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

                                    FORM 10-K
(Mark One)

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

For the fiscal year ended March 31, 2004

                                       OR

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

                         Commission File Number 0-24652

                          FREEDOM TAX CREDIT PLUS L.P.
                          ----------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                             13-3533987
-------------------------------                           ----------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

625 Madison Avenue, New York, New York                               10022
----------------------------------------                       -----------------
(Address of principal executive offices)                           (Zip Code)

Registrant's telephone number, including area code (212) 421-5333

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

     None

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

     Title of Class
     Beneficial Assignment Certificates and Limited Partnership Interests

     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 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]

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes     No  X
                                      -----  -----

     The  approximate  aggregate book value of the voting and non-voting  common
equity held by  non-affiliates  of the  Registrant  as of September 30, 2003 was
$4,509,000 based on Limited Partner equity as of such date.

     Registrant's voting and non-voting common equity is not publicly traded.

                      DOCUMENTS INCORPORATED BY REFERENCE

     None


<PAGE>


                      CAUTIONARY STATEMENT FOR PURPOSES OF
                         THE "SAFE HARBOR" PROVISIONS OF
              THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995



WHEN  USED  IN  THIS  ANNUAL  REPORT  ON  FORM  10-K,   THE  WORDS   "BELIEVES,"
"ANTICIPATES,"  "EXPECTS"  AND  SIMILAR  EXPRESSIONS  ARE  INTENDED  TO IDENTIFY
FORWARD-LOOKING  STATEMENTS.  STATEMENTS LOOKING FORWARD IN TIME ARE INCLUDED IN
THIS ANNUAL REPORT ON FORM 10-K  PURSUANT TO THE "SAFE HARBOR"  PROVISION OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE SUBJECT TO
CERTAIN  RISKS AND  UNCERTAINTIES  WHICH  COULD CAUSE  ACTUAL  RESULTS TO DIFFER
MATERIALLY,  INCLUDING,  BUT NOT  LIMITED TO,  THOSE SET FORTH IN  "MANAGEMENT'S
DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF  OPERATIONS."
READERS  ARE  CAUTIONED  NOT TO PLACE UNDUE  RELIANCE  ON THESE  FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF.

                                       2
<PAGE>

                                     PART I

Item 1. Business.

General
-------

Freedom Tax Credit Plus L.P. (the  "Partnership") is a limited partnership which
was  formed  under the laws of the State of  Delaware  on August 28,  1989.  The
General  Partners of the  Partnership  are Related  Freedom  Associates  L.P., a
Delaware limited  partnership (the "Related  General  Partner"),  and Freedom GP
Inc., a Delaware  corporation  (the "Freedom  General Partner" and together with
the Related General Partner, the "General Partners"). The general partner of the
Related  General  Partner  is  Related  Freedom   Associates  Inc.,  a  Delaware
corporation.  The  General  Partners  are both  affiliates  of  Related  Capital
Company.  On November 25, 1997,  an  affiliate  of the Related  General  Partner
purchased  100% of the stock of the Freedom  General  Partner.  On November  17,
2003, CharterMac acquired Related Capital Company,  which is the indirect parent
of RCC Manager L.L.C., the sole shareholder of Related Freedom Associates, Inc.,
the general partner of the Related General Partner. Pursuant to the acquisition,
CharterMac  acquired  controlling  interests  in  the  General  Partners.   This
acquisition did not affect the Partnership or its day-to-day operations,  as the
majority of the General Partners' management team remained unchanged.

On  February  9,  1990,  the  Partnership   commenced  a  public  offering  (the
"Offering")  of  Beneficial   Assignment   Certificates   ("BACs")  representing
assignments  of  limited  partnership  interests  in the  Partnership  ("Limited
Partnership  Interests"),  pursuant to a prospectus  dated  February 9, 1990, as
supplemented by supplements thereto,  dated December 7, 1990, May 10, 1991, July
10, 1991 and July 23, 1991 (as so supplemented, the "Prospectus").

The Partnership  received $72,896,000 of the gross proceeds of the Offering from
4,780 investors, and the Offering was terminated on August 8, 1991. (See Item 8,
"Financial  Statements and Supplementary  Data," Note 1 of Notes to Consolidated
Financial Statements.)

The  Partnership  was  formed to invest as a limited  partner  in other  limited
partnerships  ("Local  Partnerships"),  each of which owns one or more leveraged
low-income   multi-family   residential  complexes  ("Apartment   Complexes"  or
"Properties")  that are eligible for the low-income housing tax credit ("Housing
Tax Credit")  enacted in the Tax Reform Act of 1986,  and some of which may also
be eligible for the historic  rehabilitation  tax credit ("Historic Tax Credit";
together  with  Housing  Tax  Credits,  the "Tax  Credits").  The  Partnership's
investment in each Local  Partnership  represents 98% to 99% of the  partnership
interests in the Local  Partnership.  As of March 31, 2004, the  Partnership has
acquired  interests  in  forty-two  Local  Partnerships.  As of March 31,  2004,
approximately  $58,000,000  of net  proceeds  had been  invested  in such  Local
Partnerships,  representing all of the Partnership's net proceeds  available for
investment.  Subsequent  to March  31,  2004 and as of the date of this  filing,
there  have  been no  additional  investments,  nor are  any  other  investments
expected. See Item 2, "Properties," below.

The investment objectives of the Partnership are described below.

1. Entitle  qualified BACs holders to Housing Tax Credits over the Credit Period
(as defined below) with respect to each Apartment Complex.

2. Preserve and protect the Partnership's capital.

3.  Participate in any capital  appreciation  in the value of the Properties and
provide  distributions  of sale or refinancing  proceeds upon the disposition of
the Properties.

4. Allocate  passive losses to individual  BACs holders to offset passive income
that they may realize  from rental real  estate  investments  and other  passive
activities,  and allocate  passive  losses to  corporate  BACs holders to offset
business income.

One of the  Partnership's  objectives  is to entitle  qualified  BACs holders to
Housing Tax Credits over the period of the  Partnership's  entitlement  to claim
Tax Credits (for each Property,  generally ten years from the date of investment
or, if later, the date the Property is leased to qualified tenants;  referred to
herein as the  "Credit  Period").  Each of the Local  Partnerships  in which the

                                       3
<PAGE>

Partnership  has an interest has been  allocated  by the  relevant  state credit
agency the authority to recognize  Housing Tax Credits during the Credit Period,
provided  that the Local  Partnership  satisfies the rent  restriction,  minimum
set-aside and other  requirements  for recognition of the Housing Tax Credits at
all times  during the 15-year  period (the  "Compliance  Period").  Once a Local
Partnership  has become eligible to recognize  Housing Tax Credits,  it may lose
such  eligibility  and suffer an event of  "recapture"  if its Property fails to
remain in compliance with the Housing Tax Credit requirements. None of the Local
Partnerships  in which the  Partnership has acquired an interest has suffered an
event of recapture.

Housing Tax Credits with respect to a given Apartment  Complex are available for
a ten-year  period  that  commences  when the  property  is leased to  qualified
tenants.  However, the annual Housing Tax Credits available in the year in which
the Apartment Complex is leased to qualified tenants must be prorated based upon
the months  remaining in the year.  The amount of the annual Housing Tax Credits
not available in the first year will be available in the eleventh year. Internal
Revenue  Code  Section 42  regulates  the use of the  Apartment  Complexes as to
occupancy,  eligibility,  and unit gross rent,  among other  requirements.  Each
Apartment Complex must meet the provisions of these  regulations  during each of
fifteen consecutive years (the "Compliance Period") in order to remain qualified
to receive the credits.  Certain  Apartment  Complexes have extended  compliance
periods of up to fifty years.

The  Partnership  generated $0,  $1,710,233 and $6,782,384 in Tax Credits during
the 2003, 2002 and 2001 Fiscal Years, respectively.  As of December 31, 2002 all
the  Local  Partnerships  have  completed  their  tax  credit  periods  and  the
Partnership  has met  its  primary  objective  of  generating  Tax  Credits  for
qualified BACs holders.  However, each Local Partnership must continue to comply
with the Tax Credit requirements until the end of the Compliance Period in order
to avoid  recapture of the Tax Credits.  The Compliance  Period will end between
December 31, 2004 and December 31, 2007 with respect to the Properties depending
upon when the Credit Period commenced.

The Partnership  continues to meet its objective of allocating passive losses to
individual  BACs  holders to offset  passive  income that they may realize  from
rental real estate  investments  and other passive  activities,  and  allocating
passive losses to corporate BACs holders to offset business income.

As of March 31, 2004, cash  distributions  received from the Local  Partnerships
have been  relatively  immaterial.  Management  expects  that the  distributions
received  from the Local  Partnerships  will  increase,  although not to a level
sufficient to permit cash  distributions  to BACs holders.  The Partnership does
not anticipate  providing cash  distributions  to BACs holders in  circumstances
other than refinancings or sales.

Segments
--------
The Partnership operates in one segment, which is the investment in multi-family
residential property.

Competition
-----------
The real estate  business is highly  competitive  and  substantially  all of the
properties acquired are subject to active competition from similar properties in
their respective  vicinities.  In addition,  various other limited  partnerships
may, in the future, be formed by the General Partners and/or their affiliates to
engage in businesses which may compete with the Partnership.

Employees
---------
The Partnership does not have any direct  employees.  All services are performed
for the Partnership by its General  Partners and their  affiliates.  The General
Partners receive compensation in connection with such activities as set forth in
Items 11 and 13. In addition,  the Partnership  reimburses the General  Partners
and certain of their  affiliates  for expenses  incurred in connection  with the
performance  by their  employees of services for the  Partnership  in accordance
with the Partnership's Amended and Restated Agreement and Certificate of Limited
Partnership (the "Partnership Agreement").

                                       4
<PAGE>

Item 2. Properties.

The  Partnership  holds a 99%,  98.99% and 98% limited  partnership  interest in
nine, ten and twenty-three Local Partnerships,  respectively. Set forth below is
a schedule of these Local Partnerships  including certain information concerning
the Apartment Complexes (the "Local Partnership Schedule").  Further information
concerning  these  Local  Partnerships  and  their  Properties,   including  any
encumbrances  affecting the Properties,  may be found in Item 15 (a) 2; Schedule
III.
<TABLE>
<CAPTION>

                           Local Partnership Schedule
                           --------------------------

                                                                % of Units Occupied  at  May 1,
Name and Location                                        ---------------------------------------------
(Number of Units)                      Date Acquired      2004     2003     2002        2001     2000
----------------------------------     --------------    ------   ------   ------      ------   ------
<S>                                    <C>                <C>      <C>      <C>         <C>      <C>
Parkside Townhomes

York, PA (53)                          September 1990      98%      89%      87%         94%      98%

Twin Trees
Layton, UT (43)                        October 1990        95%      95%      98%        100%      98%

Bennion (Mulberry)
Taylorsville, UT (80)                  October 1990        93%      88%      96%         94%      90%

Hunters Chase
Madison, AL (91)                       October 1990        80%      95%      93%         95%      89%

Wilshire Park
Huntsville, AL (65)                    October 1990        91%      88%      94%         95%      94%

Bethel Park
Bethel, OH (84)                        October 1990        96%      89%      80%         86%      95%

Zebulon Park
Owensville, OH (66)                    October 1990        94%      94%      95%         97%      96%

Tivoli Place
Murphreesboro, TN (61)                 October 1990        90%      92%      89%         88%      95%

Northwood (Hartwood)
Jacksonville, FL (110)                 October 1990        97%      92%     100%         95%      96%

Oxford Trace
Aiken, SC (29)                         October 1990        96%      97%      79%         97%      93%

Ivanhoe Apts
Salt Lake City, UT (19)                January 1991       100%      79%      95%         95%     100%

Washington Brooklyn
Brooklyn, NY (24)                      January 1991       100%     100%     100%        100%     100%

Manhattan B (C.H. Development)
New York, NY (35)                      January 1991        97%     100%     100%         97%      94%

Davidson Court
Staten Island, NY (38)                 March 1991          97%     100%     100%        100%      95%

Magnolia Mews
Philadelphia, PA (63)                  March 1991          95%      98%     100%        100%     100%

Oaks Village
Whiteville, NC (40)                    March 1991         100%      98%     100%         98%      98%
</TABLE>


                                       5
<PAGE>

<TABLE>
<CAPTION>

                           Local Partnership Schedule
                           --------------------------
                                   (continued)
                                   -----------

                                                                % of Units Occupied  at  May 1,
Name and Location                                        ---------------------------------------------
(Number of Units)                      Date Acquired      2004     2003     2002        2001     2000
----------------------------------     --------------    ------   ------   ------      ------   ------
<S>                                    <C>                <C>      <C>      <C>         <C>      <C>
Greenfield Village
Dunn, NC (40)                          March 1991          98%      98%     100%         95%     100%

Morris Avenue (CLM Equities)
Bronx, NY (58)                         April 1991         100%     100%     100%        100%     100%

Victoria Manor
Riverside, CA (112)                    April 1991         100%     100%     100%        100%      98%

Ogontz Hall
Philadelphia, PA (35)                  April 1991          90%     100%      65%(a)     100%      84%

Eagle Ridge
Stoughton, WI (54)                     May 1991            87%      89%      93%         96%      91%

Nelson Anderson
Bronx, NY (81)                         June 1991           98%      98%      96%         98%      99%

Abraham Lincoln Apts
Irondequoit, NY (69)                   September 1991      86%      83%      94%         91%     100%

Wilson Street Apts. (Middletown)
Middletown, PA (44)                    September 1991      98%      98%      95%         91%     100%

Lauderdale Lakes
Lauderdale Lakes, FL (172)             October 1991        99%      97%      96%         95%      94%

Flipper Temple
Atlanta, GA (163)                      October 1991       100%      97%     100%         96%      97%

220 Cooper Street
Camden, NJ (29)                        December 1991      100%     100%      93%         97%     100%

Pecan Creek
Tulsa, OK (47)                         December 1991       96%      92%      94%         98%      98%

Vendome
Brooklyn, NY (24)                      December 1991      100%     100%     100%        100%     100%

Rainer Villas
New Augusta, MS (20)                   December 1991      100%      85%     100%        100%     100%

Pine Shadow Apts
Waveland, MS (48)                      December 1991      100%      98%     100%        100%     100%

Windsor Place
Wedowee, AL (24)                       December 1991      100%     100%     100%        100%     100%

Brookwood Apts
Foley, AL (38)                         December 1991       84%      95%      98%         95%      97%
</TABLE>


                                       6
<PAGE>

<TABLE>
<CAPTION>

                           Local Partnership Schedule
                           --------------------------
                                   (continued)
                                   -----------

                                                                % of Units Occupied  at  May 1,
Name and Location                                        ---------------------------------------------
(Number of Units)                      Date Acquired      2004     2003     2002        2001     2000
----------------------------------     --------------    ------   ------   ------      ------   ------
<S>                                    <C>                <C>      <C>      <C>         <C>      <C>
Heflin Hills Apts
Heflin, AL (24)                        December 1991      100%     100%     100%        100%      96%

Shadowood Apts
Stevenson, AL (24)                     December 1991      100%     100%     100%        100%      91%

Brittany Apts
DeKalb, MS (25)                        December 1991      100%     100%     100%        100%     100%

Hidden Valley Apts
Brewton, AL (40)                       December 1991      100%     100%      99%        100%     100%

Westbrook Square
Carthage, MS (32)                      December 1991       97%      97%      88%         88%      91%

Royal Pines Apts. (Warsaw Elderly)
Warsaw, KY (36)                        December 1991      100%     100%     100%        100%     100%

West Hill Square
Gordo, AL (24)                         December 1991      100%     100%     100%        100%     100%

Elmwood Manor
Picayune, MS (24)                      December 1991      100%     100%     100%        100%     100%

Harmony Gate Apts
Los Angeles, CA (70)                   January 1992        97%      99%      97%         97%      96%

(a) Property undergoing renovations.
</TABLE>

None of the Local Partnership's  assets or revenue balances are greater than 10%
of the Partnership's total assets or revenue balances.

All leases are  generally  for periods not greater  than one to two years and no
tenant occupies more than 10% of the rentable square footage.

Commercial  tenants (to which average  rental per square foot applies)  comprise
less than 5% of the rental  revenues  of the Local  Partnerships.  Rents for the
residential units are determined  annually by the U.S. Department of Housing and
Urban  Development  ("HUD") and  reflect  increases,  if any, in consumer  price
indices in various geographic areas.

Management of the General  Partners  periodically  reviews the physical state of
the  Properties  and suggests to the respective  Local General  Partners  budget
improvements  which are  generally  funded  from cash  flow from  operations  or
release of replacement reserve escrows.

Management of the General Partners  periodically  reviews the insurance coverage
of the Properties and believes such coverage is adequate.

See Item 1, Business,  above for the general competitive conditions to which the
Properties described above are subject.

Real estate taxes are calculated using rates and assessed valuations  determined
by the  township  or city in which the  Property  is  located.  Such  taxes have
approximated 1% of the aggregate cost of the Properties as shown in Schedule III
to the financial statements included herein.

                                       7
<PAGE>

The General Partners  generally  required that the general partners of the Local
Partnerships   ("Local  General  Partners")  undertake  an  obligation  to  fund
operating  deficits of the Local  Partnership  (up to a stated  maximum  amount)
during a limited period of time  (typically  three to five years)  following the
achievement of break-even operations ("Operating Deficit Guarantees"). Under the
terms of the  Operating  Deficit  Guarantees,  amounts  funded  are  treated  as
operating loans, which do not bear interest and which will be repaid only out of
50% of available cash flow or out of available net sale or refinancing proceeds.
As of March 31, 2004, all Operating Deficit Guarantees have expired and $288,259
of operating loans are outstanding.

Item 3. Legal Proceedings.

Washington Brooklyn
-------------------
In or about  September  2003,  two  putative  mortgagees  commenced  a  mortgage
foreclosure  action in the Supreme Court of the State of New York,  Kings County
(the  "Court"),  entitled  150 Beach 120th  Street Inc. v.  Washington  Brooklyn
Limited  Partnership,  Index No. 35255/2003,  seeking to foreclose on an alleged
$100,000 loan and mortgage  against the real property (the "Apartment  Complex")
owned by Washington Brooklyn Limited Partnership ("Washington"). Apparently, the
former general partner of Washington,  BUFNY Houses of Brooklyn, Inc. ("BUFNY"),
allegedly  granted two mortgages in the amounts of $225,000 and $100,000 secured
by the Apartment  Complex.  Each of the foregoing  mortgages was granted without
the  knowledge of Freedom  SLP,  L.P.  (the  "Special  Limited  Partner") or the
Partnership  (collectively  the  "Freedom  LPs") or the  consent of the  Special
Limited Partner,  as required by Washington's  Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement").  The Freedom LPs believe that
BUFNY did not use the alleged loan proceeds for the benefit of Washington or the
Apartment Complex. For these and other reasons, the Freedom LPs contend that the
alleged mortgages are invalid.

In addition, BUFNY allegedly failed to comply with the terms of either mortgage,
which resulted in the holders of the alleged  $100,000  mortgage  commencing the
foreclosure  proceedings.  BUFNY did not appear in or  otherwise  respond to the
foreclosure  proceedings.  The holders of the alleged $225,000 mortgage have not
yet, to the knowledge of the Freedom LPs, commenced any foreclosure proceedings.

Shortly  after the Freedom LPs became  aware of these  foreclosure  proceedings,
their counsel  contacted  counsel for the plaintiffs and mortgagees in an effort
to learn more about the alleged  mortgages and to resolve the disputes  relating
to the mortgages.  When those efforts failed,  the Freedom LPs filed a motion to
intervene  in the  foreclosure  action  and for  leave to file a late  answer on
behalf of themselves and Washington.  The Freedom LPs contend that the mortgages
are  invalid  and that  Washington  is not  liable  for  them or the  underlying
indebtedness. A hearing on the Freedom LPs' motion was held on June 16, 2004 and
the Court  reserved  ruling on that  motion,  which is now fully  submitted  and
pending a decision  by the Court.  The Court,  however,  has stayed all  further
proceedings in the foreclosure  action until it decides the Freedom LPs' motion.
If the Court were to deny the Freedom LPs motion or reject their defenses on the
merits to the  foreclosure  action,  it is possible that the  Apartment  Complex
might  be  foreclosed  upon and the  Partnership  might  lose  its  title to and
interests in the  Apartment  Complex.  However,  the final  outcome of this case
cannot be determined at this time.

In  addition,  due to BUFNY's  breach of  fiduciary  duties and  breaches of the
Partnership  Agreement,  the Special Limited Partner  exercised its rights under
the Partnership Agreement to remove BUFNY as Washington's general partner and to
substitute  itself as the new replacement  general partner,  effective April 26,
2004.

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

None.

                                       8
<PAGE>

                                     PART II

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

As of March 31, 2004,  the  Partnership  had issued and has  outstanding  72,896
Limited Partnership  Interests,  each representing a $1,000 capital contribution
to the Partnership, or an aggregate capital contribution of $72,896,000.  All of
the issued and  outstanding  Limited  Partnership  Interests have been issued to
Freedom Assignor Inc. (the "Assignor Limited Partner"), which has in turn issued
72,896  BACs to the  purchasers  thereof  for an  aggregate  purchase  price  of
$72,896,000.  Each BAC  represents  all of the economic and virtually all of the
ownership  rights  attributable  to a Limited  Partnership  Interest held by the
Assignor  Limited  Partner.  BACs  may be  converted  into  Limited  Partnership
Interests at no cost to the holder (other than the payment of transfer costs not
to  exceed  $100),  but  Limited  Partnership  Interests  so  acquired  are  not
thereafter  convertible into BACs. As of May 12, 2004, the Partnership has 4,126
registered holders of an aggregate of 72,896 BACs.

Neither  the  BACs nor the  Limited  Partnership  Interests  are  traded  on any
established  trading market. The Partnership does not intend to include the BACs
for  quotation  on NASDAQ or for  listing  on any  national  or  regional  stock
exchange or any other  established  securities  market.  The Revenue Act of 1987
contained  provisions  which have an adverse  impact on  investors  in "publicly
traded   partnerships."   Accordingly,   the  General   Partners   have  imposed
restrictions   limiting  the   transferability  of  the  BACs  and  the  Limited
Partnership  Interests  in secondary  market  transactions.  These  restrictions
should  prevent a public  trading market from  developing  that would  adversely
affect the ability of an investor to liquidate his or her investment quickly. It
is expected that such procedures will remain in effect until such time, if ever,
as further  revision of the Revenue  Act of 1987 may permit the  Partnership  to
lessen the scope of the restrictions.

All  of  the  Partnership's  general  partnership  interests,   representing  an
aggregate capital contribution of $2,000, are held by the two General Partners.

There are no material  restrictions in the Partnership  Agreement on the ability
of  the  Partnership  to  make  distributions.   The  Partnership  has  made  no
distributions to the BACs holders as of March 31, 2004. The Partnership does not
anticipate  providing cash distributions to its BACs holders other than from net
refinancing or sales proceeds.

                                       9
<PAGE>

Item 6. Selected Financial Data.

The  information  set  forth  below  presents  selected  financial  data  of the
Partnership.  Additional  financial  information  is set  forth  in the  audited
consolidated financial statements in Item 8 hereof.
<TABLE>
<CAPTION>
                                                     For the Years Ended March 31,
                          ---------------------------------------------------------------------------------
OPERATIONS                     2004             2003             2002             2001             2000
-----------------------   -------------    -------------    -------------    -------------    -------------
<S>                       <C>              <C>              <C>              <C>              <C>
Revenues                  $  16,373,601    $  15,732,226    $  15,417,026    $  14,946,838    $  14,333,134
Expenses                    (20,165,525)     (19,523,423)     (19,207,657)     (19,238,172)     (18,617,952)
Loss on impairment of
  of assets                           0                0                0       (2,065,000)        (500,000)
                          -------------    -------------    -------------    -------------    -------------

Loss before minority
  interest                   (3,791,924)      (3,791,197)      (3,790,631)      (6,356,334)      (4,784,818)

Minority interest                36,960           37,450           39,461           48,280           50,054
                          -------------    -------------    -------------    -------------    -------------

Net loss                  $  (3,754,964)   $  (3,753,747)   $  (3,751,170)   $  (6,308,054)   $  (4,734,764)
                          =============    =============    =============    =============    =============

Per  BAC:
  Net loss                $      (51.00)   $      (50.98)   $      (50.94)   $      (85.67)   $      (64.30)
                          =============    =============    =============    =============    =============

<CAPTION>

                                                    For the Years Ended March 31,
                          ---------------------------------------------------------------------------------
OPERATIONS                     2004             2003             2002             2001             2000
-----------------------   -------------    -------------    -------------    -------------    -------------
<S>                       <C>              <C>              <C>              <C>              <C>
Total assets              $  89,939,866    $  93,667,833    $  97,175,105    $ 100,937,211    $ 107,181,062
                          =============    =============    =============    =============    =============

Mortgage notes payable    $  66,285,158    $  67,366,819    $  68,063,227    $  69,021,892    $  69,914,088
                          =============    =============    =============    =============    =============

Total liabilities         $  79,841,161    $  79,736,876    $  79,553,880    $  79,602,583    $  79,522,764
                          =============    =============    =============    =============    =============

Total partners' capital   $   2,096,736    $   5,851,700    $   9,605,982    $  13,357,152    $  19,669,754
                          =============    =============    =============    =============    =============
</TABLE>

Cash Distributions
------------------

The  Partnership has made no  distributions  to the BACs holders as of March 31,
2004.

                                       10
<PAGE>

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

Liquidity and Capital Resources
-------------------------------

General
-------

During the year ended March 31, 2004, the primary sources of liquidity  included
working capital,  interest earned on working capital, and distributions received
from the Local Partnerships. None of these sources generated substantial amounts
of funds.

Working  capital of  approximately  $19,000,  exclusive  of Local  Partnerships'
working  capital,  remains  as of March 31,  2004.  It is used to pay  operating
expenses of the Partnership,  including  Partnership  management fees payable to
the General Partners and advances to Local Partnerships if warranted.

During the fiscal year ended March 31, 2004,  cash and cash  equivalents  of the
Partnership  and  its  forty-two  Local  Partnerships  increased   approximately
$246,000  due to  cash  provided  by  operating  activities  ($2,601,000)  and a
decrease in marketable securities ($109,000) which exceeded capital improvements
($1,014,000),  a net decrease in due to local  general  partners and  affiliates
relating to investing and finance  activities  ($324,000),  increase in deferred
costs  ($5,000),  a decrease  in  capitalization  of  consolidated  subsidiaries
attributable to minority interest ($40,000) and net repayments of mortgage loans
($1,082,000).  Included in the  adjustments  to  reconcile  the net loss to cash
provided by operating activities is depreciation and amortization ($4,979,000).

During the years ended  March 31,  2004  ("Fiscal  Year  2004"),  March 31, 2003
("Fiscal  Year  2003"),  and March 31,  2002  ("Fiscal  Year  2002") the amounts
received  from  the  Local  Partnerships  were  $15,544,   $54,649  and  $3,637,
respectively.  Cash  distributions  from Local  Partnerships are not expected to
reach a level  sufficient to permit cash  distributions  to BACs holders.  These
distributions,  as well  as the  working  capital  reserves  referred  to in the
paragraph above, will be used to meet the operating expenses of the Partnership.

Partnership  management fees owed to General Partners amounting to approximately
$6,208,000 and $5,532,000 were accrued and unpaid as of March 31, 2004 and 2003,
respectively.  Without the General Partners  continued  accrual without payment,
the Partnership will not be in a position to meet its  obligations.  The General
Partners have continued  allowing the accrual  without payment of these amounts,
but are under no obligation to continue to do so. The  Partnership  is dependent
upon the support of the General  Partners and certain of its affiliates in order
to meet its obligations at the Partnership level. The General Partners and these
affiliates have agreed to continue such support for the foreseeable future.

Effective January 1, 1999 the State of California  requires owners of a property
benefiting from FHA insured  mortgages under Section 236 or 221(a)(3) to provide
a nine month notice of contract  termination  or  prepayment  of the FHA insured
loan. In addition, with respect to the Partnership's California investments, the
owner must offer the properties for sale to those entities who agree to maintain
the property as affordable housing.

On October 20, 1999  President  Clinton  signed the Fiscal Year 2000 VA, the HUD
Independent  Agencies   Appropriations  Act  (the  "Appropriations   Act").  The
Appropriations  Act  contains  revisions to the HUD  Mark-to-Market  Program and
other HUD programs  concerning the  preservation  of the HUD housing  stock.  On
December 29, 1999 HUD issued Notice H99-36  addressing  "Project Based Section 8
Contracts  Expiring  in  Fiscal  Year  2000,"  reflecting  the  changes  in  the
Appropriations  Act and  superceding  earlier HUD Notices 98-34,  99-08,  99-15,
99-21 and 99-32.  Notice 99-36 clarifies many of the earlier  uncertainties with
respect to the earlier HUD Section 8  Mark-to-Market  Programs and continued the
Mark-to-Market  Program which allows owners with Section 8 contracts to increase
the rents to market levels where contract rents are currently  below market.  As
of March  31,  2004,  none of the  Local  Partnerships  have  opted to enter the
Mark-to-Market Program and therefore this has no impact on the Partnership.

Except as  described  above,  management  is not aware of any  trends or events,
commitments or uncertainties, which have not otherwise been disclosed, that will
or are likely to impact  liquidity in a material  way.  Management  believes the
only impact would be from laws that have not yet been adopted.  The portfolio is

                                       11
<PAGE>

diversified by the location of the  Properties  around the United States so that
if one  area of the  country  is  experiencing  downturns  in the  economy,  the
remaining  Properties  in the  portfolio  may  not  be  affected.  However,  the
geographic  diversification  of the portfolio may not protect  against a general
downturn in the national economy.

New Accounting Pronouncements
-----------------------------

In  January  2003,  the  Financial   Accounting   Standards  Board  issued  FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable  immediately for variable  interest  entities created after
January 31, 2003. The  Partnership  has not entered into any  transactions  with
variable  interest  entities.  In December 2003 the FASB  redeliberated  certain
proposed modifications and revised FIN 46 ("FIN 46 (R)"). The revised provisions
are applicable no later than the first  reporting  period ending after March 15,
2004.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
changes the accounting for certain  financial  instruments  that, under previous
guidance,  could be classified as equity or "mezzanine" equity, by now requiring
those   instruments  to  be  classified  as  liabilities   (or  assets  in  some
circumstances)  in the  Consolidated  Balance  Sheets.  Further,  SFAS  No.  150
requires  disclosure  regarding the terms of those  instruments  and  settlement
alternatives.  The  guidance in SFAS No. 150  generally  was  effective  for all
financial  instruments  entered  into or modified  after May 31,  2003,  and was
otherwise effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership has evaluated SFAS No. 150 and determined that it
does  not  have  an  impact  on  the  Partnership's   financial   reporting  and
disclosures.

Results of Operations
---------------------

Property and  equipment  to be held and used are carried at cost which  includes
the purchase price, acquisition fees and expenses,  construction period interest
and any other costs incurred in acquiring the  Properties.  The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods.  Expenditures for repairs and maintenance are charged
to expense as incurred;  major renewals and betterments are capitalized.  At the
time property and  equipment are retired or otherwise  disposed of, the cost and
accumulated   depreciation  are  eliminated  from  the  assets  and  accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings.  A loss on impairment of assets is recorded when management  estimates
amounts  recoverable  through  future  operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves  are reduced to  estimated  fair value  (generally  using  discounted
estimated  future cash flows) when the property is considered to be impaired and
the carrying value exceeds estimated fair value.

During the years ended March 31, 2004,  2003 and 2002, the  Partnership  did not
record a loss on impairment of assets.  Through March 31, 2004, the  Partnership
has recorded an aggregate of $3,665,000 of losses on impairment of assets.

The  Partnership's  primary source of income  continues to be rental income with
the  corresponding  expenses being divided among operations,  depreciation,  and
mortgage interest.

Rental  income is recognized as rent becomes due.  Rental  payments  received in
advance are deferred until earned.  The Partnership  received  rental  subsidies
which amounted to  approximately  $3,326,225,  $3,178,000 and $2,953,000 for the
years ended March 31,  2004,  2003 and 2002,  respectively.  The related  rental
subsidy programs have expiration dates that terminate upon total disbursement of
the assistance obligation.

                                       12
<PAGE>

2004 vs. 2003
-------------

Rental income  increased  approximately  4% for the year ended March 31, 2004 as
compared to 2003, primarily due to rental rate increases.

Total expenses,  excluding  repairs and maintenance,  remained fairly consistent
with an  increase  of  approximately  2% for the year  ended  March 31,  2004 as
compared to 2003.

Repairs and  maintenance  increased  approximately  $298,000  for the year ended
March 31, 2004 as compared to 2003,  primarily due to exterior  painting and the
replacement of awnings at one Local  Partnership and the replacement of carpets,
interior painting and fire damage repairs at a second Local Partnership.

2003 vs. 2002
-------------

Rental income  increased  approximately  4% for the year ended March 31, 2003 as
compared to 2002, primarily due to rental rate increases.

Other income decreased  approximately $225,000 for the year ended March 31, 2003
as  compared to 2002,  primarily  due to lower  interest  rates on cash and cash
equivalent balances at the Local Partnership level.

Total expenses,  excluding operating and other,  remained fairly consistent with
an increase of less than 1% for the year ended  March 31,  2003,  as compared to
2002.

Operating and other  increased  approximately  $302,000 for the year ended March
31, 2003 as compared to 2002, primarily due to an increase in insurance premiums
at the Local Partnerships.

Tabular Disclosure of Contractual Obligations
---------------------------------------------

The following  table  summarizes the  Partnership's  commitments as of March 31,
2004 to make future  payments under its debt  agreements  and other  contractual
obligations.
<TABLE>
<CAPTION>
                                Less than     1 - 3        3 -5       More than
                     Total       1 Year       Years        Years       5 Years
                  -----------   ---------   ---------   ----------   -----------
<S>               <C>           <C>         <C>         <C>          <C>
Mortgage notes

   payable (a)    $66,285,158   1,129,517   $3,243,42   $20,794,47   $41,117,743
                  ===========   =========   =========   ==========   ===========
</TABLE>

(a)  The  mortgage  notes are  payable  in  aggregate  monthly  installments  of
     approximately  $450,000 including principal and interest with rates varying
     from 0% to 13.50%  per  annum and have  maturity  dates  ranging  from 2005
     through 2042. The loans are collateralized by the land and buildings of the
     subsidiary partnerships, the assignment of certain subsidiary partnerships'
     rents, leases, and replacement reserves, and are without further recourse.

Off Balance Sheet Arrangements
------------------------------

The Partnership has no off-balance sheet arrangements.

Critical Accounting Estimates
-----------------------------

The preparation of consolidated financial statements requires management to make
estimates and assumptions.  These estimates and assumptions  affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities  at the  date  of the  consolidated  financial  statements  and  the
reported  amounts of revenue and expenses  during the reporting  period.  Actual
results could differ from those estimates.  The following accounting estimate is
considered critical by the Partnership.

The  Partnership is required to assess  potential  impairments to its long-lived
assets, which is primarily property and equipment.  If impairment indicators are
present,  the Partnership must measure the fair value of the assets to determine
if adjustments are to be recorded.

                                       13
<PAGE>

Other
-----

As of December 31, 2002,  the Tax Credit  Period for all of the  Properties  has
expired,  although each Local  Partnership  must continue to comply with the Tax
Credit  requirements  until the end of the  Compliance  Period in order to avoid
recapture  of the Tax Credits.  During the years ended March 31, 2004,  2003 and
2002,  the  Housing  Tax  Credits  received  by the  Partnership  for income tax
purposes totaled $0, $1,710,233 and $6,782,384, respectively.

The Partnership's  investments as limited partners in the Local Partnerships are
subject to the risks  incident to the  management and ownership of improved real
estate.  The Partnership's  investments also could be adversely affected by poor
economic  conditions  generally,  which could increase  vacancy  levels,  rental
payment defaults and operating expenses,  any or all of which could threaten the
financial viability of one or more of the Local Partnerships.

There are also  substantial  risks  associated  with the  operation of Apartment
Complexes   receiving   government   assistance.   These  include   governmental
regulations  concerning tenant eligibility,  which may make it more difficult to
rent apartments in the complexes;  difficulties in obtaining government approval
for rent  increases;  limitations  on the  percentage  of  income  which low and
moderate income tenants may pay as rent; the  possibility  that Congress may not
appropriate  funds to enable HUD to make the rental  assistance  payments it has
contracted to make; and that when the rental  assistance  contracts expire there
may not be  market  demand  for  apartments  at  full  market  rents  in a Local
Partnership's Apartment Complex.

The Local  Partnerships  are impacted by inflation  in several  ways.  Inflation
generally  allows for  increases in rental rates to reflect the impact of higher
operating and replacement  costs.  Inflation also affects the Local Partnerships
adversely  by  increasing  operating  costs as a result of higher  costs of such
items as fuel, utilities and labor.  However,  continued inflation may result in
appreciated values of the Local Partnerships'  Apartment Complexes over a period
of time as rental revenues and replacement costs continue to increase.

The  Partnership  does not anticipate that it will be in a position to make cash
distributions  at any  time  prior  to the  disposition  of the  Properties.  If
distributions  of operating cash flow are made, it is expected that they will be
limited. As of March 31, 2004, no such distributions have been made.

Item 7a. Quantitative and Qualitative Disclosures about Market Risk.

The Partnership does not have any market sensitive instruments.

                                       14
<PAGE>

Item 8.  Financial Statements and Supplementary Data.
                                                                      Sequential
                                                                         Page
                                                                      ----------
(a) 1.   Financial Statements

         Reports of Independent Registered Public Accounting Firms         16

         Consolidated Balance Sheets as of March 31, 2004 and 2003        109

         Consolidated Statements of Operations for the years ended
         March 31, 2004, 2003 and 2002                                    110

         Consolidated  Statements of Changes in Partners' Capital
         (Deficit) for the years ended March 31, 2004, 2003 and
         2002                                                             111

         Consolidated Statements of Cash Flows for the years ended
         March 31, 2004, 2003 and 2002                                    112

         Notes to Consolidated Financial Statements                       114

                                       15
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------




TO THE PARTNERS OF
FREEDOM TAX CREDIT PLUS L.P.


         We have audited the accompanying consolidated balance sheets of FREEDOM
TAX CREDIT  PLUS L.P.  AND  SUBSIDIARIES  as of March 31,  2004 and 2003 and the
related  consolidated  statements of  operations,  changes in 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 audit. We did not
audit the financial  statements of forty-two and forty subsidiary  partnerships,
whose losses aggregated  $2,809,693 and $3,382,460 for the years ended March 31,
2004 and 2003, and whose assets  constituted 99% and 91% of consolidated  assets
at March 31, 2004 and 2003, respectively. Those statements were audited by other
auditors whose reports have been furnished to us, and our opinion, insofar as it
relates to the amounts  included  for these  subsidiary  partnerships,  is based
solely on the reports of the other auditors.

         We conducted our audit in  accordance  with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  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 and the reports of the other auditors  provide a reasonable  basis for our
opinion.

         In our  opinion,  based  on our  audit  and the  reports  of the  other
auditors,  the  consolidated  financial  statements  referred  to above  present
fairly, in all material  respects,  the financial position of FREEDOM TAX CREDIT
PLUS  L.P.  AND  SUBSIDIARIES  as of March  31,  2004 and the  results  of their
operations  and their cash flows for the year ended March 31, 2004 in conformity
with accounting principles generally accepted in the United States of America.



/s/ Friedman, Alpren & Green, LLP
New York, New York
May 17, 2004, except for the information under the heading "Washington Brooklyn"
in Note 9, as to which the date is June 16, 2004.

                                       16
<PAGE>

             Report of Independent Registered Public Accounting Firm


The Partners
Freedom Tax Credit Plus L.P.:

We have audited the accompanying consolidated statements of operations,  changes
in partners' capital  (deficit),  and cash flows of Freedom Tax Credit Plus L.P.
and  consolidated  partnerships for the year ended March 31, 2002. In connection
with our audit of the consolidated  financial  statements,  we also have audited
the  financial  statement  schedules  for the year ended March 31,  2002.  These
consolidated  financial  statements  and financial  statement  schedules are the
responsibility of the Partnership's management. Our responsibility is to express
an  opinion  on  these  consolidated  financial  statements  and  the  financial
statement  schedules  based  on  our  audit.  We did  not  audit  the  financial
statements  and  financial   statement  schedules  of  25  of  the  consolidated
partnerships,  which financial statements reflect combined revenues constituting
40% of the related consolidated totals. Those financial statements and financial
statement  schedules  were  audited by other  auditors  whose  reports have been
furnished to us, and our opinion,  insofar as it relates to the amounts included
for those partnerships, is based solely on the reports of the other auditors.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit 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 and the reports of
other auditors provide a reasonable basis for our opinion.

In our  opinion,  based  on  our  audit  and  reports  of  other  auditors,  the
consolidated  financial  statements  referred to above  present  fairly,  in all
material  respects,  the results of operations and the cash flows of Freedom Tax
Credit  Plus L.P.  and  consolidated  partnerships  for the year ended March 31,
2002, in conformity with U.S. generally accepted accounting principles.  Also in
our opinion,  based on our audit and the reports of other auditors,  the related
financial  statement  schedules,  when  considered  in  relation  to  the  basic
consolidated  financial  statements  taken as a whole,  present  fairly,  in all
material respects, the information set forth therein.


/s/ KPMG LLP

New York, New York
May 18, 2002

                                       17
<PAGE>

[Letterhead of McKonly & Asbury LLP]

INDEPENDENT AUDITOR'S REPORT

The Partners of
Parkside Townhomes Associates                Pennsylvania Housing Finance Agency
Lancaster, Pennsylvania                                 Harrisburg, Pennsylvania

We have audited the accompanying balance sheets of Parkside Townhomes Associates
(a limited  partnership),  PHFA  Project No. 0 - 90 as of December  31, 2003 and
2002, and the related statements of profit and loss,  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 auditing standards generally accepted
in the United States of America 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 Parkside Townhomes  Associates
at December 31, 2003 and 2002, and its profit and loss,  partners'  equity,  and
cash flows for the years then ended, in conformity  with  accounting  principles
generally accepted in the United States of America.

In  accordance  with  Government  Auditing  Standards and  Pennsylvania  Housing
Finance  Agency's  Financial  Reporting  Manual,  we have also issued our report
dated January 27, 2004 on our  consideration of Parkside  Townhomes  Associates'
internal  control over financial  reporting and our tests of its compliance with
certain  provisions  of laws,  PHFA  regulations,  contracts and grants and have
rendered our reports  thereon on pages 25 and 26. Those  reports are an integral
part of an audit performed in accordance with Government  Auditing Standards and
should be read in conjunction with this report in considering the results of our
audits.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplementary information on pages 18
through 24 is  presented  for the purpose 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/ McKonly & Asbury LLP
Harrisburg, Pennsylvania
January 27, 2004

                                       18
<PAGE>

[Letterhead of McKonly & Asbury LLP]

INDEPENDENT AUDITOR'S REPORT

The Partners of
Parkside Townhomes Associates                Pennsylvania Housing Finance Agency
Lancaster, Pennsylvania                                 Harrisburg, Pennsylvania

We have audited the accompanying balance sheets of Parkside Townhomes Associates
(a limited  partnership),  PHFA  Project No. 0 - 90 as of December  31, 2002 and
2001, and the related statements of profit and loss,  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 auditing standards generally accepted
in the United States of America 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 Parkside Townhomes  Associates
at December 31, 2002 and 2001, and its profit and loss,  partners'  equity,  and
cash flows for the years then ended, in conformity  with  accounting  principles
generally accepted in the United States of America.

In  accordance  with  Government  Auditing  Standards and  Pennsylvania  Housing
Finance  Agency's  Financial  Reporting  Manual,  we have also issued our report
dated February 6, 2003 on our  consideration of Parkside  Townhomes  Associates'
internal  control over financial  reporting and our tests of its compliance with
certain  provisions  of laws,  PHFA  regulations,  contracts and grants and have
rendered our reports  thereon on pages 25 and 26. Those  reports are an integral
part of an audit performed in accordance with Government  Auditing Standards and
should be read in conjunction with this report in considering the results of our
audits.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplementary information on pages 18
through 24 is  presented  for the purpose 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/ McKonly & Asbury LLP
Harrisburg, Pennsylvania
February 6, 2003

                                       19
<PAGE>


[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Twin Trees Apartments, A Limited Partnership:

We have audited the  accompanying  balance  sheets of Twin Trees  Apartments,  A
Limited  Partnership (the Partnership) as of December 31, 2003 and 2002, 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Twin Trees  Apartments,  A
Limited  Partnership  as of December  31, 2003 and 2002,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004

                                       20
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Twin Trees Apartments, A Limited Partnership:

We have audited the  accompanying  balance  sheets of Twin Trees  Apartments,  A
Limited Partnership as of December 31, 2002 and 2001, 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Twin Trees  Apartments,  A
Limited  Partnership  as of December  31, 2002 and 2001,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003

                                       21
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Bennion Park Apartments, A Limited Partnership:

We have audited the accompanying  balance sheets of Bennion Park  Apartments,  A
Limited  Partnership as of December 31, 2003 and 2002 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Bennion Park  Apartments,  A
Limited  Partnership  as of  December  31,  2003 and 2002 and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.




/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004

                                       22
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Bennion Park Apartments, A Limited Partnership:

We have audited the accompanying  balance sheets of Bennion Park  Apartments,  A
Limited  Partnership as of December 31, 2002 and 2001 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Bennion Park  Apartments,  A
Limited  Partnership  as of  December  31,  2002 and 2001 and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.




/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003

                                       23
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Hunters Chase Apartments, A Limited Partnership:

We have audited the accompanying  balance sheets of Hunters Chase Apartments,  A
Limited  Partnership as of December 31, 2003 and 2002 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Hunters Chase Apartments,  A
Limited  Partnership  as of  December  31,  2003 and 2002 and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004

                                       24
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Hunters Chase Apartments, A Limited Partnership:

We have audited the accompanying  balance sheets of Hunters Chase Apartments,  A
Limited  Partnership as of December 31, 2002 and 2001 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Hunters Chase Apartments,  A
Limited  Partnership  as of  December  31,  2002 and 2001 and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003

                                       25
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Wilshire Apartments, A Limited Partnership:

We have  audited  the  accompanying  balance  sheets of Wilshire  Apartments,  A
Limited Partnership as of December 31, 2003 and 2002, 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Wilshire Apartments,  A Limited
Partnership  as of December 31, 2003 and 2002, and the results of its operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004

                                       26
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Wilshire Apartments, A Limited Partnership:

We have  audited  the  accompanying  balance  sheets of Wilshire  Apartments,  A
Limited Partnership as of December 31, 2002 and 2001, 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Wilshire Apartments,  A Limited
Partnership  as of December 31, 2002 and 2001, and the results of its operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003

                                       27
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Bethel Park Apartments, A Limited Partnership:

We have audited the  accompanying  balance sheets of Bethel Park  Apartments,  A
Limited  Partnership (the Partnership) as of December 31, 2003 and 2002, 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Bethel Park  Apartments,  A
Limited  Partnership  as of December  31, 2003 and 2002,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004

                                       28
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Bethel Park Apartments, A Limited Partnership:

We have audited the  accompanying  balance sheets of Bethel Park  Apartments,  A
Limited Partnership as of December 31, 2002 and 2001, 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Bethel Park  Apartments,  A
Limited  Partnership  as of December  31, 2002 and 2001,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003

                                       29
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Zebulon Park Apartments, A Limited Partnership:

We have audited the  accompanying  balance sheet of Zebulon Park  Apartments,  A
Limited Partnership (the Partnership) as of December 31, 2003, and 2002, 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Zebulon Park  Apartments,  A
Limited  Partnership  as of December  31, 2003 and 2002,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004

                                       30
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Zebulon Park Apartments, A Limited Partnership:

We have audited the  accompanying  balance sheet of Zebulon Park  Apartments,  A
Limited  Partnership  as of  December  31,  2002,  and  2001,  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 auditing standards generally accepted
in the  United  States of  America.  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
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 Zebulon Park  Apartments,  A
Limited  Partnership  as of December  31, 2002 and 2001,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003

                                       31
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Tivoli Place Apartments, A Limited Partnership:

We have audited the accompanying  balance sheets of Tivoli Place  Apartments,  A
Limited Partnership (the Partnership) as of December 31, 2003, and 2002, 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Tivoli Place  Apartments,  A
Limited  Partnership  as of December  31, 2003 and 2002,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004

                                       32
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Tivoli Place Apartments, A Limited Partnership:

We have audited the accompanying  balance sheets of Tivoli Place  Apartments,  A
Limited  Partnership  as of  December  31,  2002,  and  2001,  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 auditing standards generally accepted
in the  United  States of  America.  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
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 Tivoli Place  Apartments,  A
Limited  Partnership  as of December  31, 2002 and 2001,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003

                                       33
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Northwood Apartments of Georgia,
A Limited Partnership:

We have  audited the  accompanying  balance  sheets of Northwood  Apartments  of
Georgia, A Limited  Partnership as of December 31, 2003 and 2002 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 auditing standards generally accepted
in the  United  States of  America.  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
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  Northwood  Apartments  of
Georgia, A Limited Partnership as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004

                                       34
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Northwood Apartments of Georgia,
A Limited Partnership:

We have  audited the  accompanying  balance  sheets of Northwood  Apartments  of
Georgia, A Limited  Partnership as of December 31, 2002 and 2001 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 auditing standards generally accepted
in the  United  States of  America.  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
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  Northwood  Apartments  of
Georgia, A Limited Partnership as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003

                                       35
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Oxford Trace Apartments,
A Limited Partnership:

We have audited the accompanying  balance sheets of Oxford Trace  Apartments,  A
Limited  Partnership (the  Partnership) as of December 31, 2003 and 2002 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Oxford Trace  Apartments,  A
Limited  Partnership  as of December  31, 2003 and 2002,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 6, 2004

                                       36
<PAGE>

[LETTERHEAD OF KPMG LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Oxford Trace Apartments,
A Limited Partnership:

We have audited the accompanying  balance sheets of Oxford Trace  Apartments,  A
Limited  Partnership as of December 31, 2002 and 2001 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 auditing standards generally accepted
in the  United  States of  America.  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
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 Oxford Trace  Apartments,  A
Limited  Partnership  as of December  31, 2002 and 2001,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.



/s/ KPMG LLP
Atlanta, Georgia
February 7, 2003

                                       37
<PAGE>


INDEPENDENT AUDITORS' REPORT

To the Partners of
Ivanhoe Apartments Limited Partnership

We have audited the  accompanying  balance sheet of Ivanhoe  Apartments  Limited
Partnership  (a Limited  Partnership)  as of December  31, 2003 and 2002 and the
related  statements of operations,  changes in 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 auditing standards generally accepted
in the  United  States of  America.  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 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 Ivanhoe  Apartments  Limited
Partnership at December 31, 2003 and 2002, and the results of its operations and
cash flows for the years then ended, in conformity  with  accounting  principles
generally accepted in the United States of America.



/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 13, 2004

                                       38
<PAGE>


INDEPENDENT AUDITORS' REPORT

To the Partners of
Ivanhoe Apartments Limited Partnership

We have audited the  accompanying  balance sheet of Ivanhoe  Apartments  Limited
Partnership  (a Limited  Partnership)  as of December  31, 2002 and 2001 and the
related  statements of operations,  changes in 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 auditing standards generally accepted
in the  United  States of  America.  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 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 Ivanhoe  Apartments  Limited
Partnership at December 31, 2002 and 2001, and the results of its operations and
cash flows for the years then ended, in conformity  with  accounting  principles
generally accepted in the United States of America.



/s/ Lake, Hill & Myers
Salt Lake City, Utah
January 9, 2003

                                       39
<PAGE>

[Letterhead of AGBIMSON & CO., PLLC]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Washington Brooklyn Limited Partnership
(A State of Delaware Limited Partnership)

We have audited the  accompanying  balance sheet of Washington  Brooklyn Limited
Partnership (A State of Delaware  Limited  Partnership) as of December 31, 2003,
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 the audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain a 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 in the first  paragraph,
present fairly in all material  respects,  the financial  position of Washington
Brooklyn  Limited  Partnership  as of December 31, 2003,  and the results of its
operations  and its cash  flows  for the year then  ended,  in  conformity  with
accounting principles generally accepted in the United States of America.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements  taken as a whole.  The  supplementary  information  in Schedule I is
presented for purposes of additional  analysis and is not a required part of the
basic financial statement. Such information has been subjected to the procedures
applied in the audits of the basic financial  statements and, in our opinion, is
fairly stated in all material  respects in relation to the financial  statements
taken as a whole.


/s/ AGBIMSON & CO., PLLC
Rockville Centre, New York
March 31, 2004

                                       40
<PAGE>

[Letterhead of Richard J. Klinkowitz]

To the Partners C-H DEVELOPMENT  GROUP  ASSOCIATES
(A LIMITED  PARTNERSHIP)
625 Madison Avenue New York, New York 10022

Gentlemen:

I  have  audited  the  accompanying  balance  sheet  of  C-H  DEVELOPMENT  GROUP
ASSOCIATES  (a New York  Limited  Partnership)  as of December  31, 2003 and the
related  statement of operations,  partners'  equity 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 the audit.

I conducted the audit in accordance with generally accepted auditing  standards.
Those standards require that I plan and perform the audit to obtain a 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 the 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 C-H DEVELOPMENT GROUP ASSOCIATES as
of December  31, 2003 and the results of its  operations  and its cash flows for
the year then ended in conformity with generally accepted accounting principles.

Respectfully submitted,

/s/ Richard J. Klinkowitz
Far Rockaway, New York
February 18, 2004

                                       41
<PAGE>

[Letterhead of Richard J. Klinkowitz]

To the Partners C-H DEVELOPMENT  GROUP  ASSOCIATES
(A LIMITED  PARTNERSHIP)
625 Madison Avenue New York, New York 10022

Gentlemen:

I  have  audited  the  accompanying  balance  sheet  of  C-H  DEVELOPMENT  GROUP
ASSOCIATES  (a New York  Limited  Partnership)  as of December  31, 2002 and the
related  statement of operations,  partners'  equity 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 the audit.

I conducted the audit in accordance with generally accepted auditing  standards.
Those standards require that I plan and perform the audit to obtain a 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 the 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 C-H DEVELOPMENT GROUP ASSOCIATES as
of December  31, 2002 and the results of its  operations  and its cash flows for
the year then ended in conformity with generally accepted accounting principles.

Respectfully submitted,

/s/ Richard J. Klinkowitz
Far Rockaway, New York
February 22, 2003

                                       42
<PAGE>

[Letterhead of Richard J. Klinkowitz]

To the Partners C-H DEVELOPMENT  GROUP  ASSOCIATES
(A LIMITED  PARTNERSHIP)
625 Madison Avenue New York, New York 10022

Gentlemen:

I  have  audited  the  accompanying  balance  sheet  of  C-H  DEVELOPMENT  GROUP
ASSOCIATES  (a New York  Limited  Partnership)  as of December  31, 2001 and the
related  statement of operations,  partners'  equity 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 the audit.

I conducted the audit in accordance with generally accepted auditing  standards.
Those standards require that I plan and perform the audit to obtain a 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 the 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 C-H DEVELOPMENT GROUP ASSOCIATES as
of December  31, 2001 and the results of its  operations  and its cash flows for
the year then ended in conformity with generally accepted accounting principles.

Respectfully submitted,

/s/ Richard J. Klinkowitz
Far Rockaway, New York
February 22, 2002

                                       43
<PAGE>

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS'REPORT

To the Partners
Davidson Court, L.P.

We have audited the  accompanying  balance sheets of Davidson Court,  L.P. as of
December  31, 2003 and 2002,  and the related  statements  of income,  partners'
equity  (deficit)  and cash  flows for the years  then  ended.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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 Davidson Court,  L.P., as of
December 31, 2003 and 2002,  and the results of its  operations,  the changes in
partners'  equity  (deficit)  and its cash  flows for the years then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.


/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 23, 2004

                                       44
<PAGE>

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS'REPORT

To the Partners
Davidson Court, L.P.

We have audited the  accompanying  balance sheets of Davidson Court,  L.P. as of
December  31, 2002 and 2001,  and the related  statements  of income,  partners'
equity  (deficit)  and cash  flows for the years  then  ended.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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 Davidson Court,  L.P., as of
December 31, 2002 and 2001,  and the results of its  operations,  the changes in
partners'  equity  (deficit)  and its cash  flows for the years then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.


/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 25, 2003

                                       45
<PAGE>

[Letterhead of Haefele, Flanagan & Co., p.c.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Magnolia Mews Limited Partnership
Philadelphia, Pennsylvania

We have  audited  the  accompanying  balance  sheet  of  MAGNOLIA  MEWS  LIMITED
PARTNERSHIP (a  Pennsylvania  Limited  Partnership) as of December 31, 2003, 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 auditing standards  generally accepted
in the  United  States of  America.  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  MAGNOLIA  MEWS  LIMITED
PARTNERSHIP as of December 31, 2003, and the results of its operations,  changes
in  partners'  equity and its cash  flows for the year then ended in  conformity
with accounting principles generally accepted in the United States of America.

/s/ Haefele, Flanagan & Co., p.c.
Moorestown, New Jersey
February 9, 2004

                                       46
<PAGE>

[Letterhead of Haefele, Flanagan & Co., p.c.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Magnolia Mews Limited Partnership
Philadelphia, Pennsylvania

We have  audited  the  accompanying  balance  sheet  of  MAGNOLIA  MEWS  LIMITED
PARTNERSHIP (a  Pennsylvania  Limited  Partnership) as of December 31, 2002, 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 auditing standards  generally accepted
in the  United  States of  America.  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  MAGNOLIA  MEWS  LIMITED
PARTNERSHIP as of December 31, 2002, and the results of its operations,  changes
in  partners'  equity and its cash  flows for the year then ended in  conformity
with accounting principles generally accepted in the United States of America.

/s/ Haefele, Flanagan & Co., p.c.
Moorestown, New Jersey
February 7, 2003

                                       47
<PAGE>

[Letterhead of Haefele, Flanagan & Co., p.c.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Magnolia Mews Limited Partnership
Philadelphia, Pennsylvania

We have  audited  the  accompanying  balance  sheet  of  MAGNOLIA  MEWS  LIMITED
PARTNERSHIP (a  Pennsylvania  Limited  Partnership) as of December 31, 2001, 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  MAGNOLIA  MEWS  LIMITED
PARTNERSHIP as of December 31, 2001, 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.

/s/ Haefele, Flanagan & Co., p.c.
Moorestown, New Jersey
February 8, 2002

                                       48
<PAGE>

[Letterhead of Snipes, Gower & Associates, P.A.]

To the Partners
The Oaks Village Limited Partnership

We have audited the  accompanying  balance  sheets of The Oaks  Village  Limited
Partnership,  RHS Project No. 38-024-561572445 as of December 31, 2003 and 2002,
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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government  Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  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 The Oaks  Village  Limited
Partnership,  RHS Project No. 38-024-561572445 as of December 31, 2003 and 2002,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the years then ended in  conformity  with  accounting  principles
generally accepted in the United States of America.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on Page  14 is  presented  for  purposes  of  additional  analysis  and is not a
required  part  of the  basic  financial  statements  of the  partnership.  Such
information has been subjected to the auditing  procedures applied in the audits
of the basic financial  statements and, in our opinion,  is fairly stated in all
material  respects  in  relation to the basic  financial  statements  taken as a
whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January  28,  2004  on our  consideration  of The  Oaks  Village  Limited
Partnership's  internal  control over  financial  reporting and our tests of its
compliance with certain provisions of laws,  regulations,  contracts and grants.
That  report  is an  integral  part of an audit  performed  in  accordance  with
Government  Auditing  Standards,  and  should be read in  conjunction  with this
report in considering the results of our audit.


/s/ Snipes, Gower & Assoc., P.A.
Dunn, North Carolina
January 28, 2004

                                       49
<PAGE>

[Letterhead of Snipes, Gower & Associates, P.A.]

To the Partners
The Oaks Village Limited Partnership
Dunn, North Carolina

We have audited the  accompanying  balance  sheets of The Oaks  Village  Limited
Partnership,  RHS Project No. 38-024-561572445 as of December 31, 2002 and 2001,
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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government  Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  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 The Oaks  Village  Limited
Partnership,  RHS Project No. 38-024-561572445 as of December 31, 2002 and 2001,
and the results of its operations, the changes in partners' equity (deficit) and
cash flows for the years then ended in  conformity  with  accounting  principles
generally accepted in the United States of America.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on Page  13 is  presented  for  purposes  of  additional  analysis  and is not a
required  part  of the  basic  financial  statements  of the  partnership.  Such
information has been subjected to the auditing  procedures applied in the audits
of the basic financial  statements and, in our opinion,  is fairly stated in all
material  respects  in  relation to the basic  financial  statements  taken as a
whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January  24,  2003  on our  consideration  of The  Oaks  Village  Limited
Partnership's  internal  control over  financial  reporting and our tests of its
compliance with certain provisions of laws,  regulations,  contracts and grants.
That  report  is an  integral  part of an audit  performed  in  accordance  with
Government  Auditing  Standards,  and  should be read in  conjunction  with this
report in considering the results of our audit.


/s/ Snipes, Gower & Assoc., P.A.
Dunn, North Carolina
January 24, 2003

                                       50
<PAGE>

[Letterhead of Snipes, Gower & Associates, P.A.]

To the Partners
Greenfield Village Limited Partnership

We have audited the  accompanying  balance sheets of Greenfield  Village Limited
Partnership,  RHS Project  No.:  38-043-561614646,  as of December  31, 2003 and
2002, 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government  Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  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  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 Greenfield  Village  Limited
Partnership, RHS Project No.: 38-043-561614646 as of December 31, 2003 and 2002,
and the results of its operations, the changes in partners' equity (deficit) and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying  supplement  information
on Page  14 is  presented  for  purposes  of  additional  analysis  and is not a
required  part  of the  basic  financial  statements  of the  partnership.  Such
information has been subjected to the auditing  procedures applied in the audits
of the basic financial  statements and, in our opinion,  is fairly stated in all
material  respects  in  relation to the basic  financial  statements  taken as a
whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 20,  2004 on our  consideration  of  Greenfield  Village  Limited
Partnership's  internal  control over  financial  reporting and our tests of its
compliance with certain provisions of laws,  regulations,  contracts and grants.
This  report  is an  integral  part of an audit  performed  in  accordance  with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.

/s/ Snipes, Gower & Associates, P.A.
Dunn, North Carolina
January 20, 2004

                                       51
<PAGE>

[Letterhead of Snipes, Gower & Associates, P.A.]

To the Partners
Greenfield Village Limited Partnership
Dunn, North Carolina

We have audited the  accompanying  balance sheets of Greenfield  Village Limited
Partnership,  RHS Project  No.:  38-043-561614646,  as of December  31, 2002 and
2001, 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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government  Auditing Standards issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  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  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 Greenfield  Village  Limited
Partnership, RHS Project No.: 38-043-561614646 as of December 31, 2002 and 2001,
and the results of its operations, the changes in partners' equity (deficit) and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying  supplement  information
on Page  14 is  presented  for  purposes  of  additional  analysis  and is not a
required  part  of the  basic  financial  statements  of the  partnership.  Such
information has been subjected to the auditing  procedures applied in the audits
of the basic financial  statements and, in our opinion,  is fairly stated in all
material  respects  in  relation to the basic  financial  statements  taken as a
whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 22,  2003 on our  consideration  of  Greenfield  Village  Limited
Partnership's  internal  control over  financial  reporting and our tests of its
compliance with certain provisions of laws,  regulations,  contracts and grants.
This  report  is an  integral  part of an audit  performed  in  accordance  with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.

/s/ Snipes, Gower & Associates, P.A.
Dunn, North Carolina
January 22, 2003

                                       52
<PAGE>

[Letterhead of KOCH GROUP & CO., LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners
CLM Equities

We have  audited  the  accompanying  balance  sheet of CLM  Equities  (A Limited
Partnership)  as of December 31, 2003 and the related  statements of operations,
changes  in  partners'  equity  and cash  flows for the year then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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 CLM  Equities  (A Limited
Partnership) as of December 31, 2003 and the results of its operations,  changes
in its partners' equity and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.


/s/ Koch Geringer & Co., LLP
Certified Public Accountants
New York, New York
January 23, 2004

                                       53
<PAGE>

[Letterhead of KOCH GERINGER & CO., LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners
CLM Equities

We have  audited  the  accompanying  balance  sheet of CLM  Equities  (A Limited
Partnership)  as of December 31, 2002 and the related  statements of operations,
changes  in  partners'  equity  and cash  flows for the year then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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 CLM  Equities  (A Limited
Partnership) as of December 31, 2002 and the results of its operations,  changes
in its partners' equity and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.


/s/ Koch Geringer & Co., LLP
Certified Public Accountants
New York, New York
January 9, 2003

                                       54
<PAGE>

[Letterhead of KOCH GERINGER & CO., LLP]

INDEPENDENT AUDITOR'S REPORT

To the Partners
CLM Equities

We have  audited  the  accompanying  balance  sheet of CLM  Equities  (A Limited
Partnership)  as of December 31, 2001 and the related  statements of operations,
changes  in  partners'  equity  and cash  flows for the year then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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 CLM  Equities  (A Limited
Partnership) as of December 31, 2001 and the results of its operations,  changes
in its partners' equity and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the United States of America.

/s/ KOCH GERINGER & CO., LLP
Certified Public Accountants
New York, New York
January 9, 2002

                                       55
<PAGE>

[Letterhead of NSBN LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Victoria Manor Associates
Los Angeles, California

We have audited the  accompanying  balance sheet of Victoria Manor Associates (a
California  limited  partnership),  as of  December  31,  2003,  and the related
statements  of  partners'  equity,  operations  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 auditing standards  generally accepted
in the  United  States of  America.  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 Victoria Manor Associates as of
December 31, 2003,  and the results of its operations and its cash flows for the
year then ended in conformity with accounting  principles  generally accepted in
the United States of America.


/s/ NSBN LLP
March 19, 2004
Beverly Hills, California

                                       56
<PAGE>

[Letterhead of NSBN LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Victoria Manor Associates
Los Angeles, California

We have audited the  accompanying  balance sheet of Victoria Manor Associates (a
California  limited  partnership),  as of  December  31,  2002,  and the related
statements  of  partners'  equity,  operations  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 auditing standards  generally accepted
in the  United  States of  America.  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 Victoria Manor Associates as of
December 31, 2002,  and the results of its operations and its cash flows for the
year then ended in conformity with accounting  principles  generally accepted in
the United States of America.


/s/ NSBN LLP
January 23, 2003
Beverly Hills, California

                                       57
<PAGE>

[Letterhead of NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP]

INDEPENDENT AUDITORS' REPORT

The Partners
Victoria Manor Associates
Los Angeles, California

We have audited the  accompanying  balance sheet of Victoria Manor Associates (a
California  limited  partnership),  as of  December  31,  2001,  and the related
statements  of  partners'  equity,  operations  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 auditing standards  generally accepted
in the  United  States of  America.  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 Victoria Manor Associates as of
December 31, 2001,  and the results of its operations and its cash flows for the
year then ended in conformity with accounting  principles  generally accepted in
the United States of America.

/s/ Nanas, Stern, Biers, Neinstein and Co. LLP
January 25, 2002
Beverly Hills, California

                                       58
<PAGE>

[Letterhead of Joyce Miller & Associates, P.C.]

INDEPENDENT AUDITOR'S REPORT


To The Partners
Ogontz Hall Investors
Philadelphia, Pennsylvania

We have  audited the  accompanying  balance  sheets of Ogontz Hall  Investors (A
Limited  Partnership),  PHFA changes in Project #O-116,  as of December 31, 2003
and 2002,  and the related  statements of profit and loss,  changes in 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
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  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 Ogontz Hall  Investors  (A
Limited  Partnership)  as of December 31, 2003 and 2002,  and the results of its
operations,  changes in partners' capital, and its cash flows for the years then
ended in conformity with accounting  principles generally accepted in the United
States of America.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements  taken as a whole.  The supporting data included in the report (shown
on pages 23 to 26) is presented for the purposes of  additional  analysis and is
not a required part of the basic  financial  statements of Ogontz Hall Investors
(A Limited  Partnership).  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 issued a separate
report dated February 15, 2004, on our  consideration  of Ogontz Hall Investors'
internal  control over financial  reporting and our test of its compliance  with
certain provisions of laws, regulations, contracts and grants. That report is an
integral  part of an audit  performed in  accordance  with  Government  Auditing
Standards and should be read in conjunction  with this report in considering the
results of our audit.



/s/ Joyce Miller & Associates, P.C.
Glenside, Pennsylvania
February 15, 2004

                                       59
<PAGE>

[Letterhead of Fishbein & Company, P.C.]

INDEPENDENT AUDITOR'S REPORT


To The Partners
Ogontz Hall Investors
Philadelphia, Pennsylvania

We have  audited the  accompanying  balance  sheets of OGONTZ HALL  INVESTORS (A
Limited Partnership), PHFA Project No. 0-0116, as of December 31, 2001 and 2000,
and the related  statements of profit and loss,  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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  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 Ogontz Hall  Investors  (A
Limited  Partnership)  as of December 31, 2001 and 2000,  and the results of its
operations,  changes in  partners'  equity and its cash flows for the years then
ended in conformity with accounting  principles generally accepted in the United
States of America.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial  statements  taken as a whole.  The  supporting  data included in this
report  (shown on pages 19 through 23) is presented  for purposes of  additional
analysis and is not a required part of the basic financial  statements of Ogontz
Hall Investors.  Such information has been subjected to the auditing  procedures
applied in the audits of the basic financial  statements and, in our opinion, is
fairly stated in all material  respects in relation to the financial  statements
taken as a whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 18,  2002,  on our  consideration  of Ogontz Hall  Investors'  (A
Limited Partnership)  internal control and over financial reporting and our test
of its compliance with certain  provisions of laws,  regulations,  contracts and
grants. That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.

/s/ Fishbein & Company, P.C.
Elkins Park, PA
January 18, 2002

                                       60
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Partners
Eagle Ridge Limited Partnership
Madison, Wisconsin

We  have  audited  the  accompanying  balance  sheets  of  Eagle  Ridge  Limited
Partnership  as of  December  31, 2003 and 2002 and the  related  statements  of
operations, 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 auditing standards generally accepted
in the  United  States of  America.  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 Eagle Ridge Limited Partnership
as of December  31, 2003 and 2002,  and the results of its  operations  and cash
flows  for the  years  then  ended  in  conformity  with  accounting  principles
generally accepted in the United States of America.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information provided, as
identified  in the table of contents,  is presented  for purposes of  additional
analysis  and is not a required  part of the basic  financial  statements.  Such
information has been subjected to the auditing  procedures  applied in the audit
of the basic financial  statements and, in our opinion,  is fairly stated in all
material  respects  in  relation to the basic  financial  statements  taken as a
whole.


/s/ Virchow, Krause & Company, LLP
Madison, Wisconsin
January 21, 2004

                                       61
<PAGE>

[Letterhead of Virchow, Krause & Company, LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners
Eagle Ridge Limited Partnership
Madison, Wisconsin

We  have  audited  the  accompanying  balance  sheets  of  Eagle  Ridge  Limited
Partnership  as of  December  31, 2002 and 2001 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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 Eagle Ridge Limited Partnership
as of December  31, 2002 and 2001,  and the results of its  operations  and cash
flows  for the  years  then  ended  in  conformity  with  accounting  principles
generally accepted in the United States of America.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information provided, as
identified  in the table of contents,  is presented  for purposes of  additional
analysis  and is not a required  part of the basic  financial  statements.  Such
information has been subjected to the auditing  procedures  applied in the audit
of the basic financial  statements and, in our opinion,  is fairly stated in all
material  respects  in  relation to the basic  financial  statements  taken as a
whole.


/s/ Virchow, Krause & Company, LLP
Madison, Wisconsin
January 19, 2003

                                       62
<PAGE>

[Regen, Benz, MacKenzie & Anopolsky, C.P.A's, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Nelson Anderson Affordable Housing
Limited Partnership

We have audited the  accompanying  balance sheet of Nelson  Anderson  Affordable
Housing Limited  Partnership as of December 31, 2003, and the related statements
of  operations,  changes in  partners'  capital and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
used in the United States of America.  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 Nelson  Anderson  Affordable
Housing  Limited  Partnership  as of December 31,  2003,  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 used in the
United States of America.


/s/ Regen, Benz, MacKenzie & Anopolsky, C.P.A's, P.C.
New York, New York
February 25, 2004

                                       63
<PAGE>

[Regen, Benz, MacKenzie & Anopolsky, C.P.A's, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Nelson Anderson Affordable Housing
Limited Partnership

We have audited the  accompanying  balance sheet of Nelson  Anderson  Affordable
Housing Limited  Partnership as of December 31, 2002, and the related statements
of  operations,  changes in  partners'  capital and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
used in the United States of America.  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 Nelson  Anderson  Affordable
Housing  Limited  Partnership  as of December 31,  2002,  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 used in the
United States of America.


/s/ Regen, Benz, MacKenzie & Anopolsky, C.P.A's, P.C.
New York, New York
February 21, 2003

                                       64
<PAGE>

[Regen, Benz, MacKenzie & Anopolsky, C.P.A's, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Nelson Anderson Affordable Housing
Limited Partnership

We have audited the  accompanying  balance sheet of Nelson  Anderson  Affordable
Housing Limited  Partnership as of December 31, 2001, and the related statements
of  operations,  changes in  partners'  capital and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
used in the United States of America.  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 Nelson  Anderson  Affordable
Housing  Limited  Partnership  as of December 31,  2001,  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 used in the
United States of America.

/s/ Regen, Benz, MacKenzie & Anopolsky, C.P.A's, P.C.
New York, New York
February 15, 2002

                                       65
<PAGE>

[Letterhead of Insero, Kasperski, Ciaccia & Co., P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Conifer Irondequoit Associates
(A Limited Partnership)
Irondequoit, New York

We  have  audited  the  accompanying   balance  sheets  of  Conifer  Irondequoit
Associates  (A Limited  Partnership),  as of December  31, 2003 and 2002 and the
related statements of changes in partners' equity, operations 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 auditing standards generally accepted
in the  United  States of  America.  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 Conifer Irondequoit Associates
(A Limited Partnership) as of December 31, 2003 and 2002, and the results of its
operations and cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

Respectfully Submitted,

/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Rochester, New York
January 28, 2004

                                       66
<PAGE>

[Letterhead of Insero, Kasperski, Ciaccia & Co., P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Conifer Irondequoit Associates
(A Limited Partnership)
Irondequoit, New York

We  have  audited  the  accompanying   balance  sheets  of  Conifer  Irondequoit
Associates  (A Limited  Partnership),  as of December  31, 2002 and 2001 and the
related statements of changes in partners' equity, operations 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 auditing standards generally accepted
in the  United  States of  America.  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 Conifer Irondequoit Associates
(A Limited Partnership) as of December 31, 2002 and 2001, and the results of its
operations and cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

Respectfully Submitted,

/s/ Insero, Kasperski, Ciaccia & Co., P.C.
Rochester, New York
February 11, 2003

                                       67
<PAGE>

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Middletown Associates

We have audited the accompanying  balance sheets of Middletown  Associates as of
December  31,  2003 and 2002,  and the  related  statements  of profit and loss,
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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  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 Middletown  Associates as of
December  31,  2003 and 2002,  and the  results  of its  operations,  changes in
partners'  equity  (deficit)  and its cash  flows  for the year then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing Standards, we have also issued our report
for  the  year  ended  December  31,  2003,  dated  January  16,  2004,  on  our
consideration  Middletown  Associates' internal control over financial reporting
and on our tests of it compliance with certain provisions of laws,  regulations,
contracts and grants.  That report is an integral part of an audit  performed in
accordance with Government  Auditing Standards and should be read in conjunction
with the report in considering the results of our audit.

Our audits 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 28
is presented for purposes of  additional  analysis and is not a required part of
the basic  financial  statements.  Such  information  has been  subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.



/s/ REZNICK FEDDER & SILVERMAN
Baltimore, Maryland
January 16, 2004

                                       68
<PAGE>

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Middletown Associates

We have audited the accompanying  balance sheets of Middletown  Associates as of
December  31,  2002 and 2001,  and the  related  statements  of profit and loss,
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 auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  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 Middletown  Associates as of
December  31,  2002 and 2001,  and the  results  of its  operations,  changes in
partners'  equity  (deficit)  and its cash  flows  for the year then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing Standards, we have also issued our report
for  the  year  ended  December  31,  2002,  dated  January  17,  2003,  on  our
consideration  Middletown  Associates' internal control over financial reporting
and on our tests of it compliance with certain provisions of laws,  regulations,
contracts and grants.  That report is an integral part of an audit  performed in
accordance with Government  Auditing Standards and should be read in conjunction
with the report in considering the results of our audit.

Our audits was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 23 through 26
is presented for purposes of  additional  analysis and is not a required part of
the basic  financial  statements.  Such  information  has been  subjected to the
auditing procedures applied in the audit of the basic financial  statements and,
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.



/s/ REZNICK FEDDER & SILVERMAN
Baltimore, Maryland
January 17, 2003

                                       69
<PAGE>

[Letterhead of REZNICK FEDDER & SILVERMAN]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lauderdale Lakes Associates, Ltd.

We have audited the accompanying  balance sheets of Lauderdale Lakes Associates,
Ltd.,  as of  December  31,  2003  and  2002,  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 audits.

We  conducted  our audit in  accordance  with the auditing  standards  generally
accepted in the United States of America.  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 Lauderdale Lakes Associates,
Ltd. at December 31, 2003 and 2002,  and the results of its  operations  and its
cash flows for the years then ended, in conformity  with  accounting  principles
generally accepted in the United States of America.


/s/ Reznick Fedder & Silverman
Atlanta, Georgia
January 27, 2004

                                       70
<PAGE>

[Letterhead of KPMG]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lauderdale Lakes Associates, Ltd.

We have audited the accompanying  balance sheet of Lauderdale Lakes  Associates,
Ltd.,  as of December  31,  2001,  and the  related  statements  of  operations,
partners'  capital  (deficit),  and cash  flows for the year then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We  conducted  our audit in  accordance  with the auditing  standards  generally
accepted in the United States of America.  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 Lauderdale Lakes Associates,
Ltd. as of December 31,  2001,  and the results of its  operations  and its cash
flows for the year for then ended,  in  conformity  with  accounting  principles
generally accepted in the United States of America.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements  taken as a whole.  The  supplementary  information  included  in the
Schedule of Certain  Expenses 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 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 financial statements taken as a whole.



/s/ KPMG LLP
Greenville, SC
February 22, 2002

                                       71
<PAGE>

[REZNICK FEDDER & SILVERMAN LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners
Flipper Temple Associates, L.P.

We have audited the  accompanying  balance sheet of Flipper  Temple  Associates,
L.P.,  as of December  31,  2003,  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 auditing standards  generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  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 Flipper  Temple  Associates,
L.P., as of December 31, 2003, and the results of its operations, the changes in
partners' equity (deficit) and cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of America.

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 22,
2004 on our consideration of Flipper Temple Associates,  L.P.'s internal control
and on its  compliance  with  specific  requirements  applicable  to  major  HUD
programs and fair housing and non-discrimination.  Those reports are an integral
part of an audit performed in accordance with Government  Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 24 through 37 is presented for purposes of  additional  analysis and is
not a required part of the basic financial  statements of the partnership.  Such
information has been subjected to the auditing  procedures applied in the audits
of the basic financial  statements and, in our opinion,  is fairly stated in all
material  respects,  in relation to the basic  financial  statements  taken as a
whole.



/s/ Reznick Fedder & Silverman
Taxpayer Identification Number: 52-1088612
Bethesda, Maryland
January 22, 2004
Lead Auditor: James P. Martinko

                                       72
<PAGE>

[REZNICK FEDDER & SILVERMAN LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners
Flipper Temple Associates, L.P.

We have audited the  accompanying  balance sheet of Flipper  Temple  Associates,
L.P.,  as of December  31,  2002,  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 auditing standards  generally accepted
in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  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 Flipper  Temple  Associates,
L.P., as of December 31, 2002, and the results of its operations, the changes in
partners' equity (deficit) and cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of America.

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 22,
2003 on our consideration of Flipper Temple Associates,  L.P.'s internal control
and on its  compliance  with  specific  requirements  applicable  to  major  HUD
programs and fair housing and non-discrimination.  Those reports are an integral
part of an audit performed in accordance with Government  Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 23 through 27 is presented for purposes of  additional  analysis and is
not a required part of the basic financial  statements of the partnership.  Such
information has been subjected to the auditing  procedures applied in the audits
of the basic financial  statements and, in our opinion,  is fairly stated in all
material  respects,  in relation to the basic  financial  statements  taken as a
whole.



/s/ Reznick Fedder & Silverman
Taxpayer Identification Number: 52-1088612
Bethesda, Maryland
January 22, 2003
Lead Auditor: James P. Martinko

                                       73
<PAGE>

[REZNICK FEDDER & SILVERMAN LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners
Flipper Temple Associates, L.P.

We have audited the  accompanying  balance sheet of Flipper  Temple  Associates,
L.P.,  as of December  31,  2001,  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 auditing standards  generally accepted
in the United States of America 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 Flipper  Temple  Associates,
L.P., as of December 31, 2001, and the results of its operations, the changes in
partners' equity (deficit) and cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of America.

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 23 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
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 and the  "Consolidated  Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 31,
2002 on our consideration of Flipper Temple Associates,  L.P.'s internal control
and on its  compliance  with  specific  requirements  applicable  to  major  HUD
programs and fair housing and non-discrimination.  Those reports are an integral
part of an audit performed in accordance with Government  Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.

/s/ Reznick Fedder & Silverman
Taxpayer Identification Number: 52-1088612
Bethesda, Maryland
January 31, 2002
Lead Auditor: James P. Martinko

                                       74
<PAGE>

[Letterhead of Heffler, Radetich & Saitta L.L.P]

INDEPENDENT AUDITORS' REPORT

To the Partners of
220 Cooper Street, L.P.

We have audited the accompanying  balance sheets of 220 Cooper Street,  L.P., as
of  December  31,  2003 and 2002,  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 auditing standards generally accepted
in the  United  States of  America.  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 220 Cooper Street,  L.P. as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended,  in conformity with  accounting  principles  generally
accepted in the United States of America.

/s/ Heffler, Radetich & Saitta L.L.P.
Mount Laurel, NJ
January 26, 2004

                                       75
<PAGE>

[Letterhead of Heffler, Radetich & Saitta L.L.P]

INDEPENDENT AUDITORS' REPORT

To the Partners of
220 Cooper Street, L.P.

We have audited the accompanying  balance sheets of 220 Cooper Street,  L.P., as
of  December  31,  2002 and 2001,  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 auditing standards generally accepted
in the  United  States of  America.  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 220 Cooper Street,  L.P. as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended,  in conformity with  accounting  principles  generally
accepted in the United States of America.

/s/ Heffler, Radetich & Saitta L.L.P.
Mount Laurel, NJ
January 28, 2003

                                       76
<PAGE>

[ARCHAMBO, MUEGGENBORG & DICK, INC. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Pecan Creek Limited Partnership
Bartlesville, Oklahoma

We  have  audited  the  accompanying  balance  sheets  of  Pecan  Creek  Limited
Partnership,  HUD  Project  No. FHA  118-35121  (a limited  partnership),  as of
December  31, 2003 and 2002 and the  related  statements  of income,  changes in
partners'  equity,  and cash flows for the years  then  ended.  These  financial
statements   are  the   responsibility   of  the   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 auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller  General of the United States.  Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Pecan Creek Limited Partnership
as of December 31, 2003 and 2002, and the results of its operations,  changes in
its partners' equity, and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued  reports  dated January 30, 2004 on our
consideration  of Pecan Creek Limited  Partnership's  internal  control,  on its
compliance with specific requirements applicable to major HUD programs, specific
requirements  applicable  to non-major  HUD program  transactions,  and specific
requirements  applicable to Fair Housing and  Non-Discrimination.  Those reports
are an integral  part of an audit  performed in accordance  Government  Auditing
Standards and should be read in conjunction  with this report in considering the
results of our audit.

Our audits  were made for the  purpose  of  forming an opinion on the  financial
statements taken as a whole. The supplemental  information  shown on pages 15-17
and  the  information  transmitted  to  the  Department  of  Housing  and  Urban
Development (HUD) is prepared for the purpose of additional  analysis and is not
a required part of the financial  statements of Pecan Creek Limited Partnership.
Such  information has been subjected to the auditing  procedures  applied in the
audit of the basic financial statements and, in our opinion, is fairly presented
in all material respects in relation to the basic financial  statements taken as
a whole.


/s/ Archambo, Mueggenborg & Dick, Inc.
Deborah E. Mueggenborg, Audit Partner
Certified Public Accountants
73-1439902
Bartsville, Oklahoma
January 30, 2004

                                       77
<PAGE>

[ARCHAMBO, MUEGGENBORG & DICK, INC. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Pecan Creek Limited Partnership
Bartlesville, Oklahoma

We  have  audited  the  accompanying  balance  sheets  of  Pecan  Creek  Limited
Partnership,  HUD  Project  No. FHA  118-35121  (a limited  partnership),  as of
December  31, 2002 and 2001 and the  related  statements  of income,  changes in
partners'  equity,  and cash flows for the years  then  ended.  These  financial
statements   are  the   responsibility   of  the   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 auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller  General of the United States.  Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Pecan Creek Limited Partnership
as of December 31, 2002 and 2001, and the results of its operations,  changes in
its partners' equity, and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued  reports dated February 13, 2003 on our
consideration  of Pecan Creek Limited  Partnership's  internal  control,  on its
compliance with specific requirements applicable to major HUD programs, specific
requirements  applicable  to non-major  HUD program  transactions,  and specific
requirements  applicable to Fair Housing and  Non-Discrimination.  Those reports
are an integral  part of an audit  performed in accordance  Government  Auditing
Standards and should be read in conjunction  with this report in considering the
results of our audit.

Our audits  were made for the  purpose  of  forming an opinion on the  financial
statements taken as a whole. The supplemental  information  shown on pages 15-17
and  the  information  transmitted  to  the  Department  of  Housing  and  Urban
Development (HUD) is prepared for the purpose of additional  analysis and is not
a required part of the financial  statements of Pecan Creek Limited Partnership.
Such  information has been subjected to the auditing  procedures  applied in the
audit of the basic financial statements and, in our opinion, is fairly presented
in all material respects in relation to the basic financial  statements taken as
a whole.


/s/ Archambo, Mueggenborg & Dick, Inc.
Deborah E. Mueggenborg, Audit Partner
Certified Public Accountants
73-1439902
Bartsville, Oklahoma
February 13, 2003

                                       78
<PAGE>

[Letterhead of AGBIMSON & CO., PLLC]

INDEPENDENT AUDITOR'S REPORT

To the Partners
363 Grand Vendome Associates, Limited Partnership

We have audited the accompanying  balance sheet of 363 Grand Vendome Associates,
Limited  Partnership,  as of December 31, 2003,  and the related  statements  of
Loss,  Partners' Capital and Cash Flows for the year then ended. These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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 363 Grand Vendome  Associates,
Limited Partnership,  as of December 31, 2003, and the results of its operations
and its cash  flows for the year  then  ended,  in  conformity  with  accounting
principles generally accepted in the United States of America.

/s/ Agbimson & Co., PLLC
Rockville Centre, New York
January 30, 2004

                                       79
<PAGE>

[Letterhead of AGBIMSON & CO., PLLC]

INDEPENDENT AUDITOR'S REPORT

To the Partners
363 Grand Vendome Associates, Limited Partnership

We have audited the accompanying  balance sheet of 363 Grand Vendome Associates,
Limited  Partnership,  as of December 31, 2002,  and the related  statements  of
Loss,  Partners' Capital and Cash Flows for the year then ended. These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

Except as  discussed  in the  following  paragraph,  we  conducted  our audit in
accordance with auditing  standards  generally  accepted in the United States of
America.  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.

We are unable to obtain adequate support for the carrying value for the building
construction and  rehabilitation  costs included in the fixed assets at December
31, 2002,  which also affected  material  amounts  included in the Statements of
Loss and Partners' Capital for the year then ended as described in Note 10.

In our  opinion,  except for the  effects on the  financial  statements  of such
adjustments,  if any, as might have been  determined to be necessary had we been
able  to  examine  evidence   regarding  the  carrying  value  of  building  and
rehabilitation  costs,  the  financial  statements  referred  to  in  the  first
paragraph above present fairly, in all material respects, the financial position
of 363 Grand Vendome Associates,  Limited Partnership,  as of December 31, 2002,
and the results of its  operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.

/s/ Agbimson & Co., PLLC
Rockville Centre, New York
January 30, 2003

                                       80
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[Letterhead of AGBIMSON & CO., PLLC]

INDEPENDENT AUDITOR'S REPORT

To the Partners
363 Grand Vendome Associates, Limited Partnership

We have audited the accompanying  balance sheet of 363 Grand Vendome Associates,
Limited  Partnership,  as of December 31, 2001,  and the related  statements  of
Loss,  Partners' Capital and Cash Flows for the year then ended. These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

Except as  discussed  in the  following  paragraph,  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.

We are unable to obtain adequate support for the carrying value for the building
construction and  rehabilitation  costs included in the fixed assets at December
31, 2001,  which also affected  material  amounts  included in the Statements of
Loss and Partners' Capital for the year then ended as described in Note 10.

In our  opinion,  except for the  effects on the  financial  statements  of such
adjustments,  if any, as might have been  determined to be necessary had we been
able  to  examine  evidence   regarding  the  carrying  value  of  building  and
rehabilitation  costs,  the  financial  statements  referred  to  in  the  first
paragraph above present fairly, in all material respects, the financial position
of 363 Grand Vendome Associates,  Limited Partnership,  as of December 31, 2001,
and the results of its  operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

/s/ Agbimson & Co., PLLC
Rockville Centre, New York
January 30, 2002

                                       81
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
New Augusta Associates, Ltd.
New Augusta, Mississippi

We have audited the accompanying balance sheets of New Augusta Associates, Ltd.,
a limited partnership, RHS Project No.: 28-056-640665470 as of December 31, 2003
and 2002, 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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 New Augusta Associates,  Ltd.,
RHS Project  No.:  28-056-640665470  as of December  31, 2003 and 2002,  and the
results  of its  operations  and its cash  flows  for the  years  then  ended in
conformity with accounting principles generally accepted in the United States of
America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  12 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2003 and  2002,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 8, 2004 on our  consideration of New Augusta  Associates,  Ltd.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit  performed in  accordance  with  Government  Auditing  Standards and
should be read in conjunction with this report in considering the results of our
audit.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 8, 2004

                                       82
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
New Augusta Associates, Ltd.
New Augusta, Mississippi

We have audited the accompanying balance sheets of New Augusta Associates, Ltd.,
a limited partnership, RHS Project No.: 28-056-640665470 as of December 31, 2002
and 2001, 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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 New Augusta Associates,  Ltd.,
RHS Project  No.:  28-056-640665470  as of December  31, 2002 and 2001,  and the
results  of its  operations  and its cash  flows  for the  years  then  ended in
conformity with accounting principles generally accepted in the United States of
America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  12 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2002 and  2001,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 8, 2003 on our  consideration of New Augusta  Associates,  Ltd.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 8, 2003

                                       83
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Pine Shadow, Ltd.
Waveland, Mississippi

We have audited the accompanying  balance sheets of Pine Shadow,  Ltd. a limited
partnership, RHS Project No.: 28-023-640661063 as of December 31, 2003 and 2002,
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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Pine Shadow, Ltd., RHS Project
No.:  28-023-640661063  as of December 31, 2003 and 2002, and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  12 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2003 and  2002,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 27, 2004 on our  consideration  of Pine Shadow,  Ltd.'s  internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations.  That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
January 27, 2004

                                       84
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Pine Shadow, Ltd.
Waveland, Mississippi

We have audited the accompanying  balance sheets of Pine Shadow,  Ltd. a limited
partnership, RHS Project No.: 28-023-640661063 as of December 31, 2002 and 2001,
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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Pine Shadow, Ltd., RHS Project
No.:  28-023-640661063  as of December 31, 2002 and 2001, and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  12 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2002 and  2001,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  February 6, 2003 on our  consideration  of Pine Shadow,  Ltd.'s  internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 6, 2003

                                       85
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Windsor Place, L.P.
Wedowee, Alabama

We have audited the accompanying balance sheets of Windsor Place, L.P. a limited
partnership, RHS Project No.: 01-056-631024917 as of December 31, 2003 and 2002,
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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Windsor  Place,  L.P.,  RHS
Project No.:  01-056-631024917 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 11
through  14 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2003 and  2002,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated January 26, 2004 on our  consideration  of Windsor Place,  L.P.'s internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations.  That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
January 26, 2004

                                       86
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Windsor Place, L.P.
Wedowee, Alabama

We have audited the accompanying balance sheets of Windsor Place, L.P. a limited
partnership, RHS Project No.: 01-056-631024917 as of December 31, 2002 and 2001,
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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Windsor  Place,  L.P.,  RHS
Project No.:  01-056-631024917 as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  13 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2002 and  2001,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 17, 2003 on our  consideration of Windsor Place,  L.P.'s internal
control over financial reporting and on our tests of its compliance with certain
provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 17, 2003

                                       87
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Brookwood Associates, Ltd.
Foley, Alabama

We have audited the accompanying balance sheets of Brookwood Associates, Ltd., a
limited partnership,  RHS Project No.:  01-002-621394754 as of December 31, 2003
and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Brookwood Associates, Ltd., RHS
Project No.:  01-002-621394754 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  13 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2003 and  2002,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 21, 2004 on our  consideration  of Brookwood  Associates,  Ltd.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit  performed in  accordance  with  Government  Auditing  Standards and
should be read in conjunction with this report in considering the results of our
audit.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 21, 2004

                                       88
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Brookwood Associates, Ltd.
Foley, Alabama

We have audited the accompanying balance sheets of Brookwood Associates, Ltd., a
limited partnership,  RHS Project No.:  01-002-621394754 as of December 31, 2002
and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Brookwood Associates, Ltd., RHS
Project No.:  01-002-621394754 as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  13 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2002 and  2001,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 21, 2003 on our  consideration  of Brookwood  Associates,  Ltd.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 21, 2003

                                       89
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Heflin Hills Apartments, Ltd.
Heflin, Alabama

We have audited the  accompanying  balance  sheets of Heflin  Hills  Apartments,
Ltd., a limited  partnership,  RHS Project No.:  01-015-631039371 as of December
31, 2003 and 2002, 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 the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Heflin Hills Apartments,  Ltd.,
RHS Project  No.:  01-015-631039371  as of December  31, 2003 and 2002,  and the
results  of its  operations  and its cash  flows  for the  years  then  ended in
conformity with accounting principles generally accepted in the United States of
America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  13 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2003 and  2002,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 8, 2004 on our consideration of Heflin Hills  Apartments,  Ltd.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit  performed in  accordance  with  Government  Auditing  Standards and
should be read in conjunction with this report in considering the results of our
audit.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 8, 2004

                                       90
<PAGE>


[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Heflin Hills Apartments, Ltd.
Heflin, Alabama

We have audited the  accompanying  balance  sheets of Heflin  Hills  Apartments,
Ltd., a limited  partnership,  RHS Project No.:  01-015-631039371 as of December
31, 2002 and 2001, 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 the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Heflin Hills Apartments,  Ltd.,
RHS Project  No.:  01-015-631039371  as of December  31, 2002 and 2001,  and the
results  of its  operations  and its cash  flows  for the  years  then  ended in
conformity with accounting principles generally accepted in the United States of
America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  13 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2002 and  2001,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 8, 2003 on our consideration of Heflin Hills  Apartments,  Ltd.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 8, 2003

                                       91
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Shadowood Apartments, Ltd.
Stevenson, Alabama

We have audited the accompanying balance sheets of Shadowood Apartments, Ltd., a
limited partnership,  RHS Project No.:  01-036-631030182 as of December 31, 2003
and 2002,  and the  related  statements  of  operations,  partners'  deficit and
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 the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Shadowood Apartments, Ltd., RHS
Project No.:  01-036-631030182 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  13 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2003 and  2002,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 20, 2004 on our  consideration of Shadowood  Apartments,  Ltd's.,
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit  performed in  accordance  with  Government  Auditing  Standards and
should be read in conjunction with this report in considering the results of our
audit.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 20, 2004

                                       92
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Shadowood Apartments, Ltd.
Stevenson, Alabama

We have audited the accompanying balance sheets of Shadowood Apartments, Ltd., a
limited partnership,  RHS Project No.:  01-036-631030182 as of December 31, 2002
and 2001,  and the  related  statements  of  operations,  partners'  deficit and
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 the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Shadowood Apartments, Ltd., RHS
Project No.:  01-036-631030182 as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  13 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2002 and  2001,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 25, 2003 on our  consideration of Shadowood  Apartments,  Ltd's.,
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 25, 2003

                                       93
<PAGE>

[Letterhead of Donald W. Causey & Associates, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Brittany Associates, L.P.
Dekalb, Mississippi.

We have audited the accompanying balance sheets of Brittany Associates,  L.P., a
limited partnership,  RHS Project No.:  28-035-581896085 as of December 31, 2003
and 2002, 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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Brittany Associates,  L.P. RHS
Project No.:  28-035-581896085 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  12 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2003 and  2002,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  February 20, 2004 on our  consideration  of Brittany  Associates,  L.P.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit  performed in  accordance  with  Government  Auditing  Standards and
should be read in conjunction with this report in considering the results of our
audit.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 20, 2004

                                       94
<PAGE>

[Letterhead of Donald W. Causey & Associates, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Brittany Associates, L.P.
Dekalb, Mississippi.

We have audited the accompanying balance sheets of Brittany Associates,  L.P., a
limited partnership,  RHS Project No.:  28-035-581896085 as of December 31, 2002
and 2001, 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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Brittany Associates,  L.P. RHS
Project No.:  28-035-581896085 as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  12 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2002 and  2001,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  February 24, 2003 on our  consideration  of Brittany  Associates,  L.P.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 24, 2003

                                       95
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Hidden Valley Apartments, Ltd.
Brewton, Alabama

We have audited the  accompanying  balance  sheets of Hidden Valley  Apartments,
Ltd. a limited partnership, RHS Project No.: 01-027-631025600 as of December 31,
2003 and 2002, 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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Hidden Valley Apartments,  Ltd.
RHS Project  No.:  01-027-631025600  as of December  31, 2003 and 2002,  and the
results  of its  operations  and its cash  flows  for the  years  then  ended in
conformity with accounting principles generally accepted in the United States of
America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 11
through  14 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2003 and  2002,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 23, 2004 on our consideration of Hidden Valley Apartments, Ltd.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit  performed in  accordance  with  Government  Auditing  Standards and
should be read in conjunction with this report in considering the results of our
audit.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 23, 2004

                                       96
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Hidden Valley Apartments, Ltd.
Brewton, Alabama

We have audited the  accompanying  balance  sheets of Hidden Valley  Apartments,
Ltd. a limited partnership, RHS Project No.: 01-027-631025600 as of December 31,
2002 and 2001, 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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Hidden Valley Apartments,  Ltd.
RHS Project  No.:  01-027-631025600  as of December  31, 2002 and 2001,  and the
results  of its  operations  and its cash  flows  for the  years  then  ended in
conformity with accounting principles generally accepted in the United States of
America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  13 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2002 and  2001,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated February 26, 2003 on our consideration of Hidden Valley Apartments, Ltd.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 26, 2003

                                       97
<PAGE>

[Letterhead of Matthews, Cutrer & Lindsay, P.A.]

To the Partners of
Westbrook Square, LP

INDEPENDENT AUDITOR'S REPORT

We have  audited the  accompanying  balance  sheet of  Westbrook  Square,  LP (a
Mississippi  limited  partnership),  RHS  Project  No.  28-040-640770978  as  of
December 31, 2003, and the related  statements of operations,  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  audit.  The
financial  statements  of Westbrook  Square,  LP, as of December 31, 2002,  were
audited by other  auditors  whose report dated  February 14, 2003,  expressed an
unqualified opinion.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States of America 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 Westbrook  Square,  LP as of
December 31, 2003 and the results of its  operations  and its cash flows for the
years then ended in conformity with accounting  principles generally accepted in
the United States of America.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements taken as a whole.  The supplemental  information is presented for the
purposes  of  additional  analysis  and  is not a  required  part  of the  basic
financial  statements.  We have prepared the Multiple  Family  Housing  Borrower
Balance  Sheet (RHS Form RD 18930-8) and the  Multiple  Family  Housing  Project
Budget (RHS Form RD 1930-7).  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.


/s/ Matthews, Cutrer & Lindsay, P.A.
Ridgeland, Mississippi
February 27, 2004

                                       98
<PAGE>

[Letterhead of Bob T. Robinson]

To the Partners of
Westbrook Square, Ltd.

INDEPENDENT AUDITOR'S REPORT

I have audited the accompanying balance sheet of Westbrook Square, Ltd. (RD Case
number  28-040-640770978)  as of  December  31,  2002 and  2001 and the  related
statements of income,  partners' equity and cash flows for the years then ended.
These  financial   statements  are  the   responsibility  of  the  partnership's
management.  My  responsibility  is to express  an  opinion  on these  financial
statements based on my audit.

I conducted my audits in accordance with auditing  standards  generally accepted
in the United States of America and Government Auditing Standards, issued by the
Comptroller  General of the United States.  Those standards  require that I 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.  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  Westbrook  Square,  Ltd. as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in  conformity  with  accounting  principles  generally
accepted in the United States of America.

In accordance with Government Auditing  Standards,  I have also issued my report
dated February 14, 2003 on my consideration of Westbrook Square, Ltd.'s internal
control  and on my tests of its  compliance  with  certain  provisions  of laws,
regulations,  contracts,  and grants.  This  report is an  integral  part of the
audits performed in accordance with Government  Auditing Standards and should be
read in conjunction with this report in considering the results of my audits.

My audits  were made for the  purpose of  forming  an  opinion on the  financial
statements taken as a whole.  The supplemental  information is presented for the
purposes of  additional  analysis  and is not a required  part of the  financial
statements of Westbrook Square,  Ltd. Such information has been subjected to the
auditing procedures applied in the audit of the financial  statements and, in my
opinion,  is fairly  presented  in all  material  respects  in  relation  to the
financial statements taken as a whole.

The annual  budgets of  Westbrook  Square,  Ltd.  included  in the  accompanying
prescribed  form RD 1930-7 (Rev 7-00) have not been  compiled or examined by me,
and I do not express any form of assurance on them. In addition they may contain
departures from guidelines for presentation of prospective financial information
established  by the  American  Institute of Certified  Public  Accountants.  The
actual  results  may  vary  from  the  presentation  and the  variations  may be
material.


/s/ Bob T. Robinson
Jackson, Mississippi
February 14, 2003

                                       99
<PAGE>

[Letterhead of DONALD W. CAUSEY, CPA, P.C.]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Warsaw Elderly Housing, Ltd.
Warsaw, Kentucky

I have audited the accompanying balance sheets of Warsaw Elderly Housing,  Ltd.,
a limited partnership, RHS Project No.: 20-039-621409235 as of December 31, 2003
and 2002, 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. My responsibility is to express
an opinion on these financial statements based on my audits.

I conducted the audits in accordance with auditing standards  generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that I 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.  I believe that the
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 Warsaw Elderly Housing,  Ltd., RHS
Project No.:  20-039-621409235 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements taken as a whole. The supplemental  information on pages 9
through  12 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2003 and  2002,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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 my  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,  I have also issued a report
dated February 25, 2004 on my  consideration  of Warsaw Elderly  Housing,  Ltd.,
internal control over financial reporting and on my tests of its compliance with
certain  provisions of laws and regulations.  That report is an integral part of
an audit performed in accordance with Government  Auditing  Standards and should
be read in conjunction with this report in considering the results of our audit.

Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 25, 2004

                                      100
<PAGE>

[Letterhead of DONALD W. CAUSEY, CPA, P.C.]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Warsaw Elderly Housing, Ltd.
Warsaw, Kentucky

I have audited the accompanying balance sheets of Warsaw Elderly Housing,  Ltd.,
a limited partnership, RHS Project No.: 20-039-621409235 as of December 31, 2002
and 2001, 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. My responsibility is to express
an opinion on these financial statements based on my audits.

I conducted the audits in accordance with auditing standards  generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that I 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.  I believe that the
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 Warsaw Elderly Housing,  Ltd., RHS
Project No.:  20-039-621409235 as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements taken as a whole. The supplemental  information on pages 9
through  12 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2002 and  2001,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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 my  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,  I have also issued a report
dated February 24, 2003 on my  consideration  of Warsaw Elderly  Housing,  Ltd.,
internal control over financial reporting and on my tests of its compliance with
certain provisions of laws and regulations.

Donald W. Causey, CPA, P.C.
Gadsden, Alabama
February 24, 2003

                                      101
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
West Hill Square, Ltd.
Gordo, Alabama

We have audited the  accompanying  balance  sheets of West Hill Square,  Ltd., a
limited partnership,  RHS Project No.:  01-054-631010865 as of December 31, 2003
and 2002, 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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 West Hill Square,  Ltd., RHS
Project No.:  01-054-631010865 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 11
through  14 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2003 and  2002,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  February  12,  2004 on our  consideration  of West  Hill  Square,  Ltd.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit  performed in  accordance  with  Government  Auditing  Standards and
should be read in conjunction with this report in considering the results of our
audit.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 12, 2004

                                      102
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
West Hill Square, Ltd.
Gordo, Alabama

We have audited the  accompanying  balance  sheets of West Hill Square,  Ltd., a
limited partnership,  RHS Project No.:  01-054-631010865 as of December 31, 2002
and 2001, 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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 West Hill Square,  Ltd., RHS
Project No.:  01-054-631010865 as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 11
through  14 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2002 and  2001,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  February  19,  2003 on our  consideration  of West  Hill  Square,  Ltd.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 19, 2003

                                      103
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Elmwood Associates, L.P.
Picayune, Mississippi

We have audited the accompanying  balance sheets of Elmwood Associates,  L.P., a
limited partnership,  RHS Project No.:  28-055-640804193 as of December 31, 2003
and 2002, 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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Elmwood Associates,  L.P., RHS
Project No.:  28-055-640804193 as of December 31, 2003 and 2002, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  12 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2003 and  2002,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  February  21, 2004 on our  consideration  of Elmwood  Associates,  L.P.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations. That report is an integral part
of an audit  performed in  accordance  with  Government  Auditing  Standards and
should be read in conjunction with this report in considering the results of our
audit.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 21, 2004

                                      104
<PAGE>

[Letterhead of DONALD W. CAUSEY & ASSOCIATES, P.C.]

INDEPENDENT AUDITORS' REPORT

To the Partners
Elmwood Associates, L.P.
Picayune, Mississippi

We have audited the accompanying  balance sheets of Elmwood Associates,  L.P., a
limited partnership,  RHS Project No.:  28-055-640804193 as of December 31, 2002
and 2001, 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 audits.

We conducted the audits in accordance with auditing standards generally accepted
in the United States of America and Government  Auditing Standards issued by the
Comptroller   General  of  the  United  States,  and  the  U.S.   Department  of
Agriculture,  Farmers Home Administration Audit Program. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that the
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 Elmwood Associates,  L.P., RHS
Project No.:  28-055-640804193 as of December 31, 2002 and 2001, and the results
of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 10
through  12 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic financial  statements.  The supplemental  information
presented in the  Multiple  Family  Housing  Borrower  Balance  Sheet (Form FmHA
1930-8)  Parts I and II for the  year  ended  December  31,  2002 and  2001,  is
presented for purposes of complying with the  requirements  of the Rural Housing
Services and is also 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  February  24, 2003 on our  consideration  of Elmwood  Associates,  L.P.'s
internal  control over  financial  reporting and on our tests of its  compliance
with certain provisions of laws and regulations.

/s/ Donald W. Causey & Associates, P.C.
Gadsden, Alabama
February 24, 2003

                                      105
<PAGE>

[Letterhead of Grant Thornton LLP]

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Partners
Harmony Associates, L.P.

We have audited the accompanying balance sheet of Harmony Associates, L.P. as of
December 31, 2003, 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 auditing standards  generally accepted
in the  United  States of  America.  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 Harmony Associates,  L.P. as of
December 31, 2003,  and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.



/s/ Grant Thornton LLP
Los Angeles, California
January 14, 2004

                                      106
<PAGE>


[Letterhead of Grant Thornton LLP]

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Partners
Harmony Associates, L.P.

We have audited the accompanying balance sheet of Harmony Associates, L.P. as of
December 31, 2002, 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 auditing standards  generally accepted
in the  United  States of  America.  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 Harmony Associates,  L.P. as of
December 31, 2002,  and the results of its operations and its cash flows for the
year then ended in conformity with accounting  principles  generally accepted in
the United States of America.



/s/ Grant Thornton LLP
Los Angeles, California
January 24, 2003

                                      107
<PAGE>
s

[Letterhead of Grant Thornton LLP]

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Partners
Harmony Associates, L.P.

We have audited the accompanying balance sheet of Harmony Associates, L.P. as of
December 31, 2001, 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 auditing standards  generally accepted
in the  United  States of  America.  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 Harmony Associates,  L.P. as of
December 31, 2001,  and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.



/s/ Grant Thornton LLP
Los Angeles, California
January 24, 2002

                                      108
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                           CONSOLIDATED BALANCE SHEETS
                             MARCH 31, 2004 and 2003
<TABLE>
<CAPTION>
                                     ASSETS

                                                                     2004           2003
                                                                 ------------    ------------
<S>                                                              <C>             <C>
Property and equipment - (at cost, net of accumulated
  depreciation of $63,733,516 and $58,927,642,
  respectively) (Notes 4 and 6)                                  $ 80,476,651    $ 84,274,411
Cash and cash equivalents                                           2,492,636       2,247,128
Investment in marketable securities (Note 2)                                0         109,498
Cash held in escrow                                                 4,743,491       4,654,612
Deferred costs (net of accumulated amortization of
  $1,988,501 and $1,821,322, respectively) (Note 5)                   979,385       1,141,493
Other assets                                                        1,247,703       1,240,691
                                                                 ------------    ------------

Total Assets                                                     $ 89,939,866    $ 93,667,833
                                                                 ============    ============

                   LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

Liabilities:
Mortgage notes payable (Note 6)                                  $ 66,285,158    $ 67,366,819
Accounts payable and other liabilities                              1,771,574       1,411,077
Due to local general partners and affiliates (Note 7)               3,922,555       4,025,449
Due to general partners and affiliates (Note 7)                     7,861,874       6,933,531
                                                                 ------------    ------------

Total Liabilities                                                  79,841,161      79,736,876
                                                                 ------------    ------------

Minority interests                                                  8,001,969       8,079,257
                                                                 ------------    ------------

Partners' Capital (Deficit):
Limited partners (72,896 BACs
  issued and outstanding)                                           2,756,415       6,470,255
General partners                                                     (659,679)       (622,165)
Accumulated other comprehensive income:
Unrealized gain on marketable securities                                    0           3,610
                                                                 ------------    ------------

Total Partners' Capital (Deficit)                                   2,096,736       5,851,700
                                                                 ------------    ------------

Commitments and Contingencies (Notes 7 and 9)

Total Liabilities and Partners' Capital (Deficit)                $ 89,939,866    $ 93,667,833
                                                                 ============    ============
</TABLE>


See accompanying notes to consolidated financial statements.

                                      109
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    YEARS ENDED MARCH 31, 2004, 2003 and 2002
<TABLE>
<CAPTION>

                                                    2004            2003            2002
                                                ------------    ------------    ------------
<S>                                             <C>             <C>             <C>
Revenues:
Rental income                                   $ 14,797,158    $ 14,282,724    $ 13,742,506
Other                                              1,576,443       1,449,502       1,674,520
                                                ------------    ------------    ------------

Total Revenues                                    16,373,601      15,732,226      15,417,026
                                                ------------    ------------    ------------

Expenses:

Repairs and maintenance                            2,832,897       2,534,896       2,569,601
Operating and other                                2,267,403       2,094,185       1,791,861
Real estate taxes                                    959,803         995,566         986,059
Interest                                           4,335,979       4,509,840       4,565,170
Depreciation and amortization (Notes 4 and 5)      4,978,566       4,915,164       5,009,392
General and administrative                         2,946,354       2,767,712       2,677,059
General and administrative-related parties
  (Note 7)                                         1,844,523       1,706,060       1,608,515
                                                ------------    ------------    ------------

Total Expenses                                    20,165,525      19,523,423      19,207,657
                                                ------------    ------------    ------------

Loss before minority interest                     (3,791,924)     (3,791,197)     (3,790,631)

Minority interest in loss of subsidiaries             36,960          37,450          39,461
                                                ------------    ------------    ------------

Net loss                                        $ (3,754,964)   $ (3,753,747)   $ (3,751,170)
                                                ============    ============    ============


Net loss - limited partners                     $ (3,717,414)   $ (3,716,210)   $ (3,713,658)
                                                ============    ============    ============

Number of BACs outstanding                            72,896          72,896          72,896
                                                ============    ============    ============

Net loss per BAC                                $     (51.00)   $     (50.98)   $     (50.94)
                                                ============    ============    ============
</TABLE>


See accompanying notes to consolidated financial statements.

                                      110
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
        CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
                    YEARS ENDED MARCH 31, 2004, 2003 and 2002
<TABLE>
<CAPTION>

                                                                                         Accumulated
                                                                                            Other
                                                      Limited           General         Comprehensive     Comprehensive
                                     Total            Partners          Partners        Income (Loss)          Loss
                                  ------------      ------------      ------------      -------------     -------------
<S>                               <C>               <C>               <C>               <C>               <C>
Partners' capital (deficit) -
  April 1, 2001                   $ 13,357,152      $ 13,900,123      $   (547,116)     $      4,145

Comprehensive Loss:
Net Loss                            (3,751,170)       (3,713,658)          (37,512)                0        (3,751,170)
                                  ------------      ------------      ------------      ------------      ------------

Total Comprehensive Loss                                                                                  $ (3,751,170)
                                                                                                          ============

Partners' capital (deficit) -
  March 31, 2002                     9,605,982        10,186,465          (584,628)            4,145

Comprehensive Loss:
Net Loss                            (3,753,747)       (3,716,210)          (37,537)                0        (3,753,747)

Other Comprehensive Loss:
Net unrealized loss on
  marketable securities                   (535)                0                 0              (535)             (535)
                                  ------------      ------------      ------------      ------------      ------------

Total Comprehensive Loss                                                                                  $ (3,754,282)
                                                                                                          ============

Partners' capital (deficit) -
  March 31, 2003                  $  5,851,700      $  6,470,255      $   (622,165)     $      3,610

Comprehensive Loss:
Net Loss                            (3,754,964)       (3,717,414)          (37,550)                0        (3,751,426)

Other Comprehensive Loss:
Net unrealized loss on
  marketable securities                      0             3,574                36            (3,610)     $      3,610
                                  ------------      ------------      ------------      ------------      ------------

Total Comprehensive Loss                                                                                  $ (3,747,816)
                                                                                                          ============

Partners' capital (deficit) -
  March 31, 2004                  $  2,096,736      $  2,756,415      $   (659,679)     $          0
                                  ============      ============      ============      ============
</TABLE>


See accompanying notes to consolidated financial statements.

                                      111
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED MARCH 31, 2004, 2003 and 2002
<TABLE>
<CAPTION>
                                                           2004             2003             2002
                                                        -----------      -----------      -----------
<S>                                                     <C>              <C>              <C>
Cash flows from operating activities:
Net loss                                                $(3,754,964)     $(3,753,747)     $(3,751,170)

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

  Depreciation and amortization                           4,978,566        4,915,164        5,009,392
  Minority interest in loss of subsidiaries                 (36,960)         (37,450)         (39,461)
  Increase in other assets                                   (7,012)        (238,552)          (5,698)
  Increase (decrease) in accounts payable and other
   liabilities                                              360,497         (238,880)        (205,198)
  (Increase) decrease in cash held in escrow                (88,879)          16,647         (303,649)
  Increase in due to general partners
   and affiliates                                           928,343          912,768          918,843
  Increase in due to local general partners
   and affiliates                                           247,420           47,959          147,805
  Decrease in due to local general partners
   and affiliates                                           (26,314)        (134,954)         (27,862)
                                                        -----------      -----------      -----------

Net cash provided by operating activities                 2,600,697        1,488,955        1,743,002
                                                        -----------      -----------      -----------

Cash flows from investing activities:

  Additions to property and equipment                    (1,013,627)        (751,333)        (772,121)
  Decrease (increase) in marketable securities              109,498           (1,028)               0
  Increase in due to local general partners
   and affiliates                                                 0                0            3,570
  Decrease in due to local general partners
   and affiliates                                          (213,462)         (17,863)         (12,255)
                                                        -----------      -----------      -----------

Net cash used in investing activities                    (1,117,591)        (770,224)        (780,806)
                                                        -----------      -----------      -----------
</TABLE>

                                      112
<PAGE>


                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED MARCH 31, 2004, 2003 and 2002
                                  (continued)
<TABLE>
<CAPTION>
                                                           2004             2003             2002
                                                        -----------      -----------      -----------
<S>                                                     <C>              <C>              <C>


Cash flows from financing activities:
  Increase in deferred costs                                 (5,071)         (20,876)          (3,071)
  Repayments of mortgage loans - net                     (1,081,661)        (696,408)        (958,665)
  Increase in due to local general partners
   and affiliates                                           140,400          547,880          241,400
  Decrease in due to local general partners
   and affiliates                                          (250,938)        (237,506)        (156,341)
  (Decrease) increase in capitalization of
   consolidated subsidiaries attributable to
   minority interest                                        (40,328)         101,464           77,228
                                                        -----------      -----------      -----------

Net cash used in financing activities                    (1,237,598)        (305,446)        (799,449)
                                                        -----------      -----------      -----------

Net increase in cash and cash equivalents                   245,508          413,285          162,747

Cash and cash equivalents at beginning of year            2,247,128        1,833,843        1,671,096
                                                        -----------      -----------      -----------

Cash and cash equivalents at end of year                $ 2,492,636      $ 2,247,128      $ 1,833,843
                                                        ===========      ===========      ===========

Supplemental disclosure of cash flow information:
Cash paid during the year for interest                  $ 2,992,620      $ 3,303,877      $ 3,477,748
                                                        ===========      ===========      ===========
</TABLE>


See accompanying notes to consolidated financial statements.


                                      113
<PAGE>


                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31, 2004, 2003 and 2002


NOTE 1 - General

Freedom   Tax  Credit   Plus  L.P.,   a  Delaware   limited   partnership   (the
"Partnership"),  was  organized  on August  28,  1989 and  commenced  its public
offering  on  February 9, 1990 (the  "Offering").  The  general  partners of the
Partnership are Related Freedom Associates L.P. (the "Related General Partner"),
a Delaware limited partnership, and its affiliate, Freedom GP Inc. (the "Freedom
General Partner"), a Delaware corporation, together (the "General Partners"). On
November 17, 2003,  CharterMac  acquired Related Capital  Company,  which is the
indirect  parent of RCC Manager LLC,  the sole  shareholder  of Related  Freedom
Associates,  Inc., the general partner of the Related General Partner.  Pursuant
to the acquisition,  CharterMac  acquired  controlling  interests in the General
Partners.  This  acquisition  did not affect the  Partnership  or its day-to-day
operations,  as the majority of the General  Partners'  management team remained
unchanged.   The  Partnership  will  terminate  on  December  31,  2030,  unless
terminated sooner under the provision's of the partnership agreement.

The  Partnership's   business  is  to  invest  in  other  partnerships   ("Local
Partnerships,"  "subsidiaries"  or "subsidiary  partnerships")  owning leveraged
apartment  complexes  that are  eligible for the  low-income  housing tax credit
("Tax  Credit")  enacted in the Tax Reform Act of 1986 and to entitle  qualified
BACs holders to Tax Credits over the period of the Partnership's  entitlement to
claim Tax  Credits  (for each  Property,  generally  ten years  from the date of
investment or, if later,  the date the Property is leased to qualified  tenants;
referred to herein as the "Credit  Period").  Each of the Local  Partnerships in
which the  Partnership  has an interest has been allocated by the relevant state
credit agency the authority to recognize Tax Credits  during the Credit  Period,
provided  that the Local  Partnership  satisfies the rent  restriction,  minimum
set-aside and other requirements for recognition of the Tax Credits at all times
during the 15-year period (the "Compliance Period").

As of December 31, 2002,  the Credit Period for all of the  apartment  complexes
have expired,  although each Local  Partnership must continue to comply with the
Tax Credit requirements until the end of the Compliance Period in order to avoid
recapture  of the Tax Credits.  During  Fiscal  Years 2004,  2003 and 2002,  the
Partnership  generated $0, $1,710,233 and $6,782,384,  respectively,  in Housing
Tax Credits.

The Partnership was authorized to issue a total of 200,000 Beneficial Assignment
Certificates  ("BACs"),  which  had  been  registered  with the  Securities  and
Exchange  Commission  for sale to the public.  As of August 8, 1991 (the date on
which the  Partnership  held the final  closing of the sale of BACs and on which
the offering was terminated),  the Partnership had received $72,896,000 of gross
proceeds of the Offering from 4,780 investors.

The terms of the Partnership's  Limited  Partnership  Agreement  provide,  among
other things,  that net profits or losses and distributions of cash flow are, in
general,  allocated  99% to the limited  partners and BACs holders and 1% to the
General Partners.


NOTE 2 - Summary of Significant Accounting Policies

a)  Basis of Accounting and Presentation

The  Partnership's  fiscal year ends on March 31. All subsidiaries have calendar
year ends.  Accounts of the  subsidiaries  have been  adjusted for  intercompany
transactions from January 1 through March 31. The Partnership's fiscal year ends
March  31 in  order  to  allow  adequate  time  for the  subsidiaries  financial
statements  to be  prepared  and  consolidated.  The  books and  records  of the
Partnership are maintained on the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States.

                                      114
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31, 2004, 2003 and 2002


b)  Basis of Consolidation

The consolidated  financial  statements  include the accounts of the Partnership
and 42 subsidiary  partnerships,  in which the Partnership is a limited partner,
with  an  ownership   interest  ranging  from  approximately  98%  to  99%.  All
intercompany  accounts and transactions  with the subsidiary  partnerships  have
been eliminated in consolidation.  Through the rights of the Partnership  and/or
an  affiliate  of  the  General  Partners,  which  affiliate  has a  contractual
obligation to act on behalf of the Partnership, to remove the general partner of
the subsidiary partnerships and to approve certain major operating and financial
decisions,   the  Partnership  has  a  controlling  financial  interest  in  the
subsidiary partnerships.

Increases  (decreases)  in  the  capitalization  of  consolidated   subsidiaries
attributable  to  minority  interest  arises  from cash  contributions  and cash
distributions to the minority interest partners.

The  Partnership's  investment  in each  subsidiary  is equal to the  respective
subsidiary's partners' equity less minority interest capital, if any.

c)  Cash and Cash Equivalents

For  purposes  of the  consolidated  statements  of cash  flows,  cash  and cash
equivalents  include cash on hand, cash in banks,  and investments in short-term
money market  accounts  (which were purchased with original  maturities of three
months or less).

d)  Investment in Marketable Securities

Available-for-sale  securities  were  carried at fair value with net  unrealized
gain (loss) reported as a separate component of other comprehensive income until
realized. A decline in the market value of any available-for-sale security below
cost that is deemed other than  temporary  was charged to earnings  resulting in
the  establishment  of a new cost basis for the security.  During the year ended
March 31, 2004 the Partnership sold its marketable securities.

e)  Cash Held in Escrow

Cash held in escrow  includes  cash held in  escrow,  replacement  reserves  and
tenant security deposits.

f)  Property and Equipment

Property and equipment are depreciated over their estimated useful lives,  which
range  from 20 to 40 years for  properties.  Property  is  depreciated  using an
accelerated or straight-line method. Equipment lives range from 5 to 7 years and
are depreciated on a straight-line basis.

g)  Rental income

Rental  income is recognized as rent becomes due.  Rental  payments  received in
advance are deferred until earned.  The Partnership  received  rental  subsidies
which amounted to  approximately  $3,326,225,  $3,178,000 and $2,953,000 for the
years ended March 31,  2004,  2003 and 2002,  respectively.  The related  rental
subsidy programs have expiration dates that terminate upon total disbursement of
the assistance obligation.

h)  Income Taxes

The  Partnership  is not  required to provide  for, or pay,  any federal  income
taxes.  Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The  Partnership may be subject
to state and local taxes in jurisdictions  in which it operates.  For income tax
purposes, the Partnership has a fiscal year ending December 31 (see Note 8).


                                      115
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31, 2004, 2003 and 2002


i)  Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United  States  requires  management  to make certain
estimates and assumptions relating to reporting of assets, liabilities, revenues
and expenses disclosed in the consolidated  financial  statements.  Accordingly,
actual results could differ from those estimates.

j) Net Loss Per BAC

Net loss per BAC is computed based on the net loss for the period  attributed to
BAC Holders, divided by the number of BACs outstanding for the period.

k)  New Accounting Pronouncements

In  January  2003,  the  Financial   Accounting   Standards  Board  issued  FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable  immediately for variable  interest  entities created after
January 31, 2003. The  Partnership  has not entered into any  transactions  with
variable  interest  entities.  In December 2003 the FASB  redeliberated  certain
proposed modifications and revised FIN 46 ("FIN 46 (R)"). The revised provisions
are applicable no later than the first  reporting  period ending after March 15,
2004.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
changes the accounting for certain  financial  instruments  that, under previous
guidance,  could be classified as equity or "mezzanine" equity, by now requiring
those   instruments  to  be  classified  as  liabilities   (or  assets  in  some
circumstances)  in the  Consolidated  Balance  Sheets.  Further,  SFAS  No.  150
requires  disclosure  regarding the terms of those  instruments  and  settlement
alternatives.  The  guidance in SFAS No. 150  generally  was  effective  for all
financial  instruments  entered  into or modified  after May 31,  2003,  and was
otherwise effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership has evaluated SFAS No. 150 and determined that it
does  not  have  an  impact  on  the  Partnership's   financial   reporting  and
disclosures.


NOTE 3 - Fair Value of Financial Instruments

In  accordance  with SFAS No. 107  "Disclosures  about  Fair Value of  Financial
Instruments,"  the following  methods and assumptions  were used to estimate the
fair value of each class of financial instruments for which it is practicable to
estimate that value:

Cash and Cash  Equivalents,  Cash Held in  Escrow,  Accounts  Payable  and Other
--------------------------------------------------------------------------------
Liabilities,  Due to Local General  Partners and Affiliates,  and Due to General
--------------------------------------------------------------------------------
Partners and Affiliates
-----------------------
The carrying amount of cash and cash equivalents,  cash held in escrow, accounts
payable and other liabilities approximates fair value. The fair values of Due to
Local General Partners and Affiliates and Due to General Partners and Affiliates
are not readily determinable because no market exists for these instruments.

                                      116
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31, 2004, 2003 and 2002


Mortgage Notes Payable
----------------------
The fair value of mortgage notes payable is estimated, where practicable,  based
on the borrowing rate currently available for similar loans.

The estimated  fair values of the  Partnership's  mortgage  notes payable are as
follows:
<TABLE>
<CAPTION>
                                                  March 31, 2004                        March 31, 2003
                                          ------------------------------        ------------------------------
                                           Carrying                              Carrying
                                            Amount           Fair Value           Amount           Fair Value
                                          -----------        -----------        -----------        -----------
<S>                                       <C>                <C>                <C>                <C>
Mortgage Notes Payable for which it is:

Practicable to estimate fair value        $51,901,654        $51,768,160        $40,794,694        $41,312,953
Not Practicable (a)                       $14,383,504                           $26,572,125
</TABLE>

(a) The mortgage  notes payable are insured by HUD primarily in accordance  with
Section 236 of the National  Housing Act. New loans are no longer being  insured
in  accordance  with  Section 236 and  presently  existing  loans are subject to
restrictions  regarding  prepayment.  Management believes the estimation of fair
value to be impracticable.


NOTE 4 - Property and Equipment

The components of property and equipment are as follows:
<TABLE>
<CAPTION>
                                             March 31,
                                  ------------------------------
                                       2004             2003
                                  -------------    -------------

<S>                               <C>              <C>
Land                              $   5,720,520    $   5,720,520
Buildings and improvements          130,814,666      130,371,548
Other                                 7,674,981        7,109,985
                                  -------------    -------------

                                    144,210,167      143,202,053
Less:  Accumulated depreciation     (63,733,516)     (58,927,642)
                                  -------------    -------------
                                  $  80,476,651    $  84,274,411
                                  =============    =============
</TABLE>

Depreciation  expense for the years ended March 31, 2004, 2003 and 2002 amounted
to $4,811,387, $4,749,489 and $4,834,147, respectively.  Additionally, $5,513 of
accumulated depreciation on dispositions was written-off in the year ended March
31, 2004.


NOTE 5 - Deferred Costs

The  components  of  deferred  costs and their  periods of  amortization  are as
follows:
<TABLE>
<CAPTION>

                                           March 31,
                                  --------------------------
                                     2004           2003
                                  -----------    -----------
<S>                               <C>            <C>
Financing expenses                $ 2,967,886    $ 2,962,815
Less:  Accumulated amortization    (1,988,501)    (1,821,322)
                                  -----------    -----------

                                  $   979,385    $ 1,141,493
                                  ===========    ===========
</TABLE>

                                      117
<PAGE>


                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31, 2004, 2003 and 2002


Financing  expenses are being amortized over the life of the related  mortgages,
ranging from 15 to 50 years, using a method approximating the interest method.

Amortization of deferred costs for the years ended March 31, 2004, 2003 and 2002
amounted to $167,179, $165,675 and $175,245, respectively.


NOTE 6 - Mortgage Notes Payable

The  mortgage   notes  are  payable  in  aggregate   monthly   installments   of
approximately  $450,000 including principal and interest with rates varying from
0% to 13.50% per annum and have  maturity  dates ranging from 2005 through 2042.
The  loans  are  collateralized  by the land  and  buildings  of the  subsidiary
partnerships,  the assignment of certain subsidiary partnerships' rents, leases,
and replacement reserves, and are without further recourse.

Annual principal  payment on the permanent debt  requirements for mortgage notes
payable for each of the next five fiscal years and thereafter are as follows:
<TABLE>
<CAPTION>

Fiscal Year Ending March 31,      Amount
----------------------------   -----------
<S>                            <C>
2005                           $ 1,129,517
2006                             1,223,569
2007                             2,019,853
2008                            19,929,553
2009                               864,923
Thereafter                      41,117,743
                               -----------

Total                          $66,285,158
                               ===========
</TABLE>

On August 7, 2002, Ogontz Hall refinanced its first mortgage payable to Citizens
Bank of  Pennsylvania.  The former  loan with  Sovereign  Bank with a balance of
$100,411, was paid off with proceeds from its new first mortgage in an amount of
$340,600 with an annual  interest  rate of 6.75%.  Interest is payable only from
inception  through  August 2003 and  afterward  monthly  payments  are due in an
amount of $2,590,  including  principal  and interest  through  August 2007.  On
December  31,  2001,   Ogontz  Hall   consolidated  its  support  mortgage  from
Pennsylvania  Housing  Finance  Agency  ("PHFA")  of  $284,592  into the support
mortgage  from PHFA  through  the  Housing  Opportunities  Make  Economic  Sense
("HOMES").  The new loan bears no interest and principal payments are to be made
from any excess of revenues over expenses until maturity in March 2017.

On March 27, 2002,  Pecan Creek  refinanced its  outstanding  mortgage.  The new
mortgage  in the amount of  $1,025,800  is payable  in monthly  installments  of
$6,859,  including principal and interest at the rate of 7.05% through March 27,
2032.


NOTE 7 - Related Party  Transactions and Transactions  with General Partners and
Affiliates

Freedom SLP L.P., an affiliate of the General Partners,  has either a .01% or 1%
interest, as a special limited partner, in each of the Local Partnerships.

The General  Partners and their  affiliates  and the Local General  Partners and
their   affiliates   perform   services  for  the   Partnership  and  the  Local
Partnerships, respectively. The costs incurred are as follows:

                                      118
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31, 2004, 2003 and 2002


a)  Due to Local General Partners and Affiliates

At March 31, 2004 and 2003, a majority of the  following  fees were  incurred in
connection  with the  development  of the property and have been included in the
basis of the building.

Due to Local General Partners and affiliates at March 31, 2004 and 2003 consists
of the following:
<TABLE>
<CAPTION>

                                      March 31,
                              -----------------------
                                 2004         2003
                              ----------   ----------
<S>                           <C>          <C>
Operating advances            $1,666,763   $1,730,281
Development fees               1,272,449    1,485,911
Operating deficit loans (i)      288,259      314,838
Long-term note payable            63,713       84,154
Management and other fees        631,371      410,265
                              ----------   ----------

                              $3,922,555   $4,025,449
                              ==========   ==========
</TABLE>

(i) Operating deficit loans consist of the following:
<TABLE>
<CAPTION>
                                    March 31,
                              -------------------
                                2004       2003
                              --------   --------
<S>                           <C>        <C>
Wilshire Park                 $191,775   $191,775
</TABLE>

This loan to fund operating deficits is unsecured,  non-interest  bearing and is
payable out of available surplus cash of the respective subsidiary  partnership,
or at the time of sale or refinancing.
<TABLE>
<CAPTION>
                                    March 31,
                              -------------------
                                2004       2003
                              --------   --------
<S>                           <C>        <C>
Parkside Townhomes            $ 87,035   $ 84,635
Ogontz Hall                      9,449     38,428
</TABLE>

These loans to fund operating deficits are unsecured,  non-interest  bearing and
are subordinate to the second mortgage.

                                      119
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31, 2004, 2003 and 2002


b)  Other Expenses

The costs incurred to related  parties for the years ended March 31, 2004,  2003
and 2002 were as follows:
<TABLE>
<CAPTION>
                                            Year Ended March 31,
                                    ------------------------------------
                                          2004         2003         2002
                                    ----------   ----------   ----------
<S>                                 <C>          <C>          <C>
Partnership management fees (a)     $  676,000   $  676,000   $  676,000
Expense reimbursement (b)              178,723      155,977      118,659
Local administrative fee (d)            53,000       53,000       53,000
                                    ----------   ----------   ----------
Total general and administrative-
  General Partners                     907,723      884,977      847,659
                                    ----------   ----------   ----------
Property management fees
  incurred to affiliates of the
  subsidiary partnerships'
  general partners (c)                 936,800      821,083      760,856
                                    ----------   ----------   ----------
Total general and administrative-
  related parties                   $1,844,523   $1,706,060   $1,608,515
                                    ==========   ==========   ==========
</TABLE>

(a) The General  Partners are entitled to receive a partnership  management fee,
after payment of all Partnership expenses,  which together with the annual local
administrative  fees  will not  exceed a maximum  of 0.5% per annum of  Invested
Assets (as defined in the Partnership Agreement),  for administering the affairs
of  the  Partnership.  Subject  to the  foregoing  limitation,  the  partnership
management  fee  will be  determined  by the  General  Partners  in  their  sole
discretion  based upon their  review of the  Partnership's  investments.  Unpaid
partnership  management fees for any year will be accrued  without  interest and
will be payable  from  working  capital  reserves or to the extent of  available
funds after the Partnership has made  distributions  to the Limited Partners and
BACs holders of sale or refinancing  proceeds  equal to their  original  capital
contributions  plus a 10% priority return thereon (to the extent not theretofore
paid out of Cash Flow).  Partnership  management  fees owed to General  Partners
amounting to approximately  $6,208,000 and $5,532,000 were accrued and unpaid as
of March 31, 2004 and 2003, respectively. Without the General Partners continued
accrual without  payment,  the Partnership will not be in a position to meet its
obligations.  The General  Partners have continued  allowing the accrual without
payment of these amounts,  but are under no obligation to continue to do so. The
Partnership is dependent upon the support of the General  Partner and certain of
its affiliates in order to meet its  obligations at the Partnership  level.  The
General  Partner and these  affiliates  have agreed to continue such support for
the foreseeable future.

(b) The  Partnership  reimburses the General  Partners and their  affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the  Partnership's  behalf.  The amount of reimbursement  from the
Partnership is limited by the provisions of the Partnership  Agreement.  Another
affiliate of the General Partners performs asset monitoring for the Partnership.
These   services   include  site  visits  and   evaluations  of  the  subsidiary
partnerships' performance.

(c) Property  management  fees incurred by subsidiary  partnerships  amounted to
$1,108,295,  $1,071,815 and $1,051,546 for the 2004, 2003 and 2002 Fiscal Years,
respectively.  Of these fees,  $936,800,  821,083 and $760,856  were incurred to
affiliates of the subsidiary partnerships.

(d) Freedom SLP L.P., a special limited partner of the subsidiary  partnerships,
is entitled to receive an annual local  administrative  fee of up to $2,500 from
each Local Partnership.

                                      120
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31, 2004, 2003 and 2002


NOTE 8 - Income Taxes

A reconciliation of the financial  statement net loss to the income tax loss for
the Partnership and its consolidated subsidiaries follows:
<TABLE>
<CAPTION>
                                                              Years Ended December 31,
                                                    -----------------------------------------
                                                       2003            2002           2001
                                                    -----------    -----------    -----------
<S>                                                 <C>            <C>            <C>
Financial statement
Net loss                                            $(3,754,964)   $(3,753,747)   $(3,751,170)

Difference  resulting from parent company having
  a different  fiscal year for income tax and
  financial reporting purposes                          (17,957)         4,268        (56,796)

Difference between  depreciation and amortization
  expense recorded for financial  statement and
  income tax reporting purposes                         386,864       (682,390)      (657,137)

Tax-exempt interest income                                  (25)           (39)           (86)

Other                                                    48,724      1,317,852       (146,329)
                                                    -----------    -----------    -----------

Net loss as shown on the Partnership's income tax
  returns                                           $(3,337,358)   $(3,114,056)   $(4,611,518)
                                                    ===========    ===========    ===========
</TABLE>

NOTE 9 - Commitments and Contingencies

Washington Brooklyn
-------------------
In or about  September  2003,  two  putative  mortgagees  commenced  a  mortgage
foreclosure  action in the Supreme Court of the State of New York,  Kings County
(the  "Court"),  entitled  150 Beach 120th  Street Inc. v.  Washington  Brooklyn
Limited  Partnership,  Index No. 35255/2003,  seeking to foreclose on an alleged
$100,000 loan and mortgage  against the real property (the "Apartment  Complex")
owned by Washington Brooklyn Limited Partnership ("Washington"). Apparently, the
former general partner of Washington,  BUFNY Houses of Brooklyn, Inc. ("BUFNY"),
allegedly  granted two mortgages in the amounts of $225,000 and $100,000 secured
by the Apartment  Complex.  Each of the foregoing  mortgages was granted without
the  knowledge of Freedom  SLP,  L.P.  (the  "Special  Limited  Partner") or the
Partnership  (collectively  the  "Freedom  LPs") or the  consent of the  Special
Limited Partner,  as required by Washington's  Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement").  The Freedom LPs believe that
BUFNY did not use the alleged loan proceeds for the benefit of Washington or the
Apartment Complex. For these and other reasons, the Freedom LPs contend that the
alleged mortgages are invalid.

In addition, BUFNY allegedly failed to comply with the terms of either mortgage,
which resulted in the holders of the alleged  $100,000  mortgage  commencing the
foreclosure  proceedings.  BUFNY did not appear in or  otherwise  respond to the
foreclosure  proceedings.  The holders of the alleged $225,000 mortgage have not
yet, to the knowledge of the Freedom LPs, commenced any foreclosure proceedings.

Shortly  after the Freedom LPs became  aware of these  foreclosure  proceedings,
their counsel  contacted  counsel for the plaintiffs and mortgagees in an effort
to learn more about the alleged  mortgages and to resolve the disputes  relating
to the mortgages.  When those efforts failed,  the Freedom LPs filed a motion to
intervene  in the  foreclosure  action  and for  leave to file a late  answer on

                                      121
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31, 2004, 2003 and 2002


behalf of themselves and Washington.  The Freedom LPs contend that the mortgages
are  invalid  and that  Washington  is not  liable  for  them or the  underlying
indebtedness. A hearing on the Freedom LPs' motion was held on June 16, 2004 and
the Court  reserved  ruling on that  motion,  which is now fully  submitted  and
pending a decision  by the Court.  The Court,  however,  has stayed all  further
proceedings in the foreclosure  action until it decides the Freedom LPs' motion.
If the Court were to deny the Freedom LPs motion or reject their defenses on the
merits to the  foreclosure  action,  it is possible that the  Apartment  Complex
might  be  foreclosed  upon and the  Partnership  might  lose  its  title to and
interests in the  Apartment  Complex.  However,  the final  outcome of this case
cannot be determined at this time.

In  addition,  due to BUFNY's  breach of  fiduciary  duties and  breaches of the
Partnership  Agreement,  the Special Limited Partner  exercised its rights under
the Partnership Agreement to remove BUFNY as Washington's general partner and to
substitute  itself as the new replacement  general partner,  effective April 26,
2004.

Other
-----

The  Partnership is subject to risks  incident to potential  losses arising from
the management and ownership of improved real estate.  The  Partnership can also
be affected by poor economic conditions  generally,  however no more than 24% of
the properties are located in any single state. There are also substantial risks
associated with owning properties receiving government  assistance,  for example
the possibility  that Congress may not  appropriate  funds to enable HUD to make
rental  assistance  payments.  HUD also restricts  annual cash  distributions to
partners  based on  operating  results and a  percentage  of the owners'  equity
contribution.  The  Partnership  cannot  sell  or  substantially  liquidate  its
investments  in  subsidiary  partnerships  during  the period  that the  subsidy
agreements are in existence,  without HUD's approval.  Furthermore there may not
be market demand for apartments at full market rents when the rental  assistance
contract expires.

Except as  described  above,  management  is not aware of any  trends or events,
commitments or uncertainties, which have not otherwise been disclosed, that will
or are likely to impact  liquidity in a material  way.  Management  believes the
only impact would be from laws that have not yet been adopted.  The portfolio is
diversified by the location of the  properties  around the United States so that
if one  area of the  country  is  experiencing  downturns  in the  economy,  the
remaining  properties  in the  portfolio  may  not  be  affected.  However,  the
geographic  diversification  of the portfolio may not protect  against a general
downturn in the national economy.

                                      122
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31, 2004, 2003 and 2002


NOTE 10 - Selected Quarterly Financial Data (Unaudited)
<TABLE>
<CAPTION>

                                                            Quarter Ended
                                   --------------------------------------------------------------
                                     June 30,       September 30,    December 31,       March 31,
OPERATIONS                             2003             2003             2003             2004
------------------------------     -----------      ------------     -----------      -----------
<S>                                <C>              <C>              <C>              <C>
Revenues                           $ 3,991,288      $ 4,037,962      $ 4,035,354      $ 4,308,997

Operating expense                   (5,057,470)      (4,973,610)      (4,881,673)      (5,252,772)
                                   -----------      -----------      -----------      -----------

Loss before minority
  interest                          (1,066,182)        (935,648)        (846,319)        (943,775)

Minority interest in
  loss of subsidiaries                  11,698            9,275            7,923            8,064
                                   -----------      -----------      -----------      -----------

Net loss                           $(1,054,484)     $  (926,373)     $  (838,396)     $  (935,711)
                                   ===========      ===========      ===========      ===========

Net loss per BAC                   $    (14.32)     $    (12.58)     $    (11.39)     $    (12.71)
                                   ===========      ===========      ===========      ===========

<CAPTION>

                                                            Quarter Ended
                                   --------------------------------------------------------------
                                     June 30,       September 30,    December 31,       March 31,
OPERATIONS                             2002             2002             2002             2003
------------------------------     -----------      ------------     -----------      -----------
<S>                                <C>              <C>              <C>              <C>


Revenues                           $ 3,801,174      $ 3,949,289      $ 3,921,013      $ 4,060,750

Operating expense                   (4,855,206)      (4,915,151)      (4,810,530)      (4,942,536)
                                   -----------      -----------      -----------      -----------

Loss before
  minority
  interest                          (1,054,032)        (965,862)        (889,517)        (881,786)

Minority interest in
  loss of subsidiaries                  10,814            9,219            9,468            7,949
                                   -----------      -----------      -----------      -----------

Net loss                           $(1,043,218)     $  (956,643)     $  (880,049)     $  (873,837)
                                   ===========      ===========      ===========      ===========

Net loss per BAC                   $    (14.17)     $    (12.99)     $    (11.95)     $    (11.87)
                                   ===========      ===========      ===========      ===========
</TABLE>


                                      123
<PAGE>

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

None

Item 9A.  Controls and Procedures

(a) EVALUATION OF DISCLOSURE  CONTROLS AND PROCEDURES.  The Principal  Executive
Officer and Principal  Financial Officer of Related Freedom  Associates L.P. and
Freedom G.P. Inc., the general  partners of the  Partnership,  has evaluated the
effectiveness of the Partnership's  disclosure  controls and procedures (as such
term is defined in Rules 13a-15(e) and 15d-15(e)  under the Securities  Exchange
Act of 1934, as amended  ("Exchange Act") as of the end of the period covered by
this report.  Based on such  evaluation,  such officer has concluded that, as of
the end of such period, the Partnership's disclosure controls and procedures are
effective.

(b) INTERNAL CONTROL OVER FINANCIAL  REPORTING.  There have not been any changes
in  Partnership's  internal  control over financial  reporting during the fiscal
year to  which  this  report  relates  that  have  materially  affected,  or are
reasonably likely to materially affect, the Partnership's  internal control over
financial reporting.

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.

The  Partnership  has no  directors  or executive  officers.  The  Partnership's
affairs are managed and  controlled  by the General  Partners.  On November  25,
1997, an affiliate of the Related General Partner purchased 100% of the stock of
the Freedom General Partner.  Prior to such purchase the Freedom General Partner
was an affiliate of Lehman Brothers.  The Partnership has not adopted a separate
code of ethics because the Partnership  has no directors or executive  officers.
However,  the parent  company of Related  Capital  Company,  which  controls the
General Partners, has adopted a code of ethics. See http://www.chartermac.com.

On November 17, 2003, CharterMac acquired Related Capital Company,  which is the
indirect parent of RCC Manager LLC, the sole  shareholder of the general partner
of the Related General Partner. Pursuant to the acquisition, CharterMac acquired
controlling  interests in the General Partners.  Alan P. Hirmes replaced Stephen
M. Ross as Director of the Related  General  Partner and also  replaced  Michael
Brenner as Director of the Freedom General Partner, each effective April 1, 2004
as a result of this acquisition. This acquisition did not affect the Partnership
or  its  day-to-day  operations,  as  the  majority  of  the  General  Partners'
management team remained unchanged.

Certain  information  concerning the directors and executive officers of each of
the General Partners is set forth below.

The Related General Partner
---------------------------

Related Freedom Associates Inc., ("RFAI") is the sole general partner of Related
Freedom Associates L.P.

Name                                        Position
----                                        --------
Alan P. Hirmes                              Director and President

Stuart J. Boesky                            Senior Vice President

Marc D. Schnitzer                           Vice President

Denise L. Kiley                             Vice President

Glenn F. Hopps                              Treasurer

Teresa Wicelinski                           Secretary

                                      124
<PAGE>

ALAN P.  HIRMES,  49, is the  Director  and  President  of the  Related  General
Partner.  Mr.  Hirmes has been a certified  public  accountant in New York since
1978.  Prior to joining Related Capital in October 1983, Mr. Hirmes was employed
by Weiner & Co., certified public  accountants.  Mr. Hirmes is also the Managing
Director of  Related.  Mr.  Hirmes  graduated  from  Hofstra  University  with a
Bachelor  of Arts  degree.  Mr.  Hirmes  also serves on the Board of Trustees of
CharterMac and American Mortgage Acceptance Company ("AMAC").

STUART J. BOESKY,  48,  practiced  real estate and tax law in New York City with
the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined
Related Capital. From 1983 to 1984, Mr. Boesky practiced law with the Boston law
firm of Kaye,  Fialkow,  Richard &  Rothstein  (which  subsequently  merged with
Strook & Strook & Lavan) and from 1978 to 1980 was a consultant  specializing in
real estate at the accounting firm of Laventhol & Horwath.  Mr. Boesky graduated
from  Michigan  State  University  with a Bachelor of Arts degree and from Wayne
State School of Law with a Juris  Doctor  degree.  He then  received a Master of
Laws degree in Taxation  from Boston  University  School of Law. Mr. Boesky also
serves on the Board of Trustees of CharterMac and AMAC.

MARC D. SCHNITZER,  43, is responsible both for financial restructurings of real
estate properties and directing Related's  acquisition of properties  generating
Housing Tax Credits. Mr. Schnitzer received a Masters of Business Administration
from The Wharton  School of the  University  of  Pennsylvania  in December  1987
before  joining  Related in January  1988.  From 1983 to January  1986, he was a
financial  analyst for the First Boston  Corporation in New York. Mr.  Schnitzer
graduated summa cum laude with a Bachelor of Science in Business  Administration
from the School of Management at Boston  University in May 1983.  Mr.  Schnitzer
also serves on the Board of Trustees of CharterMac.

DENISE L. KILEY,  44, is responsible  for overseeing the due diligence and asset
management   of   all   multifamily    residential    properties   invested   in
Related-sponsored  corporate, public and private equity and debt funds. Prior to
joining Related in 1990, Ms. Kiley had experience acquiring, financing and asset
managing multifamily residential  properties.  From 1981 through 1985 she was an
auditor  with  PricewaterhouseCoopers.  Ms. Kiley holds a Bachelor of Science in
Accounting from Boston  College.  Ms. Kiley also serves on the Board of Trustees
of CharterMac.

GLENN F. HOPPS, 41, joined Related in December, 1990, and prior to that date was
employed  by Marks  Shron &  Company  and  Weissbarth,  Altman  and  Michaelson,
certified public accountants. Mr. Hopps graduated from New York State University
at Albany with a Bachelor of Science Degree in Accounting.

TERESA  WICELINSKI,  38, joined Related in June 1992, and prior to that date was
employed  by  Friedman,  Alpren  &  Green,  certified  public  accountants.  Ms.
Wicelinski  graduated  from Pace  University  with a Bachelor  of Arts Degree in
Accounting.

The Freedom General Partner
---------------------------

Name                                Position
----                                --------

Alan P. Hirmes                      Director and President

Stuart J. Boesky                    Executive Vice President

Marc D. Schnitzer                   Vice President

Denise L. Kiley                     Vice President

Glenn F. Hopps                      Treasurer

Teresa Wicelinski                   Secretary

                                      125
<PAGE>

Biographical  information  with respect to Messrs.  Hirmes,  Boesky,  Schnitzer,
Hopps, Ms. Kiley and Ms. Wicelinski is set forth above.

Item 11.  Executive Compensation.

The  Partnership has no officers or directors.  The Partnership  does not pay or
accrue  any fees,  salaries  or other  forms of  compensation  to  directors  or
officers of the General Partners for their services. However, under the terms of
the  Partnership  Agreement  , the General  Partners  and their  affiliates  are
entitled  to receive  compensation  from the  Partnership  in  consideration  of
certain services rendered to the Partnership by such parties.  In addition,  the
General  Partners  collectively  hold a 1% interest in all  profits,  losses and
distributions attributable to operations and a subordinated 15% interest in such
items attributable to sales and refinancings.  Certain directors and officers of
the General  Partners  receive  compensation  from the General Partner and their
affiliates  for services  performed for various  affiliated  entities  which may
include services  performed for the Partnership.  The maximum annual partnership
management fee paid to the General Partner is 0.5% of invested assets.  See Note
7 to the Financial  Statements in Item 8 above, which is incorporated  herein by
reference.

Tabular information concerning salaries, bonuses and other types of compensation
payable to executive  officers has not been included in this annual  report.  As
noted  above,  the  Partnership  has  no  executive  officers.   The  levels  of
compensation  payable to the General Partners and/or their affiliates is limited
by the terms of the Partnership  Agreement and may not be increased therefrom on
a discretionary basis.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.
<TABLE>
<CAPTION>

                       Name and address of    Amount and Nature of         Percentage
Title of Class         Beneficial Ownership   Beneficial Ownership          of Class
--------------         --------------------   --------------------         ----------
<S>                    <C>                    <C>                             <C>
General Partnership    Related Freedom        $1,000 capital contribution     50%
Interest in the        Associates L.P.        -directly owned
Partnership            625 Madison Avenue
                       New York, NY 10022

General Partnership    Freedom GP Inc.        $1,000 capital contribution     50%
Interest in the        625 Madison Avenue     -directly owned
Partnership            New York, NY 10022
</TABLE>

Freedom SLP L.P., a limited  partnership  whose general partners are the General
Partners of the  Partnership  and which acts as the special  limited  partner of
each  Local  Partnership,  has  either  a .01%  or 1%  interest  in  each  Local
Partnership.

Except as set forth below, no person (other than the Assignor  Limited  Partner)
was  known by the  Partnership  to be the  beneficial  owner of more  than  five
percent of the Limited Partnership Interests and/or BACs and neither the General
Partners  nor any director or officer of the General  Partners  owns any Limited
Partnership Interests or BACs.
<TABLE>
<CAPTION>
                                                  Amount and Nature of         Percentage
Name of Beneficial Owner (1)                      Beneficial Ownership          of Class
--------------------------------------------      --------------------         ----------
<S>                                               <C>                            <C>
Lehigh Tax Credit Partners, Inc.                  8,375.66(2)(3)                 11.5%
J. Michael Fried                                  8,375.66(2)(3)(4)              11.5%
Alan P. Hirmes                                    8,375.66(2)(3)(4)              11.5%
Stuart J. Boesky                                  8,375.66(2)(3)(4)              11.5%
Marc D. Schnitzer                                     -                            -
Denise L. Kiley                                       -                            -
Glenn F. Hopps                                        -                            -
All directors and executive officers of RFAI      8,375.66(2)(3)(4)              11.5%
and The Freedom General Partner as a
group (seven persons)
</TABLE>

                                      126
<PAGE>

(1) The address for each of the persons in the table is 625 Madison Avenue,  New
York, New York 10022.

(2) As set forth in  schedule  13D filed by the  Partnership,  Lehigh Tax Credit
L.L.C. (Lehigh) and Lehigh Tax Credit Partners,  Inc. (the "Managing Member") on
October 24, 1997 with the Securities and Exchange  Commission (the "Commission")
and pursuant to a letter  agreement dated August 26, 1997 among the Partnership,
Lehigh and Related Freedom Associates L.P. ("RFA") (the "Standstill Agreement"),
Lehigh agreed that, prior to August 26, 2007 (the "Standstill Expiration Date"),
it will not and it will cause certain  affiliates  (including  Lehigh Tax Credit
Partners II, LLC ("Lehigh II")), not to (i) acquire,  attempt to acquire or make
a proposal to acquire,  directly or indirectly,  more than 45%  (including  BACs
acquired through all other means) of the outstanding  BACs, (ii) seek to propose
to enter into,  directly or  indirectly,  any  merger,  consolidation,  business
combination,  sale or acquisition of assets,  liquidation,  dissolution or other
similar  transaction  involving  the  Partnership,  (iii)  make,  or in any  way
participate,  directly or  indirectly,  in any  "solicitation"  of  "proxies" or
"consents"  (as such  terms are used in the proxy  rules of the  Securities  and
Exchange  Commission (the  "Commission"))  to vote any voting  securities of the
Partnership,  (iv) form, join or otherwise  participate in a "group" (within the
meaning of Section 13(d)(3) of the Act) with respect to any voting securities of
the Partnership,  except that those affiliates bound by the Standstill Agreement
will not be deemed to have violated it and formed a "group"  solely by acting in
accordance with the Standstill  Agreement,  (v) disclose in writing to any third
party any  intention,  plan or  arrangement  inconsistent  with the terms of the
Standstill  Agreement,  or (vi) loan money to,  advise,  assist or encourage any
person  in  connection  with  any  action  inconsistent  with  the  terms of the
Standstill  Agreement.  In  addition,  Lehigh  agreed that until the  Standstill
Expiration  Date it will not sell any BACs  acquired  by it unless  the buyer of
such BACs agrees to be bound by the  Standstill  Agreement;  provided,  however,
Lehigh  may make  transfers  in the  secondary  market  to any  purchaser  which
represents  that  following such sale it will not own three (3%) percent or more
of the BACs outstanding.  By the terms of the Standstill Agreement,  Lehigh also
agreed to vote its BACs in the same  manner as a  majority  of all  voting  BACs
holders; provided, however, Lehigh is entitled to vote its BACs as it determines
with  regard to any  proposal  (i) to remove  RFA as a  general  partner  of the
Partnership or (ii) concerning the reduction of any fees, profits, distributions
or allocations for the benefit of RFA or its affiliates.

(3) As of May 21, 2004,  Lehigh held  4,192.83  BACs and Lehigh II held 4,182.83
BACs which constitutes approximately 11.5% of the outstanding BACs owned.

(4) Each such party serves as a director and  executive  officer of the Managing
Member and owns an equity  interest  therein,  except J. Michael  Fried who owns
only an economic interest.

Item 13.  Certain Relationships and Related Transactions.

The  Partnership  has and will continue to have certain  relationships  with the
General  Partners  and  their  affiliates,  as  discussed  in Item 11  which  is
incorporated  herein by reference  thereto.  However,  there have been no direct
financial transactions between the Partnership and the directors and officers of
the General Partners.

                                      127
<PAGE>

Item 14.  Principal Accountant Fees and Services

Audit Fees
----------
The aggregate fees billed by Friedman,  Alpren & Green, LLP and their respective
affiliates (collectively, "Friedman") for professional services rendered for the
audit of our annual  financial  statements for the years ended December 31, 2003
and  2002  and for the  reviews  of the  financial  statements  included  in the
Registrant's  Quarterly  Reports on Form 10-Q for those  years were  $52,000 and
$47,200, respectively.

Audit Related Fees
------------------
None.

Tax Fees
--------
The aggregate fees billed by Weiser LLP (formerly, Rubin and Katz LLP) and their
respective  affiliates   (collectively,   "Weiser")  for  professional  services
rendered  for the  preparation  of our annual tax  returns  for the years  ended
December 31, 2003 and 2002 were $8,300 and $8,000, respectively.

All Other Fees
--------------
None.

The Partnership is not required to have, and does not have, a stand-alone  audit
committee.


                                       128

<PAGE>


                                     PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

                                                                      Sequential
                                                                         Page
                                                                      ----------

(a) 1.   Financial Statements
         --------------------
         Reports of Independent Registered Public Accounting Firms        16

         Consolidated Balance Sheets as of March 31, 2004 and 2003       109

         Consolidated Statements of Operations for the years ended
         March 31, 2004, 2003 and 2002                                   110

         Consolidated  Statements of Changes in Partners' Capital
         (Deficit) for the years ended March 31, 2004,  2003 and
         2002                                                            111

         Consolidated Statements of Cash Flows for the years ended
         March 31, 2004, 2003 and 2002                                   112

         Notes to Consolidated Financial Statements                      114

(a) 2.   Financial Statement Schedules
         -----------------------------

         Report of Independent Registered Public Accounting Firm         137

         Schedule I - Condensed Financial Information of Registrant      138

         Schedule III - Real Estate and Accumulated Depreciation         141

         All other  schedules have been omitted because they are not
         required or because the required information is contained in
         the  financial statements or notes thereto.

(a) 3.   Exhibits
         --------

(3A)     The  Partnership's  Amended and  Restated  Agreement of
         Limited Partnership,  incorporated herein as an exhibit by
         reference to Exhibit A  to  the  Partnership's  Prospectus,
         dated February 9, 1990, as supplemented  by  supplements
         thereto dated  December 7, 1990, May 10, 1991,  July  10,
         1991  and July  23,  1991  (as so  supplemented,  the
         "Prospectus"),  filed with the  Securities  and Exchange
         Commission on July  30,  1992,  as  part of  Post-Effective
         Amendment  No.  6 to the Partnership's  registration
         statement on Form S-11,  File No. 33-30859 ("Post-Effective
         Amendment No. 6")

(3B)     The  Partnership's  Certificate of Limited  Partnership,
         as filed with Secretary  of State of the State of Delaware
         on  August  28,  1989, incorporated  herein as an exhibit by
         reference to Exhibit (3C) to the Partnership's  registration
         statement on Form S-11, File No. 33-30859, as filed with the
         Securities  and Exchange  Commission on September 1, 1989
         (the "Initial S-11")

(10A)    Form of Subscription  Agreement,  incorporated  herein as an
         exhibit by reference  to  Exhibit  B  to  the  Prospectus  as
         filed  as  part of Post-Effective Amendment No. 6

(10B)    Form of Purchase and Sale  Agreement  pertaining  to the
         Partnership's acquisition of Local Partnership  Interests,
         incorporated herein as an exhibit by reference to Exhibit
         (10C) to the Initial S-11

                                      129
<PAGE>


Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
         (continued)

                                                                      Sequential
                                                                         Page
                                                                      ----------

(10C)    Form of Amended and Restated Agreement of Limited
         Partnership of Local Partnerships, incorporated herein
         as an exhibit by reference to Exhibit (10D)  to
         Pre-Effective Amendment No. 1 to the  Partnership's
         registration  statement on Form S-11, File No. 33-30859,
         as filed with the Securities and Exchange Commission on
         December 21, 1989

(21)     Subsidiaries of the Registrant                                  131

(31.1)   Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a).     134

(32.1)   Certification  Pursuant to Rule 13a-14(b) or Rule 15d-14(b)
         and Section  1350 of Title 18 of the United  States
         Coded (18 U.S.C. 1350).                                         136

(b)      Reports on Form 8-K
         -------------------

         No reports on Form 8-K were filed during the year ended March 31, 2004.

                                      130
<PAGE>

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
         (continued)

                                                                  Jurisdiction
(c)      Subsidiaries of the Registrant (Exhibit 21)             of Organization
         ------------------------------                          ---------------

         Parkside Townhomes Associates                                 PA
         Twin Trees Apartments                                         UT
         Bennion Park Apartments (Mulberry)                            UT
         Hunters Chase Apartments                                      AL
         Wilshire Park Apartments                                      AL
         Bethel Park Apartments                                        OH
         Zebulon Park Apartments                                       OH
         Tivoli Place Apartments                                       TN
         Northwood  Apartments                                         FL
         Oxford Trace Apartments                                       SC
         Ivanhoe Apartments Limited Partnership                        UT
         Washington Brooklyn Limited Partnership                       NY
         C.H. Development Group Associates (Manhattan B)               NY
         Davidson Court Limited Partnership                            NY
         Magnolia Mews Limited Partnership                             PA
         The Oaks Village Limited Partnership                          NC
         Greenfield Village Limited Partnership                        NC
         CLM Equities Limited Partnership (Morris Avenue)              NY
         Victoria Manor Associates                                     CA
         Ogontz Hall Investors                                         PA
         Eagle Ridge Limited Partnership                               WI
         Nelson Anderson Affordable Housing Limited Partnership        NY
         Conifer Irondequoit Associates (Abraham Lincoln)              NY
         Middletown Associates (Wilson Street)                         PA
         Lauderdale Lakes Associates, Ltd.                             FL
         Flipper Temple Associates Limited Partnership                 GA
         220 Cooper Street Associates Limited Partnership              NJ
         Pecan Creek                                                   OK
         363 Grand Vendome Associates Limited Partnership              NY
         New Augusta Ltd. (Rainer Villas)                              AL
         Pine Shadow Apartments                                        MS
         Windsor Place Apartments                                      AL
         Brookwood Apartments, Ltd.                                    AL
         Heflin Hills Apartments, Ltd.                                 AL
         Shadowood Apts., Ltd.                                         AL
         Brittany Associates, Ltd.                                     MS
         Hidden Valley Apartments                                      AL
         Westbrook Square Limited Partnership                          MS
         Warsaw Elderly Housing Ltd. (Royal Pines Apts.)               KY
         West Hill Square Apts., Ltd.                                  AL
         Elmwood Associates                                            MS
         Harmony Gate Associates                                       CA

(d)      Not Applicable
         --------------


                                      131
<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.


                          FREEDOM TAX CREDIT PLUS L.P.


                                    By: RELATED FREEDOM ASSOCIATES L.P.
                                        a general partner


                                        By: RELATED FREEDOM ASSOCIATES INC.,
                                            general partner

Date:  June 24, 2004

                                        By: /s/ Alan P. Hirmes
                                            ------------------
                                            Alan. P. Hirmes,
                                            Director and President



                                    By: FREEDOM GP INC.
                                        a general partner

Date:  June 24, 2004

                                        By: /s/ Alan P. Hirmes
                                            ------------------
                                            Alan. P. Hirmes,
                                            Director and President



<PAGE>


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934, the report has been signed below by the following persons on behalf
by the registrant and in the capacities and on the dates indicated:



        Signature                           Title                      Date
---------------------------    ---------------------------------   -------------




                               Director and President (Principal
                               Executive and Financial
/s/ Alan P. Hirmes             Officer) of Related Freedom         June 24, 2004
------------------             Associates, Inc. and Freedom        -------------
Alan P. Hirmes                 GP Inc.





/s/ Glenn F. Hopps             Treasurer (Principal Accounting
------------------             Officer) of Related Freedom
Glenn F. Hopps                 Associates, Inc.                    June 24, 2004
                                                                   -------------




<PAGE>

                                                                    Exhibit 31.1



                         CERTIFICATION PURSUANT TO RULE
                           13a-14(a) OR RULE 15d-14(a)


I, Alan P. Hirmes,  Principal  Executive Officer and Principal Financial Officer
of Related Freedom Associates L.P. and Freedom GP Inc. (the "General Partners"),
each of which is a  general  partner  of  Freedom  Tax  Credit  Plus  L.P.  (the
"Partnership"), hereby certify that:

     1.  I have  reviewed  this annual  report on Form 10-K for the period ended
         March 31, 2004 of the Partnership;

     2.  Based on my  knowledge,  this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         in order to make the  statements  made,  in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this annual report;

     3.  Based on my knowledge,  the financial  statements,  and other financial
         information  included in this annual  report,  fairly  present,  in all
         material  respects the financial  condition,  results of operations and
         cash flows of the Partnership as of, and for, the periods  presented in
         this annual report;

     4.  I am responsible for establishing and maintaining  disclosure  controls
         and  procedures  (as  defined  in  Exchange  Act  Rules  13a-15(e)  and
         15d-15(e)) and internal control over financial reporting (as defined in
         Exchange Act Rules  13a-15(f) and 15d-15(f)) for the  Partnership and I
         have:

         a) designed  such  disclosure  controls and  procedures  to ensure that
         material  information  relating  to  the  Partnership,   including  its
         consolidated  subsidiaries,  is made known to me by others within those
         entities,  particularly  during the period in which this annual  report
         was being prepared;

         b) designed such internal control over financial  reporting,  or caused
         such internal control over financial  reporting to be designed under my
         supervision,  to provide reasonable assurance regarding the reliability
         of financial reporting and the preparation of financial  statements for
         external  purposes in accordance  with  generally  accepted  accounting
         principles; and

         c) evaluated the effectiveness of the Partnership's disclosure controls
         and procedures and presented in this report our  conclusions  about the
         effectiveness  of the disclosure  controls and procedures as of the end
         of the period  covered by this annual report based on such  evaluation;
         and

         d)  disclosed  in this  annual  report any change in the  Partnership's
         internal  control over  financial  reporting  that occurred  during the
         period  ending  March 31,  2004  that has  materially  affected,  or is
         reasonably  likely to materially  affect,  the  Partnership's  internal
         control over financial reporting; and



<PAGE>


     5.  I have  disclosed,  based  on my most  recent  evaluation  of  internal
         control over financial reporting,  to the Partnership's auditors and to
         the boards of directors of the General Partners:

         a) all significant  deficiencies and material  weaknesses in the design
         or operation of internal  controls over financial  reporting  which are
         reasonably  likely to  adversely  affect the  Partnership's  ability to
         record, process, summarize and report financial information; and

         b) any fraud,  whether or not  material,  that  involves  management or
         other  employees  who  have a  significant  role  in the  Partnership's
         internal controls over financial reporting.



     Date: June 24, 2004
           -------------

                                          By: /s/ Alan P. Hirmes
                                              ------------------
                                              Alan P. Hirmes
                                              Principal Executive Officer and
                                              Principal Financial Officer

<PAGE>
                                                                    Exhibit 32.1



                             CERTIFICATION PURSUANT
                       TO RULE 13a-14(b) OR RULE 15d-14(b)
                          AND SECTION 1350 OF TITLE 18
                   OF THE UNITED STATES CODE (18 U.S.C. 1350)


In  connection  with the Annual  Report of Freedom  Tax  Credit  Plus L.P.  (the
"Partnership")  on Form 10-K for the period  ending March 31, 2004 as filed with
the  Securities  and  Exchange  Commission  ("SEC")  on  the  date  hereof  (the
"Report"),  I,  Alan  P.  Hirmes,  Principal  Executive  Officer  and  Principal
Financial  Officer of Related Freedom  Associates L.P. and Freedom GP Inc., each
of which is the  general  partner of the  Partnership,  certify,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that:


       (1) The Report fully complies with the  requirements  of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and


       (2) The  information  contained  in the Report  fairly  presents,  in all
material  respects,  the  financial  condition  and result of  operations of the
Partnership.

A signed  original of this  written  statement  required by Section 906 has been
provided  to the  Partnership  and  will  be  retained  by the  Partnership  and
furnished to the SEC or its staff upon request.



By: /s/ Alan P. Hirmes
    ------------------
    Alan P. Hirmes
    Principal Executive Officer and Principal Financial Officer
    June 24, 2004


<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------
                        ON FINANCIAL STATEMENT SCHEDULES
                        --------------------------------



TO THE PARTNERS OF
FREEDOM TAX CREDIT PLUS L.P. AND SUBSIDIARIES


In connection with our audit of the consolidated financial statements of FREEDOM
TAX CREDIT PLUS L.P. AND SUBSIDIARIES  included in the Form 10-K as presented in
our opinion  dated May 17, 2004,  which is based in part on the reports of other
auditors,  we have also audited  supporting  Schedule I as of March 31, 2004 and
2003 and for the years  ended 2004 and 2003,  and  Schedule  III as of March 31,
2004 and 2003 and for the years ended March 31, 2004 and 2003.  In our  opinion,
based on our  audits  and the  reports of the other  auditors,  these  schedules
present fairly, when read in conjunction with the related financial  statements,
the financial data required to be set forth therein.






/s/ Friedman, Alpren & Green LLP
New York, New York
May 17, 2004, except for the information under the heading "Washington Brooklyn"
in Note 9 to the financial statements, as to which the date is June 16, 2004.


                                      137
<PAGE>


                          FREEDOM TAX CREDIT PLUS L.P.
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT



Summarized   condensed  financial   information  of  registrant  (not  including
consolidated subsidiary partnerships)



                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                     ASSETS

                                                                    March 31,
                                                            -------------------------
                                                                2004          2003
                                                            -----------   -----------
<S>                                                         <C>           <C>
Cash and cash equivalents                                   $    18,980   $    45,019
Investment in subsidiary partnerships,
  carried on an equity basis                                  9,557,394    12,382,543
                                                            -----------   -----------

Total assets                                                $ 9,576,374   $12,427,562
                                                            ===========   ===========


                        LIABILITIES AND PARTNERS' CAPITAL


Due to general partner and affiliates                       $ 7,430,649   $ 6,530,020
Accounts payable and other liabilities                           44,916        45,307
                                                            -----------   -----------

Total liabilities                                             7,475,565     6,575,327
                                                            -----------   -----------

Partners' capital                                             2,100,809     5,852,235
                                                            -----------   -----------

Total liabilities and partners' capital                     $ 9,576,374   $12,427,562
                                                            ===========   ===========
</TABLE>


                                      138
<PAGE>


                          FREEDOM TAX CREDIT PLUS L.P.
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT



                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                         Year Ended March 31,
                                              -----------------------------------------
                                                  2004           2003           2002
                                              -----------    -----------    -----------
<S>                                           <C>            <C>            <C>
Income

Other income                                  $    35,374    $       237    $    10,245
                                              -----------    -----------    -----------


Expenses


Equity in losses of subsidiary partnerships     2,813,143      2,808,962      2,839,620
General and administrative                         69,472         60,045         74,136
General and administrative-related parties        907,723        884,977        847,659
                                              -----------    -----------    -----------

Total Expenses                                  3,790,338      3,753,984      3,761,415
                                              -----------    -----------    -----------

Net loss                                      $(3,754,964)   $(3,753,747)   $(3,751,170)
                                              ===========    ===========    ===========
</TABLE>

                                      139
<PAGE>


                          FREEDOM TAX CREDIT PLUS L.P.
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
<TABLE>
<CAPTION>
                       CONDENSED STATEMENTS OF CASH FLOWS


                                                           Year Ended March 31,
                                                -----------------------------------------
                                                    2004           2003           2002
                                                -----------    -----------    -----------
<S>                                             <C>            <C>            <C>
Net loss                                        $(3,751,426)   $(3,753,747)   $(3,751,170)
                                                -----------    -----------    -----------

Adjustments to reconcile net loss to net cash
  used in operating activities:

  Equity in losses of subsidiary partnerships     2,809,605      2,808,962      2,839,620

  Increase (decrease) in liabilities:

  Due to general partner and affiliates             900,629        920,768        894,743
  Accounts payable and other liabilities               (391)        (6,792)        (4,501)
                                                -----------    -----------    -----------

  Total adjustments                               3,709,843      3,722,938      3,729,862
                                                -----------    -----------    -----------

Net cash used in operating activities               (41,583)       (30,809)       (21,308)
                                                -----------    -----------    -----------

Cash flows from investing activities:

Distributions from subsidiaries                      15,544         54,651          3,635
                                                -----------    -----------    -----------

Net (decrease) increase in cash and
  cash equivalents                                  (26,039)        23,842        (17,673)

Cash and cash equivalents, beginning of year         45,019         21,177         38,850
                                                -----------    -----------    -----------

Cash and cash equivalents, end of year          $    18,980    $    45,019    $    21,177
                                                ===========    ===========    ===========
</TABLE>

                                      140
<PAGE>

                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                 MARCH 31, 2004
<TABLE>
<CAPTION>

                                                          Initial Cost to Partnership              Cost
                                                       --------------------------------         Capitalized
                                                                           Buildings and       Subsequent to
Description                        Encumbrances            Land            Improvements         Acquisition
------------                       ------------        ------------        ------------        ------------
<S>                                <C>                 <C>                 <C>                 <C>
Properties:

Parkside Townhouses
  York, PA                         $  1,560,395        $    263,231        $  4,439,564        $     51,289
Twin Trees
  Layton, UT                          1,097,499             112,401           2,668,179             214,800
Bennion (Mulberry)
  Taylorsville, UT                    2,089,936             258,000           4,934,447             749,899
Hunters Chase
  Madison, AL                         2,406,317             411,100           5,616,330          (1,443,915)
Bethel Park
  Bethel, OH                          1,842,604             141,320           5,365,882             426,559
Zebulon Park
  Owensville, OH                      1,549,297             165,000           4,187,880             379,894
Tivoli Place
  Murphreesboro, TN                   1,476,746             267,500           4,146,759             361,104
Northwood
  Jacksonville, FL                    2,667,080             494,900           6,630,321             513,215
Oxford Trace
  Aiken, SC                             689,713             162,000           1,725,512            (601,668)
Wilshire
  Huntsville, AL                      1,649,943             178,497           4,014,281            (832,126)
Ivanhoe
  Salt Lake City, UT                    401,287              41,000           1,136,915              33,554
Washington Avenue
  Brooklyn, NY                                0              42,485           2,843,351              73,904
C.H. Development
  (Manhattan B)
  New York, NY                        1,418,874                   3           3,294,688              46,902
Davidson Court
  Staten Island, NY                           0              96,892             773,052              37,064
Magnolia Mews
  Philadelphia, PA                    1,610,309             200,000             668,007           2,361,024
Oaks Village
  Whiteville, NC                      1,451,077              63,548           1,799,849             194,262
Greenfield Village
  Dunn, NC                            1,459,297              78,296           1,806,126             159,208
Morris Avenue
  (CLM Equities)
  Bronx, NY                           2,254,361                   2           4,767,049             384,304
Victoria Manor
  Riverside, CA                       2,228,145             615,000           5,340,962            (153,198)



<CAPTION>

                                  Purchase Price         Gross Amount at which Carried at Close of Period
                                  Adjustments(B)       ----------------------------------------------------
                                   Buildings and                           Buildings and
Description                        Improvements            Land            Improvements           Total(A)
------------                       ------------        ------------        ------------        ------------
<S>                                <C>                 <C>                 <C>                 <C>
Properties:

Parkside Townhouses
  York, PA                         $          0        $    265,796        $  4,488,288        $  4,754,084
Twin Trees
  Layton, UT                            (47,642)            115,125           2,832,613           2,947,738
Bennion (Mulberry)
  Taylorsville, UT                      (22,842)            260,565           5,658,939           5,919,504
Hunters Chase
  Madison, AL                          (713,028)            413,665           3,456,822           3,870,487
Bethel Park
  Bethel, OH                           (846,229)            143,885           4,943,647           5,087,532
Zebulon Park
  Owensville, OH                       (542,936)            167,565           4,022,273           4,189,838
Tivoli Place
  Murphreesboro, TN                    (207,625)            270,065           4,297,673           4,567,738
Northwood
  Jacksonville, FL                     (294,886)            497,465           6,846,085           7,343,550
Oxford Trace
  Aiken, SC                            (161,049)            164,564             960,231           1,124,795
Wilshire
  Huntsville, AL                       (432,405)            181,060           2,747,187           2,928,247
Ivanhoe
  Salt Lake City, UT                          0              42,677           1,168,792           1,211,469
Washington Avenue
  Brooklyn, NY                                0              44,162           2,915,578           2,959,740
C.H. Development
  (Manhattan B)
  New York, NY                                0               1,680           3,339,913           3,341,593
Davidson Court
  Staten Island, NY                           0              98,569             808,439             907,008
Magnolia Mews
  Philadelphia, PA                            0             201,677           3,027,354           3,229,031
Oaks Village
  Whiteville, NC                              0              65,225           1,992,434           2,057,659
Greenfield Village
  Dunn, NC                                    0              79,973           1,963,657           2,043,630
Morris Avenue
  (CLM Equities)
  Bronx, NY                                   0               1,679           5,149,676           5,151,355
Victoria Manor
  Riverside, CA                               0             616,677           5,186,087           5,802,764



<CAPTION>
                                                                                      Life on which
                                                                                     Depreciation in
                                                        Year of                       Latest Income
                                   Accumulated       Construction/      Date          Statements are
Description                        Depreciation       Renovation      Acquired        Computed(C)(D)
------------                       ------------       ----------     ----------       --------------
<S>                                <C>                   <C>         <C>                   <C>
Properties:

Parkside Townhouses
  York, PA                         $  2,158,496          1989        Sept. 1990            27.5
Twin Trees
  Layton, UT                          1,453,002          1989        Oct. 1990             27.5
Bennion (Mulberry)
  Taylorsville, UT                    2,957,728          1989        Oct. 1990             27.5
Hunters Chase
  Madison, AL                         2,453,135          1989        Oct. 1990             27.5
Bethel Park
  Bethel, OH                          2,719,404          1989        Oct. 1990             27.5
Zebulon Park
  Owensville, OH                      2,149,962          1989        Oct. 1990             27.5
Tivoli Place
  Murphreesboro, TN                   2,267,682          1989        Oct. 1990             27.5
Northwood
  Jacksonville, FL                    3,586,450          1989        Oct. 1990             27.5
Oxford Trace
  Aiken, SC                             794,846          1989        Oct. 1990             27.5
Wilshire
  Huntsville, AL                      1,696,474          1989        Oct. 1990             27.5
Ivanhoe
  Salt Lake City, UT                    517,083          1991        Jan. 1991             27.5
Washington Avenue
  Brooklyn, NY                        1,222,243          1991        Jan. 1991             27.5
C.H. Development
  (Manhattan B)
  New York, NY                        1,778,725          1991        Jan. 1991             27.5
Davidson Court
  Staten Island, NY                     314,038          1991        Mar. 1991             27.5
Magnolia Mews
  Philadelphia, PA                    1,311,305          1991        Mar. 1991             27.5
Oaks Village
  Whiteville, NC                        949,526          1991        Mar. 1991             27.5
Greenfield Village
  Dunn, NC                              929,437          1991        Mar. 1991             27.5
Morris Avenue
  (CLM Equities)
  Bronx, NY                           2,295,182          1991        Apr. 1991             27.5
Victoria Manor
  Riverside, CA                       2,357,649          1991        Apr. 1991             27.5
</TABLE>



                                      141
<PAGE>


                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                 MARCH 31, 2004
<TABLE>
<CAPTION>



                                                          Initial Cost to Partnership              Cost
                                                       --------------------------------         Capitalized
                                                                           Buildings and       Subsequent to
Description                        Encumbrances            Land            Improvements         Acquisition
------------                       ------------        ------------        ------------        ------------
<S>                                <C>                 <C>                 <C>                 <C>
Ogontz Hallz
  Philadelphia, PA                    2,193,162                   0             328,846           3,426,133
Eagle Ridge
  Stoughton, WI                       1,533,001             321,594           2,627,385             152,581
Nelson Anderson
  Bronx, NY                           3,352,242                   2           6,524,096             236,374
Conifer Irondequoit
  (Abraham Lincoln)
  Irondequoit, NY                     2,772,500              20,000           5,407,108              96,415
Wilson Street Apts
  (Middletown)3,434,674
  Middletown, PA                      1,673,496              38,449                   0           3,434,674
Lauderdale Lakes
  Lauderdale Lakes, FL                4,805,084             873,973           3,976,744           5,777,145
Flipper Temple
  Atlanta, GA                         2,508,807              70,519           4,907,110             699,720
220 Cooper Street
  Camden, NJ                            940,479              41,000                   0           3,669,791
Vendome
  Brooklyn, NY                        2,590,330              12,000           4,867,584             220,536
Pecan Creek
  Tulsa, OK                           1,008,186              50,000           1,484,923             232,054
New Augusta Ltd.
  (Rainer Villas)
  New Augusta, AL                       706,469              15,000             939,681             111,779
Pine Shadow Apts
  Waveland, MS                        1,620,554              74,550           2,117,989             176,261
Windsor Place Apts
  Wedowee, AL                           755,322              40,000             904,888              53,111
Brookwood Apts
  Foley, AL                           1,250,128              68,675           1,517,190              78,692
Heflin Hills Apts
  Heflin, AL                            733,159              50,000             841,300              45,804
Shadowood Apts
  Stevenson, AL                         735,995              27,000             898,800              14,471
Brittany Apartments
  DeKalb, MS                            679,879              20,000             843,592              41,031
Hidden Valley Apts
  Brewton, AL                         1,220,129              68,000           1,637,840              76,019
Westbrook Square L.P.
  Carthage, MS                        1,013,639              40,000           1,254,957              44,921
Warsaw Elderly Housing Ltd.
  Warsaw, KY                          1,123,628              98,819           1,333,606              17,310
West Hill Square Apts. Ltd.
  Gordo, AL                             759,126              60,000             954,020              46,245


<CAPTION>



                                  Purchase Price          Gross Amount at which Carried at Close of Period
                                  Adjustments(B)        ----------------------------------------------------
                                   Buildings and                            Buildings and
Description                        Improvements             Land            Improvements           Total(A)
------------                       ------------         ------------        ------------        ------------
<S>                                <C>                  <C>                 <C>                 <C>
Ogontz Hallz
  Philadelphia, PA                            0                1,677           3,753,302           3,754,979
Eagle Ridge
  Stoughton, WI                               0              323,271           2,778,289           3,101,560
Nelson Anderson
  Bronx, NY                                   0                1,679           6,758,793           6,760,472
Conifer Irondequoit
  (Abraham Lincoln)
  Irondequoit, NY                             0               21,677           5,501,846           5,523,523
Wilson Street Apts
  (Middletown)3,434,674
  Middletown, PA                              0               40,126           3,432,997           3,473,123
Lauderdale Lakes
  Lauderdale Lakes, FL                        0              875,668           9,752,194          10,627,862
Flipper Temple
  Atlanta, GA                                 0               72,196           5,605,153           5,677,349
220 Cooper Street
  Camden, NJ                                  0               42,677           3,668,114           3,710,791
Vendome
  Brooklyn, NY                                0               13,677           5,086,443           5,100,120
Pecan Creek
  Tulsa, OK                                   0               50,161           1,716,816           1,766,977
New Augusta Ltd.
  (Rainer Villas)
  New Augusta, AL                             0               15,161           1,051,299           1,066,460
Pine Shadow Apts
  Waveland, MS                                0               74,711           2,294,089           2,368,800
Windsor Place Apts
  Wedowee, AL                                 0               40,161             957,838             997,999
Brookwood Apts
  Foley, AL                                   0               68,836           1,595,721           1,664,557
Heflin Hills Apts
  Heflin, AL                                  0               50,161             886,943             937,104
Shadowood Apts
  Stevenson, AL                               0               27,161             913,110             940,271
Brittany Apartments
  DeKalb, MS                                  0               20,161             884,462             904,623
Hidden Valley Apts
  Brewton, AL                                 0               68,161           1,713,698           1,781,859
Westbrook Square L.P.
  Carthage, MS                                0               40,161           1,299,717           1,339,878
Warsaw Elderly Housing Ltd.
  Warsaw, KY                                  0               98,980           1,350,755           1,449,735
West Hill Square Apts. Ltd.
  Gordo, AL                                   0               60,161           1,000,104           1,060,265


<CAPTION>


                                                                                      Life on which
                                                                                     Depreciation in
                                                       Year of                        Latest Income
                                   Accumulated       Construction/      Date          Statements are
Description                        Depreciation       Renovation      Acquired        Computed(C)(D)
------------                       ------------       ----------     ----------       --------------
<S>                                <C>                   <C>         <C>                   <C>
Ogontz Hallz
  Philadelphia, PA                    1,608,447          1990        Apr. 1991             27.5
Eagle Ridge
  Stoughton, WI                       1,594,395          1991        May 1991              27.5
Nelson Anderson
  Bronx, NY                           2,932,275          1991        June 1991             27.5
Conifer Irondequoit
  (Abraham Lincoln)
  Irondequoit, NY                     2,524,840          1991        Sept. 1991            27.5
Wilson Street Apts
  (Middletown)3,434,674
  Middletown, PA                      1,368,963          1991        Sept. 1991            27.5
Lauderdale Lakes
  Lauderdale Lakes, FL                3,081,393          1991        Oct. 1991             40
Flipper Temple
  Atlanta, GA                         2,163,376          1991        Oct. 1991             27.5
220 Cooper Street
  Camden, NJ                          1,623,124          1991        Dec. 1991             27.5
Vendome
  Brooklyn, NY                        2,950,334          1991        Dec. 1991             20
Pecan Creek
  Tulsa, OK                             630,846          1991        Dec. 1991             27.5
New Augusta Ltd.
  (Rainer Villas)
  New Augusta, AL                       348,180          1991        Dec. 1991             27.5
Pine Shadow Apts
  Waveland, MS                          935,520          1991        Dec. 1991             27.5
Windsor Place Apts
  Wedowee, AL                           329,580          1991        Dec. 1991             27.5
Brookwood Apts
  Foley, AL                             556,635          1991        Dec. 1991             27.5
Heflin Hills Apts
  Heflin, AL                            324,009          1991        Dec. 1991             27.5
Shadowood Apts
  Stevenson, AL                         315,158          1991        Dec. 1991             27.5
Brittany Apartments
  DeKalb, MS                            304,460          1990        Dec. 1991             27.5
Hidden Valley Apts
  Brewton, AL                           599,337          1991        Dec. 1991             27.5
Westbrook Square L.P.
  Carthage, MS                          447,123          1990        Dec. 1991             27.5
Warsaw Elderly Housing Ltd.
  Warsaw, KY                            437,505          1991        Dec. 1991             27.5
West Hill Square Apts. Ltd.
  Gordo, AL                             335,550          1991        Dec. 1991             27.5
</TABLE>


                                      142
<PAGE>


                          FREEDOM TAX CREDIT PLUS L.P.
                          AND CONSOLIDATED PARTNERSHIPS
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                 MARCH 31, 2004
<TABLE>
<CAPTION>



                                                          Initial Cost to Partnership              Cost
                                                       --------------------------------         Capitalized
                                                                           Buildings and       Subsequent to
Description                        Encumbrances            Land            Improvements         Acquisition
------------                       ------------        ------------        ------------        ------------
<S>                                <C>                 <C>                 <C>                 <C>
Elmwood Assoc
  Picayune, MS                          700,034              81,500             829,183              38,117
Harmony Gate Assoc
  Los Angeles, CA                     3,756,929                   0           9,757,807              57,491
                                   ------------        ------------        ------------        ------------


                                   $ 66,285,158        $  5,662,256        $120,113,803        $ 21,702,750
                                   ============        ============        ============        ============

<CAPTION>



                                  Purchase Price          Gross Amount at which Carried at Close of Period
                                  Adjustments(B)        ----------------------------------------------------
                                   Buildings and                            Buildings and
Description                        Improvements             Land            Improvements           Total(A)
------------                       ------------         ------------        ------------        ------------
<S>                                <C>                  <C>                 <C>                 <C>
Elmwood Assoc
  Picayune, MS                                0               81,661             867,139             948,800
Harmony Gate Assoc
  Los Angeles, CA                             0                  161           9,815,137           9,815,298
                                   ------------         ------------        ------------        ------------


                                   $ (3,268,642)        $  5,720,520        $138,489,647        $144,210,167
                                   ============         ============        ============        ============


<CAPTION>


                                                                                      Life on which
                                                                                     Depreciation in
                                                        Year of                       Latest Income
                                   Accumulated       Construction/      Date          Statements are
Description                        Depreciation       Renovation      Acquired        Computed(C)(D)
------------                       ------------       ----------     ----------       --------------
<S>                                <C>                   <C>         <C>                   <C>
Elmwood Assoc
  Picayune, MS                          281,308          1991        Dec. 1991             27.5
Harmony Gate Assoc
  Los Angeles, CA                     4,128,791          1992        Jan. 1992             27.5
                                   ------------


                                   $ 63,733,516
                                   ============

</TABLE>
(A)  Aggregate cost for federal income tax purposes, $146,576,191.
(B)  Rental guarantees and development  deficit guarantees for GAAP purposes are
     treated as a reduction of the asset.
(C)  Furniture and  fixtures,  included with  buildings  and  improvements,  are
     depreciated primarily by the straight line method over the estimated useful
     lives ranging from 5 to 7 years.
(D)  Since all properties were acquired as operating properties, depreciation is
     computed using primarily the straight line method over the estimated useful
     lives determined by the Partnership from date of acquisition.
(E)  Reconciliation of Real Estate owned:

<TABLE>
<CAPTION>
                                        Cost of Property and Equipment                          Accumulated Depreciation
                                ------------------------------------------------    ------------------------------------------------
                                                                        Years Ended March 31,
                                ----------------------------------------------------------------------------------------------------
                                    2004              2003             2002             2004              2003             2002
                                -------------     -------------    -------------    -------------     -------------    -------------
<S>                             <C>               <C>              <C>              <C>               <C>              <C>
Balance at beginning of year    $ 143,202,053     $ 142,450,720    $ 141,678,599    $  58,927,642     $  54,178,153    $  49,344,006
Additions during year:
Improvements                        1,017,659           751,333          772,121
Dispositions                           (9,545)                0                0           (5,513)                0                0
Depreciation expense                                                                    4,811,387         4,749,489        4,834,147
Loss on impairment of asset                 0                 0                0
                                -------------     -------------    -------------    -------------     -------------    -------------

Balance at close of year        $ 144,210,167     $ 143,202,053    $ 142,450,720    $  63,733,516     $  58,927,642    $  54,178,153
                                =============     =============    =============    =============     =============    =============

</TABLE>
At the time the local  partnerships  were  acquired  by Freedom  Tax Credit Plus
L.P., the entire  purchase price paid by Freedom Tax Credit Plus L.P. was pushed
down to the local  partnerships  as property and  equipment  with an  offsetting
credit to capital. Since the projects were in the construction phase at the time
of acquisition, the capital accounts were insignificant at the time of purchase.
Therefore, there are no material differences between the original cost basis for
tax and GAAP.




                                      143