<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549


                                   FORM 10-K

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

                     For the Year Ended December 31, 1997

                        Commission File Number 2-39494

                           AMERICAN HOUSING PARTNERS

                       A California Limited Partnership

                 I.R.S. Employer Identification No. 95-6345278

     12100 Wilshire Boulevard, Suite 1400, Los Angeles, California  90025

       Registrant's Telephone Number, Including Area Code (310) 207-0704

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

                                     NONE

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

                                Yes ___  No  X
                                            ---

     The registrant is a limited partnership and therefore has no voting 
     stock. As of December 31, 1997, 7,005 limited partnership interests 
     ("Interests") were outstanding, which had been issued originally in 
     1971. The Interests are not currently traded on any market. Therefore, 
     no market selling price and no average bid or asked prices exist for 
     the 60 days prior to the date of filing.
<PAGE>
 
                               TABLE OF CONTENTS

<TABLE> 
<CAPTION> 
                                                                    Page
<S>                                                                 <C> 
PART I.
Item 1.    Business                                                   1

Item 2.    Properties                                                 3

Item 3.    Legal Proceedings                                          4

Item 4.    Submission of Matters to a Vote of Security Holders        6
 

PART II.
 
Item 5.    Market for the Registrant's Partnership Interests          7

Item 6.    Selected Financial Data                                    8
 
Item 7.    Management's Discussion and Analysis of                    8
           Financial Condition and Results of Operations
 
Item 8.    Financial Statements and Supplementary Data               10
 
Item 9.    Changes in and Disagreements with Accountants             10
           on Accounting and Financial Disclosure


PART III.
 
Item 10.   Directors and Executive Officers of the Registrant        11
 
Item 11.   Executive Compensation                                    12
 
Item 12.   Partnership Interest Ownership of Certain                 12
           Beneficial Owners and Management
 
Item 13.   Certain Relationships and Related Transactions            12


PART IV.

Item 14.   Exhibits, Financial Statement Schedules                   13
           and Reports on Form 8-K
</TABLE> 
<PAGE>
 
                                    PART I

ITEM 1.  BUSINESS

     American Housing Partners ("AHP"), a  California limited partnership, was
formed on June 7, 1971, to invest through local limited partnerships in
government assisted multi-family housing developments ("Projects" or
"Government-Assisted Properties").  Each local limited partnership owns,
individually, a single low to moderate income multi-family housing project which
is subsidized and/or mortgage-insured by the federal government.  During 1997,
and as of December 31, 1997, AHP held interests in five local limited
partnerships which own and operate a Project.  The general partner of AHP is
NIDC Managers, Inc., a Delaware corporation ("NIDMI" or "the General Partner").
See Item 12 "Partnership Interest Ownership of Certain Beneficial Owners and
Management".

     In order to stimulate private investment in low and moderate income housing
of the types in which AHP has invested, the federal government has provided
investors with significant ownership incentives, including interest subsidies,
rent supplements, mortgage insurance and other measures, with the intent of
reducing the risks and providing the investors/owners with certain tax benefits,
plus limited cash distributions and the possibility of long-term capital gains.
However, there are significant risks inherent in this type of housing.  Long-
term investments in real estate limit the ability of AHP to vary its portfolio
in response to changing economic, financial and investment conditions, and such
investments are subject to changes in economic circumstances and housing
patterns, rising operating costs and vacancies, rent controls and collection
difficulties, costs and availability of energy, as well as other factors which
normally affect real estate values.  In addition, these projects usually involve
greater management burdens and operating expenses than conventional housing
projects.

     AHP's Projects were typically initiated by private developers who optioned
or acquired the sites and applied for Federal Housing Administration (FHA)
mortgage insurance and subsidies.  AHP became the sole limited partner in local
limited partnerships formed to become the owners of such Projects.  As a limited
partner, AHP's liability for obligations of the local limited partnership is
limited to its investment.  The developer typically became the managing general
partner of the local limited partnership, with responsibility for developing,
constructing, maintaining, operating and managing the Project.  Generally, NIDC
Housing Corporation, a Delaware corporation ("NIDHC"), or NIDC Asset Management,
Inc., a Delaware corporation ("NIDAM"), is a co-general partner of each local
limited partnership.  As such, NIDHC or NIDAM has the right to participate in
certain decisions that affect AHP's investment in the local limited partnership.
NIDHC and NIDAM also have the right to replace the developer as the managing
general partner of the local limited partnership and to assume day-to-day
operational control of the local limited partnership's affairs upon the
occurrence of certain events considered adverse to AHP's investment.  NIDHC and
NIDAM are affiliates of NIDMI.  See Item 12 "Partnership Interest Ownership of
Certain Beneficial Owners and Management".
<PAGE>
 
     Although each of the Projects in which AHP holds an indirect interest must
compete in the marketplace for tenants, the receipt of interest subsidies and
rent supplements from the federal government make it possible to offer these
dwelling units to tenants with low and moderate income at prices below the
market rate for comparable dwelling units in the area.

     During 1997, the Projects operated, in the aggregate, with positive cash
flow.  The distributions from the local limited partnerships are limited by the
Projects' regulatory agreements with HUD or other similar state agencies, to 6%
per annum of the original equity provided to the Project (as determined by HUD),
payable only when cash is available as determined by a formula provided by HUD.
Of the distributions payable to AHP and the general partners of the local
limited partnerships at December 31, 1997, a portion is currently payable and
the remainder is deferred until there is available cash.

     In 1983, AHP adopted a policy of selling the Projects in which it holds an
interest (through the local limited partnership) when such sale can be made on
satisfactory terms and deemed in the best interest of the partners of AHP.  This
policy resulted in two Project sales in 1983, four Project sales in 1984, one
Project sale in 1985 and three Project sales in 1989.  Of the 20 Projects in
which AHP held an interest through its ownership of local limited partnerships
(19 originally and one acquired), five remain and one, Woodbrook Apartments,
which was sold in 1985, still has not had a final closing.  See Item 2.
Properties and Item 3.  Legal Proceedings.  Due to certain partnership
amendments approved by the limited partners in December 1984, NIDMI has been
granted additional discretion to consummate the sale of the remaining Projects
in which AHP holds an interest.

     In addition the term of AHP under its original Partnership Agreement
expired on December 31, 1993, and has not been renewed.  AHP, has, therefore
been operating since January 1, 1994 as a partnership in dissolution.  As such,
AHP cannot acquire new properties or other assets and NIDMI has been obliged to
bring about the orderly liquidation of the Partnership, and the distribution of
its assets to its Partners.  Consequently, NIDMI has continued in its efforts to
finalize the sale of the remaining Projects in which AHP holds an interest.

     NIDMI has been unable to find buyers for interests which  continue to be
controlled by others at prices sufficient to justify their disposition. Sale of
any Project is subject to the approval of all general partners of the local
limited partnership as well as approval of any such transfer by HUD. Because
either such approval, if not forthcoming, could (as has previously happened)
delay or block the sale of any Project owned by that partnership, any attempt to
sell an investment has had to be limited to sale of AHP's interest in a local
limited partnership.

     NIDMI has, nevertheless, taken steps to determine the liquidation value of
the portfolio. NIDMI has tried to (a) evaluate each property, and (b) assign a
value to the Partnership's interest in such property or the debt secured
directly or indirectly by such property utilizing a variety of means including
an expert review of the evaluation methodologies used.  The General Partner has
asked the managing general partners of those local limited partnerships still
owning properties to make offers to the Partnership and have similarly sought
offers from the managing general 

                                      -2-
<PAGE>
 
partners of the partnerships owing money to the remaining local limited
partnerships to purchase the wraparound notes and partnership interest.

     While some properties have sufficient value and marketability to create the
possibility, at least that AHP's interest therein could be sold for a reasonable
price, other assets may not be readily marketable.  For some properties, there
may be no buyer whatsoever.  While NIDMI has delayed liquidation of AHP  because
of the difficulty in disposing of assets it does not believe that it can or
should delay further, since the Partnership's term has expired.

     The General Partner will, therefore, sell AHP's assets for the best price
available and distribute the proceeds of the sale to the partners.  If some
sales cannot be completed by that date or some properties cannot be disposed of
at all, NIDMI will acquire the unsold assets in order to permit the liquidation
and termination of before the beginning of the 1999 tax year.

ITEM 2.  PROPERTIES

     AHP holds interests as a limited partner in local limited partnerships that
have developed, own, and operate government-assisted multi-family housing
developments.  See Item 1.  Business.  The properties were developed from the
proceeds of mortgage loans obtained by the local limited partnerships to provide
affordable housing to the low and moderate income groups.

     The five Projects are composed primarily of garden and townhouse type
apartments representing 518 units located in four states.  The typical Project
includes a mix of 1, 2, and 3 bedroom units, laundry facilities and parking
areas, with some projects containing a playground and/or swimming pool.  The
individual units include all normal amenities with most including automatic
dishwasher and air conditioning.

     In 1983, AHP adopted a policy of selling the Projects in which it holds an
interest (through the local limited partnership) when such sale can be made on
satisfactory terms and deemed in the best interest of the partners of AHP.  See
Item 1.  Business.

     AHP sold its Partnership interest in 3 Projects in 1989.  Set forth below
is a schedule as of December 31, 1997 of Projects owned by local limited
partnerships in which AHP is a limited partner, together with the current
occupancy status of each Project.

                                      -3-
<PAGE>
 
<TABLE> 
<CAPTION>
=========================================================================================================== 
 
                          SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                                     IN WHICH AHP HAS AN INVESTMENT
    
    Name & Location       No.      Project Type      Insured and/or           Units           Units 
                         Units                      Subsidized Under        Authorized      Occupied/   
                                                                            For Rental      Percentage 
                                                                            Assistance      Total Units 
                                                                             Section 8          
=========================================================================================================== 
<S>                      <C>       <C>              <C>                     <C>             <C>    <C> 
 Jennifer Apts.            50         Garden        FHA Sec. 236                 30          50    100% 
 Columbus, OH                                                                                           

 Milham Meadows I         102         Garden        FHA Sec. 236                 45         149     99%   
 Portage, MI               48       Townhouse       Michigan State                                         
                                                    Housing Devel Auth                                     
                                                                                                           
 Pine Villa                50         Garden        FHA Sec.236                  40          49     98% 
 Spokane, WA                                                                                             
 
 Tanglewood Terrace       196         Garden        FHA Sec. 221(d)(4)            *         178     91% 
 Texarkana, TX                                                                                           
 
 Woodhaven Apts.           72         Garden        FHA Sec. 221(d)(4)            *          70     97% 
 Spokane, WA                                                                                             
</TABLE> 

*  RENTS DECONTROLLED IN 1984.

ITEM 3.  LEGAL PROCEEDINGS

     The 1991 Report contained a description of a series of administrative and
legal proceedings relating to disputes between the Department of Housing and
Urban Development ("HUD") and Associated Financial Corporation ("AFC") and its
affiliates (collectively, the "AFC Group").  Members of the AFC Group include
both General Partners of the Partnership and general partners of the Operating
Partnerships.  The information relating to such proceedings, contained on pages
4 through 30 of the 1991 Report, is incorporated herein by this reference.

     In April, 1994, members of the AFC Group entered into a comprehensive
settlement agreement with HUD (the "Settlement Agreement") on terms which the
General Partners believe are decisively favorable to the AFC Group.  Under the
Settlement Agreement, all of HUD's administrative proceedings against members of
the AFC Group, including those relating to the dispute regarding Westport
Housing Corporation, were dismissed on terms which do not permit HUD to
reinstitute any of the proceedings, and HUD agreed to refrain from using any of
the facts it alleged in the administrative proceedings or other facts relating
to the current condition of the properties owned by members of the AFC Group in
any future administrative proceedings.  HUD also terminated the 1992 suspension
and proposed debarment of the members of the AFC Group, including the General
Partners.  Under the Settlement Agreement, members of the AFC Group will regain
the unrestricted right to participate in HUD programs and otherwise do business
with HUD with respect to Government Assisted Properties.

                                      -4-
<PAGE>
 
     As described on pages 6-9 of the 1991 Report, which pages are incorporated
herein by this reference, the various partnerships affiliated with the AFC Group
and others initiated an action against HUD officials in United States District
Court in January, 1993.  In one case involving the Germano Partnership, the
District Court judge granted to the plaintiffs substantially all the relief they
had requested, including requiring HUD to renew its Section 8 Housing Assistance
Payments Contract ("HAP Contract") with the Germano Partnership.  The plaintiffs
in three similar District Court actions, described or referred to on pages 9-12
of the 1991 Report and each involving a property owned by a member of the AFC
Group, also obtained substantially all the relief they sought, including in each
case renewing an existing HAP Contract or entering into a new HAP Contract.
After obtaining the relief they sought, the plaintiffs in the District Court
actions consented to dismissals of the actions.

     In view of the favorable results they had obtained in the District Court
actions, plaintiffs in the four actions filed petitions for attorney's fees
against HUD.  Under the Settlement Agreement, HUD agreed to pay a total of
approximately $167,500 to plaintiffs in the  District Court actions, and the
plaintiffs agreed to move for dismissal of their petitions for attorney's fees.

     The 1991 Report contained a description of a civil action relating to Tyler
House, a Government-Assisted Property in which affiliates of the General
Partners had invested.  See pages 24 and 29 of the 1991 Report, which
information is incorporated herein by this reference.  As indicated therein, the
defendants appealed the judgments based upon the verdict against them.  The
appellate court subsequently denied the defendants' appeal, and the defendants
then duly satisfied the judgment.  The General Partners' prediction that the
judgment would not interfere with the performance by the General Partner of its
duties to the Partnership and that the Partnership would not be adversely
affected by the result in the litigation proved to be correct.

     On May 8, 1997, the United States filed an action against Associated
Financial Corporation, certain members of the AFC Group, including Messrs. Ross
and Rozet, and others, in the United States District Court for the Northern
District of California charging that the defendants were wrongfully
participating in the fees earned by the management agent for several properties
(not including any of the properties invested in by the Partnership) and had not
disclosed this arrangement and, thus, were violating provisions of the
applicable regulatory agreements and other agreements governing the subject
properties. The Complaint did, however, allege that the defendants made certain
false claims regarding the condition of the Sierra Nevada property. Defendants
filed an answer on August 11, 1997, denying the material allegations of the
Complaint, and asserting various separate and additional defenses.

     The government filed an amended complaint on March 2, 1998, adding
additional defendants none of whom are part of the AFC Group and added a claim
that the defendants, including the new defendants made false claims in
connection with the obtaining of insurance for various HUD-insured properties.
The defendants have filed answers to the First Amended Complaint, again denying
the material allegations of the Complaint and asserting various separate and
additional defenses.

     While substantial document discovery has been completed, the defendants
intend to move to compel significant delivery from the government of substantial
additional documentation.

                                      -5-
<PAGE>
 
Deposition discovery is in its early stages. Given the defendants need to obtain
significant additional discovery, counsel can offer no opinion as to the outcome
of the litigation at this time.

     The General Partner believes that when all of the facts are presented to an
impartial judge, the defendants will be exonerated.  However, the complaint
contains serious allegations against the defendants and every effort will be
made to show that the government is wrong in bringing the lawsuit. At this time,
the general partner does not believe that there will be any material adverse
affect to the Partnership and the operation of its investments, much like the
previous litigation with HUD described above.

Woodbrook Apartments

     A suit was commenced in January, 1976, in the New York Supreme Court by
Woodbrook Houses Associates against Hercoform Marketing (the general
contractor), Tiffany-Armstrong (the architect), Beardsley and Beardsley (site
engineers) and Seaboard Surety Company (the general contractor's insurer) to
recover damages for construction deficiencies.  The cost of correcting these
deficiencies and the additional expenses caused by these deficiencies is
estimated to exceed $700,000.  The general contractor has interposed
counterclaims in the amount of $58,000.  Because of the complexity of this
lawsuit, legal counsel cannot express an opinion on its probable outcome.  As a
condition of the sale of Woodbrook Apartments, primary responsibility to pursue
this matter shifted to the new owners, CPY Partnership.  However, the Registrant
continues to be involved in the case and will share in the case and will share
in any ultimate award or settlement obtained by Woodbrook Houses Associates.

     A suit involving Woodbrook Apartments was commenced on January 11, 1983 in
the New York Supreme Court by K-Line Windows, Inc. against Mayzan Management
Corporation (the on-site management company for Woodbrook Apartments) and NIDAM.
The action is based upon a claim for an unpaid contract sum for the installation
of storm windows at the project. On September 4, 1984, a summary judgment was
granted to the plaintiff in the amount of $56,877. The defendants have
interposed various motions to delay execution of this judgment. Settlement
negotiations are presently underway to resolve this judgment. As a condition of
the sale of Woodbrook Apartments, CPY Partnership agreed to assume full
financial responsibility for the settlement of this suit although NIDAM remains
a defendant in this action.

     At this time, it appears that neither of the two foregoing lawsuits is
being actively pursued by any party to either suit.

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

     No matter was submitted during the fourth quarter of the fiscal year ending
December 31, 1997 to a vote of security holders.

                                      -6-
<PAGE>
 
                                    PART II


ITEM 5.  MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS


     AHP partnership interests are not actively traded and no public trading
market exists.  From time to time, a sale of the partnership interests is made
at a price negotiated between the buyer and seller.  The transactions are
handled through a limited number of broker-dealers.

     As of December 31, 1997 there were 5 general partner interests held by
NIDMI and 7,005 limited partner interests held by 508 limited partners.  This
figure is based upon the number of record holders as reported by the
Registrant's transfer agent.

     During 1993 no cash distributions were made.

     During 1994 no cash distributions were made.

     During 1995 no cash distributions were made.

     During 1996 no cash distributions were made.

     During 1997 no cash distributions were made.

                                      -7-
<PAGE>
 
     ITEM 6.  SELECTED FINANCIAL DATA

     The following summary of selected financial data should be read in
conjunction with Item 14, herein, which also includes a summary of AHP's
significant accounting policies.

-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                     
FOR THE YEAR            1997         1996             1995             1994              1993
 ENDED DEC. 31:-

<S>                <C>              <C>              <C>              <C>                <C>
 
Interest and
other income         48,455             5,705            3,625              2,533             -0-
 
Distributions in    122,705            20,513          103,400            559,041           62,409
excess of                 
investment
 
Income (Loss)        33,600           (45,549)          30,334            369,769          (10,878)
from operations            

NET EARNINGS         33,600           (45,549)          30,334            369,769          (10,878)
(Loss)                     

Net earnings           4.79             (6.50)            4.33              52.75            (1.55)
(loss) per                   
partnership
interest

AT YEAR END:

Total Assets      4,834,990        4,778,600         9,768,431          9,851,368        9,725,524
Long-term debt    5,768,489        5,781,499        10,769,092         10,874,083       11,026,594

Partners' deficit(1,045,813)      (1,079,413)       (1,033,864)        (1,064,198)      (1,433,967)

Deficit per         (149.19)         (153.98)          (147.48)           (151.81)         (204.56)
partnership               
interest
 
Distributions           -0-               -0-               -0-               -0-               -0-
per partnership               
Interest

Number of               508              519               513                517              509
limited partners             
 ------------------------------------------------------------------------------------------------------
</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
          OF OPERATION.

RESULTS OF OPERATIONS:

     Payments received in 1997, 1996 and 1995 on notes receivable resulting from
project sales in prior years were limited to the amounts required to service the
underlying HUD mortgages on these projects.  The Partnership also received
surplus cash distributions of 

                                      -8-
<PAGE>
 
$122,705, $20,513 and $103,400 for 1997, 1996, and 1995, respectively. For
income tax purposes, AHP's share of net interest income recognized on the notes
receivable was $79,077 for 1997, compared with $112,578 and $104,991 for 1996
and 1995, respectively. For financial statement purposes, as the sales are
accounted for under the cost recovery method, all interest income is deferred
until the cost of the respective property is recovered.


     HUD took possession of one project owned by one of the purchaser
partnerships effective November 1, 1994 and commenced foreclosure proceedings.
The foreclosure was completed in January, 1996 and, as a result, the Partnership
lost its interest in the assets acquired and liabilities assumed in connection
with the original sale. Based on the accounting policy of the Partnership as
described in Note A.(3) to the Financial Statements, there was no net effect on
the financial statements as a result of the foreclosure. The assets and
liabilities written off as a result of the foreclosure are as follows:

    <TABLE>
     <S>                                                             <C>
     Deferred cash payment receivable                                $    (338,778)
     All-inclusive residual not receivable                              (6,549,300)
     Accrued interest receivable                                        (2,846,145)
     Underlying mortgage payable                                         4,875,015
     Deferred income                                                     4,909,804
     Reclassification of deferred income to
     allowance for uncollectibility of
     amounts due from affiliates                                           (50,596)
                                                                     -------------
               Net Effect                                            $       - 0 -
</TABLE>

     Total revenue generated in 1997 was $171,160 compared with $26,218 and
$107,025 for 1996 and 1995, respectively.  For all three years, distributions
received from partnerships in which AHP holds interests represent more than 71%
of total revenue.  For income tax purposes, cash distributions received are
treated as offsets to investment.

     Total expenses for 1997 were $137,560, compared with $71,767 and $76,691
for 1996 and 1995, respectively, an increase of 92% from 1996 to 1997 and a
decrease of 6% from 1995 to 1996.  The increase in 1997 compared to 1996 is
mainly due to an increase in professional fees.

     Net income for 1997 was $33,600 compared to net loss of $45,549 and net
income of $30,334 for 1996 and 1995 respectively.

LIQUIDITY AND CAPITAL RESOURCES:

     Although the Partnership is actively seeking to divest itself of projects
in which it has investments, the financial health and operating prospects of the
remaining projects is still viable.  Distributions of cash are still being
received from the remaining projects, and the Partnership continues to receive
proceeds from the prior sales.  There are currently no appreciable problems with
projects owned by partnerships in which AHP holds interests.

                                      -9-
<PAGE>
 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The financial statements together with the auditors' report thereon are set
forth at the pages indicated in Item 14 (a)(1) and (2).

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

     None

                                      -10-
<PAGE>
 
                                    PART III


ITEM 10.  DIRECTORS AND OFFICERS OF THE REGISTRANT

     AHP has no officers or directors.  The officers and directors of NIDMI (the
General Partner) are as follows:

            NAME                       POSITION

            Deane Earl Ross            Director, President and Treasurer
            A. Bruce Rozet             Director and Chief Executive Officer
            Suzanne Magnuson           Secretary

     The following biographical information is presented for the officers and
directors of NIDMI.

     Mr. Ross has been a principal officer of the Associated Financial
Corporation ("AFC") group of companies, including affiliates of the General
Partner, since the inception of a predecessor corporation, Oakdale Corporation,
a California corporation (which is now a wholly-owned subsidiary), in 1973.  The
AFC organization, including certain predecessors, has been continuously engaged
in the field of government-assisted low to moderate income housing developments
since its inception.

     Mr. Ross is a real estate executive with more than 35 years' experience in
the field of government-assisted housing.  In 1987, he testified before the U.S.
Senate Committee on Banking, Housing and Urban Affairs on matters relating to
housing legislation.  Mr. Ross earned a Bachelor's Degree in Real Estate &
Finance from the Wharton School of Finance & Commerce of the University of
Pennsylvania.

     Mr. Rozet has been Chairman of the Board of Associated Financial
Corporation and certain of its Affiliates, including AFC Capital Corporation,
since 1984, except for a brief period from August 1985 to February 1986.
Concurrently, from 1975 until 1987, he was also Chairman of the Board of
National Development Services Corporation, a California corporation engaged in
providing consulting services principally relating to the financial structuring
of government-assisted, low to moderate income housing developments.

     Mr. Rozet has been a financier for more than 25 years with substantial
experience in the field of real estate,  most significantly relating to
government subsidized multi-family residential housing.  Since 1972, Mr. Rozet
has been involved in the equity financing of approximately 500 government-
assisted apartment developments relating to approximately 50,000 apartment
units.  Mr. Rozet has served on a task force for the U.S. Department of Housing
and Urban Development formed to aid HUD personnel in the development and
implementation of advanced processing procedures.  Mr. Rozet has also provided
consulting services to Congressional staff personnel with respect to housing
legislation.  In 1988, Mr. Rozet testified before the U.S. House of
Representatives Committee on Ways and Means on matters relating to the Low
Income Housing Tax Credit.

                                      -11-
<PAGE>
 
     Mr. Rozet earned a Bachelor of Science Degree in Industrial Engineering
from Pennsylvania State University and completed graduate studies in Corporate
Finance and Strategic Planning at the University of California at Los Angeles
(UCLA).

     Ms. Magnuson is Secretary of National Palisades Corporation and has been an
executive officer to certain of its affiliates and predecessors since 1977.  In
June, 1987, Ms. Magnuson became Secretary of NIDMI.

ITEM 11.  EXECUTIVE COMPENSATION

     AHP has no executive officers.  No person acting in such capacity received
compensation in 1997 directly or indirectly from AHP.

ITEM 12.  PARTNERSHIP INTEREST OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

     No person is known to own beneficially in excess of five percent of the
outstanding partnership interests of AHP.  NIDMI, the General Partner, holds
five non-voting General Partnership Interests and five voting Limited
Partnership Interests.  NIDMI is beneficially owned by A. Bruce Rozet and Deane
Earl Ross, who are the Directors and executive officers of NIDMI.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     NIDAM earned management fees of $50,000 during 1997 from AHP, which
represents 18.3% of NIDAM's total revenue during 1997.  NIDAM and NIDHC are
general partners in the local limited partnerships in which AHP has invested.
A. Bruce Rozet and Deane Earl Ross, the Directors of NIDMI, beneficially own and
are executive officers of NIDAM and NIDHC.

                                      -12-
<PAGE>
 
                                 PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K:

  (a)The following documents are filed as part of this report:

 <TABLE>                                                         
 <CAPTION>
 
     (1)  Financial Statements:                                    PAGE

         <S>                                                            <C>
          Report of Independent Certified Public Accountants               F-1
          Balance Sheets - December 31, 1997 and 1996                      F-2
          Statements of Operations for the Three Years
          Ended December 31, 1997                                          F-3
          Statements of Partners' Deficit for the
          Three Years Ended December 31, 1997                              F-4
          Statements of Cash Flows for the Three Years
          Ended December 31, 1997                                          F-5
          Notes to the Financial Statements                                F-6

      (2) Financial Statement Schedules:
          Report of Independent Certified Public Accountants               S-1
         Schedule IV
            Amounts Due from Related Parties                               S-2

         Schedule XI
            Real Estate and Accumulated Depreciation of
            Limited Partnerships in which the Partnership
            has an Investment                                              S-5

          Schedule XII
            Mortgage Loans on Real Estate                                  S-8

          Schedule XIII
            Investments in and Advances to Limited Partnerships            S-11
</TABLE> 

  All other schedules are omitted because they are not applicable or the
  required information is shown in the financial statements or notes thereto.

  (b) Reports on Form 8-K

  No reports on Form 8-K were filed by AHP during the last quarter of fiscal
year 1997.

                                      -13-
<PAGE>
 
                                 SIGNATURES


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

 
                                 AMERICAN HOUSING PARTNERS
                                 a California limited partnership
                                 
                                 By:  NIDC Managers, Inc.
                                      General Partner


                                 
Date:  July 16, 1998             By: /s/ Deane Earl Ross
                                    -----------------------------
                                    Deane Earl Ross
                                    President and Director



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.




Date:  July 16, 1998             By: /s/ A. Bruce Rozet
                                    --------------------------------------
                                    A. Bruce Rozet, Chairman of the Board and
                                    Chief Executive Officer of NIDC Managers,
                                    Inc.



Date:  July 16, 1998             By: /s/ Deane Earl Ross
                                    --------------------------------------
                                    Deane Earl Ross, Director, President and
                                    Treasurer (Chief Financial Officer and Chief
                                    Accounting Officer) of NIDC Managers, Inc.

                                      -14-
<PAGE>
 
        [LETTERHEAD OF BAY SHERMAN CRAIG & GOLDSTEIN, LLP APPEARS HERE]

               Report of Independent Certified Public Accountants
               --------------------------------------------------


To the Partners
American Housing Partners


We have audited the accompanying balance sheets of American Housing Partners (a
California limited partnership) as of December 31, 1997 and 1996 and the related
statements of operations, partners' deficit and cash flows for each of the three
years in the period ended December 31, 1997.  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 did
not audit the financial statements of certain limited partnerships in which the
Partnership has an investment, the statements of which reflect total assets and
revenues constituting 100% of the combined totals of the limited partnerships in
the years presented.  These statements were audited by other auditors, whose
reports thereon have been furnished to us and our opinion, insofar as it relates
to the amounts included in Note C for those limited partnerships, is based
solely upon the reports of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the 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 and the reports of the other auditors
provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of American Housing Partners as of December 31, 1997 and
1996 and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles.

/s/ Bay Sherman Craig & Goldstein, LLP

Los Angeles, California
June 19, 1998, except for Note H,
 as to which the date is July 7, 1998

                                      F-1
<PAGE>
 
                          AMERICAN HOUSING PARTNERS 

                                 BALANCE SHEETS

                                  DECEMBER 31,

<TABLE> 
<CAPTION> 
                       ASSETS
                                             1997               1996      
                                         ------------       ------------  
<S>                                      <C>                <C>           
Cash                                      $     9,948       $   14,753   
Notes receivable, deferred cash                                           
 payments and accrued interest                                            
 from related parties - Net of                                            
 deferred gain and deferred                                               
 interest income (Notes A, B                                              
 and D)                                     4,475,523         4,488,533   
Due from affiliates (Note G)                  349,519           275,314   
Investments in and advances to limited                                    
 partnerships (Notes A and C)                       -                 -   
                                           ----------        ----------   
                                                                          
                                          $ 4,834,990       $ 4,778,600   
                                          ===========       ===========   


                   LIABILITIES AND PARTNERS' DEFICIT
 
 
Accounts payable                          $    63,094       $    27,294
Due to asset management company                49,220            49,220
Mortgages payable (Note D)                  5,224,724         5,237,734
Loans payable (Note D)                        543,765           543,765
                                          -----------       -----------
                                            5,880,803         5,858,013
                                          -----------       -----------
                                                                      
Contingent liability (Note H)                                         
                                                                      
Partners' deficit (Note I):                                           
 Limited partners                          (1,045,069)       (1,078,645)
 General partner                                 (744)             (768)
                                          -----------       -----------
                                           (1,045,813)        1,079,413)
                                          -----------       -----------
                                                                      
                                          $ 4,834,990       $ 4,778,600
                                          ===========       ===========
</TABLE>

See notes to the financial statements.

                                      F-2
<PAGE>
 
                          AMERICAN HOUSING PARTNERS 

                            STATEMENTS OF OPERATIONS

                            YEARS ENDED DECEMBER 31,


<TABLE>
<CAPTION>
                                          1997      1996       1995
                                        --------  ---------  ---------
<S>                                     <C>       <C>        <C>
 REVENUES:
  Distributions in excess of
    investment (Note C)                 $122,705  $ 20,513   $ 103,400
  Interest                                48,455     5,705       3,625
                                        --------  --------   ---------
                                         171,160    26,218     107,025
                                        --------  --------   ---------
 
EXPENSES:
  Management fees (Note E)                50,000    50,000      50,000
  Professional fees                       84,000    17,402      23,250
  Communication with partners              3,209     4,115       3,441
  Miscellaneous                              351       250           -
                                        --------  --------   ---------
                                         137,560    71,767      76,691
                                        --------  --------   ---------
 
NET INCOME (LOSS) (Notes A
 and F)                                 $ 33,600  $(45,549)  $  30,334
                                        ========  ========   =========
 
Net income (loss) per
 partnership unit (based
 upon 7,010 units)                      $   4.79  $  (6.50)  $    4.33
                                        ========  ========   =========
</TABLE>

See notes to the financial statements.

                                      F-3
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                        STATEMENTS OF PARTNERS' DEFICIT

                  YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

<TABLE> 
<CAPTION> 
                                                Limited       General
                                    Total      Partners       Partner
                                  ---------   -----------     -------
<S>                             <C>           <C>             <C> 
Partnership units throughout
  the period                          7,010         7,005        5
                                      =====         =====        =
 
Balance, January 1, 1995        $(1,064,198)  $(1,063,440)   $(758)
 
Net income                           30,334        30,312       22
                                -----------   -----------    -----
 
Balance, December 31, 1995       (1,033,864)   (1,033,128)    (736)
 
Net loss                            (45,549)      (45,517)     (32)
                                -----------   -----------    -----
 
Balance, December 31, 1996       (1,079,413)   (1,078,645)    (768)
 
Net income                           33,600        33,576       24
                                -----------   -----------    -----
 
Balance, December 31, 1997      $(1,045,813)  $(1,045,069)   $(744)
                                ===========   ===========    =====
</TABLE>

See notes to the financial statements.

                                      F-4
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                            STATEMENTS OF CASH FLOWS

                           YEARS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                            1997       1996       1995
                                          ---------  ---------  ---------
<S>                                       <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                       $ 33,600   $(45,549)  $ 30,334
  Adjustments to reconcile net
    income (loss) to net cash provided
    (used) by operating activities:
      (Increase) decrease in:
        Due from asset management
         company                                 -          -     (1,560)
        Accrued interest receivable         (5,705)    (5,705)         -
      Increase (decrease) in:
        Accounts payable                    35,800     (5,909)    (7,500)
        Management fee payable                   -     50,000          -
                                          --------   --------   --------
          Net cash provided (used) by
           operating activities             63,695     (7,163)    21,274
                                          --------   --------   --------
 
CASH FLOWS FROM INVESTING ACTIVITIES:
  Loans to affiliates                      (68,500)         -    (16,625)
                                          --------   --------   --------
          Net cash used in
            investing activities           (68,500)         -    (16,625)
                                          --------   --------   --------
 
NET INCREASE (DECREASE) IN CASH             (4,805)    (7,163)     4,649
 
Cash at beginning of year                   14,753     21,916     17,267
                                          --------   --------   --------
 
Cash at end of year                       $  9,948   $ 14,753   $ 21,916
                                          ========   ========   ========
</TABLE>

Noncash investing and financing activities:
 1. Net principal payments on mortgages payable were made by buyers on behalf of
    the Partnership totaling $13,010, $112,578 and $104,991 during the years
    ended December 31, 1997, 1996 and 1995, respectively.

 2. Noncash amounts related to the foreclosure of the Sierra Nevada project in
    1996 (see Note B):
      Write off deferred cash payment receivable             $  (338,778)
      Write off all-inclusive residual note receivable        (6,549,300)
      Write off accrued interest receivable                   (2,846,145)
      Write off deferred income                                4,859,208
      Write off mortgage payable                               4,875,015
                                                             -----------
                                                             $         -
                                                             =========== 

See notes to the financial statements.

                                      F-5
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                       NOTES TO THE FINANCIAL STATEMENTS

                       DECEMBER 31, 1997, 1996 AND 1995



A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

    A summary of the significant accounting policies consistently applied in the
    preparation of the accompanying financial statements follows.

    (1)  Organization and Line of Business

    American Housing Partners (the Partnership) was formed as a limited
    partnership on June 7, 1971 under the laws of the State of California, with
    its general partner, NIDC Managers, Inc. (NIDMI), owning five partnership
    interests and the initial limited partner owning five partnership interests.
    On August 31, 1971, the Partnership issued 7,000 partnership interests to
    limited partners through a public offering.

    The Partnership is engaged primarily in investing in limited partnerships
    that own and operate government-assisted, multi-family, residential rental
    projects.  The general partners of the limited partnerships generally are
    affiliates of NIDMI.

    The accompanying financial statements include only the assets, liabilities,
    results of operations and cash flows which relate to the Partnership, and
    not those attributable to the partners' individual activities.

    (2)  Investments in Limited Partnerships

    The Partnership uses the equity method to account for its investments in
    limited partnerships.  Accordingly, for financial statement purposes, when
    the carrying value of the investment has been reduced to zero, the
    Partnership discontinues recognizing its share of the limited partnerships'
    losses and recognizes cash distributions as income when received.

    (3)  Revenue Recognition

    Gains on the sale of investments in limited partnerships are accounted for
    using the cost recovery method.  Under this method, no gain is recognized
    until cash payments by the buyers to the Partnership exceed the
    Partnership's investments in the limited partnerships sold and all accrued
    interest has been received.

                                      F-6
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

                       DECEMBER 31, 1997, 1996 AND 1995



A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

    (4)  Income Taxes

    No provision has been made for income taxes in the accompanying financial
    statements since such taxes, if any, are the liability of the individual
    partners.

    (5)  Cash Equivalents

    The Partnership considers all highly liquid debt instruments purchased with
    a maturity of three months or less to be cash equivalents.

    (6)  Use of Estimates

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


B.  SALES OF INVESTMENTS IN LIMITED PARTNERSHIPS TO RELATED PARTIES

    Prior to 1985, six limited partnerships in which the Partnership had an
    interest disposed of the multi-family, HUD-regulated, residential rental
    projects and certain other assets and liabilities owned by them. The
    projects were sold for various sales prices consisting of cash down
    payments, deferred cash payments due in future annual installments and the
    remainder due in the form of nonrecourse all-inclusive residual notes
    receivable. The residual notes, which include the unpaid principal balances
    of the related underlying HUD mortgages, bear interest at 14% per annum and
    are collateralized by the various purchasers' partnership interests. The
    residual notes contain provisions which limit the accrual of interest if the
    sum of the unpaid principal plus accrued interest exceeds the appraised
    value of the respective project at specified dates. Based on values
    determined by management, the accrual of interest on two residual notes, one
    of which was lost through foreclosure in 1996, was suspended as of January
    1, 1992. All unpaid principal and interest is due in full through 2024.

                                      F-7
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

                       DECEMBER 31, 1997, 1996 AND 1995



B.  SALES OF INVESTMENTS IN LIMITED PARTNERSHIPS TO RELATED PARTIES (CONTINUED)

    The sales were made to partnerships whose general partners currently are
    affiliates of the general partner of the Partnership (two purchasing
    partnerships were related prior to 1985 and the remaining four partnerships
    became related during 1986).  Concurrent with the sales, the Partnership was
    assigned its share of the selling limited partnerships' rights and
    beneficial interests in and to the resulting residual notes receivable and
    the related underlying HUD mortgages, and also loans payable to the former
    managing general partners (Note D), none of which were assumed by the
    purchasers.  In 1985, the Partnership was assigned its share of the
    remaining assets of the limited partnerships.

    HUD took possession of the project owned by one of the purchaser
    partnerships effective November 1, 1994 and commenced foreclosure
    proceedings.  The foreclosure was completed in January, 1996 and, as a
    result, the Partnership lost its interest in the assets acquired and
    liabilities assumed in connection with the original sale.  Based on the
    accounting policy of the Partnership as described in Note A.(3), there was
    no net effect on the financial statements as a result of the foreclosure.
    The assets and liabilities written off as a result of the foreclosure are as
    follows:

<TABLE> 
      <S>                                          <C> 
      Deferred cash payment receivable             $  (338,778)
      All-inclusive residual note receivable        (6,549,300)
      Accrued interest receivable                   (2,846,145)
      Underlying mortgage payable                    4,875,015
      Deferred income                                4,909,804
      Reclassification of deferred income to
       allowance for uncollectibility of
       amounts due from affiliates                     (50,596)
                                                   ----------- 
               Net Effect                          $         -
                                                   =========== 
</TABLE> 

                                      F-8
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

                       DECEMBER 31, 1997, 1996 AND 1995



B.  SALES OF INVESTMENTS IN LIMITED PARTNERSHIPS TO RELATED PARTIES (CONTINUED)

    Additionally, in 1982, the Partnership and an unaffiliated individual sold
    their entire interest in a limited partnership to a partnership whose
    general partner is an affiliate of the general partner of the Partnership.
    The Partnership sold its interest for $823,000, of which $400,000 was
    received in cash and the remaining $423,000 is in the form of a note
    receivable, bearing interest at 19.5% per annum, due in 2002.  The note is
    collateralized by the purchaser's partnership interest.  Under the sales
    agreement, the individual will receive the next $800,000 in cash;
    thereafter, the additional payments will be split one-third to the
    Partnership and two-thirds to the individual.

    Under the terms of all the sales agreements, the purchasers' obligations to
    make payments on the notes receivable are limited to the purchasers' share
    of the allowable surplus cash distributions (as defined by HUD) received
    from the projects.  These distributions may not exceed the aggregate of
    $38,163 annually, plus prior allowable distributions.  No surplus cash
    distributions were received by the Partnership from the projects in 1995,
    1996 and 1997.  Aggregate allowable distributions were $432,326 at December
    31, 1997.  The purchasers are also obligated to make the payments on the
    related underlying HUD mortgages payable (Note D).

    Amounts due from the related parties in connection with these sales are
    summarized as follows:

<TABLE> 
<CAPTION> 
                                                 1997           1996
                                             ------------   ------------
      <S>                                    <C>            <C>
      Deferred cash payments due in
        various installments through
        1987.  At December 31, 1987,
        all remaining payments became
        delinquent                           $    160,288   $    160,288
      All-inclusive residual notes
        receivable                             11,704,225     11,704,225
      Note receivable                             423,000        423,000
      Accrued interest receivable              14,750,915     13,876,305
      Deferred gain on sales                   (5,824,572)    (5,824,572)
      Deferred interest income                (16,738,333)   (15,850,713)
                                             ------------   ------------
 
                                             $  4,475,523   $  4,488,533
                                             ============   ============
</TABLE>

                                      F-9
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

                       DECEMBER 31, 1997, 1996 AND 1995



C.  INVESTMENTS IN AND ADVANCES TO LIMITED PARTNERSHIPS

    The Partnership owns partnership interests in the following limited
    partnerships, each of which owns and operates a multi-family residential
    rental project:

      Homestead Limited Dividend Housing Association
      Pine Villa Associates
      Tanglewood Terrace, Ltd.
      Woodhaven Apartments Associates
      Columbia - Jennifer, Ltd.

    The projects are regulated by HUD as to the rent charges and operating
    methods. The mortgage loan obligations of the limited partnerships are
    insured by HUD and the interest payments are subsidized by HUD under
    Sections 221(d)(4) and 236 of the National Housing Act. As the limited
    partner, the Partnership is generally entitled to 99% of the profits and
    losses and varying lesser percentages of the proceeds from the sale or
    refinancing of the projects of each limited partnership in which it has
    invested.

    The following is a summary of the changes in the investments in and advances
    to the limited partnerships in which the Partnership had an equity interest:

<TABLE>
<CAPTION>
                                                1997           1996
                                             ----------     ----------
      <S>                                    <C>            <C>
      Balance, beginning of year             $       -      $       -
 
      Distributions from limited
       partnerships:
        Total distributions received          (122,705)       (20,513)
        Distributions received in
          excess of carrying values
          of the investments                   122,705         20,513
                                             ---------      ---------
 
                                                     -              -
                                             ---------      ---------

      Equity in net income of
       limited partnerships:
        Net income                             157,567        158,939
        Net income not recognized
          as the carrying values
          of the investments are
          at zero                             (157,567)      (158,939)
                                             ---------      ---------
 
      Net income recognized                          -              -
                                             ---------      ---------
 
      Balance, end of year                   $       -      $       -
                                             =========      =========
</TABLE>

                                      F-10
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

                       DECEMBER 31, 1997, 1996 AND 1995



C.  INVESTMENTS IN AND ADVANCES TO LIMITED PARTNERSHIPS (CONTINUED)

    Summarized balance sheets and statements of operations for the limited
    partnerships in which the Partnership has an equity interest are as follows:

                                BALANCE SHEETS

<TABLE>
<CAPTION>
ASSETS                                      1997          1996
                                        ------------  ------------
<S>                                     <C>           <C>
    Property and equipment, at cost:
      Buildings, equipment and
      furnishings                       $14,121,417   $13,993,302
        Less accumulated
          depreciation                    9,284,950     8,898,339
                                        -----------   -----------
                                          4,836,467     5,094,963
    Land                                    726,638       724,688
                                        -----------   -----------
                                          5,563,105     5,819,651
    Cash                                    238,361       322,009
    Other assets                          2,067,692     2,012,244
                                        -----------   -----------
 
                                        $ 7,869,158   $ 8,153,904
                                        ===========   ===========
        LIABILITIES AND PARTNERS'
          DEFICIT
 
    Mortgages payable                   $10,459,925   $10,672,230
    Other liabilities                       959,142       995,703
                                        -----------   -----------
                                         11,419,067    11,667,933
    Partners' deficit                    (3,549,909)   (3,514,029)
                                        -----------   -----------
 
                                        $ 7,869,158   $ 8,153,904
                                        ===========   ===========
 
    Partnership's share of
      partners' deficit                 $(2,829,891)  $(2,880,277)
 
    Cumulative cash distributions
      and losses from limited
      partnerships in excess of the
      Partnership's investment            2,829,891     2,880,277
                                        -----------   -----------
 
    Investments in and advances
      to limited partnerships           $         -   $         -
                                        ===========   ===========
</TABLE>

                                     F-11
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

                       DECEMBER 31, 1997, 1996 AND 1995



C.  INVESTMENTS IN AND ADVANCES TO LIMITED PARTNERSHIPS (CONTINUED)



                           STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                               1997         1996         1995
                            -----------  -----------  -----------
    <S>                     <C>          <C>          <C>
    Revenues:
     Rental                 $2,983,843   $2,779,632   $2,697,708
     Other                     173,198      275,444      281,498
                            ----------   ----------   ----------
                             3,157,041    3,055,076    2,979,206
                            ----------   ----------   ----------
 
    Expenses:
     Operating               1,826,649    1,755,620    1,852,040
     Depreciation              386,611      388,644      380,015
     Interest                  780,201      745,791      733,447
                            ----------   ----------   ----------
                             2,993,461    2,890,055    2,965,502
                            ----------   ----------   ----------
 
      NET INCOME            $  163,580   $  165,021   $   13,704
                            ==========   ==========   ==========
    Partnership's share
      of net income         $  157,567   $  158,939   $    9,363
 
    Net income not
      recognized as the
      carrying values
      of the investments
      have been reduced
      to zero                 (157,567)    (158,939)      (9,363)
                            ----------   ----------   ----------

    Equity in net income
      of limited
      partnerships
      recognized            $        -    $        -   $        -
                            ==========    ==========   ========== 
</TABLE>

                                     F-12
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

                       DECEMBER 31, 1997, 1996 AND 1995



D.  MORTGAGES AND LOANS PAYABLE

    As discussed in Note B, the Partnership was assigned interests in certain
    underlying HUD mortgages on the multi-family residential rental projects
    disposed of by limited partnerships in which the Partnership had an
    investment.  In February 1997, one of the HUD mortgages was paid with the
    proceeds of a conventional loan.  Responsibility for servicing the HUD
    mortgages remains with the sellers.  The Partnership's share of the
    mortgages is due in various monthly installments totaling $44,484, including
    interest at 7% to 10% per annum, through October, 2014.  The mortgages are
    collateralized by the apartment projects and the HUD mortgages are held by
    the Federal National Mortgage Association and insured by HUD.

    The following is a schedule of the Partnership's share of future maturities
    of the underlying HUD mortgages payable as of December 31, 1997:

<TABLE>
<CAPTION>
       Years ending
       December 31,
       ------------ 
       <S>               <C>       
         1998             $1,538,782
         1999                148,461
         2000                159,197
         2001                170,702
         2002                183,042
         Thereafter        3,024,540
                         -----------
                       
                         $ 5,224,724
                         ===========
</TABLE>

    Subsequent to December 31, 1997, the conventional loan was paid with the
    proceeds of a new conventional loan, thereby reducing the 1998 maturities by
    approximately $1,195,000.

    The Partnership was also assigned interests in certain loans, aggregating
    $543,765 at December 31, 1997 and December 31, 1996.  The loans are payable
    to the prior managing general partners of the limited partnerships in which
    the Partnership had an investment and were not assumed by the purchasers.
    The loans were originally made to finance construction costs that exceeded
    the original partners' capital contributions and the proceeds from the
    related HUD mortgages.  Theses loans are non-interest bearing and are
    payable based upon certain liquidation provisions in the various limited
    partnership agreements.

                                     F-13
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

                       DECEMBER 31, 1997, 1996 AND 1995



E.  MANAGEMENT AND LIQUIDATION FEES PAYABLE

    The Partnership entered into a management contract with NIDC Asset
    Management, Inc. (NIDAM), an affiliate of the general partner of the
    Partnership, for the performance of certain services.  The contract expires
    December 31, 1998, and continues thereafter on a month-to-month basis.
    Under the management contract, NIDAM pays the general and administrative
    expenses of the Partnership, except for legal and accounting expenses and
    the cost of communicating with the limited partners.  NIDAM earns an annual
    management fee based on the average annual tax deductions plus cash
    distributions per partnership interest, which can range from one-tenth to
    one-quarter of one percent of the Partnership's invested assets (defined as
    the Partnership's investment in and its share of the mortgage debt of the
    limited partnerships in which it has invested).  The minimum management fee
    is $50,000 per year.

    Additionally, the management contract provides that NIDAM is entitled to a
    liquidation fee from the sale of projects by the limited partnerships (to
    other than affiliates of the management company), once the requisite
    approval for a total or partial liquidation has been obtained. No
    liquidation fees were paid in 1995, 1996 and 1997.

                                     F-14
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

                       DECEMBER 31, 1997, 1996 AND 1995



F.  FEDERAL TAXABLE INCOME

    The following is a reconciliation between the net income (loss) per the
    financial statements and the net earnings for federal income tax purposes:

<TABLE> 
<CAPTION> 
                                    1997         1996        1995
                                 ----------  -----------  ----------
    <S>                          <C>         <C>          <C> 
    Net income (loss),
      financial statement
      basis                       $  33,600   $  (45,549)  $  30,334
 
    Equity in income
      of limited partnerships
      recognized for tax
      purposes but not
      recognized for
      financial statement
      purposes because the
      carrying values of the
      investments have been
      reduced to zero               222,816    2,558,986      33,017
 
    Distributions in excess
      of investments in and
      advances to limited
      partnerships                 (122,705)     (20,513)   (103,400)
 
    Net interest income
      recognized on
      residual notes
      receivable for tax
      purposes but deferred
      for financial
      statement purposes             79,077      112,578     104,991
 
    Variation in accounts
      payable and accrued
      items                          32,368       37,490       2,081
                                  ---------   ----------   ---------
 
    Net income, federal
      income tax basis            $ 245,156   $2,642,992   $  67,023
                                  =========   ==========   =========
 
    Federal tax basis net
      income per
      partnership unit
      (based upon 7,010
      units)                         $34.97      $377.03       $9.56
                                  =========   ==========   =========
</TABLE>

                                     F-15
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

                       DECEMBER 31, 1997, 1996 AND 1995



G.  DUE FROM AFFILIATES

    The Partnership has loaned funds to certain affiliated entities.  The
    balances receivable as of December 31, 1997 and 1996 are comprised of the
    following:

<TABLE>
<CAPTION>
                                        1997      1996
                                      --------  --------
           <S>                        <C>       <C>
           Advances                   $466,547  $398,047
           Accrued interest             17,568    11,863
                                      --------  --------
                                       484,115   409,910
           Less: Allowance for
                  uncollectibility     134,596   134,596
                                      --------  --------
 
                                      $349,519  $275,314
                                      ========  ========
</TABLE>

H.  CONTINGENT LIABILITY

    On May 8, 1997, the United States filed an action against Associated
    Financial Corporation ("AFC") and its affiliates (collectively, the "AFC
    Group") and others, in the United States District Court for the Northern
    District of California charging that the defendants were wrongfully
    participating in the fees earned by the management agent for several
    properties (not including any of the properties invested in by the
    Partnership) and had not disclosed this arrangement and, thus, were
    violating provisions of the applicable regulatory agreements and other
    agreements governing the subject properties.  The Complaint did, however,
    allege that the defendants made certain false claims regarding the condition
    of one property in which the Partnership had an interest in a deferred cash
    payment receivable, an all-inclusive residual note receivable and accrued
    interest receivable and was obligated on an underlying mortgage payable.
    This property was lost through foreclosure in January, 1996 and, as a
    result, the Partnership lost its interest in these items.  Defendants filed
    an answer on August 11, 1997, denying the material allegations of the
    Complaint, and asserting various separate and additional defenses.

    The government filed an amended complaint on March 2, 1998, adding
    additional defendants none of whom are part of the AFC Group and added a
    claim that the defendants, including the new defendants, made false claims
    in connection with the obtaining of insurance for various HUD-insured
    properties. The defendants have filed answers to the First Amended
    Complaint, again denying the material allegations of the Complaint and
    asserting various separate and additional defenses.

                                     F-16
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

                       DECEMBER 31, 1997, 1996 AND 1995



H.  CONTINGENT LIABILITY (Continued)

    While substantial document discovery has been completed, the defendants
    intend to move to compel significant delivery from the government of
    substantial additional documentation.  Deposition discovery is in its early
    stages.  Given the defendants' need to obtain significant additional
    discovery, counsel can offer no opinion as to the outcome of the litigation
    at this time.

    The general partner believes that when all of the facts are presented to an
    impartial judge, the defendants will be exonerated.  However, the complaint
    contains serious allegations against the defendants and every effort will be
    made to show that the government is wrong in bringing the lawsuit.  At this
    time, the general partner does not believe that there will be any material
    adverse effect to the Partnership and the operation of its investments.

I.  PARTNERSHIP STATUS

    The term of the Partnership, under its original Partnership Agreement,
    expired on December 31, 1993 and has not been renewed.  As a result, the
    Partnership has been operating since January 1, 1994 as a partnership in
    dissolution.  Therefore, no new properties or other assets can be acquired
    and the general partner has been obligated to bring about the orderly
    liquidation of the Partnership and the distribution of its assets to its
    partners.  The general partner has delayed liquidation of the Partnership
    because of difficulty in disposing of the assets, but it does not believe
    that the liquidation should be delayed further.

    The general partner will, therefore, sell the assets for the best price
    available and distribute the proceeds to the partners.  If some assets
    cannot be disposed of, the general partner will acquire them in order to
    permit the liquidation and termination of the Partnership by December 31,
    1998.

                                     F-17
<PAGE>
 
        [LETTERHEAD OF BAY SHERMAN CRAIG & GOLDSTEIN, LLP APPEARS HERE]

        Report of Independent Certified Public Accountants on Schedules
        ---------------------------------------------------------------


The Partners
American Housing Partners

In connection with our audits of the financial statements of American Housing
Partners referred to in our report dated June 19, 1998, which is included in
Part II of this Form 10-K, we did not audit the financial statements of certain
limited partnerships in which the Partnership has an investment, the statements
of which reflect total assets and revenues constituting 100% of the combined
totals of the limited partnerships in the years presented.  Such statements were
audited by other auditors, whose reports thereon have been furnished to us.
Insofar as the information presented on Schedules IV, XI, XII and XIII as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997 relates to these limited partnerships, our opinion is based
solely upon the reports of other auditors.  In our opinion, based on our audits
and the reports of other auditors, these schedules present fairly, in all
material respects, the information required to be set forth therein.


/s/ Bay Sherman Craig & Goldstein, LLP


Los Angeles, California
June 19, 1998

                                      S-1
<PAGE>
 
                  AMOUNTS DUE FROM RELATED PARTIES - CONTINUED

                          YEAR ENDED DECEMBER 31, 1997

                                                                     SCHEDULE IV


<TABLE> 
<CAPTION> 
                                                    Balance at                 Reductions   Balance at                
                                                     January 1,                   and      December 31,          
            Partnerships                               1997      Additions     Payments        1997             
---------------------------------------            -----------  ------------ -----------  -----------            
<S>                                               <C>           <C>          <C>          <C>                   
Deferred Cash Payments Receivable:                                                                              
   Country Acres Limited Partnership               $     6,582   $        -   $        -   $      6,582         
   Northview Limited Partnership                             -            -            -              -         
   Springwater Limited Partnership                           -            -            -              -                            
   Sunflower Park Limited Partnership                  137,000            -            -        137,000                             
   Thunderbird Apartments, Ltd. I                       16,706            -            -         16,706                             
                                                   -----------    ---------  -----------    -----------                             
                                                       160,288            -            -        160,288          
                                                   -----------    ---------  -----------    -----------          
                                                                                                                
14% All-inclusive Notes Receivable:                                                                             
   Country Acres Limited Partnership                 2,375,000            -            -      2,375,000         
   Northview Limited Partnership                     1,875,000            -            -      1,875,000         
   Springwater Limited Partnership                   2,810,100            -            -      2,810,100         
   Sunflower Park Limited Partnership                2,269,125            -            -      2,269,125         
   Thunderbird Apartments, Ltd. I                    2,375,000            -            -      2,375,000         
                                                   -----------    ---------  -----------    -----------         
                                                    11,704,225            -            -     11,704,225         
                                                   -----------    ---------  -----------    -----------         
                                                                                                                
19.5% Note Receivable:                                                                                          
   Wesbak Housing Fund I, Ltd.                         423,000            -            -        423,000                             
                                                   -----------    ---------  -----------    -----------           
                                                                                                                
Accrued Interest Receivable:                                                                                    
   Country Acres Limited Partnership                 2,819,132      332,500     (106,473)     3,045,159         
   Northview Limited Partnership                     2,225,248      262,500      (77,010)     2,410,738         
   Springwater Limited Partnership                   3,372,167      393,414     (139,042)     3,626,539         
   Sunflower Park Limited Partnership                1,016,527            -     (107,869)       908,658         
   Thunderbird Apartments, Ltd. I                    3,247,198      332,500      (98,395)     3,481,303         
   Wesbak Housing Fund I, Ltd.                       1,196,033       82,485            -      1,278,518         
                                                   -----------    ---------    ---------   ------------                          
                                                    13,876,305    1,403,399     (528,789)    14,750,915                          
                                                   -----------    ---------    ---------   ------------                          
                                                                                                                
Deferred Gain and Interest Income:                                                                              
   Country Acres Limited Partnership                (4,281,574)    (260,003)           -     (4,541,577)                         
   Northview Limited Partnership                    (3,581,503)    (207,830)           -     (3,789,333)                         
   Springwater Limited Partnership                  (5,133,050)    (180,339)           -     (5,313,389)                         
   Sunflower Park Limited Partnership               (2,650,418)     (30,727)     107,869     (2,573,276)                         
   Thunderbird Apartments, Ltd. I                   (4,409,707)    (234,105)           -     (4,643,812)                         
   Wesbak Housing Fund I, Ltd.                      (1,619,033)     (82,485)           -     (1,701,518)                         
                                                  ------------   ----------    ---------   ------------         
                                                   (21,675,285)    (995,489)     107,869    (22,562,905)        
                                                  ------------   ----------    ---------   ------------                         
                                                                                                                
                                                   $ 4,488,533   $  407,910    $(420,920)  $  4,475,523         
                                                  ============   ==========    ==========  ============          
</TABLE> 

                                      S-2
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                        AMOUNTS DUE FROM RELATED PARTIES

                          YEAR ENDED DECEMBER 31, 1996

                                                                     SCHEDULE IV

<TABLE> 
<CAPTION> 
                                                                                Foreclosure                      
                                                                                Reductions       Balance at       
                                                    January                         and         December 31,     
            Partnerships                              1996          Additions    Payments        1996            
---------------------------------------            -----------     ------------ ------------   ------------           
<S>                                                <C>             <C>          <C>            <C>               
Deferred Cash Payments Receivable:                                                                               
   Country Acres Limited Partnership                 $  6,582        $       -   $         -    $     6,582       
   Northview Limited Partnership                            -                -             -              -       
   Sierra Nevada Apartments, Ltd. I                   338,778                -      (338,778)             -       
   Springwater Limited Partnership                          -        ---------  ------------    -----------       
   Sunflower Park Limited Partnership                 137,000                -             -        137,000       
   Thunderbird Apartments, Ltd. I                      16,706                -             -         16,706       
                                                    ---------        ---------   -----------    -----------       
                                                      499,066                -      (338,778)       160,288       
                                                    ---------        ---------   -----------    -----------        
                                                                                                                 
14% All-inclusive Notes Receivable:                                                                              
   Country Acres Limited Partnership                2,375,000                -             -      2,375,000      
   Northview Limited Partnership                    1,875,000                -             -      1,875,000       
   Sierra Nevada Apartments, Ltd. I                 6,549,300                -    (6,549,300)             -        
   Springwater Limited Partnership                  2,810,100                -             -      2,810,100        
   Sunflower Park Limited Partnership               2,269,125                -             -      2,269,125      
   Thunderbird Apartments, Ltd. I                   2,375,000                -             -      2,375,000      
                                                   ----------        ---------   -----------    -----------      
                                                   18,253,525                -    (6,549,300)    11,704,225      
                                                   ----------        ---------   -----------    -----------      
                                                                                                                 
19.5% Note Receivable:                                                                                           
   Wesbak Housing Fund I, Ltd.                        423,000                -             -        423,000      
                                                   ----------        ---------    ----------    -----------       
                                                                                                                 
                                                                                                                 
Accrued Interest Receivable:                                                                                     
   Country Acres Limited Partnership                2,593,272           332,500     (106,640)     2,819,132      
   Northview Limited Partnership                    2,039,443           262,500      (76,695)     2,225,248      
   Sierra Nevada Apartments, Ltd. I                 2,846,145                 -   (2,846,145)             -      
   Springwater Limited Partnership                  3,097,806           393,414     (119,053)     3,372,167      
   Sunflower Park Limited Partnership               1,125,429                 -     (108,902)     1,016,527      
   Thunderbird Apartments, Ltd. I                   2,955,577           332,500      (40,879)     3,247,198            
   Wesbak Housing Fund I, Ltd.                      1,113,548            82,485            -      1,196,033          
                                                   ----------         ---------   ----------    -----------      
                                                   15,771,220         1,403,399   (3,298,314)    13,876,305      
                                                   ----------         ---------   ----------    -----------      
                                                                                                                 
Deferred Gain and Interest Income:                                                                               
   Country Acres Limited Partnership               (4,024,029)         (257,545)           -     (4,281,574)     
   Northview Limited Partnership                   (3,374,864)         (206,639)           -     (3,581,503)     
   Sierra Nevada Apartments, Ltd. I                (4,909,804)                -    4,909,804              -      
   Springwater Limited Partnership                 (4,827,285)         (305,765)           -     (5,133,050)     
   Sunflower Park Limited Partnership              (2,730,665)          (28,655)     108,902     (2,650,418)     
   Thunderbird Apartments, Ltd. I                  (4,118,086)         (291,621)           -     (4,409,707)     
   Wesbak Housing Fund I, Ltd.                     (1,536,548)          (82,485)           -     (1,619,033)     
                                                  -----------        ----------   ----------    -----------       
                                                  (25,521,281)       (1,172,710)   5,018,706    (21,675,285)     
                                                  -----------        ----------   ----------    -----------        
                                                                                                                 
                                                  $ 9,425,530       $   230,689  $(5,167,686)  $  4,488,533      
                                                  ===========        ==========   ==========    ===========       
</TABLE> 
                                                                              
                                     S-3 
<PAGE>
 
                                                                     SCHEDULE IV

                           AMERICAN HOUSING PARTNERS

                 AMOUNTS DUE FROM RELATED PARTIES - CONTINUED

                         YEAR ENDED DECEMBER 31, 1995



<TABLE> 
<CAPTION> 
                                                      Balance at                        Reductions      Balance at    
                                                      January 1,                           and         December 31,  
           Partnerships                                  1995            Additions       Payments          1995      
---------------------------------------              -------------      -----------     ----------     ------------    
<S>                                                  <C>                <C>             <C>            <C> 
Deferred Cash Payments Receivable:                   
   Country Acres Limited Partnership                 $     6,582        $         -     $        -     $      6,582  
   Northview Limited Partnership                               -                  -              -                -  
   Sierra Nevada Apartments, Ltd. I                      338,778                  -              -          338,778  
   Springwater Limited Partnership                             -                  -              -                -  
   Sunflower Park Limited Partnership                    137,000                  -              -          137,000  
   Thunderbird Apartments, Ltd. I                         16,706                  -              -           16,706  
                                                     -----------        -----------     ----------     ------------  
                                                         499,066                  -              -          499,066
                                                     -----------        -----------     ----------     ------------   

14% All-inclusive Notes Receivable:                                                                                  
   Country Acres Limited Partnership                   2,375,000                  -              -        2,375,000  
   Northview Limited Partnership                       1,875,000                  -              -        1,875,000  
   Sierra Nevada Apartments, Ltd. I                    6,549,300                  -              -        6,549,300  
   Springwater Limited Partnership                     2,810,100                  -              -        2,810,100  
   Sunflower Park Limited Partnership                  2,269,125                  -              -        2,269,125  
   Thunderbird Apartments, Ltd. I                      2,375,000                  -              -        2,375,000  
                                                     -----------        -----------      ---------      -----------  
                                                      18,253,525                  -              -       18,253,525  
                                                     -----------        -----------      ---------      -----------   

19.5% Note Receivable:
   Wesbak Housing Fund I, Ltd.                           423,000                  -              -          423,000  
                                                     -----------        -----------      ---------      -----------   

Accrued Interest Receivable:                                                                                          
   Country Acres Limited Partnership                   2,367,413            332,500       (106,641)       2,593,272 
   Northview Limited Partnership                       1,862,646            262,500        (85,703)       2,039,443 
   Sierra Nevada Apartments, Ltd. I                    2,846,145                  -              -        2,846,145  
   Springwater Limited Partnership                     2,827,260            393,414       (122,868)       3,097,806  
   Sunflower Park Limited Partnership                  1,233,299                  -       (107,870)       1,125,429  
   Thunderbird Apartments, Ltd. I                      2,623,077            332,500              -        2,955,577  
   Wesbak Housing Fund I, Ltd.                         1,031,063             82,485              -        1,113,548  
                                                     -----------        -----------      ---------      -----------  
                                                      14,790,903          1,403,399       (423,082)      15,771,220  
                                                     -----------        -----------      ---------      -----------  

Deferred Gain and Interest Income:                                                                                   
   Country Acres Limited Partnership                  (3,768,620)          (255,409)             -       (4,024,029) 
   Northview Limited Partnership                      (3,178,637)          (196,227)             -       (3,374,864)
   Sierra Nevada Apartments, Ltd. I                   (4,909,804)                 -              -       (4,909,804) 
   Springwater Limited Partnership                    (4,527,452)          (299,833)             -       (4,827,285) 
   Sunflower Park Limited Partnership                 (2,811,811)           (26,724)       107,870       (2,730,665) 
   Thunderbird Apartments, Ltd. I                     (3,785,586)          (332,500)             -       (4,118,086) 
   Wesbak Housing Fund I, Ltd.                        (1,454,063)           (82,485)             -       (1,536,548) 
                                                     -----------        -----------      ---------      -----------  
                                                     (24,435,973)        (1,193,178)       107,870      (25,521,281) 
                                                     -----------        -----------      ---------      -----------  
                                                                                                                    
                                                     $ 9,530,521        $   210,221      $(315,212)     $ 9,425,530 
                                                     ===========        ===========      =========      ===========  
</TABLE> 

                                      S-4
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

              REAL ESTATE AND ACCUMULATED DEPRECIATION OF LIMITED
            PARTNERSHIPS IN WHICH THE PARTNERSHIP HAS AN INVESTMENT

                               DECEMBER 31, 1997

                                                                     SCHEDULE XI

<TABLE>
<CAPTION>
                                                                                          Land,                       
                                                                                          Buildings,                  
                                                                                          Equipment,                  
                                                                Initial Cost to           and Furnish-                
                                                                  Partnership             ings Costs                  
                                                              ----------------------                                  
                              Number -                                   Buildings,       Capitalized                 
                              Type of        Outstanding                 Equipment,       Since                       
Partnership/Location          Apartments     Mortgage          Land      Furnishings      Completion            Land           
------------------------      ----------     -----------    -----------  -----------      ------------       -----------        
<S>                           <C>            <C>            <C>          <C>              <C>                <C> 
Columbia-Jennifer,            50-Garden      $   674,393    $    21,907  $ 1,011,149      $          -       $    21,907  
  Ltd; Columbus, OH                                                                                                             
                                                                                                                 
Homestead Limited             102-Garden       6,667,110        196,866    2,694,378         3,628,118           425,939
  Dividend Housing            48-Town-                                                                        
  Association;                house                                                                           
  Portage, MI                                                                                                 
                                                                                                              
Pine Villa                    50-Garden          505,273         46,334      789,603           625,204            68,276        
  Associates;                                                                                                                   
  Spokane, WA                                                                                                         
                                                                                                                               
Tanglewood Terrace,           196-Garden       1,605,416         91,733    2,856,587           502,643            91,733
  Ltd; Texarkana, TX                                                                                                    
                                                                                                                                 
Woodhaven Apartments          72-Garden        1,007,733         79,768    1,698,994           604,771           118,783        
  Associates;                                                                                                             
  Spokane, WA                                                                                                    
                                            ------------       --------   ----------        ----------       -----------
                                            $ 10,459,925       $436,608   $9,050,711        $5,360,736       $   726,638  
                                            ============       ========   ==========        ==========       ===========
<CAPTION>
                                                                                                     Lives              
                                                                                                     on Which           
                                   Amount at Which Carried at                                        Depreciation       
                                       Close of Period                                               in Latest          
                             ------------------------------------                                                              
                                Buildings                                                            Statement of       
                                Equipment,                        Accumulated       Construction     Operations         
Partnership/Location            Furnishings         Total         Depreciation      Period           is Computed        
------------------------        -----------       -----------     ------------      ------------     -----------        
<S>                             <C>               <C>             <C>               <C>              <C>                
Columbia-Jennifer,              $ 1,011,149       $ 1,033,056      $   730,470         1975-1976          8-33           
  Ltd; Columbus, OH                                                                                           
                                  
Homestead Limited                 6,093,423         6,519,362        3,021,675         1971-1972          4-33 
  Dividend Housing                                                                   
  Association;                                                                                                 
  Portage, MI                                                                        
                                                                                                               
Pine Villa                        1,392,865         1,461,141          933,988         1971-1972          5-33      
  Associates;                                                                                                  
  Spokane, WA                                                                        
                                                                                     
Tanglewood Terrace,               3,359,230         3,450,963        2,780,789         1971-1973          5-33    
  Ltd; Texarkana, TX                                                                 
                                                                                     
Woodhaven Apartments              2,264,750         2,383,533        1,818,028         1972-1973          5-36    
  Associates;             
  Spokane, WA                                                  
                                -----------       -----------      -----------
                                $14,121,417       $14,848,055      $ 9,284,950                                            
                                ===========       ===========      ===========  
</TABLE> 

                                      S-5
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                             NOTES TO THE SCHEDULE                   SCHEDULE XI

              REAL ESTATE AND ACCUMULATED DEPRECIATION OF LIMITED
            PARTNERSHIPS IN WHICH THE PARTNERSHIP HAS AN INVESTMENT

                 YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

1. Each limited partnership owns and operates a multi-family, HUD-regulated,
   residential housing project. During the related construction stage, all costs
   of developing the projects were included in construction-in-progress. Upon
   substantial completion, the costs were reclassified to building and
   improvements.

2. The aggregate cost of land, buildings, equipment and furnishings for federal
   income tax purposes at December 31, 1997, 1996 and 1995 is $14,387,256,
   $14,257,194 and $14,095,555, respectively.

3. Investments in property and equipment:

<TABLE>
   <S>                                         <C>
   Cost:
          Balance, January 1, 1995             $13,765,868         
                                                            
          Additions                                790,483  
                                                            
          Retirements                                    -  
                                               -----------  
                                                            
          Balance, December 31, 1995            14,556,351  
                                                            
          Additions                                168,794  
                                                            
          Retirements                               (7,155) 
                                               -----------  
                                                            
          Balance, December 31, 1996            14,717,990  
                                                            
          Additions                                130,065  
                                                            
          Retirements                                    -  
                                               -----------  
                                                            
          Balance, December 31, 1997           $14,848,055  
                                               ===========   
</TABLE>

                                      S-6
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                       NOTES TO THE SCHEDULE - CONTINUED             SCHEDULE XI

              REAL ESTATE AND ACCUMULATED DEPRECIATION OF LIMITED
            PARTNERSHIPS IN WHICH THE PARTNERSHIP HAS AN INVESTMENT

                 YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

3. Investments in property and equipment (Continued):
 
   Accumulated depreciation:

<TABLE> 
          <S>                                                 <C>     
          Balance, January 1, 1995                            $8,133,960      
                                                                              
          Depreciation charged to expense during                              
           the year                                              380,015      
                                                                              
          Retirements                                                  -      
                                                              ----------      
                                                                              
          Balance, December 31, 1995                           8,513,975      
                                                                              
          Depreciation charged to expense during                              
           the year                                              388,644      
                                                                              
          Retirements                                             (4,280)     
                                                              ----------      
                                                                              
          Balance, December 31, 1996                           8,898,339      
                                                                              
          Depreciation charged to expense during                              
           the year                                              386,611      
                                                                              
          Retirements                                                  -      
                                                              ----------      
                                                                              
          Balance, December 31, 1997                          $9,284,950      
                                                              ==========       
</TABLE>

                                      S-7
<PAGE>

                                                                    SCHEDULE XII
 
                          AMERICAN HOUSING PARTNERS 

                         MORTGAGE LOANS ON REAL ESTATE

                               DECEMBER 31, 1997



First mortgages, interests in which were assigned to the Partnership upon sale
of the real estate by the selling limited partnerships:

<TABLE> 
<CAPTION> 
                                                                                                    (1)           (1)
                                                                                 Final            Monthly         Face        
                                                         Type of     Interest   Maturity          Payments     Amount of      
          Partnership/Location                           Property      Rate       Date           to Maturity   Mortgages      
-----------------------------------------------------   ----------   --------   --------------   -----------   ----------    
<S>                                                     <C>          <C>        <C>              <C>           <C> 
Country Acres Apartments; La Porte, Indiana             Apartments   7%         February, 2013     $ 8,473     $1,352,230     
                                                                                                                                
Northview Gardens Apartments; Henry County, Virginia    Apartments   7%         June, 2014           6,115        984,000     
                                                                                                                                
Springwater Apartments; Denver, Colorado                Apartments   10% (2)    August, 1998 (2)    10,213 (2)  1,225,500 (2) 
                                                                                                                                
Sunflower Park Apartments; Kansas City, Kansas          Apartments   7%         September, 2014      8,558      1,377,225     
                                                                                                                                
Thunderbird Apartments; Las Vegas, Nevada               Apartments   7%         December, 2012      11,125      1,659,365     
                                                                                                   -------     ----------     
                                                                                                   $44,484     $6,598,320     
                                                                                                   =======     ==========     

<CAPTION> 
                                                                (1)
                                                              Carrying                                                  
                                                              Amount of       
          Partnership/Location                                Mortgages      
----------------------------------------------------        -------------   
<S>                                                              <C>         
Country Acres Apartments; La Porte, Indiana                 $     948,606    
                                                                             
Northview Gardens Apartments; Henry County, Virginia              716,890    
                                                                             
Springwater Apartments; Denver, Colorado                        1,225,500     
                                                                              
Sunflower Park Apartments; Kansas City, Kansas                  1,011,394
                                                                              
Thunderbird Apartments; Las Vegas, Nevada                       1,322,334      
                                                            -------------
                                                            $   5,224,724          
                                                            =============
</TABLE> 

The Springwater obligation is a conventioned loan, while those for the other
projects are HUD-insured.                                                   
                                                                            
   (1)  Partnership's share

   (2)  Subsequent to December 31, 1997, the Springwater loan was paid with
        the proceeds of a new conventional loan, the terms of which are
        follows:

See notes to the schedule.

<TABLE> 
<S>                                         <C>
               Interest rate                      7.65%
               Final maturity date                2023
               Monthly payments                $20,273
               Amount                       $2,707,500
</TABLE>

                                      S-8
<PAGE>

                                                                    SCHEDULE XII
 
                           AMERICAN HOUSING PARTNERS

                   MORTGAGE LOANS ON REAL ESTATE - CONTINUED

                               DECEMBER 31, 1997



HUD insured first mortgages on properties owned by limited partnerships in which
the Partnership has an investment:

<TABLE> 
<CAPTION> 
                                                                                                (1)           (1)           (1)     
                                                                               Final          Monthly         Face        Carrying  
                                                          Type of  Interest   Maturity        Payments      Amount of     Amount of 
          Partnership/Location                           Property    Rate      Date          to Maturity    Mortgages     Mortgages 
-----------------------------------------------------   ----------   ----  ---------------   -----------    ----------    ----------
<S>                                                     <C>        <C>     <C>               <C>            <C>           <C> 
Columbia-Jennifer, Ltd.; Columbus, Ohio                 Apartments    7%   September, 2016      $ 5,390     $  867,400    $  674,393
                                                                                                                                    
Homestead Limited Dividend Housing Association;                                                                                     
 Portage, Michigan                                      Apartments  6.5%   January, 2013         16,378      2,935,400     1,859,852
                                                                                                                                    
Pine Villa Associates; Spokane, Washington              Apartments    8%   May, 2012              4,930        709,000       505,273
                                                                                                                                    
Tanglewood Terrace, Ltd.; Texarkana, Texas              Apartments    7%   September, 2013       14,391      2,315,800     1,605,416
                                                                                                                                    
Woodhaven Apartments Associates; Spokane, Washington    Apartments    7%   November, 2013         8,765      1,410,500     1,007,733
                                                                                                -------     ----------    ----------
                                                                                                $49,854     $8,238,100    $5,652,667
                                                                                                =======     ==========    ==========
HUD insured second mortgages on properties owned by limited 
partnerships in which the Partnership has an investment:

Homestead Limited Dividend Housing Association;
 Portage, Michigan                                    Apartments    8.75%       2036            $36,367     $4,835,000   $ 4,807,258
                                                                                                =======    ===========   ===========
                                                                                                                                    
                                                                                       Total                             $10,459,925
                                                                                                                         ===========
</TABLE> 

(1)  100% amounts; Partnership's share is generally 99%.

See notes to the schedule.

                                      S-9
<PAGE>
 
                           AMERICAN HOUSING PARTNERS

                            NOTES TO THE SCHEDULE                 SCHEDULE XII

                   MORTGAGE LOANS ON REAL ESTATE - CONTINUED

                               DECEMBER 31, 1997

1.   Each limited partnership in which the Partnership has an investment owns an
     apartment project financed with a HUD-insured mortgage. Six of these
     limited partnerships sold their properties for cash and all-inclusive
     residual notes receivable, while remaining directly liable under the HUD
     mortgage. These limited partnerships assigned the residual notes receivable
     and the underlying HUD mortgages to their partners, including the
     Partnership.

2.   The total federal income tax basis is the same as the carrying amounts in
     the schedule.

3.   Carrying amount of the mortgage loans:

<TABLE>                                              
<CAPTION>                                                     
                                                                 (2)    
                                                            Mortgage Loans
                                                 (1)         of Limited
                                               Mortgage     Partnerships
                                           Loans Assigned   in Which the
                                              to the       Partnership Has
                                            Partnership     an Investment
                                            -----------    ---------------
     <S>                                    <C>            <C> 
     Balance at January 1, 1995             $10,330,318       $ 9,865,564
 
     Borrowings during the year                       -           953,518
 
     Payments on principal during
      the year                                 (104,991)         (172,119)
                                            -----------       -----------
 
     Balance at December 31, 1995            10,225,327        10,646,963
 
     Borrowings during the year                       -           222,201
 
     Payments on principal during
      the year                                 (112,578)         (196,934)
 
     Foreclosure during the year             (4,875,015)                -
                                            -----------       -----------
 
     Balance at December 31, 1996             5,237,734        10,672,230
 
     Borrowings during the year                       -                 -
 
     Payments on principal during the
      year - Net of refinance proceeds          (13,010)         (212,305)
                                            -----------       -----------
 
     Balance at December 31, 1997           $ 5,224,724       $10,459,925
                                            ===========       ===========
</TABLE>

      (1)  Partnership's share

      (2)  100% amounts; Partnership's share is generally 99%.

                                     S-10

<PAGE>

                                                                   SCHEDULE XIII

                           AMERICAN HOUSING PARTNERS

                    INVESTMENTS IN AND ADVANCES TO LIMITED

                                 PARTNERSHIPS

                         YEAR ENDED DECEMBER 31, 1997



The following schedule summarizes the cumulative equity in net income and losses
and cash distributions not recorded in the investments in and advances to
limited partnerships account, as the carrying values of the investments are at
zero:

<TABLE> 
<CAPTION> 
                                                                                                            (A)
                                 % of     % of Interest    Balance                           Equity in      Cash         Balance
                               Ownership    in Profit      January      Adjust-    Invest-   Net Income    Distri-       December
    Limited Partnership        Interest     and Losses     1, 1997       ments      ments      (Loss)      butions       31, 1997
----------------------------   ---------  -------------  ----------    --------   --------   ----------   ---------    -----------
<S>                            <C>        <C>            <C>           <C>        <C>        <C>          <C>          <C>  
Columbia-Jennifer, Ltd.          98.98%        98.98%    $  (258,069)  $    742   $      -   $    7,838   $  (5,498)   $  (254,987)
Homestead Limited Dividend                                                                                             
 Housing Associates              99.00         99.00        (838,281)        (1)         -      105,745    (102,424)      (834,961)
Pine Villa Associates            98.52         99.00          (8,008)         -          -       47,030           -         39,022
Tanglewood Terrace, Ltd.         99.00         99.00      (1,350,550)         -          -      (31,745)          -     (1,382,295)
Woodhaven Apartments                                                                                                   
 Associates                      95.00         99.00        (425,369)         -          -       28,699           -       (396,670)
                                                         -----------   --------    -------   ----------   ---------    -----------
                                                         $(2,880,277)  $    741    $     -   $  157,567   $(107,922)   $(2,829,891)
                                                         ===========   ========    =======   ==========   =========    =========== 

                                             (A)  Cash distributions                                                   $  (107,922)
                                                  Cash distribution reflected
                                                  by partnership in 1996 but
                                                  not received until 1997                                                  (14,783)
                                                                                                                       ----------- 

                                                     1997 Income                                                       $  (122,705)
                                                                                                                       ===========  
</TABLE> 
                                                                              

                                      S-11