                                                               5,778
6310 Office salaries                                                                     89,954
6311 Office Supplies                                                                     26,989
6320 Management fee                                                                     130,164
6331 Manager or superintendent rent free unit                                             7,548
6340 Legal expenses - project                                                            13,711
6350 Auditing expenses - project                                                          9,600
6351 Bookkeeping fees/accounting services                                                16,368
6360 Telephone and answering services                                                    11,916
6370 Bad debts                                                                            4,749
6390 Miscellaneous administrative expenses                                               23,761
                                                                                         ------

Total administrative expenses                                                                      349,257

UTILITIES EXPENSE
6450 Electricity                                                                         17,224
6451 Water                                                                               14,777
6452 Gas                                                                                109,333

Total utilities expense                                                                            141,334


OPERATING AND MAINTENANCE EXPENSES
6515 Janitor and cleaning supplies                                                        9,387
6517 Janitor and cleaning contract                                                        3,843
6520 Exterminating supplies                                                                 734
6525 Garbage and trash removal                                                           38,158
6530 Security payroll/contract                                                          166,940
6536 Grounds supplies                                                                       893
6537 Grounds contract                                                                    35,980
6540 Repairs payroll                                                                    127,205
6541 Repairs material                                                                   102,277
6542 Repairs contract                                                                    11,242
                                     STATEMENT OF PROFIT AND LOSS (continued)

                                                 DECEMBER 31, 1997
6546 Heating/cooling repairs and maintenance                                              8,406
6548 Snow removal                                                                         1,275
6560 Decorating payroll contract                                                         22,135
6561 Decorating supplies                                                                  7,557
6570 Other                                                                                9,544
6590 Miscellaneous operating and maintenance expenses                                       236
                                                                                    -----------

Total operating and maintenance expenses                                                                545,812
TAXES AND INSURANCE
6710 Real estate taxes                                                                  123,445
6711 Payroll taxes (FICA)                                                                29,527
6719 Miscellaneous taxes, licenses and permits                                              400
6720 Property and liability insurance (Hazard)                                           88,162
6721 Fidelity bond insurance                                                                914
6722 Workmen's compensation                                                              11,018
6723 Heath insurance and other employee benefits                                         28,951
                                                                                         ------

Total taxes and insurance                                                                                282,417

FINANCIAL EXPENSES
6820 Interest on mortgage payable                                                       435,537
6840 Interest on notes payable - short-term                                               1,342
6850 Mortgage insurance premium/service charge                                           45,753
                                                                                         ------

Total financial expenses                                                                                 482,632

DEPRECIATION AND AMORTIZATION
Total cost of operations before depreciation                                                           1,801,452
Profit (Loss) before depreciation                                                                        517,700
Depreciation and amortization                                                                            574,584
Operating Profit or (Loss)                                                                               (56,884)

CORPORATE OR MORTGAGOR ENTITY EXPENSES
7190 Other (revenue)/expenses                                                           (9,077)
Total corporate expenses                                                                                  (9,077)
                                                                                                             ----

Net Profit                                                                                               (47,807)
</TABLE>

                                           STATEMENT OF PARTNER'S EQUITY

                                                 DECEMBER 31, 1997


                                   Special        Investor
                     General       Limited        Limited
                     Partner       Partner        Partner        Total


Partners' equity,
    Beginning      $217,706              -       $4,922,214   $5,139,920


Net Loss               (478)             -          (47,329)     (47,807)
                  ---------   ------------        ---------  -----------

Partners' equity,
End               $ 217,228              -      $ 4,874,885  $ 5,092,113
                  ---------                     -----------  -----------






















                                              Statement OF CASH FLOWS

                                                 DECEMBER 31, 1997


Cash flows from operating activities
Rental income received                                           $    2,131,151
Interest received                                                        18,709
Other income received                                                    13,599
Administrative expenses paid                                           (133,228)
Management fees paid                                                   (130,164)
Utilities paid                                                         (145,670)
Salaries and wages paid                                                (406,234)
Operating and maintenance paid                                         (217,547)
Real estate taxes paid                                                  (65,118)
Payroll taxes paid                                                      (29,527)
Property insurance paid                                                (124,576)
Other taxes and insurance paid                                          (29,351)
Interest paid on mortgage                                              (413,662)
Interest paid on notes                                                   (1,342)
Mortgage insurance premium paid                                         (45,753)
Decrease in mortgage escrow deposits                                      2,700
Mortgagor entity income received, net                                     9,077
Net tenant security deposits received                                     2,163
                                                                 --------------

Net cash provided by operating activities                               435,227
                                                                 --------------

Cash flows from investing activities
Deposits to reserve for replacement                                     (96,633)
Deposits to painting reserve                                            (42,497)
Payment of developer fees payable                                       (34,554)
Purchase of fixed assets                                                (18,440)
                                                                  -------------
Net cash used in investing activities                                  (192,124)
                                                                  -------------

Cash flow from financing activities
Mortgage and note principal payments                                   (261,217)
Proceeds from note payable                                               17,940
                                                               ----------------

Net cash used in financing activities                                  (243,277)



                                        STATEMENT OF CASH FLOWS (CONTINUED)

                                                 DECEMBER 31, 1997


NET DECREASE IN CASH                                                       (174)

Cash, beginning                                                         392,622

Cash, end                                                       $       392,448
                                                                ===============


<PAGE>









                                            NOTES TO FINANCIAL STATEMENTS

                                                  December 31, 1997

                                  Circle Terrace Associates Limited Partnership
                                         HUD Project No.: 052-44056-LDP
                                           CDA Project No.: 28.04.0010



NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Circle Terrace Associates  Limited  Partnership was organized under the laws
    of the State of Maryland on March 28, 1990, for the purpose of acquiring and
    operating a rental housing project under Section 236 of the National Housing
    Act. The project consists of 303 units located in Lansdowne,  Maryland,  and
    is currently  operating  under the name of Circle  Terrace  Apartments.  The
    property is managed by an affiliate of the general partner based on a fee of
    $35.80 per unit per month.

    Cash distributions are limited by agreements between the partnership and the
    United States Department of Housing and Urban Development (HUD) to an annual
    amount of $30,340 per year to the extent of surplus  cash as defined by HUD.
    Undistributed  amounts are  cumulative  and may be distributed in subsequent
    years if  future  operations  provide  surplus  cash in  excess  of  current
    requirements.

    Each  building of the project has qualified  and been  allocated  low-income
    housing credits  pursuant to Internal Revenue Code Section 42 ("Section 42")
    which  regulates the use of the project as to occupant  eligibility and unit
    gross rent, among other requirements. Each building of the project must meet
    the provisions of these  regulations  during each of 15 consecutive years in
    order to remain  qualified  to receive  the  credits.  In  addition,  Circle
    Terrace Associates Limited  Partnership has executed an Extended  Low-income
    Housing  Agreement/Land  Deed   Restriction/Extended  Use  Commitment  which
    requires the utilization of the project pursuant to Section 42 for a minimum
    of 30 years, even after the disposition of the project by the partnership.

    Use of Estimates

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


<PAGE>






                                   NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                                December 31, 1997

                                  Circle Terrace Associates Limited Partnership
                                         HUD Project No.: 052-44056-LDP
                                           CDA Project No.: 28.04.0010



NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    Rental Property

    Rental property is recorded at cost. Depreciation is provided for in amounts
    sufficient to relate the cost of depreciable assets to operations over their
    estimated  service  lives  using the  straight-line  method over a 27.5-year
    life.  Personal  property is recorded  at cost and is  depreciated  over its
    estimated service life of 5-7 years using accelerated methods.  Improvements
    are capitalized,  while expenditures for maintenance and repairs are charged
    to  expense  as  incurred.   Upon  disposal  of  depreciable  property,  the
    appropriate   property  accounts  are  reduced  by  the  related  costs  and
    accumulated  depreciation.  The resulting  gains and losses are reflected in
    the statement of profit and loss.

    Amortization

    Mortgage costs are amortized over the term of the respective  loan using the
straight-line method.

    Provision for Doubtful Accounts

    The  partnership  considers  accounts  receivable  to be fully  collectible;
    accordingly,  no  allowance  for doubtful  accounts is required.  If amounts
    become  uncollectible,   they  will  be  charged  to  operations  upon  such
    determination.

    Income Taxes

    No  provision  or  benefit  for  income  taxes  has been  included  in these
    financial  statements since taxable income or loss passes through to, and is
    reportable by, the partners individually.

    Rental Income

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



<PAGE>


NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    Investments

    Investments  in U.S.  Treasury  bills are carried at amortized  cost,  which
    approximates fair market value, and are classified as held to maturity. Such
    investments are included in the reserve for replacements in the accompanying
    balance sheet.

NOTE B - PARTNERS' CAPITAL CONTRIBUTIONS

    The  partnership has one general  partner - Cooperative  Associates  Limited
    Partnership  and two  limited  partners - SLP,  Inc.  (the  special  limited
    partner)  and Boston  Financial  Qualified  Housing  Tax  Credits  L.P. V, a
    Limited Partnership (the investor limited partner).  The general partner has
    made  capital  contributions  of $413,562.  SLP,  Inc. is required to make a
    capital  contribution of $10. The investor  limited partner has made capital
    contributions totaling $5,615,234.

NOTE C - LONG-TERM DEBT

    First Mortgage

    The  partnership  is obligated  under the terms of a mortgage  note which is
    insured by the Federal  Housing  Administration  (FHA) and bears interest at
    the rate of 7%, less a varying  interest  subsidy in the  current  amount of
    $17,879 per month. Monthly payments of principal and interest in the reduced
    amount of $10,564 are due  through  maturity  in  February  2017.  The total
    interest  subsidy of  $213,447  is  reflected  as a  reduction  of  interest
    expense.  Principal  and  accrued  interest  due at  December  31,  1997 are
    $3,596,386 and $2,897, respectively.

    Under  agreements  with the  mortgage  lender and FHA,  the  partnership  is
    required  to  make  monthly  escrow   deposits  for  taxes,   insurance  and
    replacement  of  project  assets,  and  is  subject  to  restrictions  as to
    operating policies, rental charges, operating expenditures and distributions
    to partners.

    The liability of the  partnership  under the mortgage note is limited to the
    underlying value of the real estate  collateral plus other amounts deposited
    with the lender.



<PAGE>


NOTE C - LONG-TERM DEBT (Continued)

    Second Mortgage

    The  partnership  is  obligated  under the terms of a  mortgage  note in the
    original amount of $4,000,000, which is insured by the Maryland Housing Fund
    (MHF) payable to Crestar of Richmond, Virginia, Inc. The note bears interest
    at the rate of 8%. Monthly  payments of principal and interest in the amount
    of $34,576 are due through maturity in December 2011.  Principal and accrued
    interest due at December 31, 1997 are $3,483,497 and $24,099, respectively.

    The liability of the partnership  under the terms of the mortgage is limited
    to the  underlying  value of the real estate  collateral  plus other amounts
    deposited with the lender.

    Third Mortgage

    The  partnership  is  obligated  under the terms of a  mortgage  note in the
    original  amount of  $2,227,330  payable to the  Department  of Housing  and
    Community  Development  of the  State of  Maryland  (CDA).  The  note  bears
    interest at 4.5%.  Monthly payments of principal and interest of $11,373 are
    due through July 1, 2023. Principal and accrued interest due at December 31,
    1997 are $2,071,870 and $7,767, respectively.

    The liability of the partnership  under the terms of the mortgage is limited
    to the underlying value of the real estate collateral.

    Promissory Note

    The partnership is obligated under the terms of an unsecured promissory note
    payable to Baltimore County,  Maryland.  Interest accrues at the rate of 4%.
    Annual  interest  payments  commenced  January 1, 1996.  Annual  payments of
    principal  will be due  commencing  January  1, 2000 and will  extend for 30
    years  through  maturity on December 31, 2030.  Payments may be made only to
    the extent of surplus cash as defined by HUD. Principal and accrued interest
    due at December 31, 1997 are $550,000 and $103,030, respectively.


<PAGE>


NOTE C - LONG-TERM DEBT (Continued)

    Note Payable

    The  partnership  is  obligated  under the terms of a note  payable  for the
    purchase of a truck.  The note bears interest at 8.75% and requires  monthly
    payments of principal and interest of $588 through maturity in October 2000.
    The amount payable at December 31, 1997 is $17,640.

    Aggregate  annual  maturities  of  long-term  debt for each of the next five
years are as follows:

--------------------------------------------- -- ----------------
                           December 31, 1998  $          283,526
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        1999             304,471
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        2000             325,839
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        2001             343,827
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        2002             369,264
--------------------------------------------- -- ----------------

NOTE D - RELATED PARTY TRANSACTIONS

    Working Capital Advances

    The general  partner is obligated to make  working  capital  advances to the
    partnership  as needed,  up to an aggregate of $100,000.  Such  advances are
    noninterest  bearing  and can be repaid  out of  available  net cash flow as
    defined in the partnership  agreement.  No such advances were required as of
    December 31, 1997.

    In the event cash flow does not provide sufficient funds to pay the investor
    limited  partner its minimum  distribution,  such  amount  required  will be
    advanced by the general  partner and will be  considered  a project  expense
    loan.

    Management Agreement

    The  property  is  managed  by an  affiliate  of the  general  partner.  The
    management  fee is based on a  charge  of  $35.80  per unit per  month.  The
    management  agent  also  receives  fees of  $4.50  per unit  per  month  for
    accounting  services provided to the partnership.  Management and accounting
    fees  charged  to   operations   during  1997  were  $130,164  and  $16,368,
    respectively,  of which $22,482 of management fee is payable at December 31,
    1997.


<PAGE>


NOTE D - RELATED PARTY TRANSACTIONS (Continued)

    Insurance

    The sole  shareholder of an affiliate of the general  partner  provided debt
    financing for the  capitalization of LaMere Associates,  Inc.  (LaMere).  In
    connection  with such debt financing,  the  shareholder  received 20% of the
    stock of LaMere.  LaMere was paid premiums in connection  with the following
    insurance  coverage  provided to the  partnership:  property and  liability,
    fidelity bond and auto.  In connection  with such  insurance  coverage,  the
    partnership  incurred  $100,094 in premiums for the year ended  December 31,
    1997.

    Computer Services

    In  accordance  with HUD  Regulations  4381.5  Rev-2,  Paragraph  6.38,  the
    partnership  uses the services of a computer  consultant  company to provide
    the  following  services:  purchase and install  personal  computers and the
    related  equipment and software for the  project's  rental  office;  provide
    training and technical support,  and consult on software  upgrades.  Dynamic
    Information Services, Inc. (DIS), which is owned by a relative of an officer
    of the  management  company,  is a licensed  representative  of Project Data
    Systems,  Inc., a nationally  known provider of computer system software for
    the subsidized  housing industry.  DIS derives 40% of its consulting service
    revenues  from  third-party  clients  not  affiliated  with  the  management
    company.  In  1997,  the  partnership  paid DIS  $2,174  for  equipment  and
    software,  representing  actual cost,  and $1,697 for technical  support and
    training services based on billable hours.

NOTE E - CONTRACT WITH BALTIMORE COUNTY (IN LIEU OF TAXES)

    The  partnership  has  entered  into an  agreement  with  Baltimore  County,
    Maryland, whereby the partnership is to pay the County $162.50 per apartment
    unit per year (the  minimum  payment) in lieu of real estate  taxes.  To the
    extent there is net cash flow, as defined in the  agreement,  such amount is
    to be applied  toward  additional  payments.  The  minimum  payment has been
    increased 10% annually.  The amount  incurred during 1997 under the terms of
    this  agreement  was  $58,327.  This amount is included  with other city and
    county real estate taxes in the statement of profit and loss. As of December
    31, 1997, $91,140 remains payable.



<PAGE>


NOTE F - HOUSING ASSISTANCE PAYMENT (HAP) CONTRACT AGREEMENTS

    HUD has contracted with the partnership  under the United States Housing Act
    of 1937 to make housing assistance  payments to the partnership on behalf of
    qualified  tenants.  The terms of the contract covering 142 units expires on
    November  30, 1998 and the contract  covering 161 units  expired on November
    30, 1997. The contracts do not have renewal options.

    With  Congressional  passage in  October  1997 of the  Multifamily  Assisted
    Housing  and Reform  and  Affordability  Act (the  Act),  HUD has been given
    budgetary authority to approve requests for one-year renewals on all Section
    8  contracts   expiring  through  September  30,  1998.  Thus,  one  of  the
    partnership's HAP agreements will be eligible for a one-year renewal through
    March 31, 1999.

    Under provisions of the Act,  renewal of Section 8 contracts  expiring after
    September 30, 1998 are subject to evaluation and assessment  under a complex
    set of  requirements  as  prescribed by this  "mark-to-market"  legislation.
    Further,  implementing  regulations by HUD affecting administration over the
    renewal  process  have not been  finalized.  As a  result,  it is  uncertain
    whether HUD will renew these  contracts under terms that are consistent with
    the  successful  operation  of the  project.  The  project  is  economically
    dependent upon the rental income  received from both of its  agreements.  If
    HUD were not to extend either one, the project's  operating  cash flow would
    be adversely affected.

NOTE G - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS

    All profits and losses are  allocated  1% to the general  partner and 99% to
the investor limited partner.

    Cash flow, as defined in the partnership agreement,  is to be distributed as
follows:

    1.  99% to the investor  limited partner and 1% to the general partner until
        the  investor  limited  partner  has  received  distributions,   in  the
        aggregate, equal to the cumulative priority distribution.

    2. To the repayment of any project expense loans.


<PAGE>


NOTE G - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS (Continued)

    3.  To the general  partner  until it has  received  cumulatively  an amount
        equal to the cumulative  amount paid to the investor  limited partner as
        defined above.

    4.  50% to the general partner and 50% to the investor limited partner.

    Gain, if any,  from a sale,  exchange or other  disposition  is allocable as
follows:

    1.  To all partners having negative balances in their capital accounts prior
        to the  distribution of any sale or refinancing  proceeds,  an amount of
        such gain to increase their negative balance to zero.

    2.  To each partner until the positive  capital  account balance is equal to
        the  amount  of cash  available  for  distribution  as a  result  of the
        transaction, as defined in the partnership agreement.

    Loss from a sale is allocable as follows:

    1.  To  the  partners  in  proportion  to  their  positive  capital  account
        balances.  In the event  the loss is less  than the sum of the  positive
        capital  accounts,  the loss is to be allocated  such that the resulting
        capital  account balance is as near as possible to the amount of cash to
        be distributed as a result of the transaction.

    2.  1% to the general partner and 99% to the investor limited partner.

NOTE H - TAXABLE LOSS

    A reconciliation  of the financial  statement net loss to the income tax net
    loss of the partnership for the year ended December 31, 1997 is as follows:



         ----------------------------------------------------------------------
         Financial statement net loss                         $         (47,807)
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Excess depreciation for income tax purposes                     (5,750)
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Income net tax loss                                  $         (53,557)
         ----------------------------------------------------------------------




<PAGE>


NOTE I - INVESTMENT IN REAL ESTATE

    A reconciliation of the basis of the investment in real estate for financial
    reporting  purposes to that for income tax  purposes as of December 31, 1997
    is as follows:



-------------------------------------------------------------------------------
Investment in real estate for financial reporting            $       13,468,510
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Excess accumulated depreciation for income tax purposes                 (50,844)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Interest expense portion of subsidy capitalized for income tax purposes 177,337
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Investment in real estate for income tax purposes            $       13,595,003
-------------------------------------------------------------------------------

NOTE J - CONCENTRATION OF CREDIT RISK

    The partnership  maintains its cash balances in several banks.  The balances
    are  insured  by the  Federal  Deposit  Insurance  Corporation  (FDIC) up to
    $100,000 per bank.  As of December 31, 1997,  the  uninsured  portion of the
    partnership cash balances held at one bank was $147,311.

NOTE K - CONTINGENCY

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

NOTE L - OTHER MORTGAGOR ENTITY EXPENSES (ACCOUNT NO.  7190)

    Other mortgagor entity expenses consist of the following:

       ------------------------------------------------------------------------
       Interest income - partnership accounts                $            9,077
       ------------------------------------------------------------------------



<PAGE>




                                              SUPPLEMENTAL INFORMATION

                                       SUPPORTING DATA REQUIRED BY HUD AND CDA


<PAGE>






                                            SUPPLEMENTAL INFORMATION

                                     SUPPORTING DATA REQUIRED BY HUD AND CDA

                                                December 31, 1997

                                  Circle Terrace Associates Limited Partnership
                                         HUD Project No.: 052-44056-LDP
                                           CDA Project No.: 28.04.0010




                                                      - 52 -

ACCOUNTS AND NOTES RECEIVABLE (OTHER THAN FROM REGULAR TENANTS)
<TABLE>
     <S>                                  <C>                    <C>           <C>                 <C>


     ---------------------------------------------------------------------------------------------------------------
              Name of borrower             Original date         Terms         Original amount       Balance due
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     U.S. Department of Housing and         Oct. - Dec.           1/98       $          178,313  $          178,313
         Urban Development                      1997
     ---------------------------------------------------------------------------------------------------------------

DELINQUENT TENANT ACCOUNTS RECEIVABLE

     ---------------------------------------------------------------------------------------------------------------
                                                                                    Number of           Amount
                                                                                     tenants           past due
                                                                                  ----------------------------------
                                                                                  ----------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent 30 days                                                                      56  $            1,980
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent 31-60 days                                                                   52               1,807
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent 61-90 days                                                                   32               2,022
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent over 90 days                                                                 49               5,911
     -----------------------------------------------------------------------------              --------------------
     -----------------------------------------------------------------------------              --------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
                                                                                                 $           11,720
     -----------------------------------------------------------------------------              --------------------

CONTRIBUTIONS DUE

     ---------------------------------------------------------------------------------------------------------------
     SLP, Inc.                                                                                   $               10
     ---------------------------------------------------------------------------------------------------------------

MORTGAGE ESCROW DEPOSITS

     ---------------------------------------------------------------------------------------------------------------
     Estimated amount required as of December 31, 1997, for future payment of:
                                                                                                ---
                                                                                                ---
         City, state and county taxes (P.I.L.O.T)                                                $           37,836
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
         Property insurance                                                                                  31,915
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
         Mortgage insurance                                                                                  13,314
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
                                                                                                             83,065
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Amount on deposit in excess of estimated requirements                                                   25,927
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Total confirmed by mortgagee                                                                $          108,992
     ---------------------------------------------------------------------------------------------------------------

</TABLE>


<PAGE>






                                      SUPPLEMENTAL INFORMATION - CONTINUED

                                     SUPPORTING DATA REQUIRED BY HUD AND CDA

                                               December 31, 1997

                                  Circle Terrace Associates Limited Partnership
                                         HUD Project No.: 052-44056-LDP
                                           CDA Project No.: 28.04.0010



TENANT SECURITY DEPOSITS

    Tenant security  deposits are held in a separate bank account in the name of
the project.

RESERVE FOR REPLACEMENTS

    In accordance  with the provisions of the regulatory  agreement,  restricted
    cash is held by  Mellon  Mortgage  Company  to be used  for  replacement  of
    property with the approval of HUD as follows:

         ----------------------------------------------------------------------
         Balance at December 31, 1996                        $          390,217
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Monthly deposits
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
             $7,045 x 12                                                 84,540
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Interest earned                                                 12,093
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Balance at December 31, 1997, confirmed by mortgagee $         486,850
         ----------------------------------------------------------------------

RESIDUAL RECEIPTS

                                                       NONE

PAINTING RESERVE

    The partnership has established a reserve for painting of the property.  The
    restricted cash is held by the partnership.

         ----------------------------------------------------------------------
         Balance at December 31, 1996                        $           81,496
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Monthly deposits
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
             $3,333 x 12                                                 39,996
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Interest earned                                                  2,501
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Balance at December 31, 1997                        $          123,993
         ----------------------------------------------------------------------



<PAGE>


ACCOUNTS PAYABLE (OTHER THAN TRADE CREDITORS)

                                                        NONE
<TABLE>

ACCRUED TAXES
     <S>                               <C>                  <C>                  <C>              <C>

     --------------------------------------------------------------------------------------------------------------
           Description of tax          Basis for accrual     Period covered       Date due         Amount accrued
     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------
     Baltimore County, Maryland            P.I.L.O.T.             1997            12/31/97      $           91,140
         P.I.L.O.T.
     --------------------------------------------------------------------------------------------------------------

LETTERS OF CREDIT

                                                       NONE

LOANS AND NOTES PAYABLE (OTHER THAN THE INSURED MORTGAGE)

     ---------------------------------------------------------------------------------------------------------------
          Creditor        Interest      Collateral        Date         Terms    Original amount      Balance due
                            rate                        incurred
     -------------------------------------------------------------------------- -----------------  -----------------
     -------------------------------------------------------------------------- -----------------  -----------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Crestar of              8%        Second trust       12/91       20 yrs           4,000,000 $        3,483,497
         Richmond,
         Virginia, Inc.
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------
     ---------------------------------------------------------------------------
     State of Maryland      4.5%        Third trust       12/91       20 yrs           2,227,330 $        2,071,870
         CDA
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------
     ---------------------------------------------------------------------------
     Baltimore County,      4.0%         Unsecured        11/90       40 yrs             550,000 $          550,000
         Maryland
     ---------------------------------------------------------------------------------------------------------------

</TABLE>


<PAGE>


MORTGAGES PAYABLE

    ---------------------------------------------------------------------------
                       Creditor                          Address of creditor
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------
    HUD                                                Washington, D.C.
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------
    Crestar of Richmond, Virginia, Inc.                Richmond, Virginia
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------
    Department of Housing and Community                Crownsville, Maryland
        Development of the State of Maryland
    ---------------------------------------------------------------------------

                       Servicer                        Address of servicer

    Mellon Mortgage Company                            Cleveland, Ohio

    Crestar of Richmond, Virginia, Inc.                Richmond, Virginia

    Bogman, Inc.                                       Bethesda, Maryland

MORTGAGES PAYABLE FROM SURPLUS CASH

                                                       NONE

COMPENSATION OF PARTNERS

                                                        NONE

UNAUTHORIZED DISTRIBUTIONS OF PROJECT INCOME TO PARTNERS

                                                        NONE



<PAGE>


IDENTITY OF INTEREST COMPANIES AND ACTIVITIES
<TABLE>
     <S>                                      <C>                          <C>                     <C>

     --------------------------------------------------------------------------------------------------------------
            Company name                       Services rendered                 Amount paid       Amount payable
     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------
     Rental Housing Management                                               $          130,164  $          22,482
         Partnership
                                    Property management
     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------
     Rental Housing Management                                               $           16,368  $               -
         Partnership
                                    Accounting fees
     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------
     LaMere Associates, Inc.                                                 $          100,094  $               -
                                    Insurance coverage
     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------
     Dynamic Information            Equipment, software, technical support   $            3,871  $               -
         Services, Inc.             and training services
     --------------------------------------------------------------------------------------------------------------

NON-REVENUE PRODUCING UNITS

     ------------------------------------------------------------------------------------------------------------
     Name of occupant                                      Connection with project
     ------------------------------------------------------------------------------------------------------------
     ------------------------------------------------------------------------------------------------------------

     ------------------------------------------------------------------------------------------------------------
     ------------------------------------------------------------------------------------------------------------
     Willfred Chatterton                                   Assistant Supervisor
     ------------------------------------------------------------------------------------------------------------

DECLARATION OF OWNERSHIP - UNAUDITED

    ----------------------------------------------------------------------------------------------------------------
              Type of partner                      Name of partner                 Capital            Ownership
                                                                                 contributed         percentage
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------

    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    General Partner                        Cooperative Associates Limited    $          413,562          1%
                                               Partnership
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------

    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Special Limited Partner                SLP, Inc.                         $                0            0%
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------

    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Limited Partner                        Boston Financial Qualified        $        5,615,234  $       99%
                                               Housing Partnership
    ----------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>



                               INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL


To the Partners
Circle Terrace Associates Limited Partnership

         We have audited the financial  statements of Circle Terrace  Associates
Limited  Partnership  as of and for the year ended  December 31, 1997,  and have
issued our report  thereon dated  January 21, 1998. We have also audited  Circle
Terrace Associates Limited  Partnership's  compliance with specific requirements
applicable  to major  HUD-assisted  and CDA  programs and have issued our report
thereon dated January 21, 1998.

         We conducted our audits in accordance with generally  accepted auditing
standards,  Government Auditing Standards,  issued by the Comptroller General of
the United  States,  the  "Consolidated  Audit Guide for Audits of HUD Programs"
(the Guide),  issued by the U.S.  Department  of Housing and Urban  Development,
Office of the  Inspector  General  and the  Maryland  Department  of Housing and
Community  Development,  Community Development  Administration Audit Guide dated
October  1997.  Those  standards  and the two  guides  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements  are free of material  misstatement  and about whether Circle Terrace
Associates Limited Partnership complied with laws and regulations, noncompliance
with which would be material to major HUD-assisted and CDA programs.

         The management of the partnership is responsible for  establishing  and
maintaining internal control. In fulfilling this  responsibility,  estimates and
judgments by management are required to assess the expected benefits and related
costs of controls.  The objectives of internal control are to provide management
with reasonable, but not absolute, assurance that assets are safeguarded against
loss from  unauthorized  use or disposition,  that  transactions are executed in
accordance with  management's  authorization and recorded properly to permit the
preparation  of financial  statements  in  accordance  with  generally  accepted
accounting  principles,  and that  HUD-assisted  and CDA programs are managed in
compliance with applicable laws and regulations. Because of inherent limitations
in  internal   control,   errors,   fraud  or  instances  of  noncompliance  may
nevertheless  occur and not be detected.  Also,  projection of any evaluation of
internal  control to future  periods is subject to the risk that  procedures may
become inadequate  because of changes in conditions or that the effectiveness of
the design of controls may deteriorate.



<PAGE>



         In planning and performing our audits of the  partnership  for the year
ended  December  31,  1997,  we obtained an  understanding  of the design of the
relevant controls and determined whether they have been placed in operation, and
we assessed  control risk in order to determine our auditing  procedures for the
purpose of expressing our opinions on the partnership's financial statements and
on its compliance with specific  requirements  applicable to major  HUD-assisted
and CDA  programs  and to report on  internal  control  in  accordance  with the
provisions of the Guide and not to provide an opinion on internal control.

         We performed  tests of controls,  as required by the Guide, to evaluate
the  effectiveness  of the design and  operation of controls  that we considered
relevant  to  preventing  or  detecting  material  noncompliance  with  specific
requirements  that are  applicable  to the  partnership's  HUD-assisted  and CDA
programs. Our procedures were less in scope than would be necessary to render an
opinion on internal control. Accordingly, we do not express such an opinion.

         Our  consideration of internal  control would not necessarily  disclose
all  matters  in  internal  control  that  might be  material  weaknesses  under
standards established by the American Institute of Certified Public Accountants.
A material  weakness is a condition  in which the design or  operation of one or
more of the internal  control  components  does not reduce to a  relatively  low
level the risk  that  errors  or fraud in  amounts  that  would be  material  in
relation  to the  financial  statements  or that  noncompliance  with  laws  and
regulations  that would be material to a  HUD-assisted  or CDA program may occur
and not be detected  within a timely period by employees in the normal course of
performing  their assigned  functions.  We noted no matters  involving  internal
control and its operation that we consider to be material  weaknesses as defined
above.

         This report is intended  for the  information  of the audit  committee,
management,  the  Department of Housing and Urban  Development  and the Maryland
Community Development Administration. However, this report is a matter of public
record and its distribution is not limited.





Bethesda, Maryland
January 21, 1998


<PAGE>



                                          INDEPENDENT AUDITORS' REPORT ON
                                       COMPLIANCE WITH SPECIFIC REQUIREMENTS
                                      APPLICABLE TO MAJOR HUD AND CDA PROGRAMS


To the Partners
Circle Terrace Associates Limited Partnership

         We have audited the financial  statements of Circle Terrace  Associates
Limited  Partnership  as of and for the year ended  December 31, 1997,  and have
issued our report thereon dated January 21, 1998.

         We have also audited Circle Terrace  Associates  Limited  Partnership's
compliance  with  specific  program  requirements  governing  federal  financial
reports;  mortgage status;  replacement  reserve;  residual  receipts;  security
deposits;  cash  receipts and  disbursements;  distributions  to owners;  tenant
application, eligibility, and recertification; and management functions that are
applicable  to its  major  HUD-assisted  and CDA  programs  for the  year  ended
December  31,  1997.  The  management  of  Circle  Terrace   Associates  Limited
Partnership  is  responsible  for  compliance  with  those   requirements.   Our
responsibility  is to express an opinion on compliance  with those  requirements
based on our audit.

         We conducted our audit of compliance with specific program requirements
in accordance with generally accepted auditing  standards,  Government  Auditing
Standards,  issued  by  the  Comptroller  General  of  the  United  States,  the
"Consolidated Audit Guide for Audits of HUD Programs" (the Guide), issued by the
U.S.  Department  of  Housing  and Urban  Development,  Office of the  Inspector
General  and the  Maryland  Department  of Housing  and  Community  Development,
Community  Development  Administration  Audit Guide dated  October  1997.  Those
standards  and the two  guides  require  that we plan and  perform  the audit to
obtain  reasonable  assurance  about  whether  material  noncompliance  with the
requirements referred to above occurred. An audit includes examining,  on a test
basis, evidence about Circle Terrace Associates Limited Partnership's compliance
with those  requirements.  We believe that our audit provides a reasonable basis
for our opinion.

         The results of our audit procedures  disclosed  immaterial instances of
noncompliance  with the requirements  referred to above,  which are described in
the accompanying  Schedule of Findings and Questioned Costs. We considered these
instances  of  noncompliance  in forming  our  opinion on  compliance,  which is
expressed in the following paragraph.


<PAGE>



         In our opinion, Circle Terrace Associates Limited Partnership complied,
in all  material  respects,  with the  specific  program  requirements  that are
applicable  to its  major  HUD-assisted  and CDA  programs  for the  year  ended
December 31, 1997.

         This report is intended  for the  information  of the audit  committee,
management,  the  Department of Housing and Urban  Development  and the Maryland
Community Development Administration. However, this report is a matter of public
record and its distribution is not limited.





Bethesda, Maryland
January 21, 1998


<PAGE>



                                     INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
                                      WITH SPECIFIC REQUIREMENTS APPLICABLE TO
                                         FAIR HOUSING AND NON-DISCRIMINATION

To the Partners
Circle Terrace Associates Limited Partnership

         We have audited the financial  statements of Circle Terrace  Associates
Limited  Partnership  as of and for the year ended  December 31, 1997,  and have
issued our report  thereon dated  January 21, 1998. We have also audited  Circle
Terrace Associates Limited  Partnership's  compliance with specific requirements
applicable  to major  HUD-assisted  and CDA  programs and have issued our report
thereon dated January 21, 1998.

         We have applied  procedures to test Circle Terrace  Associates  Limited
Partnership's   compliance   with  the  Fair   Housing  and   Non-Discrimination
requirements  applicable to its HUD-assisted and CDA programs for the year ended
December 31, 1997.

         Our procedures were limited to the applicable  procedures  described in
the "Consolidated Audit Guide for Audits of HUD Programs" (the Guide), issued by
the U.S.  Department of Housing and Urban  Development,  Office of the Inspector
General.  Our procedures  were  substantially  less in scope than an audit,  the
objective of which is the expression of an opinion on Circle Terrace  Associates
Limited  Partnership's  compliance with the Fair Housing and  Non-Discrimination
requirements. Accordingly, we do not express such an opinion.

         The results of our tests disclosed no instances of  noncompliance  that
are required to be reported herein under the Guide.

         This report is intended  for the  information  of the audit  committee,
management,  the  Department of Housing and Urban  Development  and the Maryland
Community Development Administration. However, this report is a matter of public
record and its distribution is not limited.



Bethesda, Maryland
January 21, 1998


<PAGE>



                                     INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
                                        WITH LAWS AND REGULATIONS APPLICABLE
                                             TO THE FINANCIAL STATEMENTS

To the Partners
Circle Terrace Associates Limited Partnership

         We have audited the financial  statements of Circle Terrace  Associates
Limited  Partnership  as of and for the year ended  December 31, 1997,  and have
issued our report thereon dated January 21, 1998.

         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.

         Compliance with laws, regulations,  contracts, and grants applicable to
Circle Terrace  Associates  Limited  Partnership is the responsibility of Circle
Terrace  Associates  Limited  Partnership's  management.  As part  of  obtaining
reasonable assurance about whether the financial statements are free of material
misstatement,   we  performed  tests  of  Circle  Terrace   Associates   Limited
Partnership's   compliance  with  certain   provisions  of  laws,   regulations,
contracts,  and grants.  However,  the  objective of our audit of the  financial
statements  was not to  provide  an  opinion  on  overall  compliance  with such
provisions. Accordingly, we do not express such an opinion.

         The results of our tests disclosed no instances of  noncompliance  that
are required to be reported herein under Government Auditing Standards.

         However,   the  results  of  our  tests  disclosed  certain  immaterial
instances of noncompliance  that are described in the  accompanying  Schedule of
Findings and Questioned Costs.

         This report is intended  for the  information  of the audit  committee,
management,  the  Department of Housing and Urban  Development  and the Maryland
Community Development Administration. However, this report is a matter of public
record and its distribution is not limited.


Bethesda, Maryland
January 21, 1998


<PAGE>






                                      SCHEDULE OF FINDINGS AND QUESTIONED COSTS

                                                  December 31, 1997

                                  Circle Terrace Associates Limited Partnership
                                         HUD Project No.: 052-44056-LDP
                                           CDA Project No.: 28.04.0010



Finding

    In performing  our lease tests on the tenant  files,  we noted the following
findings:

    1) One lease did not have the manager's signature.

    2) One recertification did not have the manager's signature.

    Recommendation

    Management should strengthen  procedures to ensure that all forms are signed
by the appropriate individuals.


<PAGE>






CLIENT NAME          Circle Terrace Apartments

CLOSING DATE         December 31, 1997
<TABLE>


                                                                                                       ANNUAL AUDIT
                                                                                                      QUESTIONNAIRE
                                                                                                       CDA PROJECTS


    Answers  to these  questions  should be based  upon a review  of  procedures
and/or an actual test of transactions. "NO" answers are indicative of an adverse
condition  which must be described in the audit report  unless the mortgagor has
written permission from DHCD to deviate from the regular mortgage requirements.
<S>                                                                              <C>                   <C>
--------------------------------------------------------------------------------------------------------------------
Examination Item                                                                  Yes, No or N/A        Working
                                                                                 (Not Applicable)        Paper
                                                                                                       Reference
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1.   Mortgage Status
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Are payments on all mortgages current?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Position 1                                                                    Yes                AA-2
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Position 2                                                                    Yes                AA-3
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Position 3                                                                    Yes                AA-3
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Position 4
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Position 5
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     b.  Has the mortgagor  complied with the terms and conditions of the Yes AA
         Regulatory Agreement and/or workout arrangements?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
2.   Books and Records
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Are  a  complete   set  of  books  and  records   maintained   in  a          Yes                 CF
         satisfactory manner?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     b.  Does the mortgagor make frequent  postings (at least monthly) to the          Yes                 CF
         ledger accounts?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
3.   Cash Activities
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Are the cash receipts  deposited in the name of the project in a Yes CF
         bank whose deposits are federally-insured?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     b.  Are security  deposits kept separate and apart from all other funds Yes
         A-9 of the project in an insured institution?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     c.  Does the mortgagor  keep  sufficient  funds in the security  deposit          Yes                DD-1
         account  to  equal  or  exceed  the  aggregate  of  all  outstanding
         obligations to the depositors?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     d.  Does the owner or his/her  management agent have a fidelity bond in Yes
         CF an amount at least  equal to  potential  collections  for two months
         plus the full security  deposit  liability which provides  coverage for
         all employees handling assets of the project?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     e. Did cash disbursements exclude payments for items listed below:
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         1)   Legal expenses incurred in the sale of partnership interest?             Yes                 CF
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         2)   The fee for the  preparation of a partner's,  shareholder's  or          Yes                 CF
              individual's federal, state or local income tax returns?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         3)   Advice to an owner on tax consequences of foreclosure?                   Yes                 CF
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         4)   Reimbursement  to the owners or  affiliates  while the mortgage          N/A
              is  in  default,  or  under  workout   arrangements  for  prior
              advances,   capital  expenditures  and/or  project  acquisition
              costs?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         5)   Letter of credit fees?                                                   N/A
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     f.  Were  distributions made to, or on behalf of, the owners limited to Yes
         A-1 those authorized by the Regulatory  Agreement or the  distributions
         in accordance with prior written  approval of CDA while the project was
         in a "surplus cash" position?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         NOTE
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         1)   Distribution to nonprofit  mortgagor entities or principals may          N/A
              not be permitted by the Regulatory Agreement.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         2)   The use of rental  proceeds  to pay for costs  included  in the          N/A
              mortgagor's costs certification are unauthorized  distributions
              of project income.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     g.  Was  surplus  cash  available  for  payment  on cash  flow debt for the
         Regulatory Agreement and Note?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     h.  Were residual receipts  deposited with the mortgagee within 90 days N/A
         after the close of the mortgagor's annual accounting period?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     i.  Were excess rental  collections in Section 236 projects  remitted to          Yes                 CF
         HUD each month?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     j. Does the mortgagor have a formal collection policy? Yes CF
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     k.  Is the collection policy enforced?                                            Yes                 CF
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     l.  Do tenant accounts  receivable  consist  exclusively of amounts due Yes
         B-1 from other than employees?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     m.  Have  "write-offs"  of  tenants'  accounts  been less than 1% of the          Yes                B-1
         gross rent?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     n.  Are accounts  receivable other than tenants'  receivables  composed Yes
         B-2 exclusively of amounts due from unrelated persons or firms?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     o.  Were there  indications  that  payments  for  services,  supplies or          Yes                 CF
         materials  were not in  excess  of  amounts  normally  paid for such
         services?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     p.  If applicable, were utility allowance payments to residents paid on N/A
         a monthly basis?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
4.   Management Compensation
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Was  compensation  to the  management  agent  limited to the amounts          Yes                 25
         prescribed in the management agreement or amendments thereto?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
5.   Rents and Occupancy
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Is the gross potential  income from apartments equal to or less than          Yes                 10
         that approved by DHCD?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     b.  In subsidized projects, are dwelling unit contract rental rates and Yes
         CF Fair Market  rental  rates in Section 236 projects the same as those
         approved by DHCD?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
6.   DHCD/HUD Subsidy Payments (Section 8/RAP Projects Only)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Were the amounts  requested  from DHCD/HUD  adequately  supported by          Yes                B-2
         the accounting records?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     b. Were subsidy payments received recorded in the proper accounts? Yes B-2
--------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>


                            FINANCIAL STATEMENTS AND
                          INDEPENDENT AUDITORS' REPORT

                            CIRCLE TERRACE ASSOCIATES
                               LIMITED PARTNERSHIP
                         HUD PROJECT NO.: 052-44056-LDP
                           CDA PROJECT NO.: 28.04.0010
                                DECEMBER 31, 1998


<PAGE>






                                            TABLE OF CONTENTS - CONTINUED

                                   Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010

                                                                           PAGE

MORTGAGOR'S CERTIFICATION                                                     6
INDEPENDENT AUDITORS' REPORT                                                  7
FINANCIAL STATEMENTS
BALANCE SHEET                                                                 9
STATEMENT OF OPERATIONS                                                      11
STATEMENT OF PARTNERS' EQUITY (DEFICIT)                                      14
STATEMENT OF CASH FLOWS                                                      15
NOTES TO FINANCIAL STATEMENTS                                                17
SUPPLEMENTAL INFORMATION
ACCOUNTS AND NOTES RECEIVABLE                                                29
DELINQUENT TENANT ACCOUNTS RECEIVABLE                                        29
CONTRIBUTIONS RECEIVABLE                                                     29
MORTGAGE ESCROW DEPOSITS                                                     30
RESERVE FOR REPLACEMENTS                                                     30
RESIDUAL RECEIPTS RESERVE                                                    30
ACCOUNTS PAYABLE                                                             31
ACCRUED EXPENSES                                                             31
LETTERS OF CREDIT                                                            31
LOANS AND NOTES PAYABLE                                                      32
MORTGAGES PAYABLE                                                            32
MORTGAGES PAYABLE FROM SURPLUS CASH                                          32
UNAUTHORIZED DISTRIBUTIONS OF
  PROJECT INCOME TO PARTNERS                                                 32
IDENTITY OF INTEREST COMPANIES AND ACTIVITIES                                33
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND
 RESIDUAL RECEIPTS                                                           34
CHANGES IN FIXED ASSET ACCOUNTS                                              35
DETAIL OF ACCOUNTS - STATEMENT OF OPERATIONS                                 36
OTHER INFORMATION                                                            38
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL                             39
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
   SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD AND
   DHCD-ASSISTED PROGRAMS                                                    41
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
   SPECIFIC REQUIREMENTS APPLICABLE TO
   FAIR HOUSING AND NON-DISCRIMINATION                                       43

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
   LAWS AND REGULATIONS APPLICABLE TO THE
   FINANCIAL STATEMENTS                                                      44
ANNUAL AUDIT QUESTIONNAIRE                                                   45



<PAGE>






                                                  December 31, 1998

                                   Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010


                                                      - 30 -




                                              MORTGAGOR'S CERTIFICATION


         I  hereby  certify  that I have  examined  the  accompanying  financial
statements  and  supplemental   data  of  Circle  Terrace   Associates   Limited
Partnership  and, to the best of my knowledge  and belief,  the same is complete
and accurate.




                                                     GENERAL PARTNER



                           ---------------------------------------
                           Judith Siegel, President                        Date

                           Landex of Maryland, Inc. for Cooperative
                           Associates Limited Partnership as General
                           Partner of Circle Terrace Limited Partnership

                                                     Partnership Employer
                             Identification Number:
                                   05-0461953

                        Telephone Number: (703) 516-6690


<PAGE>





                                          MANAGEMENT AGENT'S CERTIFICATION


         I  hereby  certify  that I have  examined  the  accompanying  financial
statements  and  supplemental   data  of  Circle  Terrace   Associates   Limited
Partnership  and, to the best of my knowledge  and belief,  the same is complete
and accurate.




                                                     MANAGING AGENT

                            Rental Housing Management
                                                       Partnership



                                      ---------------------------------------
                         Eric Richelson                                  Date

David Staley                                         Managing Agent Employer
Property Manager                                       Identification Number:
                                                       13-3580730


<PAGE>



                                            INDEPENDENT AUDITORS' REPORT

To the Partners
Circle Terrace Associates Limited Partnership

         We have  audited  the  accompanying  balance  sheet of  Circle  Terrace
Associates  Limited  Partnership  as of  December  31,  1998,  and  the  related
statements of operations, partners' equity (deficit) and cash flows for the year
then  ended.   These  financial   statements  are  the   responsibility  of  the
partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

         We conducted our audit in accordance with 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 Circle  Terrace
Associates  Limited  Partnership as of December 31, 1998, and the results of its
operations,  the changes in partners'  equity  (deficit)  and cash flows for the
year then ended, in conformity with generally accepted accounting principles.

         The Housing Assistance Payment contracts covering all 303 units expired
on November 30, 1998 and November  30,  1997.  It is uncertain  whether HUD will
renew  these  contracts  under  terms that are  consistent  with the  successful
operations of the project (see note G).

         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 28
through  37 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>






                                                  December 31, 1998

                                   Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010



<PAGE>



         In accordance with Government  Auditing Standards and the "Consolidated
Audit  Guide for Audits of HUD  Programs,"  we have also  issued  reports  dated
January 20,  1999 on our  consideration  of Circle  Terrace  Associates  Limited
Partnership's  internal control and on its compliance with specific requirements
applicable  to  major  HUD  and   DHCD-assisted   programs,   fair  housing  and
non-discrimination,  and  laws  and  regulations  applicable  to  the  financial
statements.





Bethesda, Maryland                                            Federal Employer
January 20, 1999                                          Identification Number:
                                                                 52-1088612


Audit Principal: Lester Kanis



<PAGE>


                                                   BALANCE SHEET

                                                 DECEMBER 31, 1998

                                                      ASSETS



CURRENT ASSETS
1120 Cash - Operstions                                       $          232,306
1125 Cash - Entity                                                       80,337
1130 Tenant accounts receivable                                          15,651
1135 Accounts receivable - HUD                                          160,117
1140 Accounts and notes receivable - operations                           9,477
1145 Accounts and notes receivable - entity                                 860
1200 Miscellaneous prepaid expenses                                      78,039
                                                            -------------------

         Total current assets                                           576,787

DEPOSITS HELD IN TRUST - FUNDED
1191 Tenant deposits                                                     42,824

RESTRICITAD DEPOSITS AND FUNDED RESERVES
1310 Escrow deposits                                        75,274
1320 Reserve for replacements                              586,618
1330 Other reserves                                        233,968
                                                                        895,860
RENTAL PROPERTY
1410 Land                                                1,104,269
1420 Buildings                                          15,271,257
1440 Building and equipment - portable                      31,654
1460 Furnishings                                             8,378
1480 motor vehicles                                         18,340
1490 Miscellaneous fixed assets                             86,167
                                                            ------
                                                        16,520,065
1495 Less accumulated depreciation                       3,501,702
                                                         ---------
                                                                     13,018,363
OTHERASSETS
1520 Intangible assets, net of accumulated
         amortization of $99,195                                        207,725
                                                                     14,741,559

<PAGE>






                                            NOTES TO FINANCIAL STATEMENTS

                                                  December 31, 1998

                                   Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010



                                    LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
2110 Accounts payable                                                    77,228
2121 Accrued payroll taxes payable                                          178
2123 Accrued management fee payable                                      22,482
2131 Accrued interest payable - first mortgage                            2,393
2132 Accrued interest payable - second mortgage                          22,275
2134 Accrued interest payable - other loans/notes                         7,603
2160 Notes payable, current maturities                                    6,257
2170 Mortgage payable - first mortgage, current maturities               99,190
2172 Mortgage payable - second mortgage, current maturities             152,678
2174 Other loans/noted payable, current maturities                       46,346
2190 Miscellaneous current liabilities                                   21,144
2210 Prepaid revenue                                                      2,791

Total Current Liabilities                                               460,565

DEPOSITS LIABILITY
2191 Tenant deposits held in trust(contra)                               39,580

LONG TERM LIABILITIES
2133 Accrued interest payable -
     other loans/notes(surplus cash)                       103,030
2310 Notes payable, net of current maturities                5,648
2311 Notes payable - surplus cash                          550,000
2320 Mortgage payable - first mortgage,
     net of current maturities                           3,404,737
2322 Mortgage payable - second mortgage,
     net of current maturities                           3,188,620
2324 Other loans/notes payable,
     net of current maturities                           1,981,365

                                                                      9,233,400
CONTINGENCY                                                                   -
3130 PARTNERS' EQUITY (DEFICIT)                                       5,008,014
                                                                   $ 14,741,559
RENTAL REVENUE
5120 Rent revenue - gross potential                  $     335,564
5121 Tenant assistance payments                          1,958,686
                                                         ---------

     Total rental revenue                                            $2,294,250

VACANCIES
5220 Apartments                                            (13,871)
5250 Rental concessions                                     (2,830)
                                                           -------

     Total vacancies                                                    (16,701)

     Net rental revenue                                               2,277,549

FINANCIAL REVENUE
5410 Financial revenue - project operations                  8,469
5440 Revenue from investment - replacement reserve          15,228
                                                            ------

     Total financial revenue                                             23,697

OTHER REVENUE
5910 Laundry and vending                                    12,848
5920 Tenant charges                                          5,917
5990 Miscellaneous revenue                                   1,575
                                                             -----
     Total other revenue                                                 20,340

     Total revenue                                                    2,321,586



<PAGE>


ADMINISTRATIVE EXPENSES
6210 Advertising and marketing                               3,199
6250 Other renting expenses                                  1,749
6310 Office salaries                                       136,160
6311Office expenses                                         49,522
6320 Management fee                                        130,164
6331 Administrative rent free unit                           5,661
6340 Legal expense - project                                15,346
6350 Auditing expense                                        9,600
6351 Bookkeeping fees/accounting service                    16,368
6370 Bad debts                                              10,697
6390 Miscellaneous administrative expenses                  43,940
                                                            ------

Total administrative expenses                                           422,406

UTILITIES EXPENSE
6450 Electricity                                            28,145
6451 Water                                                  25,465
6452 Gas                                                    87,218

Total utility expense                                                   140,828


OPERATING AND MAINTENANCE EXPENSES
6510 Payroll                                               142,202
6515 Supplies                                               35,595
6520 Contracts                                              88,217
6525 Garbage and trash removal                              32,202
6530 Security payroll/contract                             139,709
6546 Heating/cooling repairs and maintenance                13,319
6548 Snow removal                                              571
6570 Vehicle and maintenance equipment operation and repairs26,639
6590 Miscellaneous operating and maintenance expenses       70,148
                                                            ------

Total operating and maintenance expenses                                548,602
TAXES AND INSURANCE
6710 Real estate taxes                                     126,078
6711 payroll taxes                                          26,199
6720 Property and liability insurance                       83,542
6723 Heath insurance and other employee benefits            21,323
                                                            ------
Total taxes and insurance                                               257,142

FINANCIAL EXPENSES
6820 Interest on mortgage payable                          395,638
6830 Interest on notes payable - long-term                   1,317
6850 Mortgage insurance premium/service charge              43,848
                                                            ------

Total financial expenses                                                440,803

DEPRECIATION AND AMORTIZATION
6600 Depreciation expense                                  571,976
6610 Amortization expense                                   14,004
                                                            ------
Total depreciation and amortization                                     585,980

CORPORATE OR MORTGAGOR ENTITY REVENUE AND EXPENSES
7140 Interest income                                       (12,945)
7141 Interest on notes payable                              22,000
7190 Other (revenue)/expenses                                  870
                                                               ---

Total corporate or mortgagor entity revenue and expenses                  9,925
                                                                          -----

Total expenses                                                        2,405,686
Net income (loss)                                                       (84,100)

See notes to financial statements
<PAGE>



                             General partners    Limited partners       Total

Partners' equity (deficit),
    December 31, 1997            $217,228          $4,874,886        $5,092,114

Net income (loss)                    (841)            (83,259)          (84,100)
                                    -----             -------          --------

Partners' equity (deficit),
      December 31, 1998         $ 216,387         $ 4,791,627       $ 5,008,014
                                ---------         -----------       -----------
See notes to financial statements
<PAGE>


Cash flows from operating activities
Rental receipts                                                  $    2,277,573
Interest receipts                                                        23,697
Other operating receipts                                                 10,003
Administrative expenses paid                                           (129,954)
Management fees paid                                                   (130,164)
Utilities paid                                                         (140,167)
Salaries and wages paid                                                (418,071)
Operating and maintenance paid                                         (222,341)
Real estate taxes paid                                                 (216,629)
Property insurance paid                                                 (74,523)
Net tenant security deposits received (paid)                              3,150
Other operating expenses paid                                           (27,240)
Interest paid on mortgages                                             (397,965)
Interest paid on notes                                                   (1,482)
Mortgage insurance premium paid                                         (43,261)
Entity expenses received (paid)
Interest income                                                          12,945
Professional fees                                                          (870)
Interest expense                                                        (22,000)
                                                                       --------
Net cash provided by (used in) operating activities                     502,701

Cash flows from investing activities
Net withdrawals from mortgage escrows                                    33,718
Net deposits to reserve for replacements                                (99,768)
Net deposits to other reserves                                         (109,975)
Net purchases of fixed assets                                          (121,929)
                                                                      ---------
Net cash provided by (used in) investing activities                    (297,954)

Cash flow from financing activities
Mortgage principal payments                                            (284,552)
                                                                      ---------
Net cash provided by (used in) financing activities                    (284,552)
                                                                      ---------
NET INCREASE (DECREASE) IN CASH                                         (79,805)
Cash, beginning                                                         392,447
                                                                        -------
Cash, end                                                       $       312,642
                                                                ---------------

See notes to financial statements
<PAGE>


Reconciliation of net income (loss) to net
Cash provided by (used in) operating activities
Net income (loss)                                                 $     (84,100)
                                                                  -------------
Adjustments to reconcile net income (loss) to net
Cash provided by (used in) operating activities
Depreciation                                                            571,976
Amortization                                                             14,004
Changes in asset and liability accounts
(Increase) decrease in assets
Tenant account receivable                                                 3,929
Miscellaneous prepaid expenses                                           10,195
Tenant security deposits funded                                          (1,990)
Increase (decrease) in liabilities
Accounts payable                                                         65,069
Accrued liabilities                                                     (81,146)
Accrued interest payable                                                 (2,492)
Tenant security deposits held in trust                                    5,140
Prepaid revenue                                                           2,116
                                                                          -----

Total adjustments                                                       586,801

Net cash provided by (used in) operating activities                   $ 502,701
                                                                      ---------



<PAGE>



NOTE A - ORGANIZATION



    Circle Terrace Associates  Limited  Partnership was organized under the laws
    of the State of Maryland on March 28, 1990, for the purpose of acquiring and
    operating a rental housing project under Section 236 of the National Housing
    Act. The project consists of 303 units located in Lansdowne,  Maryland,  and
    is currently operating under the name of Circle Terrace Apartments.

    Cash distributions are limited by agreements between the partnership and the
    United States Department of Housing and Urban Development (HUD) to an annual
    amount of $30,340 per year to the extent of surplus  cash as defined by HUD.
    Undistributed  amounts are  cumulative  and may be distributed in subsequent
    years if  future  operations  provide  surplus  cash in  excess  of  current
    requirements.

    Each  building of the project has qualified  and been  allocated  low-income
    housing credits  pursuant to Internal Revenue Code Section 42 ("Section 42")
    which  regulates the use of the project as to occupant  eligibility and unit
    gross rent, among other requirements. Each building of the project must meet
    the provisions of these  regulations  during each of 15 consecutive years in
    order to remain  qualified  to receive  the  credits.  In  addition,  Circle
    Terrace Associates Limited  Partnership has executed an Extended  Low-income
    Housing  Agreement/Land  Deed   Restriction/Extended  Use  Commitment  which
    requires the utilization of the project pursuant to Section 42 for a minimum
    of 30 years, even after the disposition of the project by the partnership.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Use of Estimates

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


<PAGE>






                                      NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                                  December 31, 1998

                                   Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    Rental Property

    Rental property is recorded at cost. Depreciation is provided for in amounts
    sufficient to relate the cost of depreciable assets to operations over their
    estimated  service  lives  using the  straight-line  method over a 27.5-year
    life.  Personal  property is recorded  at cost and is  depreciated  over its
    estimated  service  life of five to seven years using  accelerated  methods.
    Improvements are capitalized, while expenditures for maintenance and repairs
    are charged to expense as incurred.  Upon disposal of depreciable  property,
    the  appropriate  property  accounts  are reduced by the  related  costs and
    accumulated  depreciation.  The resulting  gains and losses are reflected in
    the statement of operations.

    Intangible Assets and Amortization

    Mortgage costs are amortized over the term of the respective  loan using the
effective interest method.

    Provision for Doubtful Accounts

    The  partnership  considers  accounts  receivable  to be fully  collectible;
    accordingly,  no  allowance  for doubtful  accounts is required.  If amounts
    become  uncollectible,   they  will  be  charged  to  operations  upon  such
    determination.

    Income Taxes

    No  provision  or  benefit  for  income  taxes  has been  included  in these
    financial  statements since taxable income or loss passes through to, and is
    reportable by, the partners individually.

    Rental Income

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


<PAGE>


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    SFAS No. 121

    The partnership has implemented  Statement of Financial Accounting Standards
    No. 121 - Accounting for the Impairment of Long-Lives  Assets which requires
    the partnership under certain  circumstances to receive long-lived assets to
    determine  if the  carrying  value  exceeds the fair value.  If the carrying
    value  exceeds  the fair value then  recorded  amounts of the assets will be
    reduced to their fair value.

NOTE C - MORTGAGES PAYABLE

    First Mortgage

    The  partnership  is obligated  under the terms of a mortgage  note which is
    insured by the Federal  Housing  Administration  (FHA) and bears interest at
    the rate of 7%, less a varying  interest  subsidy in the  current  amount of
    $18,052 per month. Monthly payments of principal and interest in the reduced
    amount of $10,564 are due  through  maturity  in  February  2017.  The total
    interest  subsidy of  $216,628  is  reflected  as a  reduction  of  interest
    expense.  Principal  and  accrued  interest  due at  December  31,  1998 are
    $3,503,927 and $2,393, respectively.

    Under  agreements  with the  mortgage  lender and FHA,  the  partnership  is
    required  to  make  monthly  escrow   deposits  for  taxes,   insurance  and
    replacement  of  project  assets,  and  is  subject  to  restrictions  as to
    operating policies, rental charges, operating expenditures and distributions
    to partners.

    Second Mortgage

    The  partnership  is  obligated  under the terms of a  mortgage  note in the
    original amount of $4,000,000, which is insured by the Maryland Housing Fund
    (MHF) payable to Crestar of Richmond, Virginia, Inc. The note bears interest
    at the rate of 8%. Monthly  payments of principal and interest in the amount
    of $34,645 are due through maturity in December 2011.  Principal and accrued
    interest due at December 31, 1998 are $3,341,298 and $22,275, respectively.


<PAGE>


NOTE C - MORTGAGES PAYABLE (Continued)

    Third Mortgage

    The  partnership  is  obligated  under the terms of a  mortgage  note in the
    original  amount of  $2,227,330  payable to the  Department  of Housing  and
    Community  Development  of the  State of  Maryland  (CDA).  The  note  bears
    interest at 4.5%.  Monthly payments of principal and interest of $11,373 are
    due through July 1, 2023. Principal and accrued interest due at December 31,
    1998 are $2,027,711 and $7,603, respectively.

    The liability of the  partnership  under the terms of all of these mortgages
    is  limited  to the  underlying  value of the real  estate  collateral  plus
    deposits held by the lenders.

    Aggregate annual  maturities of mortgages  payable for each of the next five
    years and thereafter are as follows:

--------------------------------------------- -- ----------------
                           December 31, 1999  $          298,214
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        2000             318,873
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        2001             343,827
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        2002             369,264
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        2003             396,638
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                  Thereafter           7,146,120
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------

--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                              $        8,872,936
--------------------------------------------- -- ----------------

NOTE D - NOTES PAYABLE

    The partnership is obligated under the terms of an unsecured promissory note
    payable to Baltimore County,  Maryland.  Interest accrues at the rate of 4%.
    Annual  interest  payments  commenced  January 1, 1996.  Annual  payments of
    principal  will be due  commencing  January  1, 2000 and will  extend for 30
    years  through  maturity on December 31, 2030.  Payments may be made only to
    the extent of surplus cash as defined by HUD. Principal and accrued interest
    due at December 31, 1998 are $550,000 and $103,030, respectively.


<PAGE>


NOTE D - NOTES PAYABLE (Continued)

    The  partnership  is  obligated  under the terms of a note  payable  for the
    purchase of a truck.  The note bears interest at 8.75% and requires  monthly
    payments of principal and interest of $588 through maturity in October 2000.
    The amount payable at December 31, 1998 is $11,905.

    Aggregate annual maturities of notes payable for each of the next five years
and thereafter are as follows:

--------------------------------------------- -- ----------------
                           December 31, 1999  $            6,257
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        2000               5,648
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        2001                   -
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        2002                   -
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                        2003                   -
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                  Thereafter             550,000
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------

--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
                                              $          561,905
--------------------------------------------- -- ----------------

NOTE E - RELATED PARTY TRANSACTIONS

    Working Capital Advances

    The general  partner is obligated to make  working  capital  advances to the
    partnership  as needed,  up to an aggregate of $100,000.  Such  advances are
    noninterest  bearing  and can be repaid  out of  available  net cash flow as
    defined in the partnership  agreement.  No such advances were required as of
    December 31, 1998.

    In the event cash flow does not provide sufficient funds to pay the investor
    limited  partner its minimum  distribution,  such  amount  required  will be
    advanced by the general  partner and will be  considered  a project  expense
    loan to be paid from surplus cash after required distributions as defined in
    the partnership agreement.

    Insurance

    The sole  shareholder of an affiliate of the general  partner  provided debt
    financing for the  capitalization of LaMere Associates,  Inc.  (LaMere).  In
    connection  with such debt financing,  the  shareholder  received 20% of the
    stock of LaMere.  LaMere was paid premiums in connection  with the following
    insurance  coverage  provided to the  partnership:  property and  liability,
    fidelity bond and auto.  In connection  with such  insurance  coverage,  the
    partnership  incurred  $83,542 in premiums  for the year ended  December 31,
    1998.


<PAGE>


NOTE E - RELATED PARTY TRANSACTIONS (Continued)

    Shared Project Payroll Costs

    The site  superintendent  was shared  with  another  project in the area and
    payroll costs were allocated based on time spent on each project.

    Computer Services

    In  accordance  with HUD  Regulations  4381.5  Rev-2,  Paragraph  6.38,  the
    partnership  uses the services of a computer  consultant  company to provide
    the  following  services:  purchase and install  personal  computers and the
    related  equipment and software for the  project's  rental  office;  provide
    training and technical support,  and consult on software  upgrades.  Dynamic
    Information Services, Inc. (DIS), which is owned by a relative of an officer
    of the  management  company,  is a licensed  representative  of Project Data
    Systems,  Inc., a nationally  known provider of computer system software for
    the subsidized  housing industry.  DIS derives 40% of its consulting service
    revenues  from  third-party  clients  not  affiliated  with  the  management
    company.  In 1998, the partnership paid DIS $1,710 for technical support and
    training services based on billable hours.

    Laundry Lease

    The partnership  has entered into a lease agreement with Moonbeam  Equipment
    and  Communications,  LLC ("Moonbeam"),  an affiliate of the general partner
    and  management  agent,  which  permits  Moonbeam to install  coin  operated
    laundry equipment for use by the tenants.

    The partnership  retains 55% of the income on the coin operated equipment as
    reimbursement of utility and janitorial expenses incurred by the partnership
    to maintain the common area laundry  facilities;  the balance is remitted to
    Moonbeam.  The lease  agreement  expires in January  2023 and,  among  other
    terms,  states that expenses  relating to the  maintenance and repair of the
    equipment are the obligation of Moonbeam.

    Moonbeam  earned  $9,591 from the proceeds of the laundry  room  collections
    during 1998. As of December 31, 1998, Moonbeam owes the partnership $860 for
    maintenance  expenses  relating  to  installed  equipment,  which  was  paid
    subsequent to December 31, 1998.


<PAGE>


NOTE F - MANAGEMENT FEE

    The  property  is  managed  by an  affiliate  of the  general  partner.  The
    management  fee is based on a  charge  of  $35.80  per unit per  month.  The
    management  agent  also  receives  fees of  $4.50  per unit  per  month  for
    accounting  services provided to the partnership.  Management and accounting
    fees  charged  to   operations   during  1998  were  $130,164  and  $16,368,
    respectively,  of which $22,482 of management fee is payable at December 31,
    1998.

NOTE G - HOUSING ASSISTANCE PAYMENT (HAP) CONTRACT AGREEMENTS

    HUD has contracted with the partnership  under the United States Housing Act
    of 1937 to make housing assistance  payments to the partnership on behalf of
    qualified  tenants.  The terms of the contract covering 142 units expired on
    November  30, 1998 and the contract  covering 161 units  expired on November
    30, 1997. The contracts do not have renewal options.

    Under the  Multifamily  Assisted  Housing and Reform and  Affordability  Act
    (MAHRAA)  of 1997,  Congress  set  forth  the  legislation  for a  permanent
    "mark-to-market"  program  and  provided  for  permanent  authority  for the
    renewal of Section 8 contracts. On September 11, 1998, HUD issued an interim
    rule to provide  clarification of the  implementation of the  mark-to-market
    program.  Owners with Section 8 contracts  expiring after September 30, 1998
    are subject to the provisions of MAHRAA. As such, the partnership may choose
    to either opt out of the Section 8 program,  request mortgage  restructuring
    and renewal of the Section 8 contract,  or request  renewal of the Section 8
    contract without mortgage restructuring. Each option contains a specific set
    of rules and  procedures  that must be  followed in order to comply with the
    requirements  of MAHRAA.  As of the date of the report,  the partnership has
    extended both contracts from October 1, 1998 through September 30, 1999.

    It is uncertain  whether HUD will renew these contracts under terms that are
    consistent  with the  successful  operation of the  project.  The project is
    economically  dependent  upon the rental  income  received  from both of its
    agreements.  If HUD were not to extend either one, the  project's  operating
    cash flow would be adversely affected.



<PAGE>


NOTE H - PARTNERS' CAPITAL CONTRIBUTIONS

    The  partnership has one general  partner - Cooperative  Associates  Limited
    Partnership  and two  limited  partners - SLP,  Inc.  (the  special  limited
    partner)  and Boston  Financial  Qualified  Housing  Tax  Credits  L.P. V, a
    Limited Partnership (the investor limited partner).  The general partner has
    made  capital  contributions  of $413,562.  SLP,  Inc. is required to make a
    capital  contribution of $10. The investor  limited partner has made capital
    contributions totaling $5,615,234.

NOTE I - CONTRACT WITH BALTIMORE COUNTY (IN LIEU OF TAXES)

    The  partnership  has  entered  into an  agreement  with  Baltimore  County,
    Maryland, whereby the partnership is to pay the County $162.50 per apartment
    unit per year (the  minimum  payment) in lieu of real estate  taxes.  To the
    extent there is net cash flow, as defined in the  agreement,  such amount is
    to be applied  toward  additional  payments.  The  minimum  payment has been
    increased 10% annually.  The amount  incurred during 1998 under the terms of
    this  agreement  was  $58,329.  This amount is included  with other city and
    county real estate  taxes in the  statement  of  operations.  The County has
    advised  the  partnership  that  $239,359  is due for  additional  taxes and
    interest  applicable  to 1992  through  1995  and has  placed  a lien on the
    property.  The  partnership  believes  that  such  payments  are  not due in
    accordance with the P.I.L.O.T.  agreement. Such amount has not been recorded
    until this matter is resolved.

NOTE J - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS

    All profits and losses are  allocated  1% to the general  partner and 99% to
the investor limited partner.

    Cash flow, as defined in the partnership agreement,  is to be distributed as
follows:

    1.  99% to the investor  limited partner and 1% to the general partner until
        the  investor  limited  partner  has  received  distributions,   in  the
        aggregate, equal to the cumulative priority distribution.

    2. To the repayment of any project expense loans.


<PAGE>


NOTE J - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS (Continued)

    3.  To the general  partner  until it has  received  cumulatively  an amount
        equal to the cumulative  amount paid to the investor  limited partner as
        defined above.

    4.  50% to the general partner and 50% to the investor limited partner.

    Gain, if any,  from a sale,  exchange or other  disposition  is allocable as
follows:

    1.  To all partners having negative balances in their capital accounts prior
        to the  distribution of any sale or refinancing  proceeds,  an amount of
        such gain to increase their negative balance to zero.

    2.  To each partner until the positive  capital  account balance is equal to
        the  amount  of cash  available  for  distribution  as a  result  of the
        transaction, as defined in the partnership agreement.

    Loss from a sale is allocable as follows:

    1.  To  the  partners  in  proportion  to  their  positive  capital  account
        balances.  In the event  the loss is less  than the sum of the  positive
        capital  accounts,  the loss is to be allocated  such that the resulting
        capital  account balance is as near as possible to the amount of cash to
        be distributed as a result of the transaction.

    2.  1% to the general partner and 99% to the investor limited partner.

NOTE K - TAXABLE LOSS

    A reconciliation  of the financial  statement net loss to the income tax net
    loss of the partnership for the year ended December 31, 1998 is as follows:

Financial statement net loss                                  $         (84,100)
Excess depreciation for income tax purposes                             (13,329)
Prepaid rent                                                              2,791

Income net tax loss                                           $         (94,638)
                                                             ==================


<PAGE>


NOTE L - INVESTMENT IN REAL ESTATE

    A reconciliation of the basis of the investment in real estate for financial
    reporting  purposes to that for income tax  purposes as of December 31, 1998
    is as follows:

Investment in real estate for financial reporting            $       13,018,363
Excess accumulated depreciation for income tax purposes                 (53,042)
Interest expense portion of subsidy capitalized for
income tax purposes                                                     177,317

Investment in real estate for income tax purposes            $       13,142,638
                                                             ==================

NOTE M - CONCENTRATION OF CREDIT RISK

    The partnership maintains its cash balances and escrow in several banks. The
    balances are insured by the Federal Deposit Insurance  Corporation (FDIC) up
    to $100,000 per bank. As of December 31, 1998, the uninsured  portion of the
    cash balances held at two banks was $285,780.

NOTE N - CONTINGENCY

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

    Baltimore  County has  advised  the  partnership  that  $239,359  is due for
    additional taxes and interest applicable to 1992 through 1995 and has placed
    a lien on the property.  The partnership believes that such payments are not
    due in  accordance  with the P.I.L.O.T  agreement.  Such amount has not been
    recorded until this matter is resolved.



<PAGE>


NOTE O - YEAR 2000 ISSUE (UNAUDITED)

    The Managing  Agent/General Partner has assessed the partnership's  exposure
    to date  sensitive  computer  software  programs  that may not be  operative
    subsequent  to 1999 and has  implemented  a  requisite  course  of action to
    minimize  Year 2000  risk and  ensure  that  neither  significant  costs nor
    disruption of normal business operations are encountered.  However,  because
    there is no guarantee that all systems of outside  vendors or other entities
    affecting  the  partnership's  operation  will be Year 2000  compliant,  the
    partnership remains susceptible to consequences of the Year 2000 Issue.


<PAGE>




                                              SUPPLEMENTAL INFORMATION

                                       SUPPORTING DATA REQUIRED BY HUD AND CDA


<PAGE>






                                              SUPPLEMENTAL INFORMATION

                                       SUPPORTING DATA REQUIRED BY HUD AND CDA

                                                  December 31, 1998

                                   Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010


                                                      - 54 -

ACCOUNTS AND NOTES RECEIVABLE (OTHER THAN FROM REGULAR TENANTS)
<TABLE>
     <S>      <C>                             <C>                 <C>         <C>                   <C>

     ---------------------------------------------------------------------------------------------------------------
              Name of borrower                Original date         Terms      Original amount       Balance due
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     U.S. Department of Housing and         Oct. - Nov. 1998       Demand    $          160,117  $          160,117
         Urban Development
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     -----------------------------------------------------------------------
     -----------------------------------------------------------------------
     Travelers                              Sept. - Oct. 1998      Demand    $           28,312  $            9,477
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------
     --------------------------------------------------------------------------
     Moonbeam                                   Dec. 1998          Demand    $              860  $              860
     ---------------------------------------------------------------------------------------------------------------

DELINQUENT TENANT ACCOUNTS RECEIVABLE

     ---------------------------------------------------------------------------------------------------------------
                                                                                    Number of           Amount
                                                                                     tenants           past due
                                                                                  ----------------------------------
                                                                                  ----------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent 30 days                                                                      41  $            6,775
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent 31-60 days                                                                    9               1,356
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent 61-90 days                                                                   13               2,131
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent over 90 days                                                                 19               5,389
     -----------------------------------------------------------------------------              --------------------
     -----------------------------------------------------------------------------              --------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
                                                                                                 $           15,651
     -----------------------------------------------------------------------------              --------------------

CONTRIBUTIONS RECEIVABLE

     ---------------------------------------------------------------------------------------------------------------
     SLP, Inc.                                                                                   $               10
     ---------------------------------------------------------------------------------------------------------------

</TABLE>


<PAGE>






                                        SUPPLEMENTAL INFORMATION - CONTINUED

                                       SUPPORTING DATA REQUIRED BY HUD AND CDA

                                                  December 31, 1998

                                   Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010

MORTGAGE ESCROW DEPOSITS

     --------------------------------------------------------------------------
     Estimated amount required as of December 31, 1998, for future payment of:
                                                                            ---
                                                                            ---
         City, state and county taxes (P.I.L.O.T)            $           38,632
     --------------------------------------------------------------------------
     --------------------------------------------------------------------------
         Property insurance                                              31,136
     --------------------------------------------------------------------------
     --------------------------------------------------------------------------
         Mortgage insurance                                               8,826
     --------------------------------------------------------------------------
     --------------------------------------------------------------------------

     --------------------------------------------------------------------------
     --------------------------------------------------------------------------
                                                                         78,594
     --------------------------------------------------------------------------
     --------------------------------------------------------------------------
     Amount on deposit in deficient of estimated requirements            (3,320)
     --------------------------------------------------------------------------
     --------------------------------------------------------------------------

     --------------------------------------------------------------------------
     --------------------------------------------------------------------------
     Total confirmed by mortgagee                            $           75,274
     --------------------------------------------------------------------------

RESERVE FOR REPLACEMENTS

    In accordance  with the provisions of the regulatory  agreement,  restricted
    cash is held by  Mellon  Mortgage  Company  to be used  for  replacement  of
    property with the approval of HUD as follows:

         ----------------------------------------------------------------------
         Balance at December 31, 1997                        $          486,850
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Monthly deposits
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
             $7,045 x 12                                                 84,540
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Interest earned                                                 15,228
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Balance at December 31, 1998, confirmed by mortgagee        $  586,618
         ----------------------------------------------------------------------

RESIDUAL RECEIPTS RESERVE

                                                        NONE



<PAGE>


ACCOUNTS PAYABLE

    ---------------------------------------------------------------------------
    Payable within 30 days                                   $           77,228
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------
    Payable within 31-60 days                                                 -
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------
    Payable within 61-90 days                                                 -
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------
    Payable more than 90 days                                                 -
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------
            Balance                                          $           77,228
    ---------------------------------------------------------------------------

ACCRUED EXPENSES
<TABLE>
    <S>       <C>                       <C>               <C>                      <C>            <C>

    ----------------------------------------------------------------------------------------------------------------
              Description                Basis for              Owed to              Date due      Amount accrued
                                          accrual
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------

    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Payroll taxes                          12/98              F.W.I./FICA              1/99      $              178
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Management fee                         12/98            Rental Housing             1/99      $           22,482
                             Management Partnership
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Interest - first mortgage              12/98                  HUD                  1/99      $            2,393
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Interest - second mortgage             12/98             Crestar Bank              1/99      $           22,275
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Interest - Baltimore County note       12/98           Baltimore County        Surplus cash  $          103,030
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Interest - third mortgage              12/98           State of Maryland           1/99      $            7,603
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Audit fee                              12/98          Reznick, Fedder and          2/99      $            3,536
                                    Silverman
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Water and sewer                        12/98           City of Baltimore           2/99      $            6,392
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Utility reimbursement                  12/98                Tenants                1/99      $           10,821
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Payroll                                12/98               Employees               1/99      $              395
    ----------------------------------------------------------------------------------------------------------------

</TABLE>

LETTERS OF CREDIT

                                                        NONE


<PAGE>


LOANS AND NOTES PAYABLE (OTHER THAN MORTGAGES)
<TABLE>

        <S>           <C>          <C>          <C>                <C>         <C>                  <C>
      ---------------------------------------------------------------------------------------------------------------
        Creditor      Interest     Collateral    Date incurred     Terms       Original amount       Balance due
                         rate
     -----------------------------------------------------------------------   -----------------   -----------------
     -----------------------------------------------------------------------   -----------------   -----------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Baltimore           4.0%       Unsecured        11/90        40 yrs     $          550,000  $          550,000
         County,
         Maryland
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------
     --------------------------------------------------------------------------
     GMAC               8.75%         Truck          11/97         3 yrs     $           18,096  $           11,905
     ---------------------------------------------------------------------------------------------------------------

MORTGAGES PAYABLE

    ---------------------------------------------------------------------------------------------------------------
                  Creditor                               Terms                 Original amount      Balance due
    ------------------------------------------------------------------------  ------------------  -----------------
    ------------------------------------------------------------------------  ------------------  -----------------

    ---------------------------------------------------------------------------------------------------------------
    ---------------------------------------------------------------------------------------------------------------
    HUD                                            $10,564 per month         $        4,034,207  $       3,503,927
    ---------------------------------------------------------------------------------------------------------------
    ---------------------------------------------------------------------------------------------------------------

    ---------------------------------------------------------------------------                ----
    ---------------------------------------------------------------------------                ----
    Crestar of Richmond, Virginia, Inc.            $34,645 per month         $        4,000,000  $       3,341,298
    ---------------------------------------------------------------------------------------------------------------
    ---------------------------------------------------------------------------------------------------------------

    ---------------------------------------------------------------------------                ----
    ---------------------------------------------------------------------------                ----
    Department of Housing and Community            $11,373 per month         $        2,227,330  $       2,027,711
        Development of the State of
        Maryland
    ---------------------------------------------------------------------------------------------------------------
</TABLE>

MORTGAGES PAYABLE FROM SURPLUS CASH

                                                        NONE

UNAUTHORIZED DISTRIBUTIONS OF PROJECT INCOME TO PARTNERS

                                                        NONE



<PAGE>


IDENTITY OF INTEREST COMPANIES AND ACTIVITIES
<TABLE>
     <S>                                       <C>                              <C>               <C>

     --------------------------------------------------------------------------------------------------------------
             Company name                       Services rendered                Amount paid       Amount payable
     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------
     Rental Housing Management                                                     $  130,164       $      22,482
         Partnership
                                               Property management
     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------
     Rental Housing Management                                                     $   16,368       $           -
         Partnership
                                                Accounting fees
     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------
     LaMere Associates, Inc.                                                 $           83,542  $               -
                                      Insurance coverage
     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------
     Dynamic Information              Equipment, software, technical         $            1,710  $               -
         Services, Inc.               support and training services
     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------
     --------------------------------------------------------------------------
     Moonsbeam Equipment and          Laundry equipment                      $            8,731  $               -
         Communications, LLC
     --------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>






                              SUPPLEMENTAL INFORMATION - CONTINUED

                             SUPPORTING DATA REQUIRED BY HUD AND CDA

                                  Year ended December 31, 1998
                                   Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010

COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND RESIDUAL RECEIPTS

-------------------------------------------------------------------------------
Part A - Compute Surplus Cash
                                                          ---------------------
Cash (Accounts 1120, 1170 and 1191 less 2105)                $          275,130
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Tenant subsidy vouchers due for period covered by financial statements  160,117
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Other (describe in detail)                                                    -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
        Total cash                                                      435,247
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Accrued mortgage interest payable                                        32,271
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Delinquent mortgage principal payments                                        -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Delinquent deposits to reserve for replacements                               -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Accounts payable (due within 30 days)                                    77,228
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Loans and notes payable (due within 30 days)                                  -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Deficient tax, insurance or MIP escrow deposits                           3,320
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Accrued expenses (not escrowed)                                          43,804
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Prepaid revenue (Account 2210)                                            2,791
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Tenant security deposits liability (Account 2191)                        39,580
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Other current obligations (describe in detail)                                -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
    Contracted maintenance                                    $         208,950
--------------------------------------------------------                   ----
-------------------------------------------------------------              ----
    Required maintenance                                                270,360
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
        Less total current obligations                                  469,354
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
        Surplus cash (deficiency)                             $         (34,107)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
------------------------------------------------------------------------------
Part B - Compute Distributions to Owners and Required Deposit to
           Residual Receipts
Surplus cash                                                 $             NONE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Limited dividend projects
                                                          ---------------------
                                                          ---------------------
Annual distribution earned during fiscal period covered by the           30,340
statements
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Distribution accrued and unpaid as of the end of the prior fiscal period422,419
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Distributions and entity expenses or paid during fiscal period covered  (22,000)
    by the statements
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Amount remaining as distribution earned but unpaid                      430,759
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Amount available for distribution during next fiscal period  $                -
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Deposit due residual receipts reserve                        $             NONE
-------------------------------------------------------------------------------

    Facsimile form HUD-93486


<PAGE>


CHANGES IN FIXED ASSET ACCOUNTS
<TABLE>
    <S>                               <C>                     <C>               <C>              <C>

    ----------------------------------------------------------------------------------------------------------------
                                                                          Assets
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
                                       Balance 12/31/97       Additions          Deductions       Balance 12/31/98
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------

    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Land                              $       1,104,269  $                -  $                -  $        1,104,269
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Buildings                                15,248,985              22,272                   -          15,271,257
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Building equipment - portable                18,164              13,490                   -              31,654
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Furnishings                                   8,378                   -                   -               8,378
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Motor vehicles                               18,340                                       -              18,340
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Miscellaneous fixed assets                        -              86,167                   -              86,167
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------

    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
                                      $      16,398,136  $          121,929  $                -  $       16,520,065
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------

    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Accumulated depreciation          $       2,929,726  $          571,976  $                -  $        3,501,702
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------

    ------------------------------------               ----                ----                ----
    ------------------------------------               ----                ----                ----
    Total net book value                                                                         $       13,018,363
    ------------------------------------               ----                ----                ---------------------
</TABLE>

    Fixed Asset Detail

        Additions to Buildings Account


           --------------------------------------------------------------------
                            Item and quantity                            Amount
           --------------------------------------------------------------------

           --------------------------------------------------------------------
           --------------------------------------------------------------------

           Railings                                    $                  5,304
           --------------------------------------------------------------------
           Lighting fixtures                                              9,373
           --------------------------------------------------------------------
           Drains                                                         7,595
           --------------------------------------------------------------------
           --------------------------------------------------------------------

           --------------------------------------------------------------------
           --------------------------------------------------------------------
                                                       $                 22,272
           --------------------------------------------------------------------



<PAGE>


CHANGES IN FIXED ASSET ACCOUNTS (Continued)

    Fixed Asset Detail (Continued)

        Additions to Building Equipment - Portable Account

           --------------------------------------------------------------------
                            Item and quantity                            Amount
           --------------------------------------------------------------------
           --------------------------------------------------------------------

           --------------------------------------------------------------------
           --------------------------------------------------------------------
           Security camera equipment                   $                  5,750
           --------------------------------------------------------------------
           --------------------------------------------------------------------
           Computer cabinets                                              7,740
           --------------------------------------------------------------------
           --------------------------------------------------------------------

           --------------------------------------------------------------------
           --------------------------------------------------------------------
                                                       $                 13,490
           --------------------------------------------------------------------

        Additions to Miscellaneous Fixed Assets Account

           --------------------------------------------------------------------
                            Item and quantity                            Amount
           --------------------------------------------------------------------
           --------------------------------------------------------------------

           --------------------------------------------------------------------
           --------------------------------------------------------------------
           Landscaping shrubs, trees                   $                 33,944
           --------------------------------------------------------------------
           --------------------------------------------------------------------
           Sidewalk replacement                                          52,223
           --------------------------------------------------------------------
           --------------------------------------------------------------------

           --------------------------------------------------------------------
           --------------------------------------------------------------------
                                                       $                 86,167
           --------------------------------------------------------------------

DETAIL OF ACCOUNTS - STATEMENT OF OPERATIONS

    MISCELLANEOUS ADMINISTRATIVE EXPENSES (ACCOUNT NO. 6390)

        -----------------------------------------------------------------------
        Payroll preparation                                  $            1,668
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------
        License and fees                                                  6,516
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------
        Travel                                                            3,129
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------
        Resident services                                                19,000
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------
        Miscellaneous                                                    13,627
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------

        -----------------------------------------------------------------------
        -----------------------------------------------------------------------
                                                             $           43,940
        -----------------------------------------------------------------------


<PAGE>


DETAIL OF ACCOUNTS - STATEMENT OF OPERATIONS (Continued)

    OTHER OPERATING AND MAINTENANCE EXPENSES (ACCOUNT NO. 6590)

        -----------------------------------------------------------------------
        Extraordinary repairs                                $            2,566
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------
        Alterations and improvements                                     29,230
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------
        Appliances                                                       11,035
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------
        Carpeting                                                        26,017
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------
        Additional maintenance                                            1,300
        -----------------------------------------------------------------------
        -----------------------------------------------------------------------

        -----------------------------------------------------------------------
        -----------------------------------------------------------------------
                                                             $           70,148
        -----------------------------------------------------------------------



<PAGE>


OTHER INFORMATION

    ---------------------------------------------------------------------------
    Total mortgage  principal  payments  required during the audit year
    (12 monthly  payments). Applies to all direct loans and HUD-held and
    fully-insured  mortgages.  Any HUD-approved second mortgages are
    included.                                                          $284,552
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------
    Total of 12 monthly deposits in the audit year made to the replacement
    reserve account, as required by the regulatory agreement, even if payments
    are temporarily suspended or reduced.                               $84,540
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
    ----------------------------------------------------------------------------
    Replacement  reserve and residual  receipts  reserve releases which are
    included as expense items on the statement of operations.             $   -
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------
    Project  improvement reserve releases under the flexible subsidy program
    which are included as expense items on the statement of operations.   $   -
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
    Mortgage payable note detail (Section 236 only)
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------
        Interest reduction payments from subsidy             $          216,628
    ---------------------------------------------------------------------------


    ---------------------------------------------------------------------------
    Related party transactions detail:
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------
                                  Entity name                       Amount paid
    ---------------------------------------------------------------------------
    ---------------------------------------------------------------------------

                                                         ----------------------
                                                         ----------------------
    LaMere Associates, Inc.                                   $          83,542
                                         --------------------------------------
                                          -------------------------------------

                                                         ----------------------
                                                         ----------------------
    Dynamic Information Systems, Inc.                         $           1,710
                                         --------------------------------------
                                          -------------------------------------

                                                         ----------------------
                                                         ----------------------
    Rental Housing Management Partnership                     $          16,368
                                          -------------------------------------
                                         --------------------------------------

                                                         ----------------------
                                                         ----------------------
    Rental Housing Management Partnership                     $         130,164
                                           ------------------------------------
                                         --------------------------------------

                                                         ----------------------
                                                         ----------------------
    Moonbeam Equipment and Communications, LLC                $           8,731
                                              ---------------------------------


<PAGE>



                               INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL


To the Partners
Circle Terrace Associates Limited Partnership

         We have audited the financial  statements of Circle Terrace  Associates
Limited  Partnership  as of and for the year ended  December 31, 1998,  and have
issued our report  thereon dated  January 20, 1999. We have also audited  Circle
Terrace Associates Limited  Partnership's  compliance with specific requirements
applicable to major HUD-assisted and DHCD-assisted  programs and have issued our
report thereon dated January 20, 1999.

         We conducted our audits in accordance with generally  accepted auditing
standards,  Government Auditing Standards,  issued by the Comptroller General of
the United  States,  the  "Consolidated  Audit Guide for Audits of HUD Programs"
(the Guide),  issued by the U.S.  Department  of Housing and Urban  Development,
Office of the  Inspector  General  and the Audit  Guide  issued by the  Maryland
Department of Housing and  Community  Development.  Those  standards and the two
guides  require  that we plan  and  perform  the  audits  to  obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement  and about whether Circle Terrace  Associates  Limited  Partnership
complied with laws and regulations,  noncompliance  with which would be material
to major HUD-assisted and DHCD-assisted programs.

         The management of the partnership is responsible for  establishing  and
maintaining internal control. In fulfilling this  responsibility,  estimates and
judgments by management are required to assess the expected benefits and related
costs of controls.  The objectives of internal control are to provide management
with reasonable, but not absolute, assurance that assets are safeguarded against
loss from  unauthorized  use or disposition,  that  transactions are executed in
accordance with  management's  authorization and recorded properly to permit the
preparation  of financial  statements  in  accordance  with  generally  accepted
accounting  principles,  and that  HUD-assisted and  DHCD-assisted  programs are
managed in compliance with applicable laws and regulations.  Because of inherent
limitations in internal control, errors, fraud or instances of noncompliance may
nevertheless  occur and not be detected.  Also,  projection of any evaluation of
internal  control to future  periods is subject to the risk that  procedures may
become inadequate  because of changes in conditions or that the effectiveness of
the design of controls may deteriorate.


<PAGE>


         In planning and performing our audits of the  partnership  for the year
ended  December  31,  1998,  we obtained an  understanding  of the design of the
relevant controls and determined whether they have been placed in operation, and
we assessed  control risk in order to determine our auditing  procedures for the
purpose of expressing our opinions on the partnership's financial statements and
on its compliance with specific  requirements  applicable to major  HUD-assisted
and DHCD-assisted  programs and to report on internal control in accordance with
the  provisions  of the Guide  and not to  provide  any  assurance  on  internal
control.

         We performed  tests of controls,  as required by the Guide, to evaluate
the  effectiveness  of the design and  operation of controls  that we considered
relevant  to  preventing  or  detecting  material  noncompliance  with  specific
requirements  that  are  applicable  to  the   partnership's   HUD-assisted  and
DHCD-assisted  programs.  Our  procedures  were  less in  scope  than  would  be
necessary  to render an  opinion on  internal  control.  Accordingly,  we do not
express such an opinion.

         Our  consideration of internal  control would not necessarily  disclose
all  matters  in  internal  control  that  might be  material  weaknesses  under
standards established by the American Institute of Certified Public Accountants.
A material  weakness is a condition  in which the design or  operation of one or
more of the internal  control  components  does not reduce to a  relatively  low
level the risk  that  errors  or fraud in  amounts  that  would be  material  in
relation  to the  financial  statements  or that  noncompliance  with  laws  and
regulations  that would be material to a HUD-assisted or  DHCD-assisted  program
may occur and not be detected  within a timely period by employees in the normal
course of performing  their assigned  functions.  We noted no matters  involving
internal control and its operation that we consider to be material weaknesses as
defined above.

         This report is intended solely for the information and use of the audit
committee, management, others within the organization, the Department of Housing
and Urban  Development  and the  Maryland  Department  of Housing and  Community
Development  and is not  intended  to be and should not be used by anyone  other
than these specified parties.




Bethesda, Maryland
January 20, 1999


<PAGE>


                                    INDEPENDENT AUDITORS' REPORT ON
                                COMPLIANCE WITH SPECIFIC REQUIREMENTS
                          APPLICABLE TO MAJOR HUD AND DHCD-ASSISTED PROGRAMS


To the Partners
Circle Terrace Associates Limited Partnership

         We have audited the financial  statements of Circle Terrace  Associates
Limited  Partnership  as of and for the year ended  December 31, 1998,  and have
issued our report thereon dated January 20, 1999.

         We have also audited Circle Terrace  Associates  Limited  Partnership's
compliance  with  specific  program  requirements  governing  federal  financial
reports;  mortgage status;  replacement  reserve;  residual  receipts;  security
deposits;  cash  receipts and  disbursements;  distributions  to owners;  tenant
application, eligibility, and recertification; and management functions that are
applicable to its major  HUD-assisted  and  DHCD-assisted  programs for the year
ended December 31, 1998. The  management of Circle  Terrace  Associates  Limited
Partnership  is  responsible  for  compliance  with  those   requirements.   Our
responsibility  is to express an opinion on compliance  with those  requirements
based on our audit.

         We conducted our audit of compliance with specific program requirements
in accordance with generally accepted auditing  standards,  Government  Auditing
Standards,  issued  by  the  Comptroller  General  of  the  United  States,  the
"Consolidated Audit Guide for Audits of HUD Programs" (the Guide), issued by the
U.S.  Department  of  Housing  and Urban  Development,  Office of the  Inspector
General and the Audit Guide  issued by the  Maryland  Department  of Housing and
Community  Development.  Those standards and the two guides require that we plan
and perform the audit to obtain  reasonable  assurance  about  whether  material
noncompliance  with  the  requirements  referred  to  above  occurred.  An audit
includes  examining,  on a test basis,  evidence about Circle Terrace Associates
Limited  Partnership's  compliance with those requirements.  We believe that our
audit provides a reasonable basis for our opinion.

         In our opinion, Circle Terrace Associates Limited Partnership complied,
in all  material  respects,  with the  specific  program  requirements  that are
applicable to its major  HUD-assisted  and  DHCD-assisted  programs for the year
ended December 31, 1998.


<PAGE>


         This report is intended solely for the information and use of the audit
committee, management, others within the organization, the Department of Housing
and Urban  Development  and the  Maryland  Department  of Housing and  Community
Development  and is not  intended  to be and should not be used by anyone  other
than these specified parties.





Bethesda, Maryland
January 20, 1999


<PAGE>


                                     INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
                                      WITH SPECIFIC REQUIREMENTS APPLICABLE TO
                                         FAIR HOUSING AND NON-DISCRIMINATION

To the Partners
Circle Terrace Associates Limited Partnership

         We have audited the financial  statements of Circle Terrace  Associates
Limited  Partnership  as of and for the year ended  December 31, 1998,  and have
issued our report thereon dated January 20, 1999.

         We have applied  procedures to test Circle Terrace  Associates  Limited
Partnership's   compliance   with  the  Fair   Housing  and   Non-Discrimination
requirements  applicable to its HUD-assisted and DHCD-assisted  programs for the
year ended December 31, 1998.

         Our procedures were limited to the applicable  procedures  described in
the "Consolidated Audit Guide for Audits of HUD Programs" (the Guide), issued by
the U.S.  Department of Housing and Urban  Development,  Office of the Inspector
General.  Our procedures  were  substantially  less in scope than an audit,  the
objective of which is the expression of an opinion on Circle Terrace  Associates
Limited  Partnership's  compliance with the Fair Housing and  Non-Discrimination
requirements. Accordingly, we do not express such an opinion.

         The results of our tests disclosed no instances of  noncompliance  that
are required to be reported herein under the Guide.

         This report is intended solely for the information and use of the audit
committee, management, others within the organization, the Department of Housing
and Urban  Development  and the  Maryland  Department  of Housing and  Community
Development  and is not  intended  to be and should not be used by anyone  other
than these specified parties.




Bethesda, Maryland
January 20, 1999


<PAGE>


                                     INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
                                        WITH LAWS AND REGULATIONS APPLICABLE
                                             TO THE FINANCIAL STATEMENTS

To the Partners
Circle Terrace Associates Limited Partnership

         We have audited the financial  statements of Circle Terrace  Associates
Limited  Partnership  as of and for the year ended  December 31, 1998,  and have
issued our report thereon dated January 20, 1999.

         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.

         Compliance with laws, regulations,  contracts, and grants applicable to
Circle Terrace  Associates  Limited  Partnership is the responsibility of Circle
Terrace  Associates  Limited  Partnership's  management.  As part  of  obtaining
reasonable assurance about whether the financial statements are free of material
misstatement,   we  performed  tests  of  Circle  Terrace   Associates   Limited
Partnership's   compliance  with  certain   provisions  of  laws,   regulations,
contracts,  and grants.  However,  the  objective of our audit of the  financial
statements  was not to  provide  an  opinion  on  overall  compliance  with such
provisions. Accordingly, we do not express such an opinion.

         The results of our tests disclosed no instances of  noncompliance  that
are required to be reported herein under Government Auditing Standards.

         This report is intended solely for the information and use of the audit
committee, management, others within the organization, the Department of Housing
and Urban  Development  and the  Maryland  Department  of Housing and  Community
Development  and is not  intended  to be and should not be used by anyone  other
than these specified parties.


Bethesda, Maryland
January 20, 1999


<PAGE>


CLIENT NAME  Circle Terrace Associates Limited Partnership

PROJECT NUMBER  28.04.0010                                         ANNUAL AUDIT
                                                                  QUESTIONNAIRE
FISCAL YEAR END  December 31, 1998                                 CDA PROJECTS
                -------------------------------------------------------


    Answers  to these  questions  should be based  upon a review  of  procedures
and/or  an  actual  test  of  transactions.  Answers  indicative  of an  adverse
condition must be described in the audit report unless the mortgagor has written
permission  from  DHCD to  deviate  from the  requirements  of law,  regulation,
contract or grant.
<TABLE>

--------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                  <C>
Examination Status                                                                Yes, No or N/A        Working
                                                                                 (Not Applicable)        Paper
                                                                                                       Reference
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1.   Mortgage Status
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Are payments on all mortgages current?                                        Yes                AA-1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Position 1                                                                    Yes                AA-2
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Position 2                                                                    Yes                AA-4
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Position 3
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Position 4
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Position 5
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     b.  Has the  mortgagor  complied  with the terms and  conditions of the Yes
         Regulatory Agreement and/or workout agreements?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
2.   Books and Records
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Are  a  complete   set  of  books  and  records   maintained   in  a          Yes                 CF
         satisfactory manner?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     b.  Does the mortgagor make frequent  postings (at least monthly) to the          Yes                 CF
         ledger accounts?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
3.   Cash Activities
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Are the cash receipts deposited in the name of the project in a Yes A-1
         bank whose deposits are federally-insured?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     b.  Are security  deposits kept separate and apart from all other funds Yes
         A-10 of the project in an insured institution?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     c.  Does the mortgagor  keep  sufficient  funds in the security  deposit          Yes                DD-1
         account  to  equal  or  exceed  the  aggregate  of  all  outstanding
         obligations to the tenants?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     d.  Does the owner or his/her  management agent have a fidelity bond in Yes
         CF an  amount  at least  equal to the  requirements  of the  Regulatory
         Agreement which provides coverage for all employees  handling assets of
         the project?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     e. Did cash disbursements exclude payments for items listed below:
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         1)   Legal expenses incurred in the sale of partnership interest?             Yes
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         2)   The fee for the preparation of a partner's,  shareholder's  or Yes
              individual's federal, state or local income tax returns?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         3)   Advice to an owner on tax consequences of foreclosure?                   Yes
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         4)   Reimbursement  to the owners or  affiliates  while the mortgage          Yes
              is  in  default,  or  under  workout   arrangements  for  prior
              advances,   capital  expenditures  and/or  project  acquisition
              costs?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         5)   Letter of credit fees?                                                   Yes
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     f.  Were  distributions  made to, or on behalf of,  the  owners  limited to
         those  authorized by the Regulatory  Agreement or the  distributions in
         accordance with prior written  approval of CDA while the project was in
         a "surplus cash" position?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         NOTE
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         1)   Distribution to nonprofit mortgagor entities or principals may not
              be permitted by the Regulatory Agreement.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         2)   The use of rental  proceeds  to pay for costs  included  in the          N/A
              mortgagor's costs certification are unauthorized  distributions
              of project income.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     g.  Was surplus  cash  available  for payment on cash flow debt per the N/A
         Deed of Trust and Note?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     h.  Were residual  receipts  deposited with the mortgagee within 90 days          N/A
         after the close of the mortgagor's fiscal year?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     i.  Were excess rental  collections in Section 236 projects  remitted to          N/A
         HUD each month?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     j. Does the mortgagor have a formal collection policy? Yes HUD-Q
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     k.  Is the collection policy enforced?                                            Yes               HUD-Q
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     l.  Do tenant accounts  receivable  consist  exclusively of amounts due Yes
         B-1 from tenants?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     m.  Have  "write-offs"  of  tenants'  accounts  been less than 1% of the          Yes                 11
         gross rents?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     n.  Are accounts receivable other than tenants' receivables composed No B-3
         exclusively of amounts due from unrelated persons or firms?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     o.  Were there  indications  that  payments for  services,  supplies or Yes
         materials were consistent with amounts normally paid for such services?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     p.  If applicable,  were utility allowance payments to residents paid on          Yes             Lease test
         a monthly basis?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
4.   Management Compensation
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Was  compensation  to the  management  agent  limited to the amounts          Yes                 20
         prescribed in the management agreement as written or amended?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
5.   Rents and Occupancy
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Is the gross potential  income from apartments equal to or less than          Yes                 10
         that approved by DHCD?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     b.  In subsidized projects, are dwelling unit contract rental rates and Yes
         Fair  Market  rental  rates in Section 236  projects  the same as those
         approved by DHCD?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
6.   DHCD/HUD Subsidy Payments (Section 8/RAP Projects Only)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     a.  Were the amounts  requested from DHCD/HUD  adequately  supported by Yes
         the accounting records?
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     b.  Were subsidy payments received recorded in the proper accounts?               Yes
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------                 ----
---------------------------------------------------------------------------------                 ----
7.   Ownership Interest
---------------------------------------------------------------------------------                 ----
---------------------------------------------------------------------------------                 ----

---------------------------------------------------------------------------------                 ----
---------------------------------------------------------------------------------                 ----
     a.  Were any changes of  stockholders  or  investors  during the current          N/A
         fiscal  year  approved by DHCD?  (provide a schedule of  significant
         changes)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------                 ----
---------------------------------------------------------------------------------                 ----
     b.  Were any  dividends  paid or other  distribution  made to  owners or No
         stockholders  including  distribution,  purchase or redemption of stock
         that is not reflected in the equity  statement?  (provide a schedule of
         payments or distributions)
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                            FINANCIAL STATEMENTS AND
                          INDEPENDENT AUDITORS' REPORT

                           CIRCLE TERRACE ASSOCIATES
                              LIMITED PARTNERSHIP
                         HUD PROJECT NO.: 052-44056-LDP
                          CDA PROJECT NO.: 28.04.0010

                               DECEMBER 31, 1999



<PAGE>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                                TABLE OF CONTENTS



MORTGAGOR'S CERTIFICATION

MANAGING AGENT'S CERTIFICATION

INDEPENDENT AUDITORS' REPORT

FINANCIAL STATEMENTS

         BALANCE SHEET

         STATEMENT OF OPERATIONS

         STATEMENT OF PARTNERS' EQUITY (DEFICIT)

         STATEMENT OF CASH FLOWS

         NOTES TO FINANCIAL STATEMENTS

SUPPLEMENTAL INFORMATION

         ASSETS AND LIABILITIES DATA

         INCOME AND EXPENSE STATEMENT DATA

         ACCOUNTS AND NOTES RECEIVABLE

         RESERVE FOR REPLACEMENTS

         RESIDUAL RECEIPTS RESERVE

         LETTERS OF CREDIT

         LOANS AND NOTES PAYABLE

         MORTGAGES PAYABLE

         MORTGAGES PAYABLE FROM SURPLUS CASH



<PAGE>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                          TABLE OF CONTENTS - CONTINUED


SUPPLEMENTAL INFORMATION (CONTINUED)

         IDENTITY OF INTEREST COMPANIES AND ACTIVITIES

         COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND
           RESIDUAL RECEIPTS

         CHANGES IN FIXED ASSET ACCOUNTS

         DETAIL OF ACCOUNTS - STATEMENT OF OPERATIONS

         OTHER INFORMATION

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
   WITH SPECIFIC REQUIREMENTS APPLICABLE TO
   MAJOR HUD  AND DHCD-ASSISTED PROGRAMS

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
   SPECIFIC REQUIREMENTS APPLICABLE TO FAIR HOUSING AND
   NON-DISCRIMINATION

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
   LAWS AND REGULATIONS APPLICABLE TO THE
   FINANCIAL STATEMENTS

         ANNUAL AUDIT QUESTIONNAIRE




<PAGE>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                                December 31, 1999




                            MORTGAGOR'S CERTIFICATION


         I  hereby  certify  that I have  examined  the  accompanying  financial
statements  and  supplemental   data  of  Circle  Terrace   Associates   Limited
Partnership  and, to the best of my knowledge and belief,  the same are complete
and accurate.




                                        OFFICER



                                   Peter Siegel, Vice President       Date

                                   Landex of Maryland, Inc. for Cooperative
                                   Associates Limited Partnership as General
                                   Partner of Circle Terrace Limited Partnership



                                   Partnership Employer
                                   Identification Number:
                                   05-0461953

                                  Telephone Number: (410) 234-0111



<PAGE>



                         MANAGING AGENT'S CERTIFICATION


         I  hereby  certify  that I have  examined  the  accompanying  financial
statements  and  supplemental   data  of  Circle  Terrace   Associates   Limited
Partnership  and, to the best of my knowledge and belief,  the same are complete
and accurate.




                                                            MANAGING AGENT

                                                       Rental Housing Management
                                                             Partnership




                                                            Fred Beguin

David Staley
Property Manager                                        Managing Agent Taxpayer
                                                         Identification Number:
                                                            13-3580730


<PAGE>



                          INDEPENDENT AUDITORS' REPORT


To the Partners
Circle Terrace Associates Limited Partnership

         We have  audited  the  accompanying  balance  sheet of  Circle  Terrace
Associates  Limited  Partnership  as of  December  31,  1999,  and  the  related
statements of operations, partners' equity (deficit) and cash flows for the year
then  ended.   These  financial   statements  are  the   responsibility  of  the
partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

         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 Circle  Terrace
Associates  Limited  Partnership as of December 31, 1999, and the results of its
operations,  the changes in partners'  equity  (deficit)  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 27
through  37 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>


         In accordance with Government  Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated March
24, 2000 on our consideration of Circle Terrace Associates Limited Partnership's
internal control and on its compliance with specific requirements  applicable to
major HUD programs and fair housing and non-discrimination.




Bethesda, Maryland                                      Federal Employer
March 24, 2000                                          Identification Number:
                                                        52-1088612

Lead Auditor:  Robert J. Denmark


<PAGE>



                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                                  BALANCE SHEET

                                DECEMBER 31, 1999

                                     ASSSETS

<TABLE>
<CAPTION>

CURRENT ASSETS

<S>                                                                                             <C>
1120   Cash - operations                                                                        $        197,819
1125   Cash - entity                                                                                      83,708
1130   Tenant accounts receivable                                                                          7,305
1135   Accounts receivable - HUD                                                                          30,070
1200   Miscellaneous prepaid expenses                                                                     94,917
                                                                                                ----------------
   Total current assets                                                                                  413,819

DEPOSITS HELD IN TRUST - FUNDED
1191   Tenant deposits                                                                                    46,173

RESTRICTED DEPOSITS AND FUNDED RESERVES
1310   Escrow deposits                                                      $          48,177
1320   Reserve for replacements                                                       688,508
1330   Other reserves                                                                 275,538
                                                                           ------------------
                                                                                                       1,012,223
RENTAL PROPERTY
1410   Land                                                                         1,104,269
1420   Buildings                                                                   15,271,257
1440   Building equipment - portable                                                   31,654
1460   Furnishings                                                                      8,378
1480   Motor vehicles                                                                  18,340
1490   Miscellaneous fixed assets                                                      86,167
                                                                           -------------------
                                                                                   16,520,065
1495   Less accumulated depreciation                                               (4,074,656)
                                                                           ------------------
                                                                                                       12,445,409
OTHER ASSETS
1520    Intangible assets, net of accumulated
       amortization of $113,199                                                                           193,721
                                                                                               ------------------

                                                                                                $      14,111,345
</TABLE>


<PAGE>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                            BALANCE SHEET - Continued

                                DECEMBER 31, 1999

                   LIABILIATIES AND PARTNERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>

CURRENT LIABILITIES
<S>                                                                                              <C>
2110     Accounts payable - operations                                                           $        66,510
2123     Accrued management fee payable                                                                   22,482
2131     Accrued interest payable - first mortgage                                                         2,393
2132     Accrued interest payable - second mortgage                                                       22,275
2134     Accrued interest payable - other loans/notes                                                      7,603
2160     Notes payable, current maturities                                                                 5,000
2170     Mortgage payable - first mortgage, current maturities                                           106,364
2172     Mortgage payable - second mortgage, current maturities                                          165,351
2174     Other loans/notes payable, current maturities                                                    48,476
2180     Utility allowances                                                                                  977
2190     Miscellaneous current liabilities                                                                16,438
2210     Prepaid revenue                                                                                   1,415
                                                                                                --------------------

        Total current liabilities                                                                         465,284

DEPOSITS LIABILITY
2191     Tenant deposits held in trust (contra)                                                           44,969

LONG-TERM LIABILITIES
2133     Accrued interest payable - other loans/notes
         (surplus cash)                                                     $        125,030
2311     Notes payable - surplus cash                                                550,000
2320      Mortgage payable - first mortgage, net of
         current maturities                                                        3,298,373
2321      Mortgage payable - second mortgage, net of
         current maturities                                                        3,022,010
2324     Other loans/notes payable, net of current maturities                      1,932,744
                                                                           -----------------
                                                                                                       8,928,157
CONTINGENCIES
                    -

3130     PARTNERS' EQUITY (DEFICIT)                                                                    4,672,935
                                                                                                ----------------

                                                                                                 $   14,111,345
</TABLE>


                        See notes to financial statements


<PAGE>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                       Statement of Operations - Continued

                           Year end DECEMBER 31, 1999

<TABLE>
<CAPTION>

RENTAL REVENUE
<S>                                                                       <C>
5120   Rent revenue - gross potential                                     $         403,361
5121   Tenant assistance payments                                                 1,875,570
                                                                         ------------------

Total rental revenue                                                                              $     2,278,931

VACANCIES
5220   Apartments                                                                    (10,077)
5250   Rental concessions                                                             (5,587)
                                                                         --------------------

Total vacancies                                                                      (15,664)

Net rental revenue                                                                                      2,263,267

FINANCIAL REVENUE
5410   Financial revenue - project operations                                          7,494
5440   Revenue from investments - replacement reserve                                 17,350
5490   Revenue from investments - miscellaneous                                        2,314
                                                                         --------------------

Total financial revenue                                                               27,158

OTHER REVENUE
5910   Laundry and vending                                                             18,276
5920   Tenant charges                                                                   4,674
5990   Miscellaneous revenue                                                            7,997
                                                                         --------------------

Total other revenue                                                                    30,947

Total revenue                                                                                           2,321,372


</TABLE>


<PAGE>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                       Statement of Operations - Continued

                           Year end DECEMBER 31, 1999
<TABLE>
<CAPTION>

ADMINISTRATIVE EXPENSES
<S>                                                                                   <C>
6210    Advertising and marketing                                                     13,789
6250    Other renting expenses                                                        10,086
6310    Office salaries                                                              169,032
6311    Office expenses                                                               52,082
6320    Management fee                                                               130,164
6331    Administrative rent free unit                                                  3,774
6340    Legal expense - project                                                       15,944
6350    Auditing expense                                                              10,275
6351    Bookkeeping fees/accounting services                                          16,368
6370    Bad debts                                                                     20,504
6390    Miscellaneous administrative expenses                                         24,423
                                                                         -------------------

Total administrative expenses                                                                    466,441

UTILITIES EXPENSE
6450    Electricity                                                                   32,231
6451    Water                                                                         25,852
6452    Gas                                                                           70,637
6453    Sewer                                                                          2,188
                                                                         --------------------

Total utilities expense                                                                                 130,908

OPERATING AND MAINTENANCE EXPENSES
6510    Payroll                                                                      173,639
6515    Supplies                                                                      54,463
6520    Contracts                                                                    220,014
6525    Garbage and trash removal                                                     36,820
6530    Security payroll/contract                                                    149,009
6546    Heating/cooling repairs and maintenance                                       17,328
6548    Snow removal                                                                   1,709
6570     Vehicle and maintenance equipment operation
         and repairs                                                                  15,478
6590    Miscellaneous operating and maintenance expenses                              78,662
                                                                         -------------------

Total operating and maintenance expenses                                                                747,122


</TABLE>


<PAGE>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                       Statement of Operations - Continued

                           Year end DECEMBER 31, 1999
<TABLE>
<CAPTION>

TAXES AND INSURANCE
<S>                                                                                        <C>
6710    Real estate taxes                                                                   139,107
6711    Payroll taxes                                                                        37,131
6720    Property and liability insurance                                                     80,122
6723    Health insurance and other employee benefits                                         25,809
                                                                                -------------------

Total taxes and insurance                                                                   282,169

FINANCIAL EXPENSES
6820    Interest on mortgage payable                                                        377,439
6830    Interest on notes payable - long-term                                                   547
6850    Mortgage insurance premium/service charge                                            44,738
                                                                                -------------------

Total financial expenses                                                                    422,724

6900    Nursing home/Assisted living and other elderly care expenses                          1,500

DEPRECIATION AND AMORTIZATION
6600    Depreciation expense                                                                572,954
6610    Amortization expense                                                                 14,004
                                                                                -------------------

Total depreciation and amortization                                                         586,958

CORPORATE OR MORTGAGOR ENTITY
REVENUE AND EXPENSES
7105    Entity revenue                                                                       (3,371)
7141    Interest on notes payable                                                            22,000
                                                                                -------------------

Total corporate or mortgagor entity revenue and expenses                                     18,629

Total expenses                                                                                         2,656,451

Net income (loss)                                                                                 $     (335,079)
                                                                                                 ================

</TABLE>


                        See notes to financial statements

<PAGE>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                     Statement of Partner's Equity (deficit)

                          Year ended December 31, 1999



<TABLE>
<CAPTION>
                                                              General          Limited
                                                              Partner          Partners                Total
Partners' equity (deficit)
<S>      <C> <C>                                        <C>                 <C>                <C>
December 31, 1998                                       $        216,387    $     4,791,627    $     5,008,014

Net income (loss)                                                 (3,351)          (331,728)          (335,079)
                                                       -------------------  ----------------   ----------------

Partners' equity (deficit)
December 31, 1999                                       $        213,036    $     4,459,899    $     4,672,935
                                                       ==================  =================  ================


</TABLE>























                        See notes to financial statements


<PAGE>
<TABLE>
<CAPTION>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                              Statement Cash Flows

                          Year ended December 31, 1999
Cash flows from operating activities
<S>                                                                                           <C>
Rental receipts                                                                               $        2,376,006
Interest receipts                                                                                         27,158
Other operating receipts                                                                                  30,947
Entity/construction receipts
Entity interest income                                                                                      3,371
Administrative expenses paid                                                                             (133,490)
Management fees paid                                                                                     (130,164)
Utilities paid                                                                                           (129,931)
Salaries and wages paid                                                                                  (491,680)
Operating and maintenance paid                                                                           (435,192)
Real estate taxes paid                                                                                   (150,451)
Property insurance paid                                                                                   (87,072)
Miscellaneous taxes and insurance paid                                                                       (178)
Net tenant security deposits received (paid)                                                                2,040
Other operating expenses paid                                                                             (69,146)
Interest paid on mortgages                                                                               (377,439)
Interest paid on notes                                                                                       (547)
Mortgage insurance premium paid                                                                           (43,322)
Net cash provided by (used in) operating activities                                                       390,910


Cash flows from investing activities
Net deposits to mortgage escrows                                                                           27,097
Net deposits to reserve for replacements                                                                 (101,890)
Net deposits to other reserves                                                                            (41,570)
Net cash provided by (used in) investing activities                                                      (116,363)
                                                                                             ---------------------

Cash flows from financing activities
Mortgage principal payments                                                                              (306,523)
Entity/construction financing activities
Due from affiliate                                                                                            860
Net cash provided by (used in) financing activities                                                      (305,663)
                                                                                             ---------------------

NET INCREASE (DECREASE) IN CASH                                                                           (31,116)

Cash, beginning                                                                                           312,643

Cash, end                                                                                     $           281,527
                                                                                             ====================

</TABLE>


<PAGE>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                        Statement Cash Flows - continued

                          Year ended December 31, 1999

<TABLE>
<CAPTION>

Reconciliation of net income (loss) to net
cash provided by (used in) operating activities
<S>                                                                                           <C>
Net income (loss)                                                                             $        (335,079)
                                                                                             -------------------
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities
Depreciation                                                                                             572,954
Amortization                                                                                              14,004
Changes in asset and liability accounts
(Increase) decrease in assets
Tenant accounts receivable                                                                                 8,346
Accounts receivable - other                                                                              130,047
Accounts receivable - interest                                                                             9,477
Miscellaneous prepaid expenses                                                                           (16,878)
Tenant security deposits funded                                                                           (3,349)
Increase (decrease) in liabilities
Accounts payable                                                                                         (10,718)
Accrued liabilities                                                                                       (3,907)
Accrued interest payable                                                                                  22,000
Tenant security deposits held in trust                                                                     5,389
Prepaid revenue                                                                                           (1,376)

Total adjustments                                                                                        725,989

Net cash provided by (used in) operating activities                                           $          390,910
                                                                                             ==================


</TABLE>












                        See notes to financial statements


<PAGE>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 1999


NOTE A - ORGANIZATION

    Circle Terrace Associates  Limited  Partnership was organized under the laws
    of the State of Maryland on March 28, 1990, for the purpose of acquiring and
    operating a rental housing project under Section 236 of the National Housing
    Act. The project consists of 303 units located in Lansdowne,  Maryland,  and
    is currently operating under the name of Circle Terrace Apartments.

    Cash distributions are limited by agreements between the partnership and the
    United  States  Department  of Housing and Urban  Development  ("HUD") to an
    annual  amount of $30,340 per year to the extent of surplus  cash as defined
    by HUD.  Undistributed  amounts are  cumulative  and may be  distributed  in
    subsequent  years if future  operations  provide  surplus  cash in excess of
    current requirements.

    Each  building of the project has qualified  and been  allocated  low-income
    housing credits  pursuant to Internal Revenue Code Section 42 ("Section 42")
    which  regulates the use of the project as to occupant  eligibility and unit
    gross rent, among other requirements. Each building of the project must meet
    the provisions of these  regulations  during each of 15 consecutive years in
    order to remain  qualified  to receive  the  credits.  In  addition,  Circle
    Terrace Associates Limited  Partnership has executed an Extended  Low-income
    Housing  Agreement/Land  Deed   Restriction/Extended  Use  Commitment  which
    requires the utilization of the project pursuant to Section 42 for a minimum
    of 30 years, even after the disposition of the project by the partnership.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Use of Estimates

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


<PAGE>


                  Circle Terrace Associates Limited Partnership
                         HUD Project No.: 052-44056-LDP
                           CDA Project No.: 28.04.0010

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                December 31, 1999


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    Rental Property

    Rental property is recorded at cost. Depreciation is provided for in amounts
    sufficient to relate the cost of depreciable assets to operations over their
    estimated  service  lives  using the  straight-line  method over a 27.5-year
    life.  Personal  property is recorded  at cost and is  depreciated  over its
    estimated  service  life of five to seven years using  accelerated  methods.
    Improvements are capitalized, while expenditures for maintenance and repairs
    are charged to expense as incurred.  Upon disposal of depreciable  property,
    the  appropriate  property  accounts  are reduced by the  related  costs and
    accumulated  depreciation.  The resulting  gains and losses are reflected in
    the statement of operations.

    Intangible Assets and Amortization

    Mortgage costs are amortized over the term of the respective  loan using the
effective interest method.

    Provision for Doubtful Accounts

    The  partnership  considers  accounts  receivable  to be fully  collectible;
    accordingly,  no  allowance  for doubtful  accounts is required.  If amounts
    become  uncollectible,   they  will  be  charged  to  operations  upon  such
    determination.

    Income Taxes

    No  provision  or  benefit  for  income  taxes  has been  included  in these
    financial  statements since taxable income or loss passes through to, and is
    reportable by, the partners individually.

    Rental Income

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



<PAGE>


NOTE C - MORTGAGES PAYABLE

    First Mortgage

    The  partnership  is obligated  under the terms of a mortgage  note which is
    insured by the Federal Housing  Administration ("FHA") and bears interest at
    the rate of 7%, less a varying  interest  subsidy in the  current  amount of
    $17,999 per month. Monthly payments of principal and interest in the reduced
    amount of $10,564 are due  through  maturity  in  February  2017.  The total
    interest  subsidy of  $215,990  is  reflected  as a  reduction  of  interest
    expense.  Principal  and  accrued  interest  due at  December  31,  1999 are
    $3,404,737 and $2,393, respectively.

    Under  agreements  with the  mortgage  lender and FHA,  the  partnership  is
    required  to  make  monthly  escrow   deposits  for  taxes,   insurance  and
    replacement  of  project  assets,  and  is  subject  to  restrictions  as to
    operating policies, rental charges, operating expenditures and distributions
    to partners.

    Second Mortgage

    The  partnership  is  obligated  under the terms of a  mortgage  note in the
    original amount of $4,000,000, which is insured by the Maryland Housing Fund
    ("MHF") and payable to Crestar of  Richmond,  Virginia,  Inc. The note bears
    interest at the rate of 8%.  Monthly  payments of principal  and interest in
    the amount of $34,645 are due through  maturity in December 2011.  Principal
    and accrued  interest due at December 31, 1999 are  $3,187,361  and $22,275,
    respectively.

    Third Mortgage

    The  partnership  is  obligated  under the terms of a  mortgage  note in the
    original  amount of  $2,227,330  payable to the  Department  of Housing  and
    Community  Development  of the State of  Maryland  ("CDA").  The note  bears
    interest at 4.5%.  Monthly payments of principal and interest of $11,373 are
    due through July 1, 2023. Principal and accrued interest due at December 31,
    1999 are $1,981,220 and $7,603, respectively.

    The liability of the  partnership  under the terms of all of these mortgages
    is  limited  to the  underlying  value of the real  estate  collateral  plus
    deposits held by the lenders.


<PAGE>


NOTE C - MORTGAGES PAYABLE (Continued)

    Third Mortgage (Continued)

    Aggregate annual  maturities of mortgages  payable for each of the next five
    years and thereafter are as follows:

                           December 31, 2000  $ 320,191
                                        2001            343,827
                                        2002            369,264
                                        2003            396,638
                                        2004            426,097
                                  Thereafter          6,717,301
                                              -------------------

                                              $ 8,573,318
                                              ===================

NOTE D - NOTES PAYABLE

    The partnership is obligated under the terms of an unsecured promissory note
    payable to Baltimore County,  Maryland.  Interest accrues at the rate of 4%.
    Annual  interest  payments  commenced  January 1, 1996.  Annual  payments of
    principal  will be due  commencing  January  1, 2000 and will  extend for 30
    years  through  maturity on December 31, 2030.  Payments may be made only to
    the extent of surplus cash as defined by HUD. Principal and accrued interest
    due at December 31, 1999 are $550,000 and $125,030, respectively.

    The  partnership  is  obligated  under the terms of a note  payable  for the
    purchase of a truck.  The note bears interest at 8.75% and requires  monthly
    payments of principal and interest of $588 through maturity in October 2000.
    The amount payable at December 31, 1999 is $5,000.


<PAGE>


NOTE D - NOTES PAYABLE (Continued)

    Aggregate annual maturities of notes payable for each of the next five years
    and thereafter are as follows:
                           December 31, 2000            $ 5,000
                                        2001                  -
                                        2002                  -
                                        2003                  -
                                        2004                  -
                                  Thereafter            550,000
                                              -------------------

                                              $         555,000
                                              ===================

NOTE E - RELATED PARTY TRANSACTIONS

    Working Capital Advances

    The general  partner is obligated to make  working  capital  advances to the
    partnership  as needed,  up to an aggregate of $100,000.  Such  advances are
    noninterest  bearing  and can be repaid  out of  available  net cash flow as
    defined in the partnership  agreement.  No such advances were required as of
    December 31, 1999.

    In the event cash flow does not provide sufficient funds to pay the investor
    limited  partner its minimum  distribution,  such  amount  required  will be
    advanced by the general  partner and will be  considered  a project  expense
    loan to be paid from surplus cash after required distributions as defined in
    the partnership agreement.

    Insurance

    The majority  shareholder  of an affiliate of the general  partner  provided
    debt financing for the capitalization of LaMere Associates, Inc. ("LaMere").
    In connection with such debt financing,  the shareholder received 20% of the
    stock of LaMere.  LaMere was paid premiums in connection  with the following
    insurance  coverage  provided to the  partnership:  property and  liability,
    fidelity bond and auto.  In connection  with such  insurance  coverage,  the
    partnership  incurred  $80,228 in premiums  for the year ended  December 31,
    1999.




<PAGE>


NOTE E - RELATED PARTY TRANSACTIONS (Continued)

    Shared Project Payroll Costs

    The site  superintendent  was shared  with  another  project in the area and
    payroll costs were allocated based on time spent on each project.

    Computer Services

    In  accordance  with HUD  Regulations  4381.5  Rev-2,  Paragraph  6.38,  the
    partnership  uses the services of a computer  consultant  company to provide
    the  following  services:  purchase and install  personal  computers and the
    related  equipment and software for the  project's  rental  office,  provide
    training and technical support,  and consult on software  upgrades.  Dynamic
    Information Services, Inc. (DIS), which is owned by a relative of an officer
    of the  management  company,  is a licensed  representative  of Project Data
    Systems,  Inc., a nationally-known  provider of computer system software for
    the subsidized  housing industry.  DIS derives 40% of its consulting service
    revenues  from  third-party  clients  not  affiliated  with  the  management
    company.  In 1999, the partnership  paid DIS $928 for technical  support and
    training services based on billable hours.

    Laundry Lease

    The partnership  has entered into a lease agreement with Moonbeam  Equipment
    and Communications,  LLC ("Moonbeam"),  an affiliate of the general partner,
    which permits Moonbeam to install coin-operated laundry equipment for use by
    the tenants.

    The partnership retains 45% of the income on the coin-operated  equipment as
    reimbursement of utility and janitorial expenses incurred by the partnership
    to maintain the common area laundry  facilities;  the balance is remitted to
    Moonbeam.  The lease  agreement  expires in January  2023 and,  among  other
    terms,  states that expenses  relating to the  maintenance and repair of the
    equipment are the obligation of Moonbeam.

    Moonbeam  earned  $8,918 from the proceeds of the laundry  room  collections
    during 1999, of which $6,245 remains payable as of December 31, 1999.


<PAGE>


NOTE F - MANAGEMENT FEE

    The  property  is  managed  by an  affiliate  of the  general  partner.  The
    management  fee is based on a  charge  of  $35.80  per unit per  month.  The
    management  agent  also  receives  fees of  $4.50  per unit  per  month  for
    accounting  services provided to the partnership.  Management and accounting
    fees  charged  to   operations   during  1999  were  $130,164  and  $16,368,
    respectively,  of which $22,482 of management fee is payable at December 31,
    1999.

NOTE G - HOUSING ASSISTANCE PAYMENT (HAP) CONTRACT AGREEMENTS

    HUD has contracted with the partnership  under the United States Housing Act
    of 1937 to make housing assistance  payments to the partnership on behalf of
    qualified  tenants.  The terms of the contract covering 142 units expired on
    November 30, 1998,  and the contract  covering 161 units expired on November
    30, 1997.
    The contracts do not have renewal options.

    Under the  Multifamily  Assisted  Housing and Reform and  Affordability  Act
    ("MAHRAA")  of 1997,  Congress  set forth the  legislation  for a  permanent
    "mark-to-market"  program  and  provided  for  permanent  authority  for the
    renewal of Section 8 contracts. On September 11, 1998, HUD issued an interim
    rule to provide  clarification of the  implementation of the  mark-to-market
    program.  Owners with Section 8 contracts  expiring after September 30, 1998
    are subject to the provisions of MAHRAA. As such, the partnership may choose
    to either opt out of the Section 8 program,  request mortgage  restructuring
    and renewal of the Section 8 contract,  or request  renewal of the Section 8
    contract without mortgage restructuring. Each option contains a specific set
    of rules and  procedures  that must be  followed in order to comply with the
    requirements  of MAHRAA.  As of the date of the report,  the partnership has
    extended both contracts from October 1, 1999 through September 30, 2000.

    It is uncertain  whether HUD will renew these contracts under terms that are
    consistent  with the  successful  operation of the  project.  The project is
    economically  dependent  upon the rental  income  received  from both of its
    agreements.  If HUD were not to extend either one, the  project's  operating
    cash flow would be adversely affected.


<PAGE>


NOTE H - PARTNERS' CAPITAL CONTRIBUTIONS

    The  partnership has one general  partner - Cooperative  Associates  Limited
    Partnership  and two  limited  partners - SLP,  Inc.  (the  special  limited
    partner)  and Boston  Financial  Qualified  Housing  Tax  Credits  L.P. V, a
    Limited Partnership (the investor limited partner).  The general partner has
    made  capital  contributions  of $413,562.  SLP,  Inc. is required to make a
    capital  contribution of $10. The investor  limited partner has made capital
    contributions totaling $5,615,234.

NOTE I - CONTRACT WITH BALTIMORE COUNTY (IN LIEU OF TAXES)

    The  partnership is obligated under the terms of an agreement with Baltimore
    County,  Maryland,  whereby  the  partnership  is to pay the County $220 per
    apartment unit per year (the minimum  payment) in lieu of real estate taxes.
    To the extent  there is net cash flow,  as  defined in the  agreement,  such
    amount is to be applied toward additional payments.  The minimum payment has
    been increased 10% annually. The amount incurred during 1999 under the terms
    of this  agreement was $66,660.  This amount is included with other city and
    county real estate  taxes in the  statement  of  operations.  The County has
    advised  the  partnership  that  $239,359  is due for  additional  taxes and
    interest  applicable  to 1992  through  1995  and has  placed  a lien on the
    property.  The  partnership  believes  that  such  payments  are  not due in
    accordance with the P.I.L.O.T.
    agreement.  Such amount has not been recorded until this matter is resolved.

NOTE J - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS

    All profits and losses are  allocated  1% to the general  partner and 99% to
the investor limited partner.

    Cash flow, as defined in the partnership agreement,  is to be distributed as
follows:

    1. 99% to the investor  limited  partner and 1% to the general partner until
       the  investor  limited  partner  has  received   distributions,   in  the
       aggregate, equal to the cumulative priority distribution.

    2. To the repayment of any project expense loans.


<PAGE>


NOTE J - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS (Continued)

    3.  To the general  partner  until it has  received  cumulatively  an amount
        equal to the cumulative  amount paid to the investor  limited partner as
        defined above.

    4.  50% to the general partner and 50% to the investor limited partner.

    Gain, if any,  from a sale,  exchange or other  disposition  is allocable as
follows:

    1.  To all partners having negative balances in their capital accounts prior
        to the  distribution of any sale or refinancing  proceeds,  an amount of
        such gain to increase their negative balance to zero.

    2.  To each partner until the positive  capital  account balance is equal to
        the  amount  of cash  available  for  distribution  as a  result  of the
        transaction, as defined in the partnership agreement.

    Loss from a sale is allocable as follows:

    1.  To  the  partners  in  proportion  to  their  positive  capital  account
        balances.  In the event  the loss is less  than the sum of the  positive
        capital  accounts,  the loss is to be allocated  such that the resulting
        capital  account balance is as near as possible to the amount of cash to
        be distributed as a result of the transaction.

    2.  1% to the general partner and 99% to the investor limited partner.

NOTE K - TAXABLE LOSS

  <TABLE>
<CAPTION>
 A reconciliation  of the financial  statement net loss to the income tax net
    loss of the partnership for the year ended December 31, 1999 is as follows:

<S>                                                                                              <C>
      Financial statement net loss                                                               $       (335,079)
      Excess depreciation for income tax purposes                                                          (6,393)
      Other differences                                                                                    (6,658)
                                                                                                -------------------

      Income net tax loss                                                                        $       (348,130)
                                                                                                ===================


</TABLE>



NOTE L - INVESTMENT IN REAL ESTATE

    A reconciliation of the basis of the investment in real estate for financial
    reporting  purposes to that for income tax  purposes as of December 31, 1999
    is as follows:
<TABLE>
<CAPTION>

<S>                                                                                             <C>
      Investment in real estate for financial reporting                                         $      12,445,409
      Excess accumulated depreciation for income tax purposes                                             (59,435)
      Interest expense portion of subsidy capitalized for income tax purposes                             177,317
                                                                                                -------------------

      Investment in real estate for income tax purposes                                          $     12,563,291

                                                                                                ===================
</TABLE>

NOTE M - CONCENTRATION OF CREDIT RISK

    The partnership maintains its cash balances and escrow in several banks. The
    balances are insured by the Federal Deposit Insurance  Corporation  ("FDIC")
    up to $100,000 per bank. As of December 31, 1999,  the uninsured  portion of
    the cash balances held at two banks was $337,199.

NOTE N - CONTINGENCIES

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

    Baltimore  County has  advised  the  partnership  that  $239,359  is due for
    additional taxes and interest applicable to 1992 through 1995 and has placed
    a lien on the property.  The partnership believes that such payments are not
    due in accordance  with the P.I.L.O.T.  agreement.  Such amount has not been
    recorded until this matter is resolved.








<PAGE>