June 25, 1999




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, 1999
       Commission File Number 0-19706


Dear Sir / Madam:

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

Very truly yours,



/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller



QH510K-K


<PAGE>



                                                   UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                               Washington, DC 20549

                                                     FORM 10-K

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


For the fiscal year ended                             Commission file number
March 31, 1999                                                0-19706

                  BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                  (Exact name of registrant as specified in its charter)

      Massachusetts                                           04-3054464
(State of organization)                                     (I.R.S. Employer
                                                           Identification No.)
  101 Arch Street, 16th Floor
  Boston, Massachusetts                                          02110-1106
(Address of Principal executive office)                          (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, 1999


<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:

     "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>


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

                                            ANNUAL REPORT ON FORM 10-K
                                         FOR THE YEAR ENDED MARCH 31, 1999


                                                 TABLE OF CONTENTS


                                                                  Page No.

PART I

     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-15
     Item 7A.     Quantitative and Qualitative Disclosures about
                    Market Risk                                     K-18
     Item 8       Financial Statements and Supplementary Data       K-18
     Item 9       Changes in and Disagreements with Accountants
                    on Accounting and Financial Disclosure          K-18

PART III

     Item 10      Directors and Executive Officers
                    of the Registrant                               K-18
     Item 11      Management Remuneration                           K-20
     Item 12      Security Ownership of Certain Beneficial
                    Owners and Management                           K-20
     Item 13      Certain Relationships and Related Transactions    K-20

PART IV

     Item 14      Exhibits, Financial Statement Schedules and
                    Reports on Form 8-K                             K-23

SIGNATURES                                                          K-24




<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.  On
March 1, 1997,  an  affiliate of the  Partnership's  Managing  General  Partner,
Boston  Financial  GP1-LLC,  became the Local General Partner of Burbank Limited
Partnership  I  ("Burbank").  As a result,  the  Partnership  was deemed to have
control over  Burbank (the  "Combined  Entity") and the  accompanying  financial
statements  are  presented  in  combined  form  to  conform  with  the  required
accounting  treatment under generally accepted accounting  principles.  However,
this  change  only  affects  the  presentation  of the  Partnership's  operating
results,  not the  business of the  Partnership.  Accordingly,  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.

Table A on the following  page lists the  Properties  owned 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                                     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 approximately 99%, except for
     a 95%  interest  in  Strathern  Park/Lorne  Park  Apartments  and an  88.6%
     interest  in  Huguenot  Park.  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.



<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,  1999,  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 10.04%, have Shelter Development
Corp.  as Local  General  Partner;  (ii) Hillwood  Pointe,  Pinewood  Pointe and
Whispering Trace,  representing  11.88%, 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 1.70%, have Seals & Associates,  Inc. & E. Lamar Seals
as Local General Partners; (v) Bixel House and Harmony Apartments,  representing
7.04%,  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 (BF Lansing  Limited  Partnership,  an
affiliate of the Managing General  Partner,  became the  Administrative  General
Partner in Carib Villas II and Carib Villas III on January 31, 1993).  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 which 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 The Boston Financial Group Limited  Partnership,  an affiliate of the
General Partners, 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-seven 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 88.6%, 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        1999           1999          1998              Subsidy*            1999
---------------------------------  --------------  -------------  -----------  ---------------    -------------    ---------------


<S>                                   <C>          <C>             <C>          <C>                    <C>                <C>
Strathern Park/Lorne Park, a
 California Limited Partnership (1)
Strathern Park/Lorne Park
Los Angeles, CA                       241          $8,418,667      $8,418,667   $17,428,457            None               98%

Maiden Choice Limited
 Partnership
Park Caton
Catonsville, MD                       101           2,513,300       2,513,300     4,021,395            None               98%

Cedar Lane I, Ltd.
Cedar Lane I
London, KY                             36             288,587         288,587     1,108,259            None              100%

Silver Creek II, Ltd.
Silver Creek II
Berea, KY                              24             193,278         193,278       768,386            None              100%

Tompkins/Rosecliff, Ltd.
Rosecliff
Sanford, FL                           168           3,604,720       3,604,720     5,562,595            None               88%

Brookwood L.D.H.A.
Brookwood
Ypsilanti, MI                          81           2,373,295       2,373,295     3,019,835            None               96%

Water Oak Apartment, L.P.
Water Oak
Orange City, FL                        40             293,519         293,519     1,256,023            None               98%


</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      1999            1999                 1998              Subsidy*            1999
---------------------------    -----------   ------------    ----------         ---------------     -------------    ---------------


<S>                              <C>          <C>             <C>                <C>                    <C>                 <C>
Yester Oaks, L.P.
Yester Oaks
Lafayette, GA                    44           319,254         319,254            1,286,809              FmHA                98%

Ocean View Apartments, L.P.
Ocean View
Fernandina Beach, FL             42           334,177         334,177            1,366,353              None               100%

Burbank Limited Partnership I
Wheeler House
Nashua, NH                       17           300,531         300,531              706,873            Section 8            100%

Archer Village, Ltd.
Archer Village
Archer, FL                       24           171,380         171,380              708,517              FmHA                95%

The Oaks of Dunlop Farms, L.P.
Oaks of Dunlop
Colonial Heights, VA            144         2,791,280       2,791,280            4,428,393              None                97%

Timothy House Limited
 Partnership
Timothy House
Towson, MD                      112         3,064,250       3,064,250            2,500,426              None                98%

Westover Station Associates, L.P.
Westover Station
Newport News, VA                108         1,972,947       1,972,947            2,661,411              None                99%

</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                                                Capital Contribution
                                                    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      1999             1999              1998                Subsidy*         1999
------------------------------    ------------   -------------   -------------     --------------     -------------    ------------


<S>                                    <C>         <C>              <C>               <C>                    <C>               <C>
Christiansted Limited Dividend
 Housing Association
Carib III
St. Croix, VI                          24          322,260          322,260           1,482,307              FmHA              79%

St. Croix II Limited Partnership
Carib II
St. Croix, VI                          20          347,680          347,680           1,402,191              FmHA              95%

Whispering Trace Apartments,
 A Limited Partnership
Whispering Trace
Woodstock, GA                          40        1,093,330        1,093,330           1,376,939              None              88%

Historic New Center Apartments
 Limited Partnership
New Center
Detroit, MI                           104        2,949,420        2,949,420           2,932,517            Section 8           95%

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           2,926,844              None              96%

Kensington Place Townhomes,
 A Limited Partnership
Pinewood Pointe
Jacksonville, FL                      136        3,153,173        3,153,173           3,962,864              None              97%

</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     1999                 1999             1998              Subsidy*            1999
------------------------------   -----------  -------------    ----------------- ----------------     -------------    -------------


<S>                                 <C>         <C>                <C>             <C>                    <C>                 <C>
Westgate Apartments Limited
 Partnership
Westgate
Bismark, ND                         60          935,893            935,893         1,365,415              None                85%

Woodlake Hills Limited
 Partnership
Woodlake Hills
Pontiac, MI                        144        4,154,670          4,154,670         3,811,770              None                91%

Bixel House, a California
 Limited Partnership
Bixel House
Los Angeles, CA                     76          710,677            710,677         1,273,858            Section 8             99%

Harmony Apartments, a California
 Limited Partnership
Magnolia Villas
North Hollywood, CA                 65        3,203,996          3,203,996         2,238,307              None                99%

Schumaker Place Associates, L.P.
Schumaker Place
Salisbury, MD                       96        2,910,453          2,910,453         2,913,267              None               100%

Circle Terrace Associates Limited
 Partnership
Circle Terrace
Lansdowne, MD                      303        5,811,234          5,811,234         8,872,936            Section 8             99%
                                -------     ------------      ------------      -------------
                                 2,374      $ 55,570,462      $ 55,570,462      $ 82,782,947
                                =======     ============      ============      =============


</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.








<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 15.15%
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 10.46% 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.

The duration of the leases for occupancy in the Properties  described  above are
six to twelve  months.  The Managing  General  Partner  believes the  Properties
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,  is involved in certain  litigation with an entity formerly  affiliated
with this  Partnership  and its previous  local  general  partner.  Recently,  a
tentative  settlement agreement was agreed  upon.   Tompkins/Rosecliff  and  the
Partnership will contribute a total of $150,000,  of which the Partnership  will
contribute  $100,000.  In  the  opinion  of  Management,  this is an appropriate
settlement,  which 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,  1999,  there  were  3,234  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,  1999,  1998 and 1997.  In the  Partnership's
early  years,  cash  available  for  distribution  was derived from the interest
earned on the  temporary  investment of funds held by the  Partnership  prior to
paying  capital   contributions   to  Local  Limited   Partnerships.   All  cash
distributions  made to date have  constituted  a return of capital for generally
accepted accounting principles.




<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.
<TABLE>
<CAPTION>

                                           March 31,     March 31,       March 31,       March 31,      March 31,
                                             1999           1998           1997            1996           1995

<S>                                     <C>            <C>             <C>            <C>            <C>
Revenue (E)                             $     400,484  $      321,439  $     204,683  $     224,012  $      171,863
Equity in losses of Local Limited
     Partnerships (E)                      (2,944,720)     (4,777,460)    (4,044,413)    (4,695,617)     (4,747,136)
Net loss                                   (3,383,033)     (5,838,302)    (4,337,761)    (4,952,448)     (5,110,677)
     Per Limited Partnership Unit (A)          (48.59)        (83.85)         (62.30)        (71.13)         (73.40)
Cash and cash equivalents  (E)                450,450         239,932        449,567        243,644          72,535
Marketable securities                       2,666,281       3,064,717      2,840,127      3,099,255       3,196,496
Investment in Local Limited
     Partnerships                          21,538,791      24,775,767     30,531,768     34,878,562      39,667,730
Total assets (B)                           25,653,434      28,905,668     33,871,495     38,246,869      42,985,386
Long-term debt (E)                            706,873         707,659              -              -               -
Total liabilities (E)                       1,134,775       1,002,330        298,276        318,728         149,379
Cash Distributions                                  -               -              -              -               -
Other data:
Passive loss (C)                           (5,120,476)     (5,324,956)    (5,154,301)    (5,187,774)     (5,204,384)
     Per Limited Partnership Unit (A,C)        (73.54)         (76.48)       (74.03)         (74.51)        (74.75)
 Portfolio income (C)                         340,850         361,519        281,707        350,417         233,083
     Per Limited Partnership Unit (A,C)          4.90            5.19           4.05           5.03            3.35
Low-Income Housing Tax Credit (C)          10,405,744      10,512,076     10,512,996     10,506,229      10,519,636
     Per Limited Partnership Unit (A,C)        150.97          150.98         150.99         150.90          151.09
Local Limited Partnership interests
     owned at end of period (D)                    27              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) Revenue for the year ended  March 31, 1999  includes  $119,443 of rental and
other revenues from the Combined Entity that is included in the combined revenue
on the  Combined  Statement  of  Operations.  Equity in losses of Local  Limited
Partnerships  in the year ended March 31, 1999 does not include $1,702 of income
from the Combined Entity that has been combined with the  Partnership's  loss on
the Combined  Statement of  Operations.  Cash and cash  equivalents at March 31,
1999 include $519 of cash and cash equivalents from the Combined Entity that has
been combined with the Partnership in the Combined Balance Sheet. Long-term debt
at March 31, 1999 is related to the Combined Entity.  Total liabilities includes
$730,296  that has been combined with the  Partnership  in the Combined  Balance
Sheet.


<PAGE>

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,  interest rates, and unanticipated  delays or expenses on the
part of the Partnership and their suppliers in achieving year 2000 compliance.

Liquidity and Capital Resources

At March 31, 1999, the Partnership  (including the Combined Entity) had cash and
cash  equivalents  of $450,450,  compared with  $239,932 at March 31, 1998.  The
decrease  is  attributable  to net cash used for  operations  and  purchases  of
marketable securities, partially offset by proceeds from sales and maturities of
marketable  securities  and  cash  distributions  received  from  Local  Limited
Partnerships.

Approximately  $2,553,000  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.

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, 1999, the Partnership had no
contractual or other obligation to any Local Limited  Partnership  which had not
been paid or provided for.

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. No such
event has occurred to date.

Cash Distributions

No cash  distributions  were made during the year ended March 31, 1999. In prior
years,  cash available for  distribution was derived from the interest earned on
the temporary  investment  of the  Partnership's  funds,  at money market rates,
prior  to the  funds  being  contributed  to  the  Partnership's  Local  Limited
Partnership  investments.  Based on the  results of 1998  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. Therefore, it is expected that only a limited amount of cash
will be distributed to investors from this source in the future.

Results of Operations

1999 versus 1998

The  Partnership's  results  of  operations  for the year ended  March 31,  1999
resulted in a net loss of $3,383,033 as compared to a net loss of $5,838,302 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 an increase in
general and administrative expenses and due to provisions for valuation of Local
Limited  Partners and  property  impairment  provisions  in 1998 not required in
1999. 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. Other revenue  increased due to an increase in
distributions received by the Partnership from the Local Limited Partnerships.
<PAGE>
1998 versus 1997

The  Partnership's  results  of  operations  for the year ended  March 31,  1998
resulted in a net loss of $5,838,302 as compared to a net loss of $4,337,761 for
the same period in 1997. The increase in net loss is primarily  attributable  to
an increase in equity in losses of Local Limited  Partnerships,  a provision for
valuation of rental  property and a provision  for  valuation of  Investment  in
Local  Limited  Partnership.  Equity  in losses  of Local  Limited  Partnerships
increased due to a general increase in operating  expenses for the Local Limited
Partnerships.  Other  revenue  increased  due to an  increase  in  distributions
received by the Partnership from the Local Limited Partnerships.

Low-Income Housing Tax Credits

The 1998, 1997 and 1996 Tax Credits per Unit were $150.97,  $150.98 and $150.99,
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.

On November 10, 1997, the Partnership transferred 50% of its interest in capital
and  profits of Westgate  Apartments  to the local  general  partner in order to
protect the Partnership in the event of a foreclosure-induced recapture of these
tax credits.

Property Discussions

Limited  Partnership  interests have been acquired in twenty-seven Local Limited
Partnerships that are located in ten states and the Virgin Islands.  Five of the
properties,   totaling  612  units,  were  existing  properties  that  underwent
rehabilitation  and twenty-two  properties,  consisting of 1,762 units, were new
construction.

Most of the twenty-seven Local Limited Partnerships have stabilized  operations.
The majority of these  stabilized  properties  are  operating at  break-even  or
generating positive operating cash flow.

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 site manager was hired in October 1998. The new
site manager will focus on  implementing a new marketing  strategy and improving
rent  collections.  As of December 31, 1998,  occupancy  for Historic New center
improved  slightly to 92%. The Managing General Partner will continue to closely
monitor property operations.

Westgate,  located in North Dakota, has been experiencing  declining  occupancy.
Occupancy as of December 31, 1998 was 84%.  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 an effort to
reduce  possible  future risk,  the Managing  General  Partner  consummated  the
transfer of 50% of the Partnership's interest in capital and profits in Westgate
to the Local  General  Partner.  The Managing  General  Partner has the right to
transfer the Partnership's  remaining  interest to the Local General Partner any
time after one year has elapsed.  The Partnership  will retain its full share of
tax  credits  until  such  time as the  remaining  interest  is put to the Local
General  Partner.  In addition,  the 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  proceeded to negotiate with the lender on temporary debt  restructuring
to reduce  interest  rates and extend  the due date of the loan to 1998.  At the
same  time,   the  Managing   General   Partner  began   exploring   refinancing
opportunities.  A potential  lender was identified and performed an appraisal in
March.  The appraisal  showed  inadequate loan to value  coverage.  The Managing
General  Partner is currently  negotiating  with the lender and is exploring all
measures  to protect  the  remaining  tax  credits  generated  by the  property.
However,  It is  possible  that the  Partnership  will not be able to retain its
interest in Wheeler House through 1999. A foreclosure  would result in recapture
of  credits,  the  allocation  of taxable  income to the Fund and loss of future
benefits associated with this property.


<PAGE>

In accordance with Financial  Accounting  Standard No. 121,  "Accounting for the
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed Of",
the Partnership has implemented  policies and practices for assessing impairment
of its real estate assets and  investments in Local Limited  Partnerships.  Each
asset is analyzed by real estate experts to determine if an impairment indicator
exists.  If so, the carrying value is compared to the  undiscounted  future cash
flows  expected  to be  derived  from the asset and,  if there is a  significant
impairment  in value,  a provision to write down the asset to fair value will be
charged against income.

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, 1999, 1998 and 1997.

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.

Impact of Year 2000

The Managing  General  Partner's  plan to resolve year 2000 issues  involves the
following four phases: assessment,  remediation, testing and implementation.  To
date,  the Managing  General  Partner has fully  completed an  assessment of all
information  systems that may not be operative  subsequent to 1999 and has begun
the remediation,  testing and implementation phase on both hardware and software
systems.  Because the hardware and software  systems of both the Partnership and
Local Limited  Partnerships are generally the  responsibility of obligated third
parties,  the plan primarily  involves  ongoing  discussions  with and obtaining
written  assurances from these third parties that pertinent systems will be 2000
compliant.   In  addition,   neither  the  Partnership  nor  the  Local  Limited
Partnerships are incurring significant  additional costs since such expenses are
principally  covered under the service contracts with vendors.  As of June 1999,
the General Partner is in the final stages of its Year 2000 remediation plan and
believes all major  systems are  compliant;  any systems still being updated are
not considered significant to the Partnership's operations. However, despite the
likelihood that all significant  year 2000 issues are expected to be resolved in
a timely manner,  the Managing General Partner has no means of ensuring that all
systems of outside vendors or other entities that impact operations will be 2000
compliant.  The Managing  General Partner does not believe that the inability of
third  parties to address  their year 2000 issues in a timely manner will have a
material impact on the Partnership.  However,  the effect of  non-compliance  by
third parties is not readily determinable.

Management has also evaluated a worst case scenario  projection  with respect to
the year 2000 and  expects  any  resulting  disruption  of either  the  Managing
General Partner's activities or any Local Limited Partnership's operations to be
short-term  inconveniences.  Such  problems,  however,  are not  likely to fully
impede the ability to carry out necessary duties of the  Partnership.  Moreover,
because  expected  problems  under a worst  case  scenario  are not  extensively
detrimental,   and  because  the  likelihood  that  all  systems  affecting  the
Partnership  will be compliant  before 2000,  the Managing  General  Partner has
determined  that a formal  contingency  plan that  responds to  material  system
failures is not necessary.


<PAGE>

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The  Partnership  has  invested in  marketable  securities  with a fair value of
$2,666,281 at March 31, 1999; these securities, with rates ranging from 4.87% to
8.15%,  do not subject the  Partnership  to  significant  market risk because of
their short term maturities and high liquidity.  In addition,  the Partnership's
debt  obligation is currently due and payable and therefore  does not expose the
Partnership to future interest rate risk.

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.

<PAGE>

                                 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" or "Arch  Street,
Inc."), an affiliate of The Boston Financial Group Limited Partnership  ("Boston
Financial"),  a Massachusetts  limited partnership.  George Fantini, Jr., a Vice
President of the Managing General Partner,  resigned his position effective June
30, 1995.  Donna  Gibson,  a Vice  President of the  Managing  General  Partner,
resigned from her position on September  13, 1996.  Georgia  Murray  resigned as
Managing Director,  Treasurer and Chief Financial Officer of the General Partner
on May 25, 1997. Fred N. Pratt, Jr. resigned as Managing Director of the General
Partner on May 28, 1997. William E. Haynsworth resigned as Managing Director and
Chief  Operating  Officer of the  General  Partner on March 23,  1998.  Peter G.
Fallon resigned as a Vice President of the General Partner on June 1, 1999.

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.

     Name                                           Position

Jenny Netzer                      Managing Director and President
Michael H. Gladstone              Managing Director, Vice President and Clerk
Randolph G. Hawthorne             Managing Director, Vice President and
                                    Chief Operating Officer
James D. Hart                     Chief Financial Officer and Treasurer
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 43,  graduated  from  Harvard  University  (B.A.,  1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982.  Ms.  Netzer  joined  Boston  Financial  in 1987  and is a Senior  Vice
President leading the Institutional Tax Credit Team. She is also a member of the
Senior Leadership Team, the firm's Executive Committee.  Previously,  Ms. Netzer
led Boston  Financial's  new business  initiatives  and managed the firm's Asset
Management division,  which is responsible for the performance of 750 properties
and providing service to 35,000 investors.  Before joining Boston Financial, she
was Deputy Budget Director for the Commonwealth of Massachusetts,  where she was
responsible  for the  Commonwealth's  health care and public  pension  programs'
budgets.  Ms. Netzer was also  Assistant  Controller at Yale  University and has
been a member of the Watertown Zoning Board of Appeals.

Michael H. Gladstone,  age 42,  graduated from Emory  University  (B.A.,  1978)
and Cornell  University  (J.D.;  M.B.A.,  1982).  Mr. Gladstone joined Boston
Financial in 1985, and is Vice President and General  Counsel.  He is also a
member of the Senior  Leadership Team.  Prior to joining Boston  Financial,  Mr.
Gladstone was associated  with the Boston law firm of Herrick & Smith.  Mr.
Gladstone is on the Advisory Board of the Housing and Development  Reporter.  He
is also a member of the Investment Program  Association,  The National Realty
Committee,  Cornell Real Estate Council,  National Housing Conference,  and the
Massachusetts Bar.

Randolph G.  Hawthorne,  age 49, is a graduate  of  Massachusetts  Institute  of
Technology (S.B., 1971) and Harvard Graduate School of Business (M.B.A.,  1973).
Mr.  Hawthorne joined Boston Financial in 1973 and is currently a Vice President
responsible for structuring and acquiring real estate  investments.  Previously,
Mr.  Hawthorne  served as Treasurer of Boston  Financial.  Mr. Hawthorne is Past
Chairman of the Board of the National  Multi Housing  Council,  having served on
the board  since  1989.  He is a past  president  of the  National  Housing  and
Rehabilitation Association is a member of the Residential Development Council of
the  Urban  Land  Institute,  as well as a member of the  Advisory  Board of the
Berkeley Real Estate  Center at the  University  of  California.  In addition to
speaking at industry conferences,  he is on the Editorial Advisory Boards of the
Tax Credit Advisor and Multi-Housing News.

James D. Hart,  age 41,  graduated  from  Trinity  College  (B.A.) and Amos Tuck
School at Dartmouth College  (M.B.A.).  Mr. Hart joined Boston Financial in 1998
and serves as Chief Financial  Officer and is a member of the Senior  Leadership
Team. Prior to joining Boston Financial, Mr. Hart was engaged in venture capital
management on behalf of institutional  investors,  including the negotiation and
structuring of private equity and mezzanine  transactions as a Vice President of
Interfid  Ltd.,  and later in the  operational  management  of a  venture-backed
software company,  as Managing Director and Chief Financial Officer of Bitstream
Inc. Mr. Hart has also served on the Board of  Directors  of several  companies,
including those that went on to complete initial public offerings.

Paul F. Coughlan,  age 55, is a graduate of Brown University  (A.B.,  1965). Mr.
Coughlan  joined  Boston  Financial  in 1975  and is  currently  a  Senior  Vice
President and a member of the Investment Management division with responsibility
for  marketing  institutional  investments.  Previously,  he was national  sales
manager for Boston  Financial's retail tax credit funds. Prior to joining Boston
Financial,  Mr.  Coughlan  was an  investment  broker  with Bache & Company  and
Reynolds Securities, Inc.

William E. Haynsworth,  age 59, is a graduate of Dartmouth College (A.B., 1961)
and Harvard Law School (L.L.B.,  1964;  L.L.M.,  1969). Mr. Haynsworth joined
Boston  Financial  in 1977 and is a Senior Vice  President  responsible  for the
structuring  of real estate  investments  and the  acquisition  of property
interests.  Prior to joining Boston  Financial,  Mr.  Haynsworth was Acting
Executive  Director and General  Counsel of the  Massachusetts  Housing  Finance
Agency. He was also the Director of Non-Residential  Development of the Boston
Redevelopment  Authority and an associate of the law firm of Goodwin,  Procter
& Hoar. Mr.  Haynsworth is a member of the Executive  Committee and the Board of
Directors of the  Affordable  Housing Tax Credit  Coalition.  He is a member
of the Senior Leadership Team and the Board of Directors of Boston Financial.
Mr. Haynsworth has over 25 years of real estate experience.


<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, 1999, 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:
                                                          Amount
     Title of             Name and Address            Beneficially   Percent of
      Class              of Beneficial Owner              Owned         Class

     Limited     Oldham Institutional Tax Credits LLC   8,024 Units      11.64%
     Partner             101 Arch Street
                            Boston, MA

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,  1999.  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.

As of March 31,  1999,  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.,  Boston Financial 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  (including  Boston  Financial) 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  (including  Boston
Financial) 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 paid in the three
years  ending  March 31,  1999 are  described  below and 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.

<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  required  under this item is contained  in Note 5 to the  financial
statements presented as a separate section of this Report. The affiliates of the
Managing   General   Partner  which  have  received  fee  payments  and  expense
reimbursements from the Partnership are as follows:

Organizational fees and expenses and selling 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, 1999.

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, 1999,  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,  1999  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, 1999.

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 .351% (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, 1999 are as follows:

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

     Asset Management Fees      $   243,169    $   238,087     $   231,035
<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 made in
each of the three years ended March 31, 1999 are as follows:

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

   Salaries and benefits
expense reimbursements           $   109,845    $   127,926     $   117,763

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  made to partners.  No cash distributions were paid to
the General Partners in each of the three years ended March 31, 1999. 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 Boston Financial and its affiliates  during each of the three
years ended March 31, 1999 is presented in Note 6 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 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,
1999.

(a)(3)(c)  Exhibits

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

    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 25, 1999
           ------------------------                      -------------
           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/William G. Haynsworth              Date:  June 25, 1999
           ------------------------------              --------------
           William G. Haynsworth,
           Managing Director, Vice President and
           Chief Operating Officer




     By:   /s/Michael H. Gladstone           Date:    June 25, 1999
           -----------------------                     -------------
           Michael H. Gladstone,
           A Managing Director
Item 8.  Financial Statements and Supplementary Data











<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, 1999
                                                                            Index



                                                                              Page No.

<S>                                                                             <C>
Report of Independent Accountants
    For the years ended March 31, 1999, 1998 and 1997                           F-2

Combined Financial Statements

    Combined Balance Sheets - March 31, 1999 and 1998                           F-3

    Combined Statements of Operations - Years Ended
       March 31, 1999, 1998 and 1997                                            F-4

    Statements of Changes in Partners' Equity (Deficiency) -
       Years Ended March 31, 1999, 1998 and 1997                                F-5

    Combined Statements of Cash Flows - Years Ended
       March 31, 1999, 1998 and 1997                                            F-6

    Notes to the Combined Financial Statements                                  F-7

Financial Statement Schedule

    Schedule III - Real Estate and Accumulated Depreciation                     F-22
</TABLE>


See also Index to Exhibits on Page K-23 for the financial statement 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.



<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
combined  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  "Partnership")  at March 31, 1999 and 1998, and
the results of its  operations and its cash flows for each of the three years in
the  period  ended  March  31,  1999,  in  conformity  with  generally  accepted
accounting  principles.  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 combined financial statements.  These financial statements and financial
statement schedule are the responsibility of the Partnership's  management;  our
responsibility  is to  express  an opinion  on these  financial  statements  and
financial statement schedule based on our audits. We did not audit the financial
statements  of certain  local  limited  partnerships  for which total  assets of
$22,064,425 and  $25,246,134,  are included in these financial  statements as of
March 31, 1999 and 1998,  respectively,  and for which net losses of $2,943,018,
$4,967,607, and $4,044,413 are included in the accompanying financial statements
as of March 31, 1999, 1998, 1997, 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  statements in accordance with generally  accepted
auditing  standard,  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.


/s/PricewaterhouseCoopers LLP
June 18, 1999
Boston, Massachusetts


<PAGE>


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



                       COMBINED BALANCE SHEETS - MARCH 31, 1999 and 1998

<TABLE>
<CAPTION>

                                                                              1999               1998
                                                                         -------------       -------------
Assets

<S>                                                                      <C>                 <C>
Cash and cash equivalents                                                $     450,450       $     239,932
Accounts receivable from affiliates                                            173,739                   -
Mortgagee escrow deposits                                                            -                 382
Tenant security deposit escrow                                                   3,758               3,017
Investments in Local Limited Partnerships, net of reserve
   for valuation of $590,197 (Note 4)                                       21,538,791          24,725,581
Marketable securities, at fair value (Notes 1 and 3)                         2,666,281           3,064,717
Prepaid assets                                                                   1,489                   -
Rental property at cost, net of accumulated
   depreciation (Note 5)                                                       778,843             829,110
Replacement reserve escrow                                                       7,425               2,888
Other assets                                                                    32,658              40,041
                                                                         -------------       -------------
   Total Assets                                                          $  25,653,434       $  28,905,668
                                                                         =============       =============

Liabilities and Partners' Equity

Accounts payable to affiliates (Note 6)                                  $     143,443       $      79,210
Accounts payable and accrued expenses                                          133,838              72,983
Mortgage note payable (Note 7)                                                 706,873             707,659
Tenant security deposits payable                                                 3,803               3,017
Deferred revenue (Note 8)                                                      146,818             139,461
                                                                         -------------       -------------
   Total Liabilities                                                         1,134,775           1,002,330
                                                                         -------------       -------------

Minority interest in Local Limited Partnership                                 116,986             140,554

General, Initial and Investor Limited Partners' Equity                      24,394,204          27,777,237
Net unrealized gains (losses) on marketable securities                           7,469             (14,453)
                                                                         -------------       -------------
   Total Partners' Equity                                                   24,401,673          27,762,784
                                                                         -------------       -------------
   Total Liabilities and Partners' Equity                                $  25,653,434       $  28,905,668
                                                                         =============       =============
The accompanying notes are an integral part of these combined financial statements.

</TABLE>



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

                              COMBINED STATEMENTS OF OPERATIONS

                    FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>


                                                         1999              1998                 1997
                                                    ------------        ------------        ------------
Revenue:
<S>                                                 <C>                 <C>                 <C>
   Rental                                           $    117,971        $     98,473        $          -
   Investment (Note 3)                                   159,094             179,999             191,349
   Other                                                 123,419              42,967              13,334
                                                    ------------        ------------        ------------
     Total Revenue                                       400,484             321,439             204,683
                                                    ------------        ------------        ------------

Expenses:
   General and administrative
     (includes reimbursements to an affiliate
     in the amounts of $109,845, $127,926
     and $117,763 in 1999, 1998 and 1997,
     respectively) (Note 6)                              453,057             237,092             237,545
   Asset management fees, related party (Note 6)         243,169             238,087             231,035
   Provision for valuation of investment in
       Local Limited Partnership                               -             590,197                   -
   Rental operations, exclusive of depreciation           40,261              30,067                   -
   Provision for valuation of rental property                  -             160,000                   -
   Interest                                               73,899              64,148                   -
   Depreciation                                           27,043              35,299                   -
   Amortization                                           24,813              29,291              29,451
                                                    ------------        ------------        ------------
     Total Expenses                                      862,242           1,384,181             498,031
                                                    ------------        ------------        ------------

Loss before minority interest in losses of
   Local Limited Partnership,  equity in
   losses of Local Limited Partnerships and
   extraordinary item                                   (461,758)         (1,062,742)           (293,348)

Minority interest in losses of
   Local Limited Partnership                                 (17)              1,900                   -

Equity in losses of Local Limited
   Partnerships (Note 4)                              (2,944,720)         (4,777,460)         (4,044,413)

Extraordinary gain on cancellation of indebtedness        23,462                   -                   -
                                                    ------------        ------------        ------------

Net Loss                                            $ (3,383,033)       $ (5,838,302)       $ (4,337,761)
                                                    ============        ============        ============

Net Loss allocated:
   General Partners                                 $    (33,830)       $    (58,383)       $    (43,378)
   Limited Partners                                   (3,349,203)         (5,779,919)         (4,294,383)
                                                    ------------        ------------        ------------
                                                    $ (3,383,033)       $ (5,838,302)       $ (4,337,761)
                                                    ============        ============        ============

Net Loss per Limited Partnership
   Unit (68,929 Units)                              $    (48.59)        $     (83.85)       $     (62.30)
                                                    ===========         ==============      ==============

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


<PAGE>
                  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, 1999, 1998 AND 1997
<TABLE>
<CAPTION>


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

<S>                             <C>              <C>             <C>              <C>             <C>
Balance at March 31, 1996       $   (212,573)    $      5,000    $ 38,160,873     $    (25,159)   $ 37,928,141
                                ------------     ------------    ------------     ------------    ------------

Comprehensive Loss:
   Net change in net unrealized
     losses on marketable securities
     available for sale                    -                -               -          (17,161)        (17,161)
   Net Loss                          (43,378)               -      (4,294,383)               -      (4,337,761)
                                ------------     ------------    ------------     ------------    ------------
Comprehensive Loss                   (43,378)               -      (4,294,383)         (17,161)     (4,354,922)
                                ------------     ------------    ------------     ------------    ------------

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

Comprehensive Income (Loss):
   Net change in net unrealized
     losses on marketable securities
     available for sale                    -                -               -           27,867          27,867
   Net Loss                          (58,383)               -      (5,779,919)               -      (5,838,302)
                                ------------     ------------    ------------     ------------    ------------
Comprehensive Income (Loss)          (58,383)               -      (5,779,919)          27,867      (5,810,435)
                                ------------     ------------    ------------     ------------    ------------

Balance at March 31, 1998           (314,334)           5,000      28,086,571          (14,453)     27,762,784
                                ------------     ------------    ------------     ------------    ------------

Comprehensive Income (Loss):
   Net change in net unrealized
     losses on marketable securities
     available for sale                    -                -               -           21,922          21,922
   Net Loss                          (33,830)               -      (3,349,203)               -      (3,383,033)
                                ------------     ------------    ------------     ------------    ------------
Comprehensive Income (Loss)          (33,830)               -      (3,349,203)          21,922      (3,361,111)
                                ------------     ------------    ------------     ------------    ------------

Balance at March 31, 1999       $   (348,164)    $      5,000    $ 24,737,368     $      7,469    $24,401,673
                                ============     ============    ============     ============    ===========


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

<PAGE>

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

                                COMBINED STATEMENTS OF CASH FLOWS

                       FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>


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

Cash flows from operating activities:
<S>                                                       <C>              <C>               <C>
   Net loss                                               $  (3,383,033)   $  (5,838,302)    $  (4,337,761)
   Adjustments to reconcile net loss to net
     cash used for operating activities:
     Equity in losses of Local Limited Partnerships           2,944,720        4,777,460         4,044,413
     Provision for valuation of Investment in Local
       Limited Partnership                                            -          590,197                 -
     Provision for valuation of rental property                       -          160,000                 -
     Depreciation and amortization                               51,856           64,590            29,451
     (Gain) Loss on sales and maturities of
       marketable securities                                     14,790           (1,154)           (1,560)
     Gain on forgiveness of debt                                (23,462)               -                 -
     Minority interest in income (losses) of Local
       Limited Partnership                                           17           (1,900)                -
     Cash distribution income included in cash
       distribution from Local Limited Partnership              (65,089)               -                 -
     Increase (decrease) in cash arising from changes
      in operating assets and liabilities:
       Tenant security deposits                                    (741)            (131)                -
       Prepaid assets                                            (1,489)               -                 -
       Mortgagee escrow deposits                                 (2,041)           3,990                 -
       Replacement reserve deposits                              (2,114)            (739)                -
       Other assets                                               6,383           10,992           (24,625)
       Accounts payable to affiliate                             64,233          (25,605)           16,700
       Accounts payable and accrued expenses                     48,557           21,457           (32,191)
       Tenant security deposits payable                             786              131                 -
       Deferred revenue                                           7,357          (34,896)           (4,961)
                                                          -------------    -------------     -------------
Net cash used for operating activities                         (339,270)        (273,910)         (310,534)
                                                          -------------    -------------     -------------

Cash flows from investing activities:
   Investments in Local Limited Partnerships                    (50,420)               -                 -
   Purchases of marketable securities                        (2,523,829)      (2,889,608)         (755,442)
   Proceeds from sales and maturities of
     marketable securities                                    2,929,397        2,694,039           998,969
   Additions to rental property                                    (633)               -                 -
   Cash distributions received from Local Limited
     Partnerships                                               368,798          241,893           272,930
   Advance to affiliate                                        (172,739)          (1,000)                -
   Cash received upon assumption of General Partner
     interest in a Combined Entity                                    -              937                 -
                                                          -------------    -------------     -------------
Net cash provided by investing activities                       550,574           46,261           516,457
                                                          -------------    -------------     -------------

Cash flows from financing activities:
   General Partner contribution                                       -           23,462                 -
   Payment of mortgage principal                                   (786)          (5,448)                -
                                                          -------------    -------------     -------------
Net cash  provided by (used for) financing activities              (786)          18,014                 -
                                                          -------------    -------------     -------------

Net increase (decrease) in cash and
   cash equivalents                                             210,518         (209,635)          205,923

Cash and cash equivalents, beginning                            239,932          449,567           243,644
                                                          -------------    -------------     -------------

Cash and cash equivalents, ending                         $     450,450    $     239,932     $     449,567
                                                          =============    =============     =============
The accompanying notes are an integral part of these combined financial statements.
</TABLE>


<PAGE>

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



                          NOTES TO THE COMBINED 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 the Boston  Financial  Group  Limited  Partnership
("Boston Financial"). 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, 1999, the Managing General Partner has designated  approximately  $2,553,000
of marketable securities as such Reserves.

2.   Significant Accounting Policies

Basis of Presentation and Combination

The Partnership accounts for its investments in Local Limited Partnerships, with
the exception of the Combined Entity (defined below), using the equity method of
accounting  because the  Partnership  does not have a majority  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  currently 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 COMBINED FINANCIAL STATEMENTS (continued)


2.  Significant Accounting Policies (continued)

Basis of Presentation and Combination (continued)

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.

On March 1, 1997, an affiliate of the  Partnership's  Managing  General Partner,
Boston  Financial  GP1-LLC,  became the Local General Partner of Burbank Limited
Partnership  ("Burbank"),  a Local Limited  Partnership in which the Partnership
has invested.  Since the Local General Partner of Burbank is an affiliate of the
Partnership and has a controlling financial interest in Burbank, as set forth in
paragraph 22 of ARB 51, these combined financial statements include all activity
at Burbank beginning on March 1, 1997. All significant intercompany balances and
transactions have been eliminated.  As used herein, the "Combined Entity" refers
to Burbank.

The General  Partners  have  decided to report the results of the Local  Limited
Partnerships,  including the Combined Entity,  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 combined financial statements is as of December 31,
1998, 1997 and 1996.

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  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.

Cash Equivalents

Cash equivalents  consist of short-term  money market  instruments with original
maturities of 90 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.

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 COMBINED FINANCIAL STATEMENTS (continued)


2.   Significant Accounting Policies (continued)

Effect of recently issued Accounting Standard

The Financial  Accounting Standards Board recently issued Statement of Financial
Accounting  Standards  No. 130,  Reporting  Comprehensive  Income.  The standard
requires that changes in comprehensive  income be shown in a financial statement
that is displayed with the same  prominence as other financial  statements.  The
standard is effective for fiscal years  beginning  after  December 15, 1997. The
Partnership  adopted the new standard  effective  April 1, 1998 and its adoption
did not have a significant  effect on the  Partnership's  financial  position or
results of operations. The only component of the Partnership's other accumulated
comprehensive   income  is  net  unrealized   gains  and  losses  on  marketable
securities.

Rental Property

Real  estate  and  personal  property  of the  Combined  Entity is  recorded  in
accordance with SFAS 121. The Combined Entity  provides for  depreciation  using
primarily the straight-line method over its estimated useful lives.

In accordance with Financial  Accounting  Standard No. 121,  "Accounting for the
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed Of",
the Partnership has implemented  policies and practices for assessing impairment
of its real estate assets and  investments in Local Limited  Partnerships.  Each
asset is analyzed by real estate experts to determine if an impairment indicator
exists.  If so, the carrying value is compared to the  undiscounted  future cash
flows  expected  to be  derived  from the asset and,  if there is a  significant
impairment  in value,  a provision to write down the asset to fair value will be
charged against income.

Rental Income

Rental  income,  principally  from  short-term  leases on the Combined  Entity's
apartment  units,  is recognized as income under the accrual method as the rents
become due.

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.


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

                      NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


3.   Marketable Securities

A summary of marketable securities is as follows:
<TABLE>
<CAPTION>

                                                                 Gross             Gross
                                                              Unrealized        Unrealized           Fair
                                                 Cost            Gains            Losses             Value


<S>                                         <C>               <C>               <C>             <C>
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
                                            ============      ===========       ==========      ============

Debt securities issued by the US
   Treasury and other US governement
   corporations and agencies                $  2,934,294      $     5,308       $  (21,353)     $  2,918,249

Mortgage backed securities                       144,876            1,592                -           146,468
                                            ------------      -----------       ----------      ------------

Marketable securities at March 31, 1998     $  3,079,170      $     6,900       $  (21,353)     $  3,064,717
                                            ============      ===========       ==========      ============
</TABLE>


The contractual maturities at March 31, 1999 are as follows:
<TABLE>
<CAPTION>
                                                                                                Fair
                                                                            Cost                Value

<S>                                                                      <C>                 <C>
Due in less the one year                                                 $   399,788         $   400,906
Due in one year to five years                                              1,947,692           1,953,502
Mortgage backed securities                                                   311,332             311,873
                                                                         -----------         -----------
                                                                         $ 2,658,812         $ 2,666,281
                                                                         ===========         ===========
</TABLE>

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 $451,000,  $1,792,000 and
$804,000  during  the  fiscal  years  ended  March  31,  1999,  1998  and  1997,
respectively.  Proceeds  from  the  maturities  of  marketable  securities  were
approximately  $2,479,000,  $902,000 and $195,000  during the fiscal years ended
March 31, 1999, 1998 and 1997,  respectively.  Included in investment income are
gross gains of $4,895, $7,205 and $2,951 and gross losses of $19,685,  $6,051and
$1,391 that were  realized on the sales  during the fiscal years ended March 31,
1999, 1998 and 1997, respectively.




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

               NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


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, excluding the Combined Entity
in 1999. 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,  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 88.6%,  respectively.  Upon
dissolution,   proceeds  will  be  distributed   according  to  each  respective
partnership agreement.

The  following  is a  summary  of  Investments  in Local  Limited  Partnerships,
excluding the Combined Entity in 1999 and 1998, at March 31:

<TABLE>
<CAPTION>
                                                               1999              1998           1997
                                                           ------------     ------------    ------------

Capital contributions paid to Local Limited
   Partnerships and purchase price paid to
   withdrawing partners of Local Limited
<S>                                                        <C>               <C>             <C>
   Partnerships                                            $ 55,269,931      $55,219,511     $55,520,042

Cumulative equity in losses of Local Limited
   Partnerships  (excluding cumulative
   unrecognized losses of $1,236,440 and $133,567
   in 1999 and 1998, respectively)                          (32,603,028)     (29,735,570)    (25,141,481)

Cumulative cash distributions received
   from Local Limited Partnerships                           (1,341,854)        (973,056)       (731,163)
                                                           ------------     ------------    ------------

Investments in Local Limited Partnerships
  before adjustment                                          21,325,049       24,510,885      29,647,398

Excess of investment cost over the underlying net assets acquired:

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

    Accumulated amortization of acquisition
    fees and expenses                                          (202,418)        (201,464)       (200,510)
                                                           ------------     ------------    ------------

Investments in Local Limited Partnerships                    22,128,988       25,315,778      30,453,245

Reserve for valuation of Investment in Local
   Limited Partnership                                         (590,197)        (590,197)              -
                                                           ------------     ------------    ------------
                                                           $ 21,538,791     $ 24,725,581  $   30,453,245
                                                           ============     ============  ==============
</TABLE>


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.




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

                      NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


4.   Investments in Local Limited Partnerships (continued)

Summarized financial  information as of December 31, 1998, 1997 and 1996 (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  accounted for on the equity method  (excluding the Combined Entity
beginning on the date of  combination)  in which the Partnership has invested as
of that date is as follows:

Summarized Balance Sheets - as of December 31,
<TABLE>
<CAPTION>
                                                         1998               1997                1996
                                                    --------------      --------------      --------------
Assets:
<S>                                                 <C>                 <C>                 <C>
   Investment property, net                         $  108,683,329      $  113,022,632      $  119,404,292
   Current assets                                        3,051,869           3,319,977           3,109,145
   Other assets                                          5,864,260           5,949,514           5,944,574
                                                    --------------      --------------      --------------
     Total Assets                                   $  117,599,458      $  122,292,123      $  128,458,011
                                                    ==============      ==============      ==============

Liabilities and Partners' Equity:
   Long-term debt, net of current portion           $   82,067,318      $   84,044,067      $   85,520,204
   Current liabilities (including current portion
     of long-term debt)                                  8,669,686           8,060,589           7,168,891
   Other liabilities                                     2,206,860           1,456,872           1,389,432
                                                    --------------      --------------      --------------
     Total Liabilities                                  92,943,864          93,561,528          94,078,527

Partnership's Equity                                    19,691,908          23,844,561          29,509,002
Other Partners' Equity                                   4,963,686           4,886,034           4,870,482
                                                    --------------      --------------      --------------
     Total Liabilities and Partners' Equity         $  117,599,458      $  122,292,123      $  128,458,011
                                                    ==============      ==============      ==============

Summarized Income Statements - for the years ended December 31,

Rental and other income:                            $   14,524,674      $   14,309,317      $   14,377,262
                                                    --------------      --------------      --------------

Expenses:
   Operating                                             7,835,920           7,622,343           7,389,143
   Interest                                              5,842,850           5,919,806           6,159,027
   Depreciation and amortization                         4,913,928           5,786,902           4,970,595
                                                    --------------      --------------      --------------
     Total Expenses                                     18,592,698          19,329,051          18,518,765
                                                    --------------      --------------      --------------

     Net Loss                                       $   (4,068,024)     $   (5,019,734)     $   (4,141,503)
                                                    ==============      ==============      ==============

Partnership's share of Net Loss                     $   (3,970,328)     $   (4,908,884)     $   (4,046,556)
                                                    ==============      ==============      ==============
Other partners' share of Net Loss                   $      (97,696)     $     (110,850)     $      (94,947)
                                                    ==============      ==============      ==============
</TABLE>

For the years ended March 31, 1999 and 1998, the  Partnership has not recognized
$1,102,873  and  $131,424,  respectively,  of equity in losses of Local  Limited
Partnerships  relating to two 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
$19,610,329  differs  from  the  Partnership's   Investments  in  Local  Limited
Partnerships  before  adjustment  of  $21,325,049  principally  because:  a) the
Partnership  has not  recognized  $1,236,440  of equity in losses of five  Local
Limited  Partnerships  whose equity in losses exceeded its total investment;  b)
distributions made by Local Limited  Partnerships during the quarter ended March
31, 1999 are not reflected in the December 31, 1998 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.

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

                 NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

5.   Rental Property

Real estate and personal property  belonging to the Combined Entity are recorded
at cost, the components of which, excluding certain acquisition costs of $26,329
and  $50,186  as of  December  31,  1998  and  1997,  respectively,  paid by the
Partnership and included in basis, are as follows at December 31:
<TABLE>
<CAPTION>

                                                         1998             1997
                                                     -----------       -----------
           <S>                                       <C>               <C>
           Land                                      $    42,000       $    42,000
           Building and improvements                   1,005,572         1,004,939
                                                     -----------       -----------
                                                       1,047,572         1,046,939
           Less:   accumulated depreciation             (295,058)         (268,015)
                                                     -----------       -----------
           Total                                     $   752,514       $   778,924
                                                     ===========       ===========
</TABLE>

During the year ended  December 31, 1997,  an  impairment  loss of $160,000 was
recognized on the real estate in the combined  Entity,  which  decreased the
carrying value to $1,046,939.

6.   Transactions with Affiliates

An affiliate of the Managing General Partner currently  receives the base amount
of 0.351% (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 of $243,169, $238,087 and $231,035 for the years ended March 31,
1999, 1998 and 1997, respectively,  have been included in expenses.  Included in
accounts  payable  to  affiliate  at March 31,  1999 and 1998 are  $122,057  and
$60,556,  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,  1999,  1998 and 1997 are  $109,845,
$127,926 and $117,763, 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,  1999 and 1998 are  $21,385  and  $18,654,
respectively.

BF Lansing  Limited  Partnership  ("BF  Lansing"),  an affiliate of the Managing
General  Partner,  is the  Administrative  General  Partner in two Local Limited
Partnerships  in which the  Partnership  has  invested,  St.  Croix II,  Limited
Partnership  ("Carib Villas II") and Christiansted  Limited  Partnership ("Carib
Villas  III").  BF Lansing's  only  responsibility  in relation to the two Local
Limited Partnerships is the selection of a management agent. BF Lansing selected
Lansing  Management  Company  ("LMC"),  an  affiliate  of the  Managing  General
Partner, as the management agent for Carib Villas II and III. The management fee
charged to each property is equal to 5% of property gross revenues.  Included in
operating  expenses  in  the  summarized  income  statements  in  Note  4 to the
financial  statements are $21,120,  $21,120 and $15,305,  respectively,  of fees
paid to LMC for the years ended December 31, 1998, 1997 and 1996.

LMC is also the management agent for Historic New Center,  another Local Limited
Partnership in which the Partnership invested. Included in operating expenses in
the  summarized  income  statements  in Note 4 to the financial  statements  are
$24,185, $21,986 and $24,561,  respectively, of fees earned by LMC for the years
ended December 31, 1998, 1997 and 1996.

Boston  Financial  Property  Management  ("BFPM"),  an affiliate of the Managing
General  Partner,  is the management  agent for Woodlake  Hills, a Local Limited
Partnership in which the Partnership is invested.  The management fee charged to
the property is 4% of property gross revenues. Included in operating expenses in
the  summarized  income  statements  in Note 4 to the financial  statements  are
$35,150, $34,752 and $37,497, respectively, of fees earned by BFPM for the years
ended December 31, 1998, 1997 and 1996.

<PAGE>

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

                      NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


7.   Mortgage Notes Payable

The  Combined  Entity has a mortgage  note  payable  in the  original  amount of
$750,000  amortized over 30 years at a rate of 11.5%.  On December 27, 1997, the
mortgage  holder of the note reduced the interest  rate to 10%;  this  reduction
changed the monthly payment from $7,427 to $6,143.  It was  anticipated  that by
the end of 1998,  the  Combined  Entity would have  negotiated  a new  financing
agreement  with  another  lending  institution.  As of December  31,  1998,  the
remaining  balance on this note is $706,873 and the Managing  General Partner is
negotiating  with the lender to either refinance or obtain a time extension that
will permit negotiations with another lending institution.  It remains uncertain
as to whether  foreclosure  can be avoided  because the note is  technically  in
default.

8.   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, 1999,  $99,000 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.

9.   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,  is involved in certain  litigation with an entity formerly  affiliated
with this  Partnership  and its previous  local  general  partner.  Recently,  a
tentative  settlement agreement  was agreed upon.   Tompkins/Rosecliff  and the
Partnership will contribute a total of $150,000,  of which the Partnership  will
contribute  $100,000.  In  the opinion  of  Management,  this is an  appropriate
settlement,  which will eliminate the risk of foreclosure and recapture posed by
this litigation.

10.  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.



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

                         NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


11.  Federal Income Taxes

A  reconciliation  of the loss  reported in the Combined  Statements  of
Operations  for the fiscal  years ended March 31,  1999,  1998 and 1997 to the
loss reported for federal income tax purposes for the years ended December 31,
1998, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>

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

<S>                                                       <C>              <C>               <C>
Net Loss per Statement of Operations                      $  (3,383,033)   $  (5,838,302)    $  (4,337,761)

   Adjustment for equity in losses of Local Limited
     Partnerships for financial reporting purposes
     over (under) equity in losses for tax purposes            (358,118)      (1,419,314)         (555,803)

   Equity in losses of Local Limited Partnerships not
     recognized for financial reporting purposes             (1,102,873)        (131,424)           (2,143)

   Adjustment to reflect March 31, fiscal year-end
     to December 31, tax year-end                                64,611           31,986           (46,742)

   Adjustment for expenses not currently deductible for
     tax purposes                                                     -                -           114,572

   Related party expenses paid in current year but
     expensed for book purposes in prior year                         -         (114,572)          (55,889)

   Adjustment for accelerated amortization
     for tax purposes over amortization
     for financial reporting purposes                           (12,749)          (8,383)          (10,828)

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

   Other                                                         12,536                -            22,000
                                                          -------------    -------------     -------------

   Net Loss for federal income tax
     purposes                                             $  (4,779,626)   $  (6,889,812)    $  (4,872,594)
                                                          =============    =============     =============
</TABLE>




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

                       NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

11.  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, 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                                              $   4,114,643    $  13,039,165    $ (8,924,522)
                                                          =============    =============    ============
Liabilities                                               $   1,134,775    $     204,721    $    930,054
                                                          =============    =============    ============
</TABLE>

The  differences  in assets and  liabilities  of the  Partnership  for financial
reporting  purposes are primarily  attributable to: (i) for financial  reporting
purposes, the Partnership combines the financial statements of one Local Limited
Partnership  with its financial  statements;  for tax reporting  purposes,  this
entity is carried on the equity method (ii) the  cumulative  equity in loss from
Local Limited  Partnerships,  including the Combined  Entity,  for tax reporting
purposes  is  approximately  $3,689,000  greater  than for  financial  reporting
purposes,  including approximately  $1,236,000 of losses the Partnership has not
recognized  relating to five Local Limited  Partnerships whose cumulative equity
in losses exceeded its total  investment;  (iii) the amortization of acquisition
fees  for  tax  reporting  purposes  exceeds  financial  reporting  purposes  by
approximately $64,000; (iv) 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 (v)  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, 1998
are as follows:
<TABLE>
<CAPTION>

                                                             Financial           Tax
                                                             Reporting        Reporting
                                                             Purposes         Purposes       Differences

<S>                                                       <C>              <C>              <C>
Investments in Local Limited Partnerships                 $  24,775,767    $  23,114,290    $  1,661,477
                                                          =============    =============    ============
Other assets                                              $   4,129,901    $  13,054,826     $(8,924,925)
                                                          =============    =============     ===========
Liabilities                                               $   1,002,330    $     217,179    $    785,151
                                                          =============    =============    ============
</TABLE>

The  differences  in assets and  liabilities  of the  Partnership  for financial
reporting  purposes are primarily  attributable to: (i) for financial  reporting
purposes, the Partnership combines the financial statements of one Local Limited
Partnership  with its financial  statements;  for tax reporting  purposes,  this
entity is carried on the equity  method;  (ii) the  Partnership  has  provided a
reserve for valuation of  approximately  $590,000 against one of its investments
in Local  Limited  Partnerships  for  financial  reporting  purposes;  (iii) the
cumulative  equity  in loss  from  Local  Limited  Partnerships,  including  the
Combined Entity, for tax reporting purposes is approximately  $2,163,000 greater
than for  financial  reporting  purposes,  including  approximately  $134,000 of
losses  the  Partnership  has  not  recognized  relating  to two  Local  Limited
Partnerships  whose cumulative  equity in losses exceeded its total  investment;
(iv) the  amortization of acquisition  fees for tax reporting  purposes  exceeds
financial reporting purposes by approximately $51,000; (v) approximately $34,000
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 (vi) 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>
                        BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. V
                                        (A Limited Partnership)


                      NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

12.  Supplemental Combining Schedules
<TABLE>
<CAPTION>

                                                                            Balance Sheets

                                           Boston Financial
                                           Qualified Housing        Wheeler
                                              Tax Credits             House
                                               L.P V (A)           (Burbank) (B)    Eliminations     Combined (A)
Assets

<S>                                        <C>                    <C>               <C>             <C>
Cash and cash equivalents                  $       449,931        $          519    $           -   $      450,450
Accounts receivable from affiliates                174,739                     -           (1,000)         173,739
Tenant security deposit escrow                           -                 3,758                -            3,758
Investments in Local
   Limited Partnerships, net                    21,483,543                     -           55,248       21,538,791
Marketable securities, at fair value             2,666,281                     -                -        2,666,281
Prepaid assets                                           -                 1,489                -            1,489
Rental property at cost, net of
   accumulated depreciation                              -               752,514           26,329          778,843
Replacement reserve escrow                               -                 7,425                -            7,425
Other assets                                        32,658                     -                -           32,658
                                           ---------------       ---------------    -------------   --------------
     Total Assets                          $    24,807,152       $       765,705    $      80,577   $   25,653,434
                                           ===============       ================   ==============  ==============

Liabilities and Partners' Equity

Accounts payable to affiliates             $       143,443       $         1,000    $      (1,000)  $      143,443
Accounts payable and accrued expenses              115,218                18,620                -          133,838
Mortgage note payable                                    -               706,873                -          706,873
Tenant security deposits payable                         -                 3,803                -            3,803
Deferred revenue                                   146,818                     -                -          146,818
                                           ---------------       ---------------    -------------   --------------
     Total Liabilities                             405,479               730,296           (1,000)       1,134,775
                                           ---------------       ---------------    -------------   --------------

Minority interest in Local Limited
   Partnership                                           -                     -          116,986          116,986
                                           ---------------       ---------------    -------------   --------------

General, Initial and Investor
   Limited Partners' Equity                     24,394,204                35,409          (35,409)      24,394,204
                                           ---------------       ---------------    -------------   --------------
Net unrealized gains on
   marketable securities                             7,469                     -                -            7,469
                                           ---------------       ---------------    -------------   --------------
     Total Partners' Equity                     24,401,673                35,409          (35,409)      24,401,673
                                           ---------------       ---------------    -------------   --------------
     Total Liabilities and Partners' Equity$    24,807,152       $       765,705    $      80,577   $   25,653,434
                                           ===============       ===============    =============   ==============

(A) As of March 31, 1999.
(B) As of December 31, 1998 - See Note 2.
</TABLE>


<PAGE>

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

                    NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

12.  Supplemental Combining Schedules (continued)
<TABLE>
<CAPTION>

                                                                       Statements of Operations

                                           Boston Financial
                                           Qualified Housing         Wheeler
                                              Tax Credits             House
                                              L.P. V (A)           (Burbank) (B)    Eliminations      Combined (A)
Revenue:
<S>                                         <C>                  <C>                <C>                <C>
   Rental                                   $             -      $       117,971    $           -      $    117,971
   Investment                                       158,954                  140                -           159,094
   Other                                            122,087                1,332                -           123,419
                                            ---------------      ---------------    -------------      ------------
     Total Revenue                                  281,041              119,443                -           400,484
                                            ---------------      ---------------    -------------      ------------

Expenses:
   General and administrative                       453,057                    -                -           453,057
   Asset management fees, related party             243,169                    -                -           243,169
   Rental operations, exclusive of depreciation           -               40,261                -            40,261
   Interest                                               -               73,899                -            73,899
   Depreciation                                           -               27,043                -            27,043
   Amortization                                      24,813                    -                -            24,813
                                            ---------------      ---------------    -------------      ------------
     Total Expenses                                 721,039              141,203                -           862,242
                                            ---------------      ---------------    -------------      ------------

Loss before minority interest in losses of
   Local Limited Partnership, equity in
   losses of Local Limited
   Partnerships and extraordinary item             (439,998)             (21,760)               -          (461,758)

Minority interest in losses of
   Local Limited Partnership                              -                    -              (17)              (17)

Equity in losses of Local Limited
   Partnerships                                  (2,943,035)                   -           (1,685)       (2,944,720)
                                            ---------------      ---------------    -------------      ------------

Extraordinary gain on cancellation
   of indebtedness                                        -               23,462                -            23,462
                                            ---------------      ---------------    -------------      ------------

Net Loss                                    $    (3,383,033)     $         1,702    $      (1,702)     $ (3,383,033)
                                            ===============      ===============    =============      ============

(A) For the year ended March 31, 1999.
(B) For the year ended December 31, 1998 - See Note 2.
</TABLE>



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

                       NOTES TO COMBINED FINANCIAL STATEMENTS (continued)

12.  Supplemental Combining Schedules (continued)
<TABLE>
<CAPTION>

                                                                       Statements of Cash Flows

                                           Boston Financial
                                           Qualified Housing         Wheeler
                                              Tax Credits              House
                                               L.P. V (A)          (Burbank) (B)    Eliminations        Combined (A)

Cash flows from operating activities:
<S>                                         <C>                  <C>                <C>              <C>
Net Loss                                    $    (3,383,033)     $         1,702    $      (1,702)   $   (3,383,033)
Adjustments to reconcile net loss to
   net cash used for operating activities:
     Equity in losses of Local
       Limited Partnerships                       2,943,035                    -            1,685         2,944,720
     Depreciation and amortization                   24,813               27,043                -            51,856
     Loss on sale and
       maturities of
       marketable securities                         14,790                    -                -            14,790
     Cash distribution income included in
       cash distributions from Local
       Limited Partnerships                         (65,089)                   -                -           (65,089)
     Gain on forgiveness of debt                          -              (23,462)               -           (23,462)
     Minority interest in losses of
       Local Limited Partnership                          -                    -               17                17
   Increase (decrease)  in
       cash arising from
       changes in operating assets and liabilities:
       Tenant security deposits                           -                 (741)               -              (741)
       Prepaid assets                                     -               (1,489)               -            (1,489)
       Mortgagee escrow deposits                          -               (2,041)               -            (2,041)
       Replacement reserve deposits                       -               (2,114)               -            (2,114)
       Other assets                                   6,383                    -                -             6,383
       Accounts payable to affiliates                64,233                    -                -            64,233
       Accounts payable and
        accrued expenses                             47,527                1,030                -            48,557
       Tenant security deposits payable                   -                  786                -               786
       Deferred revenue                               7,357                    -                -             7,357
                                            ---------------      ---------------    -------------    --------------
Net cash used for operating activities             (339,984)                 714                -          (339,270)
                                            ---------------      ---------------    -------------    --------------

Cash flows from investing activities:
   Investments in Local Limited Partnerships        (50,420)                 -                 -            (50,420)
   Purchases of marketable securities            (2,523,829)                 -                 -         (2,523,829)
 Proceeds from sales and maturities
     of marketable securities                     2,929,397                  -                 -          2,929,397
   Additions to rental property                        -                  (633)                -               (633)
   Cash distributions received from
     Local Limited Partnerships                     368,798                  -                 -            368,798
   Advance to affiliate
     from affiliates                               (173,739)             1,000                 -           (172,739)
                                            ---------------      -------------      ------------     --------------
Net cash provided by investing activities           550,207                367                 -            550,574
                                            ---------------      -------------      ------------     --------------


</TABLE>

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

                        NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

12.  Supplemental Combining Schedules (continued)
<TABLE>
<CAPTION>

                                                                 Statements of Cash Flows (continued)

                                           Boston Financial
                                           Qualified Housing         Wheeler
                                              Tax Credits              House
                                              L.P. V (A)           (Burbank) (B)    Eliminations     Combined (A)


Cash flows from financing activities:
<S>                                         <C>                  <C>                <C>            <C>
   Payment of mortgage principal                          -               (786)                -               (786)
                                            ---------------      -------------      ------------   ----------------
Net cash used for financing activities                    -               (786)                -               (786)
                                            ---------------      -------------      ------------   ----------------

Net increase in cash and cash equivalents           210,223                295                 -            210,518

Cash and cash equivalents, beginning                239,708                224                 -            239,932
                                            ---------------      -------------      ------------   ----------------

Cash and cash equivalents, ending           $       449,931      $         519      $          -   $        450,450
                                            ===============      =============      ============   ================

(A) For the year ended March 31, 1999.
(B) For the year ended December 31, 1998 - See Note 2.
</TABLE>
<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, 1999
<TABLE>


                                                                                                             GROSS AMOUNT
                                                                                                               AT WHICH
                                                                                                              CARRIED AT
                                                                                                             DECEMBER 31,
                                                    COST OF INTEREST AT ACQUISITION DATE                         1998
                                                    -------------------------------------                    --------------
                                                                                          NET IMPROVEMENTS
                             NUMBER       TOTAL                                              CAPITALIZED
                               OF        ENCUM-                         BUILDING AND        SUBSEQUENT TO
        DESCRIPTION           UNITS     BRANCES *         LAND          IMPROVEMENTS         ACQUISITION         LAND
        -----------           -----     ---------         ----          ------------         -----------         ----
<S>                               <C>   <C>             <C>                 <C>                 <C>             <C>


Low and Moderate
Income Apartment Complexes

Strathern Park/Lorne Park         241   $17,428,457       $4,369,500         $10,513,639         $10,997,952    $5,889,320
  Los Angeles, CA
Maidens Choice                    101     4,021,395          807,791           2,013,769           3,430,551       807,791
  Baltimore, MD
Cedar Lane                         36     1,108,259           40,000           1,375,512              11,854        40,000
  London, KY
Silver Creek                       24       768,386           20,000             946,812                   0        20,000
  Berea, KY
Rosecliff                         168     5,562,595        1,200,000           3,304,950           4,578,797     1,120,000
  Orlando, FL
Brookwood                          81     3,019,835           91,470             344,580           4,561,568       522,673
  Ypsilanti Township, MI
Water Oak                          40     1,256,023           98,058           1,467,944               5,638        98,058
  Orange City, FL
Yester Oaks                        44     1,286,809           47,105           1,574,145               2,489        47,105
  Lafayette, GA
Ocean View                         42     1,366,353          112,620           1,600,421               7,347       112,620
  Ferandina Beach, FL
Wheeler House                      17       706,873           42,000           1,139,412           (133,840)        42,000
  Nashua, NH
Archer Village                     24       708,517           40,000             861,288              38,869        40,000
  Archer, FL
Oaks of Dunlop                    144     4,428,393          631,959           6,492,444             148,134       631,959
  Colonial Heights, VA
Timothy House                     112     2,500,426           11,638           6,344,664             434,139        11,638
  Towson, MD
Westover Station                  108     2,661,411          305,645           4,299,613               8,089       305,645
  Newport News, VA
Carib Villas III                   24     1,482,307          107,582           1,802,466               5,614       239,009
  St. Croix, VI
Carib Villas II                    20     1,402,191           57,720           1,787,528               5,614       197,195
  St. Croix, VI
Whispering Trace                   40     1,376,939          218,000           2,413,145           (467,706)       218,000
  Woodstock, GA
New Center                        104     2,932,517           79,652           3,534,776           2,932,510        96,116
  Detroit, MI

</TABLE>


<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, 1999
(continued)
<TABLE>

                             GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,
                                                 1998
                            ------------------------------------------------            LIFE ON
                                                                                         WHICH
                                                                                     DEPRECIATION
                              BUILDING AND                   ACCUMULATED     DATE     IS COMPUTED       DATE
        DESCRIPTION           IMPROVEMENTS       TOTAL       DEPRECIATION    BUILT      (YEARS)       ACQUIRED
        -----------           ------------       -----       ------------    -----      -------       --------
<S>                              <C>          <C>               <C>         <C>        <C>           <C>


Low and Moderate
Income Apartment Complexes

Strathern Park/Lorne Park        $19,991,771   $25,881,091       $5,972,453  1991       various       07/05/90
  Los Angeles, CA
Maidens Choice                     5,444,320     6,252,111        1,751,942  1991       various       08/17/90
  Baltimore, MD
Cedar Lane                         1,387,366     1,427,366          335,526  1991       various       09/10/90
  London, KY
Silver Creek                         946,812       966,812          235,121  1990       various       08/15/90
  Berea, KY
Rosecliff                          7,963,747     9,083,747        2,437,766  1991       various       09/18/90
  Orlando, FL
Brookwood                          4,474,945     4,997,618        1,141,319  1992       various       10/01/90
  Ypsilanti Township, MI
Water Oak                          1,473,582     1,571,640          421,448  1991       various       01/01/91
  Orange City, FL
Yester Oaks                        1,576,634     1,623,739          466,846  1991       various       01/01/91
  Lafayette, GA
Ocean View                         1,607,768     1,720,388          491,142  1991       various       01/01/91
  Ferandina Beach, FL
Wheeler House                      1,005,572     1,047,572          295,058  1991       various       01/01/91
  Nashua, NH
Archer Village                       900,157       940,157          271,728  1991       various       01/01/91
  Archer, FL
Oaks of Dunlop                     6,640,578     7,272,537        2,239,564  1991       various       01/01/91
  Colonial Heights, VA
Timothy House                      6,778,803     6,790,441        1,347,329  1992       various       03/05/91
  Towson, MD
Westover Station                   4,307,702     4,613,347          993,754  1991       various       03/30/91
  Newport News, VA
Carib Villas III                   1,676,653     1,915,662          544,187  1992       various       03/21/91
  St. Croix, VI
Carib Villas II                    1,653,667     1,850,862          526,156  1991       various       03/01/91
  St. Croix, VI
Whispering Trace                   1,945,439     2,163,439          715,668  1990       various       05/01/91
  Woodstock, GA
New Center                         6,450,822     6,546,938        1,640,913  1992       various       06/27/91
  Detroit, MI

</TABLE>


<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, 1999
(continued)
<TABLE>

                                                                                                             GROSS AMOUNT
                                                                                                               AT WHICH
                                                                                                              CARRIED AT
                                                                                                             DECEMBER 31,
                                                    COST OF INTEREST AT ACQUISITION DATE                         1998
                                                    -------------------------------------                    --------------
                                                                                          NET IMPROVEMENTS
                             NUMBER       TOTAL                                              CAPITALIZED
                               OF        ENCUM-                         BUILDING AND        SUBSEQUENT TO
        DESCRIPTION           UNITS     BRANCES *         LAND          IMPROVEMENTS         ACQUISITION         LAND
        -----------           -----     ---------         ----          ------------         -----------         ----
<S>                               <C>     <C>              <C>                <C>                <C>           <C>


Low and Moderate
Income Apartment Complexes
Huguenot Park                      24     1,400,000           83,000           2,088,664                   0        83,000
  New Paltz, NY
Hillwood Pointe                   100     2,926,844          454,185           5,103,711              79,106       454,185
  Jacksonville, FL
Pinewood Pointe                   136     3,962,864          555,093           6,809,808             556,869       555,093
  Jacksonville, FL
Westgate                           60     1,365,415          215,168           2,152,519              24,702       238,920
  Bismark, ND
Woodlake Hills                    144     3,811,770          233,690           6,481,250           2,390,901       187,588
  Pontiac, MI
Bixel House                        76     1,273,858          190,746           2,294,879              50,061       190,746
  Los Angeles, CA
Harmony                            65     2,238,307                0           7,020,696             117,826             0
  North Hollywood, CA
Schumaker Place                    96     2,913,267          531,776           1,627,716           3,603,531     1,023,027
  Salisbury, MD
Circle Terrace                    303     8,872,936                0           7,884,733           8,635,332     1,104,269
  Lansdown, MD
                            -----------------------------------------------------------------------------------------------

SUBTOTAL                        2,374    82,782,947       10,544,398          93,281,084          42,025,947    14,275,957

LESS: Combined Entity              17       706,873           42,000           1,139,412           (133,840)        42,000
                            -----------------------------------------------------------------------------------------------

TOTAL                           2,357   $82,076,074      $10,502,398         $92,141,672         $42,159,787   $14,233,957
                            ===============================================================================================
</TABLE>

(1) The  aggregate  cost for  Federal  Income Tax  purposes is  approximately  $
126,889,000.

                          * 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.



<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, 1999
(continued)
<TABLE>



                             GROSS AMOUNT AT WHICH CARRIED AT DECEMBER
                                              31, 1998
                            ---------------------------------------------           LIFE ON
                                                                                     WHICH
                                                                                 DEPRECIATION
                             BUILDING AND                  ACCUMULATED    DATE    IS COMPUTED      DATE
        DESCRIPTION          IMPROVEMENTS       TOTAL      DEPRECIATION   BUILT     (YEARS)      ACQUIRED
        -----------          ------------       -----      ------------   -----     -------      --------
<S>                              <C>           <C>            <C>         <C>       <C>         <C>


Low and Moderate
Income Apartment Complexes
Huguenot Park                     2,088,664     2,171,664        587,767  1991      various      06/26/91
  New Paltz, NY
Hillwood Pointe                   5,182,817     5,637,002      1,536,730  1991      various      07/19/91
  Jacksonville, FL
Pinewood Pointe                   7,366,677     7,921,770      2,165,492  1991      various      07/31/91
  Jacksonville, FL
Westgate                          2,153,469     2,392,389        588,342  1991      various      07/25/91
  Bismark, ND
Woodlake Hills                    8,918,253     9,105,841      2,135,350  1992      various      08/01/91
  Pontiac, MI
Bixel House                       2,344,940     2,535,686        895,823  1991      various      07/31/91
  Los Angeles, CA
Harmony                           7,138,522     7,138,522      2,079,026  1991      various      07/31/91
  North Hollywood, CA
Schumaker Place                   4,739,996     5,763,023      1,097,433  1992      various      09/20/91
  Salisbury, MD
Circle Terrace                   15,415,796    16,520,065      3,501,702  1993      various      12/06/91
  Lansdown, MD
                            ---------------------------------------------

SUBTOTAL                        131,575,472   145,851,429     36,415,585

LESS: Combined Entity             1,005,572     1,047,572        295,058
                            ---------------------------------------------

TOTAL                          $130,569,900  $144,803,857    $36,120,527
                            =============================================

</TABLE>


<PAGE>


<TABLE>
<S>                                   <C>            <C>            <C>                                <C>


Summary of property owned and accumulated depreciation:

Property Owned December 31, 1998                                    Accumulated Depreciation December 31, 1998
------------------------------------------------------------------  -------------------------------------------------
Balance at beginning of period                       $145,480,348   Balance at beginning of period        31,410,776
  Additions during                                                    Additions during period:
period:
     Less current year Wheeler        (1,047,572)                        Less current year Wheeler         (295,058)
House                                                               House
     Other acquisitions                    95,346                                                          5,004,809
                                                                    Depreciation
                                                                                                       --------------
     Improvements etc.                    275,735                   Balance at close of period           $36,120,527
                                    --------------                                                     ==============
                                                        (676,491)
  Deductions during
period:
     Cost of real                               0
estate sold
     Impairment of                              0
Assets
                                    --------------
                                                                0
                                                  ----------------
Balance at close of                                  $144,803,857
period
                                                  ================



Property Owned December 31, 1997                                    Accumulated Depreciation December 31, 1997
------------------------------------------------------------------  -------------------------------------------------
Balance at beginning of period                       $145,480,438   Balance at beginning of period        26,076,146
  Additions during                                                    Additions during period:
period:
     Less current year Wheeler        (1,046,939)                        Less current year Wheeler         (268,015)
House                                                               House
     Other acquisitions                   125,851                                                          5,602,645
                                                                    Depreciation
                                                                                                       --------------
     Improvements etc.                     34,059                   Balance at close of period           $31,410,776
                                    --------------                                                     ==============
                                                        (887,029)
  Deductions during
period:
     Cost of real                               0
estate sold
     Impairment of Assets (1)           (160,000)
                                    --------------
                                                        (160,000)
                                                  ----------------
Balance at close of                                  $144,433,409
period
                                                  ================


Property Owned December 31, 1996                                    Accumulated Depreciation December 31, 1996
------------------------------------------------------------------  -------------------------------------------------
Balance at beginning of period                       $145,304,421   Balance at beginning of period        21,269,750
  Additions during                                                    Additions during period:
period:
     Other acquisitions                    13,520                                                          4,806,396
                                                                    Depreciation
                                                                                                       --------------
     Improvements etc.                    162,497                   Balance at close of period           $26,076,146
                                    --------------                                                     ==============
                                                          176,017
  Deductions during
period:
     Cost of real                               0
estate sold
     Reclassification to                        0
intangible assets
                                    --------------
                                                                0
                                                  ----------------
Balance at close of                                  $145,480,438
period
                                                  ================


</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, 1999
            Reports of Independent Auditors

<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>

Woodlake Hills

[Letterhead]

[LOGO]
JOHN J. LEHOTAN, C.P.A.
Brown City, MI

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, 1996 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, 1996 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 Accountants
February 5, 1997

<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>

Strathern Park

[Letterhead]

[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, 1996 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, 1996, 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.
NANAS, STERN, BIERS, NEINSTEIN AND CO.
January 14, 1997

<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>

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, 1996,  and the related  statements of profit and
loss (on HUD Form No. 92410),  partners' equity and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

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

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 20 through 34
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,
1997, on our  consideration  of Maiden  Choice  Limited  Partnership's  internal
control structure and on its compliance with specific requirements applicable to
CDA programs,  affirmative fair housing, and laws and regulations  applicable to
the financial statements.

/s/Reznick Fedder & Silverman
Baltimore, Maryland           Federal Employer Identification Number:
                                                   52-1088612
Audit Principal: William T. Riley
January 6, 1997

<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>

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, 1997 and 1996
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 audit.

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  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 Cedar Lane I, Ltd.  as of
December 31, 1997 and 1996, 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 a report
dated  January 27, 1998 on our  consideration  of Cedar Lane I, Lts.'s  internal
control structure and compliance with laws and regulations.

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
Lexington, Kentucky

January 27, 1998

<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>

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,  1997  and  1996,  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 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 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, 1997 and 1996 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
Lexington, Kentucky
January 27, 1998

<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>

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, 1996, 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, 1996,  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, 1997

<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>

Brookwood L.D.H.A.

[Letterhead]

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


INDEPENDENT AUDITORS' REPORT

To the Partners
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, 1996 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,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  positions of Brookwood  L.D.H.A.  Limited
Partnership,  MSHDA No. 832 as of  December  31,  1996,  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  30,  1997 on our  consideration  of the  partnership's  internal
control  structure  and a report dated January 30, 1997 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

      I  have  audited  the  accompanying   balance  sheet  of  Burbank  Limited
Partnership  I as of December 31, 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 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 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,  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. Management's plans regarding this matter
are described in Note 8. 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 25, 1999
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 1996,  and the related  statements of
income,  partners' equity and cash flows for the years 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 audits, provide a reasonable basis for my opinion.

       In my opinion, the financial statements referred to above present fairly,
in all material respects,  the financial position of Burbank Limited Partnership
I as of December 31, 1997 and 1996,  and the results of its  operations  and its
cash  flows for the years  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,
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>

Virginia Housing Development Authority

[Letterhead]

[LOGO]
Wall Einchorn & Chernitzer., P.C.
Certified Public Accountants
First Virginia Bank Towers
555 Main Street
Suite 1500
Post Office Box 3610
Norfolk, Virginia 23514
Alvin A. Wall, CPA                           Telephone (757)625-4700
Martin A. Einhorn, CPA                    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,
1997 and 1996, 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 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 VHDA Project Number 90-0300-C
as of December 31, 1997 and 1996, 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  9 to  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/Wall, Einhorn & Chernitzer, P.C.
Norfolk, Virginia
January 22, 1998

<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>

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, 1996,  and the related  statements of profit and
loss (on HUD Form No. 92410),  partners' equity and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

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

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 20 through 34
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 14,
1997,  on our  consideration  of Timothy House  Limited  Partnership's  internal
control structure and on its compliance with specific requirements applicable to
CDA programs,  affirmative fair housing, and laws and regulations  applicable to
the financial statements.

/s/Reznick Fedder & Silverman
Baltimore, Maryland                Federal Employer
January 14, 1997                         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, 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>

Westover Station Associates, L.P.

[Letterhead]

Wilfore & Wynn
A Professional Corporation
Certified Public Accountants

INDEPENDENT AUDITORS' REPORT

The Partners
Westover Station Associates, L.P.
(A Limited Partnership)
Newport News, Virginia

We have audited the accompanying  balance sheets of Westover Station Associates,
L.P.,  VHDA Project Number  90,0303-C,  as of December 31, 1997 and 1996 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 audit.

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, 1997 and 1996,  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 5, 1998

4530 Professional Circle  Virginia Beach, Virginia 23455-6498
Telephone (804)456-0111 Fax (804)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 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>

Christiansted Limited Dividend Housing

[Letterhead]

Kirschner Hutton Perlin, P.C.
Certified Public Accountants

               26913 Northwestern Hwy. Suite 510
               Southfield, Michigan 48034-8444
                Telephone: (810) 356-3880
                Facsimile: (810) 356-3885

Independent Auditors' Report
Partners              January 19, 1998

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, 1997 and 1996, 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 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 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, 1997 and 1996, 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>

St. Croix II. Limited Partnership

 [Letterhead]

Kirschner Hutton Perlin, P.C.
Certified Public Accountants



               26913 Northwestern Hwy. Suite 510
               Southfield, Michigan 48034-8444
                Telephone: (810) 356-3880
                Facsimile: (810) 356-3885

Independent Auditors' Report
Partners              January 17, 1998

St. Croix II. Limited Partnership

We have  audited  the  accompanying  balance  sheet  of St.  Croix  II,  Limited
Partnership  as of December  31, 1997 and 1996,  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 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, 1997 and 1996, 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, 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>

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, 1997 and 1996, 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
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.
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, 1997 and 1996,  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 16, 1998

<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>

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,  1997 and  1996,  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
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.
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, 1997 and 1996,  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 16, 1998

<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>

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,  1997 and  1996,  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
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.
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, 1997 and 1996,  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 16, 1998

<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>

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, 1997 and 1996,  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 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 Huguenot Park Associates,  L.P.
as of December 31, 1997 and 1996, 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, 1998

<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>

Westgate Apartments Limited Partnesrhip

[Letterhead]

[LOGO]
Charles Bailly & Company P.L.L.P.

INDEPENDENT AUDITOR'S REPORT

The Partners
Westgate Apartments Limited Partnesrhip
Wahpeton, North Dakota

We have audited the accompanying  balance sheets of Westagate Apartments Limited
Partnership  as of December  31, 1997 and 1996,  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, 1997 and 1996, and the results of its operations,
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998

<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>

Bixel House

[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
Bixel House
Los Angeles, California

      I have  audited  the  accompanying  balance  sheet  of  Bixel  House as of
December  31,  1996,  and the  related  statements  of  operations,  changes  in
partners'  capital,  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  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
audits provide a reasonable basis for my opinion.

       In my opinion, the financial statements referred to above present fairly,
in all material respects,  the financial position of Bixel House at December 31,
1996, and the results of its operations and cash flows for the years then ended,
in conformity with generally accepted accounting principles.

/s/Suarez Accountancy Corporation
Certified Public Accountant
San Pedro, California
February 14, 1997

<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>

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,  1996,  and the  related  statements  of  operations,  changes  in
partners'  capital,  and cash flows for the year ended  December 31,  1996.  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  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
audits provide a reasonable basis for my opinion.

       In my opinion, the financial statements referred to above present fairly,
in all  material  respects,  the  financial  position of Harmony  Apartments  at
December 31, 1996, and the results of its operations and cash flows for the year
ended  December  31,  1996 in  conformity  with  generally  accepted  accounting
principles.

/s/Suarez Accountancy Corporation
Certified Public Accountant
San Pedro, California
February 14, 1997

<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>

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, 1997 and December 31, 1996, 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, 1997 and  December  31,  1996,  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
January 30, 1998

<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>

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,  1996,  and the related  statements  of
profit and loss (on HUD Form No. 92410), partners' equity and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

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

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

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental  information on pages 26 trough 40
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,
1997, on our consideration of Circle Terrace  Associates  Limited  Partnership's
internal  control  structure and on its  compliance  with specific  requirements
applicable to Major HUD and CDA programs, affirmative fair housing, and laws and
regulations applicable to the financial statements.

/s/Reznick Fedder & Silverman
Baltimore, Maryland                Federal Employer
January 14, 1997                         Identification Number:
                                                     52-1088612
Audit Principal:  Lester A. Kanis


<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>

Water Oaks Apartments

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS REPORT

To the Partners
Water Oaks Apartments, Ltd.

We have audited the accompanying balance sheets of Water Oaks Apartments,  L.P.,
RHS Project No. 09-64-581801555 as of December 31, 1997 and 1996 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
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.,
RECD  Project  No.  09-64-581801555  as of December  31, 1997 and 1996,  and the
results of its  operations,  changes in partners'  equity 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 15
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 9, 1998,  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
Atalnta, Georgia
January 9, 1998


<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>
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, 1997 and 1996, 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
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, 1997 and 1996, and the results
of its operations,  changes in partners' equity 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 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 9, 1998, on our  consideration of Archer Village,  Ltd.'s internal
control structure and its compliance with laws and regulations applicable to the
financial statements.

/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 9, 1998

<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>

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, 1997 and 1996, 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
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, 1997 and 1996,  and the
results of its  operations,  the changes in partners'  equity 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 15
through 20 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 9, 1998 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, 1998

<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>

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,  1997 and 1996,  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
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, 1997 and 1996, and the results of its
operations,  changes in  partners'  equity 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
____ through ____ 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 9, 1998,  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 9, 1998

<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>

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,  1996,  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, 1996, 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, 1997

<PAGE>
















<PAGE>





         FINANCIAL STATEMENTS AND
         INDEPENDENT AUDITORS' REPORT

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

         DECEMBER 31, 1996


<PAGE>





                                            TABLE OF CONTENTS

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

                                                                           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                                                26
DELINQUENT TENANT ACCOUNTS RECEIVABLE                                        26
CONTRIBUTIONS DUE                                                            26
MORTGAGE ESCROW DEPOSITS                                                     26
TENANT SECURITY DEPOSITS                                                     27
RESERVE FOR REPLACEMENTS                                                     27
RESIDUAL RECEIPTS                                                            27
PAINTING RESERVE                                                             27
ACCOUNTS PAYABLE                                                             28
ACCRUED TAXES                                                                28
LETTERS OF CREDIT                                                            28
LOANS AND NOTES PAYABLE                                                      28
MORTGAGES PAYABLE                                                            29


<PAGE>





                                          TABLE OF CONTENTS - CONTINUED

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

MORTGAGES PAYABLE FROM SURPLUS CASH                                          29
COMPENSATION OF PARTNERS                                                     29
UNAUTHORIZED DISTRIBUTIONS OF
   PROJECT INCOME TO PARTNERS                                                29
IDENTITY OF INTEREST COMPANIES AND ACTIVITIES                                30
NON-REVENUE PRODUCING UNITS                                                  30
DECLARATION OF OWNERSHIP - UNAUDITED                                         30
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND
  RESIDUAL RECEIPTS                                                          31
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND RESIDUAL
  RECEIPTS AS OF JUNE 30, 1996 - UNAUDITED                                   32
SCHEDULE OF FUNDS IN FINANCIAL INSTITUTIONS                                  33
CHANGES IN FIXED ASSET ACCOUNTS                                              34
COMPARISON OF BUDGET TO ACTUAL INCOME AND EXPENSES                           35
MONTHLY INCOME AND EXPENSE STATEMENT - CASH BASIS                            38
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL
  STRUCTURE                                                                  41
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
  SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD AND
  CDA PROGRAMS                                                               43
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC
  REQUIREMENTS APPLICABLE TO AFFIRMATIVE FAIR HOUSING                        45
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH LAWS AND
   REGULATIONS APPLICABLE TO THE FINANCIAL STATEMENTS                        46
SCHEDULE OF FINDINGS AND QUESTIONED COSTS                                    48
ANNUAL AUDIT QUESTIONNAIRE                                                   49


<PAGE>





                                                December 31, 1996

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






         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


/s/ Judith Siegel    2/24/97
---------------------------------------
    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,  1996,  and the related  statements  of
profit and loss (on HUD Form No. 92410), partners' equity and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

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

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

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 26 through 40
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.

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 18,
1997 on our  consideration of Circle Terrace  Associates  Limited  Partnership's
internal  control  structure and on its  compliance  with specific  requirements
applicable to major HUD and CDA programs, affirmative fair housing, and laws and
regulations applicable to the financial statements.

/s/ Reznick Fedder & Silverman
Bethesda, Maryland                   Federal Employer
January 18, 1997                     Identification Number:  52-1088612



Audit Principal:  Lester A. Kanis


<PAGE>
                                  Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP




                                                   BALANCE SHEET

                                                 DECEMBER 31, 1996

                                                      ASSETS



CURRENT ASSETS

1110  Petty cash                                               $          1,400
1120 Cash in bank                                                       280,303
1121 Cash - partnership                                                 109,693
1130 Tenant accounts receivable                                          37,113
1131 Accounts receivable - HUD                                           10,645
1133 Due from affiliates                                                    600
1240 Prepaid property insurance                                          64,979
                                                              -----------------

         Total current assets                                           504,733

DEPOSITS HELD IN TRUST - FUNDED
1191 Tenant security deposits                                            38,026

RESTRICITED DEPOSITS AND FUNDED RESERVES
1310 Mortgage escrow deposits                                    $      111,692
1320 Reserve for replacements                                           390,217
1330 Painting reserve                                                    81,496
                                                                ---------------
                                                                        583,405
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
1460 Furnishings                                                          8,378
                                                                 --------------
                                                                     16,379,796
1495 Less accumulated depreciation                                    2,369,146
                                                                    -----------

                                                                     14,010,650
OTHER ASSETS
1901 Mortgage costs, less accumulated
         amortization of $71,187                                        235,733
                                                                     -----------
                                                                $    15,372,547
                                                                     ===========
<PAGE>








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


                                              BALANCE SHEET-Continued

                                                 DECEMBER 31, 1996

                                         LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES
2110 Accounts payable                                             $      32,827
2130 Accrued interest payable                                            34,889
2150 Accrued P.I.L.O.T.                                                  32,813
2190 Accrued management fees                                             22,482
2350 Developer fee payable                                               34,554
2210 Rent deferred credits                                                1,793
2320 Current maturities of long term debt                               260,332
                                                                        -------

Total Current Liabilities                                               419,690

DEPOSITS LIABILITIES
2191 Tenant security deposits (contra)                                   29,470

LONG TERM LIABILITIES
2320 Long term debt, net of current maturities                      $ 9,702,438
2335 Accrued interest                                                    81,029
                                                                  -------------

                                                                      9,783,467
CONTINGENCY                                                                   -
3130 PARTNERS' EQUITY                                                 5,139,920
                                                                     ----------
                                                                  $  15,372,547
                                                                     ==========







See notes to financial statements


<PAGE>

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

                                           STATEMENT OF PROFIT AND LOSS

                                                 DECEMBER 31, 1996
<TABLE>



RENTAL INCOME

<S>                                                                             <C>               <C>
5120 Apartments or member carrying charges (Coops)                              $     264,754
5121 Tenant assistance payments                                                     2,032,314
5190  Miscellaneous HAP Contract Billing Adjustment                                   192,753
                                                                                      -------


     Total rent revenue potential at 100% occupancy                                                $2,489,821

VACANCIES
5200 Apartments                                                                       (32,041)
                                                                                --------------

     Total vacancies                                                                                  (32,041)

     Net rental revenue                                                                             2,457,780

FINANCIAL REVENUE
5410 Interest Income -project operations                                               25,403
5440 Income from investments - reserve for replacement                                  2,148
5490 Income from investments - miscellaneous                                            1,254
                                                                                        -----

     Total financial revenue                                                                           28,805

OTHER REVENUE
5910 Laundry and vending                                                               12,031
5920 NSF and late charges                                                               3,488
                                                                                        -----

     Total other revenue                                                               15,519
                                                                                                    ---------
     Total revenue                                                                                  2,502,104
                                                                                                    ---------

</TABLE>

<PAGE>
                               Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP

                                     STATEMENT OF PROFIT AND LOSS (continued)

                                                 DECEMBER 31, 1996


<TABLE>

ADMINISTRATIVE EXPENSES

<S>                                                                                       <C>     <C>
6210 Advertising and marketing                                                            7,875
6250 Other renting expenses                                                               3,404
6310 Office salaries                                                                     88,713
6311 Office Supplies                                                                     41,395
6320 Management fee                                                                     130,164
6331 Manager or superintendent rent free unit                                             7,868
6340 Legal expenses - project                                                             8,991
6350 Auditing expenses - project                                                          9,946
6351 Bookkeeping fees/accounting services                                                16,368
6360 Telephone and answering services                                                    11,654
6370 Bad debts                                                                            1,538
6390 Miscellaneous administrative expenses                                               22,905
                                                                                         ------

Total administrative expenses                                                                      350,821

UTILITIES EXPENSE
6450 Electricity                                                                         46,261
6451 Water                                                                               19,300
6452 Gas                                                                                110,539

Total utilities expense                                                                            176,100


OPERATING AND MAINTENANCE EXPENSES
6515 Janitor and cleaning supplies                                                       13,469
6517 Janitor and cleaning contract                                                        3,510
6519 Exterminating payroll / contract                                                     2,362
6520 Exterminating supplies                                                                 553
6525 Garbage and trash removal                                                           40,836
6530 Security payroll/contract                                                          145,421
6536 Grounds supplies                                                                     1,011
6537 Grounds contract                                                                    29,930
6540 Repairs payroll                                                                    111,325
6541 Repairs material                                                                    95,128
6542 Repairs contract                                                                     8,567

<PAGE>

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

                               STATEMENT OF PROFIT AND LOSS (continued)

                                                 DECEMBER 31, 1996

6546 Heating/cooling repairs and maintenance                                              9,313
6548 Snow removal                                                                         2,801
6560 Decorating payroll contract                                                         11,945
6561 Decorating supplies                                                                  8,117
6570 Other                                                                                4,042
6590 Miscellaneous operating and maintenance expenses                                       698
                                                                                    -----------

Total operating and maintenance expenses                                                                489,028
TAXES AND INSURANCE
6710 Real estate taxes                                                                  110,225
6711 Payroll taxes (FICA)                                                                35,444
6719 Miscellaneous taxes, licenses and permits                                              441
6720 Property and liability insurance (Hazard)                                           92,000
6721 Fidelity bond insurance                                                                934
6722 Workmen's compensation                                                              14,378
6723 Heath insurance and other employee benefits                                         29,051
                                                                                         ------

Total taxes and insurance                                                                                282,473

FINANCIAL EXPENSES
6820 Interest on mortgage payable                                                       456,888
6840 Interest on notes payable - short-term                                                 411
6850 Mortgage insurance premium/service charge                                           47,116
                                                                                         ------

Total financial expenses                                                                                 504,415

DEPRECIATION AND AMORTIZATION
Total cost of operations before depreciation                                                           1,802,837
Profit (Loss) before depreciation                                                                        699,267
Depreciation and amortization                                                                            578,028
Operating Profit or (Loss)                                                                               121,239

CORPORATE OR MORTGAGOR ENTITY EXPENSES
7190 Other (revenue)/expenses                                                              (910)
Total corporate expenses                                                                                    (910)
                                                                                                            ----

Net Profit                                                                                               122,149
See notes to financial statements                                                                        =======
</TABLE>
<PAGE>
                               Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP

                                         STATEMENT OF PARTNER'S EQUITY

                                                 DECEMBER 31, 1996



                                   Special        Investor
                     General       Limited        Limited
                     Partner       Partner        Partner        Total


Partners' equity,
    Beginning      $405,549              -       $4,802,276   $5,207,825

Distributions      (190,054)             -                -     (190,054)

Net Profit            2,211              -          119,938      122,149
                  ---------   -------------       ---------  -----------

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




See notes to financial statements


<PAGE>


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

                                              Statement OF CASH FLOWS

                                                 DECEMBER 31, 1996


Cash flows from operating activities
Rental income received                                           $    2,462,268
HAP contract billing adjustment                                        (391,217)
Interest received                                                        28,805
Other income received                                                    15,519
Administrative expenses paid                                           (116,065)
Management fees paid                                                   (130,164)
Utilities paid                                                         (176,100)
Salaries and wages paid                                                (359,766)
Operating and maintenance paid                                         (217,944)
Real estate taxes paid                                                 (127,407)
Payroll taxes paid                                                      (35,444)
Property insurance paid                                                 (89,115)
Other taxes and insurance paid                                          (29,492)
Interest paid on mortgage                                              (459,610)
Mortgage insurance premium paid                                         (47,116)
Increase in mortgage escrow deposits                                     (3,819)
Mortgagor entity income received, net                                       910
Net tenant security deposits received                                         1
                                                                 --------------

Net cash provided by operating activities                               324,244
                                                                 --------------

Cash flows from investing activities
Deposits to reserve for placement                                       (86,687)
Deposits to painting reserve                                            (41,249)
Investment in rental property                                           (34,554)
                                                                  -------------
Net cash used in investing activities                                  (162,490)
                                                                  -------------

Cash flow from financing activities
Mortgage principal payments                                            (242,054)
Payments on note payable                                                 (3,434)
Distributions to partners                                              (190,054)
                                                               ----------------

Net cash used in financing activities                                  (435,542)




NET DECREASE IN CASH                                                   (273,788)

Cash, beginning                                                         665,184

Cash, end                                                       $       391,396
                                                                ===============

See notes to financial statements

<PAGE>


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


                                        STATEMENT OF CASH FLOWS (CONTINUED)

                                                 DECEMBER 31, 1996


Reconciliation of net profit to net cash
provided by operating activities
Net Profit                                                            $ 122,149
Adjustments to reconcile net profit to net cash
provided by operating activities
Depreciation                                                            560,357
Amortization                                                             17,671
Mortgagor entity income, net                                               (910)
Mortgagor entity income received, net                                       910
Changes in asset and liability accounts
(Increase) decrease in assets
Tenant accounts receivable                                              (29,612)
Accounts receivable H.U.D.                                               43,462
Prepaid property insurance                                               18,197
Tenant security deposits - net                                                1
Mortgage escrow accounts                                                 (3,819)
Increase (decrease) in liabilities
Accounts payable                                                          5,138
Accrued payable - other                                                   1,366
Accrued interest payable                                                 (2,311)
Accrued P.I.L.O.T.                                                      (17,182)
Rent deferred credits                                                        44
HAP contract billing adjustment                                        (391,217)
                                                                 --------------

Net cash provided by (used in) operating activities                   $ 324,244
                                                                      ---------


See notes to financial statements
<PAGE>

Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
Notes to Financial Statements
December 31, 1996

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, 1996
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
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.

Notes to Financial Statements - continued
December 31, 1996
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, 1996 are $3,682,653 and $3,730, 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>

Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
Notes to Financial Statements - (continued)
December 31, 1996

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, 1996 are $3,614,775 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, 1996 are $2,113,786 and
$7,060, 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, 1996 are $550,000 and $81,029, respectively.

Note Payable

The  partnership is obligated under the terms of a note payable for the purchase
of a truck.  The note bears interest at 11.9% and requires  monthly  payments of
principal and interest of $320 through maturity in May 1997.
The principal due at December 31, 1996 is $1,556.


<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
Notes to Financial Statements - (continued)
December 31, 1996

NOTE C - LONG-TERM DEBT (Continued)

Note Payable (Continued)

Management  believes it is not  practicable  to  estimate  the fair value of the
partnership's  mortgages  and  promissory  note  because  programs  with similar
characteristics  are not currently  available to the  partnership.  The carrying
amount of the note  payable  for the  purchase  of the truck  approximates  fair
value.

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

--------------------------------------------- -- ----------------
December 31, 1997                             $  260,332
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
1998                                             277,639
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
1999                                             298,056
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2000                                             320,024
--------------------------------------------- -- ----------------
--------------------------------------------- -- ----------------
2001                                             343,653
--------------------------------------------- -- ----------------

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,
1996.

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.

<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
Notes to Financial Statements - (continued)
December 31, 1996

Note D - Related Party Transactions (continued)

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
1996 were $130,164 and $16,368, respectively, of which $22,482 of management fee
is payable at December 31, 1996.

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
$107,312 in premiums for the year ended December 31, 1996.

Development Fee

Based on final costs of the project and HUD and CDA's  approval,  an  additional
development  fee was incurred by the  partnership  for services  rendered by the
general  partner in a prior year. The balance payable of such fee as of December
31, 1996 is $34,554 and is payable from partnership cash.

Due from Affiliates

The  partnership  had advanced  $1,570 out of development  cash on behalf of two
affiliates of the general partner. Such advances are noninterest bearing and due
on demand. As of December 31, 1996, $600 is due on the advances.
<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
Notes to Financial Statements - (continued)
December 31, 1996

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

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 1996, 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.

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 1996 under the terms of this  agreement  was $53,025 of
which $32,813 is unpaid at December 31, 1996. This amount is included with other
city and county real estate taxes in the statement of profit and loss.

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  expires on November 30,
1997. The contracts do not have renewal options.



<PAGE>
Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
Notes to Financial Statements - (continued)
December 31, 1996

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.

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.


<PAGE>

Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
Notes to Financial Statements - (continued)
December 31, 1996

NOTE H - TAXABLE LOSS

A  reconciliation  of the  financial  statement net profit to the income tax net
loss of the partnership for the year ended December 31, 1996 is as follows:

         ----------------------------------------------------------------------
         Financial statement net profit                              $  122,149
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Reduction in rents received in advance, net                   (391,219)
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Excess depreciation for income tax purposes                     (6,393)
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Income net tax loss                                       $  (275,463)
         ----------------------------------------------------------------------

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, 1996 is as
follows:

         ----------------------------------------------------------------------
         Investment in real estate for financial reporting        $  14,010,650
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Excess accumulated depreciation for income tax purposes        (45,094)
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Interest expense portion of subsidy capitalized for
         income tax purposes                                            177,337
         ----------------------------------------------------------------------
         ----------------------------------------------------------------------

         ----------------------------------------------------------------------
         ----------------------------------------------------------------------
         Investment in real estate for income tax purposes        $  14,142,893
         ----------------------------------------------------------------------

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 by
the banks.  As of December 31, 1996, the uninsured  portion of the cash balances
held at one bank was $172,788.

NOTE K - CONTINGENCY

The partnership  has two HAP contracts  which provide rental  assistance for 303
units. One of the contracts  covering 161 units is due to expire on November 30,
1997.  No extension  to this  contract has been granted by HUD as of January 18,
1997.  Payments received under this contract represent a significant  portion of
the partnership's  revenue.  Management's plan is to apply for an extension with
HUD during 1997 to obtain an additional term for the HAP contract.


<PAGE>

Circle Terrace Associates Limited Partnership
HUD Project No.: 052-44056-LDP
Notes to Financial Statements - (continued)
December 31, 1996

NOTE K - CONTINGENCY (Continued)

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.


<PAGE>



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

                                              SUPPLEMENTAL INFORMATION

                                           SUPPORTING DATA REQUIRED BY HUD

                                                  December 31, 1996








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


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

     <S>                         <C>            <C>            <C>             <C>                <C>
     Name of borrower            Original       Interest       Terms           Original amount    Balance due
                                 date           rate
     -------------------------------------------------------   ----------------------------------------------------
     -------------------------------------------------------   ----------------------------------------------------

     --------------------------------------------------------------------------------------------------------------
     --------------------------------------------------------------------------------------------------------------
     General partner             1993           N/A            Demand       $  1,570           $  600
     affiliates
     --------------------------------------------------------------------------------------------------------------
</TABLE>

DELINQUENT TENANT ACCOUNTS RECEIVABLE

<TABLE>
     <S>                                                                         <C>           <C>

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

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent 30 days                                                           51            $  6,080
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent 31-60 days                                                        36               1,761
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent 61-90 days                                                        28               7,731
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Delinquent over 90 days                                                      46               21,541
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
                                                                                  161           $  37,113
     ---------------------------------------------------------------------------------------------------------------

CONTRIBUTIONS DUE

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

MORTGAGE ESCROW DEPOSITS

     ---------------------------------------------------------------------------------------------------------------
     Estimated amount required as of December 31, 1996, for future payment of:


     City, state and county taxes (P.I.L.O.T)                                                   $  35,367
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Property insurance                                                                            40,434
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Mortgage insurance                                                                            22,568
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
                                                                                                   98,369
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Amount on deposit in excess of estimated requirements                                         13,323
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Total confirmed by mortgagee                                                               $  111,692
     ---------------------------------------------------------------------------------------------------------------

</TABLE>




<PAGE>


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


                                       SUPPLEMENTAL INFORMATION - CONTINUED

                                         SUPPORTING DATA REQUIRED BY HUD

                                                December 31, 1996



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:
<TABLE>

     <S>                                                                                        <C>
     ---------------------------------------------------------------------------------------------------------------
     Balance at December 31, 1995                                                               $  303,529
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Monthly deposits
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     $7,045 x 12                                                                                   84,540
     ----------------------------------------------------------------------------------------------
     ----------------------------------------------------------------------------------------------
     Interest earned                                                                               2,148
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------                 ---
     --------------------------------------------------------------------------                 ---
     Balance at December 31, 1996                                                               $  390,217
     confirmed by mortgagee
     --------------------------------------------------------------------------                 --------------------

</TABLE>

RESIDUAL RECEIPTS

NONE

PAINTING RESERVE

The  partnership  has  established a reserve for painting of the  property.  The
restricted cash is held by the partnership.
<TABLE>
     <S>                                                                                       <C>

     ---------------------------------------------------------------------------------------------------------------
     Balance at December 31, 1995                                                               $  40,246
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Monthly deposits
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     $3,333 x 12                                                                                   39,996
     ----------------------------------------------------------------------------------------------
     ----------------------------------------------------------------------------------------------
     Interest earned                                                                               1,254
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     --------------------------------------------------------------------------                 ---
     --------------------------------------------------------------------------                 ---
     Balance at December 31, 1996                                                               $  81,496
     --------------------------------------------------------------------------                 --------------------

</TABLE>



<PAGE>
                                 Circle Terrace Associates Limited Partnership
                                         HUD Project No.: 052-44056-LDP


                                       SUPPLEMENTAL INFORMATION - CONTINUED

                                         SUPPORTING DATA REQUIRED BY HUD

                                                December 31, 1996

ACCOUNTS PAYABLE (OTHER THAN TRADE CREDITORS)

         NONE

ACCRUED TAXES
<TABLE>
     <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.            1996              12/31/96        $  32,813
     P.I.L.O.T.
     --------------------------------------------------------------------------------------------------------------

</TABLE>

LETTERS OF CREDIT

NONE

LOANS AND NOTES PAYABLE (OTHER THAN THE INSURED MORTGAGE)
<TABLE>


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

     <S>                <C>          <C>               <C>             <C>          <C>                 <C>
     Creditor           Interest     Collateral        Date incurred   Terms        Original amount     Balance due
                        rate
     --------------------------------------------------------------------------------   -----------------   ----------------
     --------------------------------------------------------------------------------   -----------------   ----------------

     -----------------------------------------------------------------------------------------------------------------------
     -----------------------------------------------------------------------------------------------------------------------
     GMAC               11.9%        Truck             7/92            5 yr          $  14,437           $  1,556
     -----------------------------------------------------------------------------------------------------------------------
     -----------------------------------------------------------------------------------------------------------------------

     -----------------------------------------------------------------------------------------------------------------------
     -----------------------------------------------------------------------------------------------------------------------
     Crestar of         8%           Second trust      12/91           20 yr         $  4,000,000        $  3,614,775
     Richmond,
     Virginia, Inc.
     -----------------------------------------------------------------------------------------------------------------------
     -----------------------------------------------------------------------------------------------------------------------

     -----------------------------------------------------------------------------------
     -----------------------------------------------------------------------------------
     State of           4.5%         Third trust       12/91           20 yr         $  2,227,330        $  2,113,786
     Maryland CDA
     -----------------------------------------------------------------------------------------------------------------------
     -----------------------------------------------------------------------------------------------------------------------

     -----------------------------------------------------------------------------------
     -----------------------------------------------------------------------------------
     Baltimore          4.0%         Unsecured         11/90           40 yr         $  550,000          $  550,000
     County, Maryland
     -----------------------------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>
                                 Circle Terrace Associates Limited Partnership
                                         HUD Project No.: 052-44056-LDP


                                       SUPPLEMENTAL INFORMATION - CONTINUED

                                         SUPPORTING DATA REQUIRED BY HUD

                                                December 31, 1996

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


                                       SUPPLEMENTAL INFORMATION - CONTINUED

                                         SUPPORTING DATA REQUIRED BY HUD

                                                December 31, 1996
<TABLE>


IDENTITY OF INTEREST COMPANIES AND ACTIVITIES

     <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.                                                $  107,312          $  -
                                    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        $  1                  1%
                                      Partnership
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------

    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Special Limited Partner           SLP, Inc.                             $  0                      0%
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------

    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Limited Partner                   Boston Financial Qualified Housing    $  5,615,234       $  99%
                                      Partnership
    ----------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

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


                                       SUPPLEMENTAL INFORMATION - CONTINUED

                                         SUPPORTING DATA REQUIRED BY HUD

                                                December 31, 1996


SCHEDULE OF FUNDS IN FINANCIAL INSTITUTIONS
<TABLE>

     ---------------------------------------------------------------------------------------------------------------
     <S>       <C>                                                                             <C>
     Funds held by mortgagor, operating accounts
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     1.       Citibank N.A., checking                                                           $  8,043
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     2.       Citibank N.A., money market 2.5%                                                     38,175
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     3.       Bank of New York, money market, 2.6%                                                 22,968
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     4.       Chase Manhattan Bank, money market, 2.6%                                             1,200
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     5.       NationsBank, checking                                                                3,737
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     6.       Chemical Bank, money market, 2.75%                                                   43,085
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     7.       Fleet Bank, nominee checking                                                         163,095
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Total                                                                                         280,303
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Funds held by mortgagor,  development account
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     1.       Fleet Bank, checking 4.6%                                                            109,693
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Funds held by mortgagor, in trust - tenant security deposits
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     1.       Citibank N.A., checking, 1.00%                                                       38,026
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Funds held by mortgagor, in trust - painting reserve
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     1.       Nat West Savings Bank, savings, 2.75%                                                81,496
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Total funds held by mortgagor                                                                 509,518
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Funds held by mortgagee, (in trust)
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     1.       Tax and insurance escrow, Chemical Mortgage Company                                  66,188
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     2.       Reserve for replacements, Chemical Mortgage Company
     Money market account 3.67%                                                                    390,217
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     3.       MIP reserve, Crestar of Richmond, Virginia, Inc.                                     45,504
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Total funds held by mortgagee                                                                 501,909
     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------

     ---------------------------------------------------------------------------------------------------------------
     ---------------------------------------------------------------------------------------------------------------
     Total funds in financial institutions                                                      $  1,011,427
     ---------------------------------------------------------------------------------------------------------------
</TABLE>

The amounts above have been confirmed Fleet Bank on January 5, 1997.
Crestar of Richmond, Virginia, Inc. on January 5, 1997
Mellon Mortgage Company on January 15, 1997

all cash accounts held by mortgagor have been agreed to December 1996
bank statement.




<PAGE>



INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE

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, 1996, and have issued our
report  thereon  dated  January 18, 1997.  We have also audited  Circle  Terrace
Associates  Limited  Partnership's  compliance with  requirements  applicable to
major  HUD-assisted  and CDA programs and have issued our report  thereon  dated
January 18, 1997.

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 Inspector General in July 1993; and the Maryland Department of Housing
and Community Development, Community Development Audit Guide dated October 1996.
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 a major HUD-assisted and CDA program.

The  management  of  the  partnership  is  responsible  for   establishing   and
maintaining an internal control  structure.  In fulfilling this  responsibility,
estimates  and  judgments  by  management  are  required to assess the  expected
benefits  and  related  costs  of  internal  control   structure   policies  and
procedures.  The  objectives  of an internal  control  structure  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  any  internal  control  structure,  errors,  irregularities  or
instances of  noncompliance  may nevertheless  occur and not be detected.  Also,
projection of any  evaluation  of the structure 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 and operation of policies and procedures
may deteriorate.


<PAGE>



In planning  and  performing  our audits of the  partnership  for the year ended
December 31, 1996,  we obtained an  understanding  of the design of the relevant
internal control structure  policies and procedures 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
the internal  control  structure in accordance  with the provisions of the Guide
and not to provide an opinion on the internal control structure.

We  performed  tests of  controls,  as  required by the Guide,  to evaluate  the
effectiveness of the design and operation of internal control structure policies
and procedures 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 these internal control structure
policies and procedures. Accordingly, we do not express such an opinion.

Our  consideration  of the  internal  control  structure  would not  necessarily
disclose all matters in the internal  control  structure  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  structure  elements  does not
reduce  to a  relatively  low  level the risk  that  errors,  irregularities  or
instances of  noncompliance  with laws and  regulations in amounts that would be
material in relation to the financial statements being audited or a HUD-assisted
and 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 the internal  control  structure 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,
and the Department of Housing and Urban Development and the Maryland  Department
of Housing and Community Development  Administration.  However, this report is a
matter of public record and its distribution is not limited.




/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 18, 1997


<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, 1996, and have issued our
report thereon dated January 18, 1997.

We have also audited Circle Terrace Associates Limited Partnership's  compliance
with the 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, 1996.
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 Inspector General in
July 1993;  and the Maryland  Department of Housing and  Community  Development,
Community  Development  Audit Guide dated October 1996.  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.



<PAGE>



The  results  of our  audit  procedures  disclosed  an  immaterial  instance  of
noncompliance with the requirements referred to above, which is described in the
accompanying  Schedule of Findings and  Questioned  Costs.  We  considered  this
instance  of  noncompliance  in  forming  our  opinion on  compliance,  which is
expressed in the following paragraph.

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, 1996.

This report is intended for the information of the audit committee,  management,
the Department of Housing and Urban  Development and the Maryland  Department of
Housing and  Community  Development  Administration.  However,  this report is a
matter of public record and its distribution is not limited.




/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 18, 1997




<PAGE>



         INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
         WITH SPECIFIC REQUIREMENTS APPLICABLE TO
         AFFIRMATIVE FAIR HOUSING

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, 1996, and have issued our
report  thereon  dated  January 18, 1997.  We have also audited  Circle  Terrace
Associates  Limited  Partnership's  compliance with  requirements  applicable to
major  HUD-assisted  and CDA programs and have issued our report  thereon  dated
January 18, 1997.

We  have  applied   procedures  to  test  Circle  Terrace   Associates   Limited
Partnership's   compliance  with  the  Affirmative  Fair  Housing   requirements
applicable to its  HUD-assisted and CDA programs for the year ended December 31,
1996.

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 Inspector General in
July 1993 and the  Maryland  Department  of Housing and  Community  Development,
Community  Development  Audit Guide dated  October  1996.  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 Affirmative Fair Housing  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  Department of
Housing and  Community  Development  Administration.  However,  this report is a
matter of public record and its distribution is not limited.



/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 18, 1997


<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, 1996, and have issued our
report thereon dated January 18, 1997.

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 a certain  immaterial  instance of
noncompliance  that is  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  Department  of  Housing  and  Community  Development   Administration.
However,  this report is a matter of public record and its  distribution  is not
limited.




/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 18, 1997


<PAGE>





                                    SCHEDULE OF FINDINGS AND QUESTIONED COSTS

                                                December 31, 1996

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

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>




                                                                - 52 -

ANNUAL AUDIT QUESTIONNAIRE

PROJECT NAME               Circle Terrace Associates

CDA PROJECT NUMBER         28.04.0010

FISCAL YEAR END   12/31/96
Answers to these questions  should be based upon 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.
<TABLE>
<S>     <C>                                                 <C>        <C>         <C>         <C>

-----------------------------------------------------------------------------------------------------------------------------------
     EXAMINATION STATUS                                      YES        NO          N/A        WORKING PAPER REFERENCE
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
1.       Mortgage Status
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     a.       Are payments on all mortgages current?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     Position 1                                              X                                 AA-1
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------       ---------------------------------------
-------------------------------------------------------------------------------------       ---------------------------------------
     Position 2                                              X                                 AA-4
---------------------------------------------------------------------------------------------  ------------------------------------
---------------------------------------------------------------------------------------------  ------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     Position 3                                              X                                 AA-2
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     Position 4
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     Position 5
---------------------------------------------------------------------------------   -----------------------------------------------
---------------------------------------------------------------------------------   -----------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     b. Has the mortgagor  complied with the terms           X                                 AA- section
     and conditions of the Regulatory Agreement and/or
     workout arrangements?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------       --------------------------------------------------------------
--------------------------------------------------------------       --------------------------------------------------------------
2.       Books and Records
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     a.       Are a complete set of books and records        X                                 common file
     maintained in a satisfactory manner?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     b.  Does the  mortgagor  make  frequent  postings       X                                common  file
        (at least monthly) to the ledger accounts?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
3.       Cash Activities
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     a.       Are the cash receipts deposited in the         X                                 common file
     name of the project in a bank whose deposits are
     federally insured?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     b. Are  security  deposits  kept  separate  and         X                                    A-10
        apart from all other funds of the project in
        an insured institution?
----------------------------------------------------------------------  -----------------------------------------------------------
----------------------------------------------------------------------  -----------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     c.       Does the mortgagor keep sufficient funds       X                                 DD-1
     in the security deposit account to equal or exceed
     the aggregate of all outstanding obligations to the
     depositors?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     d.       Does the owner or his management agent         X                                 common file
     have a fidelity  bond in 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?
-----------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------
3.       Cash Activities (continued)
----------------------------------------------------------
----------------------------------------------------------

----------------------------------------------------------
----------------------------------------------------------
     e. Did cash disbursements exclude payments for items listed below:
----------------------------------------------------------
----------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     I.       Legal expenses incurred in the sale of         X                                 common file
     partnership interest?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------       ---------------------------------------
-------------------------------------------------------------------------------------       ---------------------------------------
     ii.      The fee for the preparation of a               X
     partner's, shareholder's or individual's federal,
     state or local income tax returns?
---------------------------------------------------------------------------------------------  ------------------------------------
---------------------------------------------------------------------------------------------  ------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     iii.     Advice to an owner on tax consequences of      X
     foreclosure?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     iv.  Reimbursement  to the owners of  affiliates        X
          while the mortgage is in default,  or  under
          workout  arrangements  for  prior  advances,   capital
          expenditures and/or project acquisition costs?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     v.       Letter of credit fees?                         X
---------------------------------------------------------------------------------   -----------------------------------------------
---------------------------------------------------------------------------------   -----------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     f.       Were distributions made to, or on behalf       X                                 A-8
     of, the owners  limited to those  authorized by the Regulator  Agreement or
     the  distributions  in accordance with prior written  approval of CDA while
     the project was in a "surplus cash" position?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------       --------------------------------------------------------------
--------------------------------------------------------------       --------------------------------------------------------------
     I.       Distribution to non-profit mortgagor                                  X
     entities or principles may not be permitted by the
     Regulatory Agreement.
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     ii.      The use of rental proceeds to pay for                                 X
     costs included in the mortgagor's cost
     certification are unauthorized distributions of
     project income.
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     iii.     Was surplus cash available for payment on
     cash flow debt per the Regulatory Agreement and
     Note?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     g. Were residual receipts deposited with the                                   X
     mortgagee within ninety days
     after the close of the mortgagors annual account period?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     h. Were  excess  rental  collections  in section                               X          common  file
     236 project remitted to HUD each month?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     I.       Does the mortgagor have a formal                                      X          common file
     collection policy?
----------------------------------------------------------------------  -----------------------------------------------------------
----------------------------------------------------------------------  -----------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
     j.       Is the collection policy enforced?             X                                 common file
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     k. Do tenant accounts  receivable  consist              X                                     B-1
     exclusively of amounts due from other than employees?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------                  -----       ----
--------------------------------------------------------------                  -----       ----
     l.       Have "write-offs" of tenants' accounts         X                                 21
     been less than one percent of the gross rent?
     ------------------------------------------------------------------------------------------------------------------------------
     ------------------------------------------------------------------------------------------------------------------------------

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

--------------------------------------------------------------       ----       -----       ----
-----------------------------------------------------------------------------------------------------------------------------------
3.       Cash Activities (continued)
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
    m. Are accounts  receivable other than                   X                                B-2
    tenants'  receivables  composed
    exclusively of amounts due from unrelated persons or firms?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
    n. Were there indications that payments for              X                           common file
    services, supplies or materials were not in excess of amounts
    normally paid for such services?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
    o. If applicable,  were utility  allowance              X
       payments to residents paid on a monthly basis?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------       -------------------------------------------
---------------------------------------------------------------------------------       -------------------------------------------
4.       Management Compensation
----------------------------------------------------------       -----       ----
----------------------------------------------------------       -----       ----

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
    a.       Was compensation to the management agent    X                                  20
    limited to the amounts prescribed in the
    management agreements written or amended?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
5.       Rents and Occupancy
----------------------------------------------------------       -----       ----       -----
----------------------------------------------------------       -----       ----       -----

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
    a.       Is the gross potential rental income        X                                  10
    from apartments equal to or less than that
    approved by DHCD?
------------------------------------------------------------------------------  ---------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
    b.       In subsidized projects, are dwelling        X                                  common file
    unit  contract  rental  rates and 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/       X                                  B-2
    HUD adequately supported by the accounting
    records?
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
    b.  Were  subsidy  payments  received  recorded      X                                  B-2
    in the  prior  proper accounts?
-----------------------------------------------------------------------------------------------------------------------------------

</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, 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









                                              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.




/s/ Reznick Fedder & Silverman
Bethesda, Maryland                                   Federal Employer
January 21, 1998                                       Identification Number:
                                                       52-1088612



Audit Principal:  Lester A. Kanis


<PAGE>
                                Circle Terrance Associates Limited Partnership
                                        HUD Project No.: 052-44056-LDP
                                         CDA Project No.: 28.04.0010

                                                  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
                                                                     ==========
See Notes to Financial Statements
<PAGE>








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








See notes to financial statements

<PAGE>
                                 Circle Terrance Associates Limited Partnership
                                        HUD Project No.: 052-44056-LDP
                                         CDA Project No.: 28.04.0010
                                           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>
<PAGE>
                               Circle Terrance Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                           CDA Project No.: 28.04.0010
                                           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
                  ---------                     -----------  -----------



See notes to financial statements

<PAGE>
















                                              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)






NET DECREASE IN CASH                                                       (174)

Cash, beginning                                                         392,622

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

See notes to Financial Statements
<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>
                                      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)

    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>
                                    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 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>

                                    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 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>
                                    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 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>
                                    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 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>

                                  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 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>
                                   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 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>
                                       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

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>
                                       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

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>

                                     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
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.




/S/Reznick Fedder & Silverman
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.




/S/Reznick Fedder & Silverman
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.


/S/Reznick Fedder & Silverman
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.

/S/Reznick Fedder & Silverman
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                                                     5
MANAGEMENT AGENT'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                                                28
DELINQUENT TENANT ACCOUNTS RECEIVABLE                                        28
CONTRIBUTIONS RECEIVABLE                                                     28
MORTGAGE ESCROW DEPOSITS                                                     29
RESERVE FOR REPLACEMENTS                                                     29
RESIDUAL RECEIPTS RESERVE                                                    29
ACCOUNTS PAYABLE                                                             30
ACCRUED EXPENSES                                                             30
LETTERS OF CREDIT                                                            30
LOANS AND NOTES PAYABLE                                                      31
MORTGAGES PAYABLE                                                            31
MORTGAGES PAYABLE FROM SURPLUS CASH                                          31
UNAUTHORIZED DISTRIBUTIONS OF
  PROJECT INCOME TO PARTNERS                                                 31
IDENTITY OF INTEREST COMPANIES AND ACTIVITIES                                32
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND
 RESIDUAL RECEIPTS                                                           33
CHANGES IN FIXED ASSET ACCOUNTS                                              34
DETAIL OF ACCOUNTS - STATEMENT OF OPERATIONS                                 35
OTHER INFORMATION                                                            37
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL                             38
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
   SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD AND
   DHCD-ASSISTED 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
ANNUAL AUDIT QUESTIONNAIRE                                                   44



<PAGE>








                                   Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010
                                                 December 31, 1998






                                              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


                           /s/Peter Siegel              3/30/99
                           ---------------------------------------
                           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: (703) 516-6690


<PAGE>



                                  Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010
                                                 December 31, 1998

                                          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>










<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 Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010

                                                   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>









                                   Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010
                                                   December 31, 1998


                                    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
                                                                     ==========
See notes to the Financial Statements
<PAGE>
                                  Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010
                                             Statement of Operations
                                                December 31, 1998

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>

                                  Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010
                                                December 31, 1998
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>
                                  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, 1998

                             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>
                                  Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010
                                              Statement of Cash Flows
                                            Year ended December 31, 1998

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>
                                  Circle Terrace Associates Limited Partnership
                                          HUD Project No.: 052-44056-LDP
                                            CDA Project No.: 28.04.0010
                                      Statement of Cash Flows (continued)
                                          Year ended December 31, 1998

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
                                                                      ---------

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, 1998

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>
                                      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)

    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>
                                      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 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>
                                      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 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>
                                      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 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>

                                      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 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.


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.
<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 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.

    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.


<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 J - PARTNERSHIP PROFITS AND LOSSES AND DISTRIBUTIONS (Continued)

    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>
                                   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 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.


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
                                                          Rental Housing Management
    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    Management fee                         12/98           Management Partnership      1/99      $           22,482

    ----------------------------------------------------------------------------------------------------------------
    ----------------------------------------------------------------------------------------------------------------
    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                                       61,410   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.



/s/Reznick Fedder & Silverman
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.




/s/Reznick Fedder & Silverman
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.



/s/Reznick Fedder & Silverman
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.

/s/Reznick Fedder & Silverman
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>

<PAGE>
STRATHERN PARK
DECEMBER 31, 1996







<PAGE>



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, 1996 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, 1996, 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, Sterns, Biers, Neinstein and Co. LLP
NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP

January 14, 1997


<PAGE>



STRATHERN PARK
BALANCE SHEET
DECEMBER 31, 1996


<TABLE>
<CAPTION>

ASSETS
<S>                                            <C>                                <C>

Cash  (Note 5)                                                                       $215,615
Receivables                                                                            38,582
Reserve for replacements  (Note 5)                                                     96,652
Tenant security deposits  (Note 5)                                                    122,015

Rental property - at cost (Note 2)
                                               Land                                 5,889,320
                                               Buildings                           19,042,548
                                               Equipment and furnishings              944,597
                                                                                --------------
                                                                                   25,876,465
                                               Less:  accumulated depreciation    (4,438,048)
                                                                                --------------
                                                                                   21,438,417
Other assets
Syndication fee  (Net of accumulated
amortization
     of $94,252)                                                                      624,415
                                                                                --------------

TOTAL ASSETS                                                                      $22,535,696
                                                                                ==============


LIABILITIES

Accounts payable and accrued expenses                                                 $85,799
Security deposits                                                                     107,497
Accrued interest payable  (Note 2)                                                  3,316,184
Long term debt  (Notes 2 and 5)                                                    17,552,451
                                                                                --------------

TOTAL LIABILITIES                                                                  21,061,931

DEFERRED INCOME                                                                        20,238

PARTNERS' EQUITY (NOTE 3)                                                           1,453,527
                                                                                --------------

TOTAL LIABILITIES AND PARTNERS' EQUITY                                            $22,535,696
                                                                                ==============
</TABLE>

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


<PAGE>



STRATHERN PARK
STATEMENT OF PARTNERS' EQUITY
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>


                                      Profit       Balance          Net          Distri-        Balance
                                     and Loss      January          Loss         butions        December
                                    Percentage     1, 1996      for the year       Paid         31, 1996
                                    ------------------------------------------------------------------------
<S>                                        <C>       <C>           <C>             <C>            <C>

GENERAL PARTNER

  Safran Associates Investment
      Partnership II, A California
      Limited Partnership                    1%      $(44,808)      $(12,443)         $(788)      $(58,039)

CLASS A LIMITED PARTNER

  Safran Associates Investment
      Partnership II, A California
      Limited Partnership                    4%      (181,046)       (49,771)        (3,140)      (233,957)

INVESTOR LIMITED PARTNER

  Boston Financial Qualified
      Housing Tax Credits L.P.V., A
      Massachusetts Limited
      Partnership                           95%      3,002,218    (1,182,070)       (74,625)      1,745,523

SPECIAL LIMITED PARTNER

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


                                                    $2,776,364   $(1,244,284)      $(78,553)     $1,453,527
                                                ============================================================
</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, 1996

<TABLE>
<CAPTION>
<S>                                <C>                                          <C>
INCOME

                                   Gross possible rents                         $1,524,672
                                   (Vacancies)                                     (7,097)
                                   Interest                                         11,370
                                   Miscellaneous                                    34,321
                                                                            ---------------

TOTAL INCOME                                                                    $1,563,266



EXPENSES  (Note 4)

                                   Administrative expense                          128,724
                                   Management fees                                 118,048
                                   Utilities                                       114,579
                                   Operating and maintenance expense               227,504
                                   Taxes and insurance                             167,311
                                   Interest expense - Mortgage note payable        569,657
                                   Interest expense - Notes payable                684,796
                                   Depreciation and amortization                   796,931
                                                                            ---------------
                                                                                 2,807,550
                                                                            ---------------



NET LOSS                                                                      $(1,244,284)
                                                                            ===============
</TABLE>

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


<PAGE>



STRATHERN PARK
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<S>                                                          <C>           <C>

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss                                                                   $(1,244,284)
Adjustments to reconcile net loss to net cash
   provided by operating activities:
Depreciation and amortization                                 $796,931
Increases in -
Miscellaneous receivables                                      (4,079)
Rent receivable                                               (28,375)
Accrued interest payable                                       684,796
Accounts payable and accrued expenses                            4,781
Deferred income                                                 20,238
Decreases in -
Tenant security deposits                                         3,445
Security deposits                                              (5,643)
Total Adjustments                                                             1,472,094
                                                                       -----------------

Net Cash Provided by Operating Activities                                       227,810

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in reserve for replacements                                           (24,336)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on mortgage                                (52,868)
Interest payments on notes payable from residual receipts     (52,368)
Distributions paid                                            (78,553)
                                                           ------------
Net Cash Used in Financing Activities                                         (183,789)
                                                                       -----------------
Net Increase in Cash and Cash Equivalents                                        19,685

Cash and cash equivalents at Janaury 1, 1996                                    195,930
                                                                       -----------------
Cash and cash equivalents at December 31, 1996                                 $215,615
                                                                       =================

SUPPLEMENTAL DISCLOSURE OF CASH FROM INFORMATION:
Cash paid during the year for interest                        $622,453
                                                           ============
Cash paid during the year for taxes                               $800
                                                           ============
</TABLE>

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



<PAGE>



STRATHERN PARK
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996

Note 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT  ACCOUNTING POLICES  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 unites,  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.

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:
<TABLE>
<CAPTION>
<S>                                    <C>

Classification                         Life
---------------
Buildings                              27.5  Years
Equipment  and   furnishings              7  Years
</TABLE>

Amortization  - amortization  of  syndication  costs is computed  using the
straight line method over a period of 40 years.


Note 1     ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES  (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
<TABLE>
<CAPTION>
<S>                                                                                      <C>

Mortgage  note  payable,  secured  by First  Deed of  Trust,  requiring  monthly
payments of $51,913, including interest at 9.41% per annum, maturing February,
2022.                                                                                    $5,928,171

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, 1996 amounted to $1,774,998.                                                 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, 1996 amounted to $1,556,241.                                    6,445,175
                                                                                   -----------------

                                                                                        $17,552,451
                                                                                   =================
</TABLE>



Note 2     LONG TERM DEBT  (Contd.)

Maturities of long term debt as of December 31, 1996  for the succeeding five
years are as follows:
<TABLE>
<CAPTION>

Years ended December 31,
<S>                                                                                        <C>

1997                                                                                           $59,816
1998                                                                                            65,779
1999                                                                                            72,337
2000                                                                                            77,942
2001                                                                                            87,318
Thereafter                                                                                  17,189,259
                                                                                      -----------------
                                                                                           $17,552,451
                                                                                      =================
</TABLE>


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).









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, 1996
---------------------------------------------------------------------------------
<S>                     <C>                  <C>          <C>          <C>
Thomas Safran and
   Associates, Inc.     Management fee       6320         118,048      (73)
                                                      ===========================

</TABLE>

In addition,  the project reimbursed the management company for allocated common
costs such as office supplies and health insurance.  The aggregate total of such
reimbursements
was $17,341 for the year.

The general partner has a direct  ownership  interest in the management  company
listed above.

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.
<TABLE>
<CAPTION>
                                                                                  December 31, 1996
                                                                       -----------------------------------
                                                                          Carrying            Fair
                                                                           Amount            Value
<S>                                                                      <C>            <C>

Cash and Short Term Investments                                             $434,282       $434,282
Long Term Debt  (First Deed of Trust)                                     (5,928,171)    (5,928,171)
Long Term Debt  (Second & Third Deed of Trust)                           (11,624,280)   (11,624,280)
</TABLE>


<PAGE>



STRATHERN PARK                                            SCHEDULE I
BOSTON FINANCIAL QUALIFIED HOUSING                       Page 1 of 2
BALANCE SHEET FORMAT
DECEMBER 31, 1996
<TABLE>
<CAPTION>


ASSETS

CURRENT ASSETS
<S>                                                                         <C>                           <C>

Petty cash                                                                          500
Cash in bank                                                                    215,115
Rent receivables                                                                 35,940
Miscellaneous receivables                                                         2,642
Tenant security deposits                                                        122,015
                                                                        ----------------
Total Current Assets                                                                                           376,212

RESERVES AND DEPOSITS
Reserve for replacements                                                                                        96,652

FIXED ASSETS
Land                                                                          5,889,320
Buildings                                                                    19,042,548
Equipment and furnishings                                                       944,597
                                                                        ----------------
                                                                             25,876,465
Less:  accumulated depreciation                                             (4,438,048)
                                                                        ----------------
Total Fixed Assets                                                                                          21,438,417

OTHER ASSETS
Syndication fee  (Net of accumulated amortization
     of $94,252)                                                                                               624,415
                                                                                                       ----------------



TOTAL ASSETS                                                                                                22,535,696
                                                                                                       ================




</TABLE>

<PAGE>



STRATHERN PARK                                                 SCHEDULE I
BOSTON FINANCIAL QUALIFIED HOUSING                            Page 2 of 2
BALANCE SHEET FORMAT
DECEMBER 31, 1996
<TABLE>

<CAPTION>

LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES
<S>                                                                          <C>                          <C>

Accounts payable                                                                 37,750
Accrued interest payable - 1st mortgage                                          48,049
Tenant security deposit liability                                               107,497
                                                                        ----------------
Total Current Liabilities                                                                                      193,296

MORTGAGE NOTE PAYABLE CURRENT PORTION
1st mortgage note payable current portion                                                                       59,816

LONG TERM LIABILITIES
Accrued interest payable - notes
2nd mortgage note payable                                                     1,818,646
3rd mortgage note payable                                                     1,497,538
Mortgage notes payable
1st mortgage note payable                                                     5,868,355
2nd mortgage note payable                                                     5,179,105
3rd mortgage note payable                                                     6,445,175
Deferred income                                                                  20,238
                                                                        ----------------
Total Long Term Liabilities                                                                                 20,829,057

OWNERS' EQUITY
Limited partners' equity                                                      1,511,566
General partners' equity                                                       (58,039)
                                                                        ----------------
Total Owners' Equity                                                                                         1,453,527
                                                                                                       ----------------

TOTAL LIABILITIES AND PARTNERS' EQUITY                                                                      22,535,696
                                                                                                       ================


</TABLE>



<PAGE>



STRATHERN PARK                                                   SCHEDULE II
BOSTON FINANCIAL QUALIFIED HOUSING -                              Page 1 of 4
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>

REVENUE

<S>                                                           <C>                            <C>
Rent revenue
Apartments                                                    1,465,438
Tenant assistance payments                                       46,529
Furniture and equipment                                         ---
Stores and commercial                                            12,705
Garage and parking spaces                                       ---
Flexible subsidy income                                         ---
Miscellaneous                                                   ---
                                                           -------------
Total rent revenue                                                                           1,524,672

Vacancies
Apartments                                                      (7,097)
Stores and commercial                                           ---
Garage and parking spaces                                       ---
Miscellaneous                                                   ---
                                                           -------------
Total Vacancies                                                                                (7,097)
                                                                                        ---------------

Net Rental Revenue                                                                           1,517,575

Financial Revenue
Interest Income - operations                                      2,973
Interest Income - residual receipts                             ---
Interest income - reserve for replacements                        3,835
Interest income - miscellaneous                                   4,562
                                                           -------------
Total Financial Revenue                                                                         11,370

Other Revenue
Laundry and vending                                              21,534
NSF and late charges                                              2,848
Damages and cleaning fees                                         2,168
Forfeited tenant security deposits                                2,486
Other revenue                                                     5,285
Non-cash revenue                                                ---
                                                           -------------
Total Other Revenue                                                                             34,321
                                                                                        ---------------

NET REVENUE                                                                                  1,563,266
                                                                                        ===============

</TABLE>




<PAGE>



STRATHERN PARK                                                   SCHEDULE II
BOSTON FINANCIAL QUALIFIED HOUSING -                             Page 2 of 4
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>


EXPENSES
<S>                                                             <C>                          <C>

Administrative Expenses
Advertising                                                         469
Other renting expense                                           ---
Office salaries                                                   6,815
Office supplies                                                  48,699
Management fee                                                  118,048
Manager or superintendent salary                                 47,125
Manager's rent free unit                                        ---
Legal expenses  (project)                                         3,183
Auditing expenses  (project)                                      9,500
Bookkeeping fees/accounting services                            ---
Telephone and answering services                                  6,159
Bad debts                                                         6,774
Miscellaneous administrative expenses                           ---
                                                           -------------
Total Administrative Expenses                                                                  246,772

Utilities Expenses
Fuel oil/coal                                                   ---
Electricity                                                      37,754
Water                                                            43,777
Gas                                                               5,686
Sewer                                                            27,362
                                                           -------------
Total Utilities Expenses                                                                       114,579

Operating & Maintenance
Janitor and cleaning payroll                                    ---
Janitor and cleaning supplies                                     8,164
Janitor and cleaning contract                                   ---
Exterminating payroll/contract                                    1,484
Exterminating supplies                                          ---
Garbage and trash removal                                        12,035
Security payroll/contract                                         4,295




</TABLE>



<PAGE>



STRATHERN PARK                                                 SCHEDULE II
BOSTON FINANCIAL QUALIFIED HOUSING -                           Page 3 of 4
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996


<TABLE>
<CAPTION>

EXPENSES  (Cont.)
<S>                                                             <C>                            <C>

Operating & Maintenance  (Cont.)
Grounds payroll                                                 ---
Grounds supplies                                                  3,481
Grounds contract                                                 27,060
Repairs payroll                                                  59,020
Repairs material                                                 23,635
Repairs contract                                                 73,340
Elevator maintenance/contract                                   ---
Heating/cooling repairs and maintenance                             403
Swimming pool maintenance/contract                              ---
Snow removal                                                    ---
Decorating payroll/contract                                       2,804
Decorating supplies                                              11,783
Other, gasoline                                                 ---
Miscellaneous operating and maintenance                         ---
                                                           -------------
Total Operating and Maintenance                                                                227,504

Taxes and Insurance
Real estate taxes                                               116,658
Payroll taxes (FICA)                                             11,306
Miscellaneous taxes, licenses                                       765
Property and liability insurance                                 22,635
Fidelity bond insurance                                             149
Workmen's compensation                                            5,698
Health insurance and other benefits                              10,100
Other insurance                                                 ---
Miscellaneous taxes and insurance                               ---
                                                           -------------
Total Taxes and Insurance                                                                      167,311

Interest on Mortgage Notes
Interest on 1st mortgage                                                                       569,657



</TABLE>


<PAGE>



STRATHERN PARK                                                    SCHEDULE II
BOSTON FINANCIAL QUALIFIED HOUSING -                               Page 4 of 4
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>


EXPENSES  (Cont.)
<S>                                                             <C>                        <C>

Other Financial Expenses
Amortization                                                     17,967
Interest on notes payable (long term)                           684,796
Mortgage insurance premium                                      ---
Miscellaneous financial expenses                                ---
Non-cash expense                                                ---
                                                           -------------
Total Financial Expenses                                                                       702,763
                                                                                        ---------------

TOTAL EXPENSES BEFORE DEPRECIATION                                                           2,028,586
                                                                                        ---------------

PROFIT (LOSS) BEFORE DEPRECIATION                                                            (465,320)

Depreciation                                                                                   778,964
                                                                                        ---------------

OPERATING PROFIT (LOSS)                                                                    (1,244,284)

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

NET PROFIT  (LOSS)                                                                         (1,244,284)
                                                                                        ===============

1st mortgage principal payment                                                                  52,868
2nd mortgage principal payment                                                                ---
3rd mortgage principal payment                                                                ---
                                                                                        ---------------

Total mortgage principal payments                                                               52,868
                                                                                        ===============

Actual replacement reserve deposits                                                             75,836
Replacement or painting reserve releases                                                      (51,500)
Cash subsidies                                                                                ---
Capital improvements not expensed                                                             ---
Capital contribution or disbursement                                                            78,553



</TABLE>


<PAGE>



STRATHERN PARK                                                    SCHEDULE III
COMPUTATION OF RESIDUAL RECEIPTS
DECEMBER 31, 1996


<TABLE>

<CAPTION>
<S>                                                                             <C>                        <C>

Net income (loss) as of December 31, 1996                                                                  (1,244,284)

ADD:
Depreciation                                                                    778,964
Amortization                                                                     17,967
Community Redevelopment Agency loan interest                                    322,259
Housing Development Grant loan interest                                         362,537
Releases from reserve for replacements                                           51,500                      1,533,227
                                                                        ----------------               ----------------

                                                                                                               288,943
LESS:
Principal payments on mortgage                                                 (52,868)
Deposits to reserve for replacements                                           (75,836)
Payments for capital expenditures                                             ---                            (128,704)
                                                                        ----------------               ----------------




RESIDUAL RECEIPTS, as defined in the partnership agreement
                                                                                                               160,239
                                                                                                       ================
</TABLE>


<PAGE>
                                STRATHERN PARK
                               DECEMBER 31, 1997























<PAGE>



Nanas, Stern, Biers, Neinstein & Co. LLP
Certified Public Accountants
9454 Wilshire Boulevard
Beverly Hills, California 90212-2901
Tel (310) 273-2501
Fax (310) 859-0374







                            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
January 28, 1998

<PAGE>



                                                  STRATHERN PARK
                                                   BALANCE SHEET
                                                 DECEMBER 31, 1997
<TABLE>
<CAPTION>



ASSETS
     <S>                                                                         <C>           <C>

     Cash and cash equivalents (Note 5)                                                        $             75,050
     Receivables                                                                                             28,003
     Reserve for replacements  (Note 5)                                                                     138,827
     Tenant security deposits  (Note 5)                                                                     120,342

     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                                   (5,213,507)           20,667,584
                                                                                 --------------

     Other assets
                 Syndication fee  (Net of accumulated amortization
                      of $112,219)                                                                          606,448
                                                                                                  ------------------

                 TOTAL ASSETS                                                                  $         21,636,254
                                                                                                  ==================



LIABILITIES

     Accounts payable and accrued expenses                                                     $             72,821
     Security deposits                                                                                      106,609
     Accrued interest payable  (Note 2)                                                                   3,940,215
     Long term debt  (Notes 2 and 5)                                                                     17,482,959
                                                                                                  ------------------

                 TOTAL LIABILITIES                                                                       21,602,604

DEFERRED INCOME                                                                                              20,604

PARTNERS' EQUITY  (Note 3)                                                                                   13,046
                                                                                                  ------------------

                 TOTAL LIABILITIES AND PARTNERS' EQUITY                                        $         21,636,254
                                                                                                  ==================
</TABLE>

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

<PAGE>



                                 STRATHERN PARK
                          STATEMENT OF PARTNERS' EQUITY
                          YEAR ENDED DECEMBER 31, 1997





<TABLE>
<CAPTION>

                                           Profit            Balance            Net             Distri-          Balance
                                          and Loss           January           Loss             butions         December
                                         Percentage          1, 1997       for the year          Paid           31, 1997
                                        --------------    --------------   --------------    --------------   --------------
GENERAL PARTNER
<S>                                                <C>  <C>              <C>               <C>              <C>

Safran Associates Investment
      Partnership II, A California
      Limited Partnership                          1%   $      (58,039)  $      (13,443)   $         (702)  $      (72,184)


CLASS A LIMITED PARTNER

  Safran Associates Investment
      Partnership II, A California
      Limited Partnership                          4%         (233,957)         (53,774)           (9,110)        (296,841)


INVESTOR LIMITED PARTNER

  Boston Financial Qualified
      Housing Tax Credits L.P.V., A
      Massachusetts Limited
      Partnership                                 95%         1,745,523      (1,277,121)          (86,331)          382,071


SPECIAL LIMITED PARTNER

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


                                                        $     1,453,527  $   (1,344,338)   $      (96,143)  $        13,046
                                                          ==============   ==============    ==============   ==============

</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, 1997


<TABLE>
<CAPTION>

INCOME
<S>                                                                                    <C>                 <C>

                  Gross potential - rents                                              $      1,547,419
                  (Vacancies)                                                                  (12,686)
                  Interest                                                                       13,651
                  Miscellaneous                                                                  41,426
                                                                                          --------------

                              TOTAL INCOME                                                                 $      1,589,810



EXPENSES  (Note 4)

                  Administrative expense                                                        143,310
                  Management fees                                                               123,995
                  Utilities                                                                     134,201
                  Operating and maintenance expense                                             321,412
                  Taxes and insurance                                                           180,032
                  Interest expense - Mortgage note payable                                      552,976
                  Interest expense - Notes payable                                              684,796
                  Depreciation and amortization                                                 793,426
                                                                                          --------------
                                                                                                                  2,934,148
                                                                                                             ---------------




NET LOSS                                                                                                   $    (1,344,338)
                                                                                                             ===============
</TABLE>
                                                  See   accompanying   auditors'
                                     report.  The notes are an integral  part of
                                     these financial statements.

<PAGE>



                                                 STRATHERN PARK
                                             STATEMENT OF CASH FLOWS
                                          YEAR ENDED DECEMBER 31, 1997

                                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                           <C>               <C>

      Net Loss                                                                                    $    (1,344,338)

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

               Depreciation and amortization                                  $   793,426

               (Increase)/Decrease in -
                           Receivables                                               10,579
                           Tenant security deposits                                   1,673

               (Decrease)/Increase in -
                           Accounts payable and accrued expenses                   (12,978)
                           Accrued interest payable                                 624,031
                           Security deposits                                          (888)
                           Deferred income                                              366
                                                                                ------------
               Total Adjustments                                                                        1,416,209
                                                                                                    --------------

               Net Cash Provided by Operating Activities                                                   71,871

CASH FLOWS FROM INVESTING ACTIVITIES

        Deposits to reserve for replacements                                       (82,055)
        Releases from reserve for replacements                                       39,880
        Purchase of equipment                                                       (4,626)
                                                                                ------------
               Net Cash Used in Investing Activities                                                      (46,801)

CASH FLOWS FROM FINANCING ACTIVITIES

        Principal payments on mortgage                                             (69,492)
        Distributions paid                                                         (96,143)
                                                                                ------------
               Net Cash Used in Financing Activities                                                     (165,635)
                                                                                                    --------------

               Net Decrease in Cash and Cash Equivalents                                                 (140,565)

Cash and cash equivalents at January 1, 1997                                                              215,615
                                                                                                    --------------

Cash and cash equivalents at December 31, 1997                                                   $         75,050
                                                                                                    ==============

        SUPPLEMENTAL DISCLOSURE OF CASH FROM INFORMATION:

               Cash paid during the year for interest                         $     617,557
                                                                                ============

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

<PAGE>



                                 STRATHERN PARK
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1997


Note 1      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

            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 40 years.


                                                            STRATHERN PARK
                                                   NOTES TO FINANCIAL STATEMENTS
                                                          DECEMBER 31, 1997

Note 1      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES  (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.

<TABLE>
<CAPTION>

Note 2      LONG TERM DEBT
                  <S>                                                                       <C>
                  Mortgage  note  payable,  secured  by  First  Deed  of  Trust,
                  requiring monthly payments of $51,913, including interest
                  at 9.41% per annum, maturing February, 2022.                              $    5,858,679

                  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, 1997 amounted to $2,128,864.                                      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, 1997 amounted to $1,811,351.                          6,445,175
                                                                                              -----------------

                                                                                            $    17,482,959
                                                                                              =================
</TABLE>





<PAGE>



                     STRATHERN PARK
              NOTES TO FINANCIAL STATEMENTS
                    DECEMBR 31, 1997

Note 2      LONG TERM DEBT  (Contd.)

            Maturities  of  long  term  debt as of  December  31,  1997  for the
            succeeding five years are as follows:

                  Years ended December 31,
                           1998                        65,779
                           1999                        72,337
                           2000                        77,942
                           2001                        87,318
                           2002                        96,023
                           Thereafter              17,083,560
                                                ---------------
                                            $      17,482,959
                                                ===============


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, 1997

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>
            <S>                                 <C>                    <C>               <C>              <C>

                                                                                            (Income)         Receivable
                                                                                            Expense          (Payable)
                                                                          Account           for the         At December
                          Name                      Description             No.               Year            31, 1997
            ----------------------------------  ---------------------  ---------------   ---------------  -----------------

            Thomas Safran and
               Associates, Inc.(TS&A, Inc.)     Management fee              6320      $         111,491 $       ---
                                                                                         ===============  =================
</TABLE>

            In addition,  the project reimbursed TS&A, Inc. for allocated common
            costs  such  as  office  supplies,   salaries,  payroll  taxes,  and
            insurance.  The aggregate total of such  reimbursements  was $92,671
            for the year.

            The  general  partner  has  a  direct  ownership   interest  in  the
            management company listed above.

            Thomas  Safran & Associates,  Inc.  (TS&A,  Inc.) has  subcontracted
            certain accounting and supervisory functions to Insignia Residential
            Group of California, Inc. (IRG) for a period of two years commencing
            August 1, 1997.  TS&A,  Inc. will continue to be the managing  agent
            and IRG will report to them on a monthly basis.  The agreement among
            TS&A,  Inc., IRG and the Project  provides a portion of the approved
            management fees to be paid to IRG 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.
<TABLE>
<CAPTION>

                                                                                                 December 31, 1997
                                                                                         ----------------------------------
                                                                                            Carrying            Fair
                                                                                             Amount            Value
            <S>                                                                       <C>               <C>

            Cash and Short Term Investments                                           $         334,219 $          334,219
            Long Term Debt  (First Deed of Trust)                                           (5,858,679)        (5,858,679)
            Long Term Debt  (Second & Third Deed of Trust)                                 (11,624,280)       (11,624,280)

</TABLE>

<PAGE>














                                          STRATHERN PARK

                                BOSTON FINANCIAL QUALIFIED HOUSING

                                       BALANCE SHEET FORMAT

                                         DECEMBER 31, 1997





















<PAGE>


                                                                      SCHEDULE I
                                                                     Page 1 of 2
                                 STRATHERN PARK
                       BOSTON FINANCIAL QUALIFIED HOUSING
                              BALANCE SHEET FORMAT
                                DECEMBER 31, 1997
<TABLE>
<CAPTION>

                                       ASSETS
<S>                                                                                   <C>                  <C>
CURRENT ASSETS
       1110      Petty cash                                                           $            500
       1120      Cash in bank                                                                   74,550
       1130      Rent receivables                                                               25,655
       1140      Miscellaneous receivables                                                       2,348
       1191      Tenant security deposits                                                      120,342
                                                                                         --------------
                              Total Current Assets                                                         $        223,395

RESERVES AND DEPOSITS
       1320      Reserve for replacements                                                                           138,827

FIXED ASSETS
       1410      Land                                                                        5,889,320
       1420      Buildings                                                                  19,042,548
       1450      Equipment and furnishings                                                     949,223
                                                                                         --------------
                                                                                            25,881,091
       4100      Less:  accumulated depreciation                                           (5,213,507)
                                                                                         --------------
                              Total Fixed Assets                                                                 20,667,584

OTHER ASSETS
       1820      Syndication fee  (Net of accumulated amortization
                      of $112,219)                                                                                  606,448
                                                                                                             ---------------



                              TOTAL ASSETS                                                                 $     21,636,254
                                                                                                             ===============

</TABLE>

<PAGE>


                                                                      SCHEDULE I
                                                                     Page 2 of 2

                                 STRATHERN PARK
                       BOSTON FINANCIAL QUALIFIED HOUSING
                              BALANCE SHEET FORMAT
                                DECEMBER 31, 1997


                          LIABILITIES AND PARTNERS' EQUITY
<TABLE>
<CAPTION>
<S>                                                                                   <C>                  <C>
CURRENT LIABILITIES
       2110      Accounts payable                                                     $         25,256
                 Accrued interest payable - 1st mortgage                                        47,565
       2191      Tenant security deposit liability                                             106,609
                                                                                         --------------
                              Total Current Liabilities                                                    $        179,430

MORTGAGE NOTE PAYABLE CURRENT PORTION
                 1st mortgage note payable current portion                                                           65,779

LONG TERM LIABILITIES
                 Accrued interest payable - notes
                              2nd mortgage note payable                                      2,128,864
                              3rd mortgage note payable                                      1,811,351
                 Mortgage notes payable
       2321                   1st mortgage note payable                                      5,792,900
       2322                   2nd mortgage note payable                                      5,179,105
       2323                   3rd mortgage note payable                                      6,445,175
       2210                   Deferred income                                                   20,604
                                                                                         --------------
                              Total Long Term Liabilities                                                        21,377,999

PARTNERS'  EQUITY
       3130      Limited partners' equity                                                       85,230
       3131      General partners' equity                                                     (72,184)
                                                                                         --------------
                              Total Owners' Equity                                                                   13,046
                                                                                                             ---------------

                              TOTAL LIABILITIES AND PARTNERS' EQUITY                                       $     21,636,254
                                                                                                             ===============

</TABLE>

<PAGE>


                                                                     SCHEDULE II
                                                                     Page 1 of 4
                                                  STRATHERN PARK
                                       BOSTON FINANCIAL QUALIFIED HOUSING -
                                             STATEMENT OF OPERATIONS
                                           YEAR ENDED DECEMBER 31, 1997


<TABLE>
<CAPTION>

REVENUE
       <S>                                                                      <C>                <C>
               Rent revenue
       5120      Apartments                                                     $      1,482,095
       5121      Tenant assistance payments                                               52,472
       5130      Furniture and equipment                                                ---
       5140      Stores and commercial                                                    12,852
       5170      Garage and parking spaces                                              ---
       5180      Flexible subsidy income                                                ---
       5190      Miscellaneous                                                          ---
                                                                                   --------------

                              Total rent revenue                                                   $     1,547,419

              Vacancies
       5220      Apartments                                                             (12,686)
       5240      Stores and commercial                                                  ---
       5270      Garage and parking spaces                                              ---
       5290      Miscellaneous                                                          ---
                                                                                   --------------

                              Total Vacancies                                                             (12,686)
                                                                                                     --------------


              Net Rental Revenue                                                                         1,534,733

              Financial Revenue
       5410      Interest Income - operations                                              3,254
       5430      Interest Income - residual receipts                                    ---
       5440      Interest income - reserve for replacements                                4,692
       5490      Interest income - miscellaneous                                           5,705
                                                                                   --------------

                              Total Financial Revenue                                                       13,651
              Other Revenue
       5910      Laundry and vending                                                      26,400
       5920      NSF and late charges                                                      6,725
       5930      Damages and cleaning fees                                                 2,782
       5940      Forfeited tenant security deposits                                        2,129
       5990      Other revenue                                                             3,390
       5991      Non-cash revenue                                                       ---
                                                                                   --------------
                              Total Other Revenue                                                           41,426
                                                                                                     --------------

NET REVENUE                                                                                        $     1,589,810
                                                                                                     ==============
</TABLE>


<PAGE>


                                                                     SCHEDULE II
                                                                     Page 2 of 4
                                                  STRATHERN PARK
                                       BOSTON FINANCIAL QUALIFIED HOUSING -
                                             STATEMENT OF OPERATIONS
                                           YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>


EXPENSES
       <S>                                                                      <C>                <C>
              Administrative Expenses
       6210      Advertising                                                    $          1,482
       6250      Other renting expense                                                  ---
       6310      Office salaries                                                          15,299
       6311      Office supplies                                                          46,028
       6320      Management fee                                                          123,995
       6330      Manager or superintendent salary                                         44,382
       6331      Manager's rent free unit                                               ---
       6340      Legal expenses  (project)                                                 2,581
       6350      Auditing expenses  (project)                                              9,500
       6351      Bookkeeping fees/accounting services                                   ---
       6360      Telephone and answering services                                         10,282
       6370      Bad debts                                                                13,756
       6390      Miscellaneous administrative expenses                                  ---
                                                                                   --------------

                              Total Administrative Expenses                                        $       267,305

              Utilities Expenses
       6420      Fuel oil/coal                                                          ---
       6450      Electricity                                                              38,537
       6451      Water                                                                    56,476
       6452      Gas                                                                       7,061
       6453      Sewer                                                                    32,127
                                                                                   --------------

                              Total Utilities Expenses                                                     134,201

              Operating & Maintenance
       6510      Janitor and cleaning payroll                                           ---
       6515      Janitor and cleaning supplies                                             5,449
       6517      Janitor and cleaning contract                                          ---
       6519      Exterminating payroll/contract                                            1,527
       6520      Exterminating supplies                                                 ---
       6525      Garbage and trash removal                                                13,379
       6530      Security payroll/contract                                                18,611



<PAGE>


                                                                                                          SCHEDULE II
                                                                                                          Page 3 of 4

                                                  STRATHERN PARK
                                       BOSTON FINANCIAL QUALIFIED HOUSING -
                                             STATEMENT OF OPERATIONS
                                           YEAR ENDED DECEMBER 31, 1997




EXPENSES  (Cont.)
              Operating & Maintenance  (Cont.)
       6535      Grounds payroll                                                $       ---
       6536      Grounds supplies                                                         10,648
       6537      Grounds contract                                                         27,910
       6540      Repairs payroll                                                          71,622
       6541      Repairs material                                                         40,743
       6542      Repairs contract                                                         81,225
       6545      Elevator maintenance/contract                                          ---
       6546      Heating/cooling repairs and maintenance                                   2,518
       6547      Swimming pool maintenance/contract                                     ---
       6548      Snow removal                                                           ---
       6560      Decorating payroll/contract                                              27,775
       6561      Decorating supplies                                                      20,005
       6570      Other, gasoline                                                        ---
       6590      Miscellaneous operating and maintenance                                ---
                                                                                   --------------

                              Total Operating and Maintenance                                      $       321,412

              Taxes and Insurance
       6710      Real estate taxes                                                       124,522
       6711      Payroll taxes (FICA)                                                     13,155
       6719      Miscellaneous taxes, licenses                                          ---
       6720      Property and liability insurance                                         21,402
       6721      Fidelity bond insurance                                                ---
       6722      Workmen's compensation                                                    8,563
       6723      Health insurance and other benefits                                       8,281
       6729      Other insurance                                                        ---
       6790      Miscellaneous taxes and insurance                                      ---
                                                                                   --------------

                              Total Taxes and Insurance                                                    175,923

              Interest on Mortgage Notes
       6821      Interest on 1st mortgage                                                                  552,976


<PAGE>


                                                                     SCHEDULE II
                                                                     Page 4 of 4

                                                  STRATHERN PARK
                                       BOSTON FINANCIAL QUALIFIED HOUSING -
                                             STATEMENT OF OPERATIONS
                                           YEAR ENDED DECEMBER 31, 1997



EXPENSES  (Cont.)
              Other Financial Expenses
     6690        Amortization                                                   $         17,967
     6830        Interest on notes payable (long term)                                   684,796
     6850        Mortgage insurance premium                                             ---
     6890        Miscellaneous financial expenses                                          4,109
     6895        Non-cash expense                                                       ---
                                                                                   --------------

                              Total Financial Expenses                                             $       706,872
                                                                                                     --------------

TOTAL EXPENSES BEFORE DEPRECIATION                                                                       2,158,689
                                                                                                     --------------

PROFIT (LOSS) BEFORE DEPRECIATION                                                                        (568,879)

     6600        Depreciation                                                                              775,459
                                                                                                     --------------

OPERATING PROFIT (LOSS)                                                                                (1,344,338)

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


NET PROFIT  (LOSS)                                                                                 $   (1,344,338)
                                                                                                     ==============


                 1st mortgage principal payment                                                    $        69,492
                 2nd mortgage principal payment                                                           ---
                 3rd mortgage principal payment                                                           ---
                                                                                                     --------------

                                          Total mortgage principal payments                        $        69,492
                                                                                                     ==============


                 Actual replacement reserve deposits                                               $        82,055
                 Replacement or painting reserve releases                                          $      (39,880)
                 Cash subsidies                                                                           ---
                 Capital improvements not expensed                                                        ---
                 Capital contribution or disbursement                                              $        96,143

</TABLE>

<PAGE>


                                                                    SCHEDULE III

                                 STRATHERN PARK
                        COMPUTATION OF RESIDUAL RECEIPTS
                                DECEMBER 31, 1997



<TABLE>
<CAPTION>
<S>                                                                                   <C>                  <C>
Net income (loss) as of December 31, 1997                                                                  $    (1,344,338)


ADD:          Depreciation                                                            $        775,459
              Amortization                                                                      17,967
              Community Redevelopment Agency loan interest                                     322,259
              Housing Development Grant loan interest                                          362,537
              Approved releases from reserve for replacements                                   38,067
              Releases from reserve for replacements                                            39,880            1,556,169
                                                                                         --------------      ---------------

                                                                                                                    211,831

LESS:         Principal payments on mortgage                                                  (69,492)
              Deposits to reserve for replacements                                            (82,055)
              Payments for capital expenditures                                                (4,626)            (156,173)
                                                                                         --------------      ---------------




RESIDUAL RECEIPTS, as defined in the partnership agreement
     at December 31, 1997                                                                                  $         55,658
                                                                                                             ===============


</TABLE>






<PAGE>


STRATHERN PARK
DECEMBER 31, 1998




<PAGE>











                          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>