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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934



for the quarter ended March 31, 2003



Commission File Number 0-17669



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NATIONAL HOUSING TRUST LIMITED PARTNERSHIP

(A Delaware Limited Partnership)



I.R.S. Employer Identification No. 04-2981989



2335 North Bank Drive, Columbus, OH 43220

Registrants Telephone Number, Including Area Code: (614) 451-9929



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



None



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



Units of Limited Partnership Interest



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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No ̈



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



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NATIONAL
HOUSING TRUST LIMITED PARTNERSHIP

A DELAWARE LIMITED PARTNERSHIP

March 31, 2003 FORM 10-Q



TABLE OF CONTENTS



|                                 |  | PAGE NO.                                                                             
|-------------------------------- |  | -------------------------------------------------------------------------------------
|                                
|PART I     FINANCIAL
INFORMATION |  |                                                                                      
|                                
|Item1.                           |  | Unaudited Combined Financial Statements                                              
|                                
|                                 |  | Combined Balance Sheets                                                              
|                                
|                                 |  | Combined Statements of Operations                                                    
|                                
|                                 |  | Combined Statements of Cash Flows                                                    
|                                
|                                 |  | Notes to Combined Financial Statements                                               
|                                
|Item 2.                          |  | Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                
|Item 3.                          |  | Quantitative and Qualitative Disclosures about Market Risk                           
|                                
|Item 4.                          |  | Controls and Procedures                                                              
|                                
|PART II     OTHER INFORMATION    |  |                                                                                      
|                                
|Other Information                |  | 15                                                                                   
|                                
|Signatures                       |  | 16                                                                                   



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NATIONAL HOUSING TRUST LIMITED PARTNERSHIP

COMBINED BALANCE SHEETS MARCH 31, 2003 (UNAUDITED) AND
DECEMBER 31, 2002

(In Thousands)



|                                  |  | March 31 2003 |         |   | December 31 2002 |  
|--------------------------------- |  | ------------- | ------- | - | ---------------- | -
|                                  |  | (Unaudited)   |         |   |                  |  
|ASSETS                            |  |               |         |   |                  |  
|Current Assets:                   |  |               |         |   |                  |  
|Cash and cash equivalents         |  | $             | 1,044   |   |                  | $
|Tenants security deposits        |  |               | 404     |   |                  |  
|Mortgage escrow deposits          |  |               | 814     |   |                  |  
|Prepaid expenses and other assets |  |               | 1,274   |   |                  |  
|                                  |  |               |         |   |                  |  
|Total current assets              |  |               | 3,536   |   |                  |  
|                                  |  |               |         |   |                  |  
|Restricted Cash:                  |  |               | 4,880   |   |                  |  
|                                  |  |               |         |   |                  |  
|Rental property held for sale:    |  |               | 1,795   |   |                  |  
|                                  |  |               |         |   |                  |  
|Rental property:                  |  |               |         |   |                  |  
|Buildings and improvements        |  |               | 66,508  |   |                  |  
|Furniture and equipment           |  |               | 2,576   |   |                  |  
|                                  |  |               |         |   |                  |  
|                                  |  |               | 69,084  |   |                  |  
|Less accumulated depreciation     |  |               | (33,131 | ) |                  |  
|                                  |  |               |         |   |                  |  
|                                  |  |               | 35,953  |   |                  |  
|Land                              |  |               | 3,097   |   |                  |  
|                                  |  |               |         |   |                  |  
|                                  |  |               | 39,050  |   |                  |  
|                                  |  |               |         |   |                  |  
|Total assets                      |  | $             | 49,261  |   |                  | $
|                                  |  |               |         |   |                  |  



The
accompanying notes are an integral part of the combined financial statements.



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NATIONAL
HOUSING TRUST LIMITED PARTNERSHIP

COMBINED BALANCE SHEETS, CONTINUED

(In Thousands, except Investment Units)



|                                                     |  | March 31 2003 |         |   | December 31 2002 |  
|---------------------------------------------------- |  | ------------- | ------- | - | ---------------- | -
|                                                     |  | (Unaudited)   |         |   |                  |  
|LIABILITIES AND PARTNERS CAPITAL                    |  |               |         |   |                  |  
|Current liabilities:                                 |  |               |         |   |                  |  
|Current maturities of long-term debt                 |  | $             | 6,821   |   |                  | $
|Accounts payable and accrued expenses                |  |               | 4,051   |   |                  |  
|Rents received in advance                            |  |               | 71      |   |                  |  
|Deposits held                                        |  |               | 443     |   |                  |  
|Accrued interest on mortgage notes payable           |  |               | 268     |   |                  |  
|                                                     |  |               |         |   |                  |  
|Total current liabilities                            |  |               | 11,654  |   |                  |  
|                                                     |  |               |         |   |                  |  
|Long-term debt, less current maturities:             |  |               |         |   |                  |  
|Mortgage notes payable                               |  |               | 30,734  |   |                  |  
|Promissory notes, including accrued interest payable |  |               | 36,970  |   |                  |  
|                                                     |  |               |         |   |                  |  
|                                                     |  |               | 67,704  |   |                  |  
|                                                     |  |               |         |   |                  |  
|Partners deficit:                                   |  |               |         |   |                  |  
|General Partners:                                    |  |               |         |   |                  |  
|NHT, Inc.                                            |  |               | (36     | ) |                  |  
|Other Operating General Partners                     |  |               | (263    | ) |                  |  
|                                                     |  |               |         |   |                  |  
|Limited partners:                                    |  |               |         |   |                  |  
|Issued and outstanding 1,014,668 investment units    |  |               | (29,798 | ) |                  |  
|                                                     |  |               |         |   |                  |  
|                                                     |  |               | (30,097 | ) |                  |  
|                                                     |  |               |         |   |                  |  
|Total liabilities and partners capital              |  | $             | 49,261  |   |                  | $
|                                                     |  |               |         |   |                  |  



The
accompanying notes are an integral part of the combined financial statements.



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NATIONAL
HOUSING TRUST LIMITED PARTNERSHIP

COMBINED STATEMENTS OF OPERATIONS (UNAUDITED
)

FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002

(In Thousands, except per Unit Amounts)



|                                      |  | 2003 |        |   | 2002 |  
|------------------------------------- |  | ---- | ------ | - | ---- | -
|Revenues:                             |  |      |        |   |      |  
|Rental revenues                       |  | $    | 3,050  |   |      | $
|Other income                          |  |      | 91     |   |      |  
|                                      |  |      |        |   |      |  
|Total revenues                        |  |      | 3,141  |   |      |  
|                                      |  |      |        |   |      |  
|Expenses:                             |  |      |        |   |      |  
|Administration                        |  |      | 517    |   |      |  
|Operating and maintenance             |  |      | 682    |   |      |  
|Management fees                       |  |      | 245    |   |      |  
|Partnership asset management fees     |  |      | 85     |   |      |  
|Utilities                             |  |      | 614    |   |      |  
|Taxes and insurance                   |  |      | 562    |   |      |  
|Depreciation and amortization         |  |      | 642    |   |      |  
|                                      |  |      |        |   |      |  
|Total expenses                        |  |      | 3,347  |   |      |  
|                                      |  |      |        |   |      |  
|Income (loss) from rental operations  |  |      | (206   | ) |      |  
|                                      |  |      |        |   |      |  
|Other revenues and (expenses):        |  |      |        |   |      |  
|Interest income                       |  |      | 29     |   |      |  
|Interest expense                      |  |      | (907   | ) |      |  
|                                      |  |      |        |   |      |  
|Net loss                              |  | $    | (1,084 | ) |      | $
|                                      |  |      |        |   |      |  
|Net loss per limited partnership unit |  | $    | (1.07  | ) |      | $
|                                      |  |      |        |   |      |  



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NATIONAL
HOUSING TRUST LIMITED PARTNERSHI
P

COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002

(In
Thousands)



|                                                                                |  | 2003 |        |   | 2002 |  
|------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | -
|Cash flows from operating activities:                                           |  |      |        |   |      |  
|Net loss                                                                        |  | $    | (1,084 | ) |      | $
|Adjustments to reconcile net loss to net cash provided by operating
activities: |  |      |        |   |      |  
|Depreciation and amortization                                                   |  |      | 642    |   |      |  
|Accrued interest on promissory notes                                            |  |      | 585    |   |      |  
|Changes in operating assets and liabilities:                                    |  |      |        |   |      |  
|Increase in deposits, prepaids and other assets                                 |  |      | (385   | ) |      |  
|Increase (decrease) in accounts payable and accrued expenses                    |  |      | 278    |   |      |  
|Increase (decrease) in other current liabilities                                |  |      | 103    |   |      |  
|                                                                                |  |      |        |   |      |  
|Cash provided by operations                                                     |  |      | 139    |   |      |  
|                                                                                |  |      |        |   |      |  
|Investing activities:                                                           |  |      |        |   |      |  
|Additions to buildings, furniture and Equipment, net                            |  |      | (358   | ) |      |  
|Withdrawals from (deposits to) restricted cash, net                             |  |      | 556    |   |      |  
|                                                                                |  |      |        |   |      |  
|Cash used for investing activities                                              |  |      | 198    |   |      |  
|                                                                                |  |      |        |   |      |  
|Financing Activities:                                                           |  |      |        |   |      |  
|Payments of term debt                                                           |  |      | (286   | ) |      |  
|                                                                                |  |      |        |   |      |  
|Net cash (used) for, provided by financing activities                           |  |      | (286   | ) |      |  
|                                                                                |  |      |        |   |      |  
|Increase (decrease) in cash and cash equivalents                                |  |      | 51     |   |      |  
|Cash and cash equivalents beginning of year                                     |  |      | 993    |   |      |  
|                                                                                |  |      |        |   |      |  
|Cash and cash equivalents end of period                                         |  | $    | 1,044  |   |      | $
|                                                                                |  |      |        |   |      |  



The
accompanying notes are an integral part of the combined financial statements.



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NATIONAL
HOUSING TRUST LIMITED PARTNERSHI
P

(UNAUDITED)

NOTES TO COMBINED FINANCIAL STATEMENTS



NOTE ABASIS OF PRESENTATION



The accompanying combined financial statements include the accounts of National Housing Trust Limited Partnership (the
Investment Partnership) and the Operating Partnerships in which it has acquired significant limited partnership interests.



The information furnished reflects all adjustments (all of which were of a normal recurring nature) which are, in the opinion of management, necessary to
fairly present the combined financial position, results of operations, and cash flows on a consistent basis.



The accompanying unaudited combined financial statements are presented in accordance with the requirements for Form 10-Q and consequently do not include all disclosures normally required by generally
accepted accounting principles. Reference should be made to the Partnerships 2002 Annual Report on Form 10-K for additional disclosures including a summary of the Partnerships accounting policies which are not significantly different.



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|ITEM 2. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
S
|------- |  | --------------------------------------------------------------------------------------



General



In 1988, the Investment
Partnership raised $20,293,000 in gross proceeds through a public offering. After paying the selling, offering and organization expenses of the offering, the Investment Partnership had $17,249,000 in net proceeds. Of the net proceeds, $260,000 was
deposited in the Investment Partnership reserve and $16,989,000 was invested in 31 Operating Partnerships. The 31 Operating Partnerships that were acquired own low-income housing developments eligible for the low-income housing tax credit. One of
the Properties was also eligible for the historic rehabilitation tax credit. The 31 acquisitions occurred from October 1988 through March 1990. Two Operating Partnerships were liquidated in 1998, having paid remaining Operating Partnership
liabilities out of available Operating Partnership cash. Any cash in excess of liabilities was distributed to the Partnership. As Partnership liabilities were in excess of assets and available cash, no distributions were made to holders of Units of
limited partnership interest in the Investment Partnership (the Unit holders). The Springchase Apartments Limited Partnership was dissolved in 1999. The Trinidad Apartments Limited Partnership is expected to be dissolved in 2003. One
Operating Partnership was sold in November 2001, per approval from the Unit holders. The tax credits were bonded. Any cash in excess of the liabilities was distributed to the Partnership. As Partnership liabilities were in excess of assets and
available cash, no distributions were made to the Unit holders. The two Operating Partnerships that owned Traverse Woods I and Traverse Woods II merged in 2002. This was undertaken principally to combine replacement reserves for capital improvements
at the two Properties. The merger should have no effect to the Investment Partnership Unit holders.



Each Operating Partnerships Property qualifies for the Low Income Housing Tax Credits (LIHTC). The LIHTC program was created by the 1986 Tax Reform Act and is governed by Section 42
of the Internal Revenue Code. In order for a Property to qualify for the LIHTCs, the Property must be utilized as a low-income property for 15 years before it can be sold. The General Partner anticipates the Properties will be sold starting in the
years 2003 through 2008. The Investment Partnership serves as a conduit of the Operating Partnerships tax credits, passive losses, portfolio income and other tax information to the Unit holders. The LIHTCs are allocated to the Unit holders for
10 years after a property has been placed in service and rented up. The tax credits were first allocated to Unit holders in 1988. The Investment Partnership elected a special option available in 1990 to accelerate the LIHTC for individuals who had
an interest in the Investment Partnership before October 26, 1990. Qualifying Unit holders received a tax credit of 150% of the LIHTC otherwise allowable for the first tax year ending December 31, 1990. The remaining tax credit available for 1991
and subsequent tax years is being reduced on a pro rata basis by the amount of the 1990 increased credit. Non-qualifying Unit holders will receive the original unaccelerated tax credit for the remaining qualifying tax years of their investment.



An analysis of future tax credits anticipated based upon current
information and assuming no changes in the Operating Partnerships indicates an estimate of future tax credits for the qualifying Unit holders who received the 1990 acceleration to be as follows: approximately $ .04 of credit per unit for the years
ending December 31, 2003 and 2004.



In certain respects
government-assisted housing complexes differ from conventional housing complexes. These differences include (a) greater financing leverage than is usual in conventional complexes, (b) review of compliance with construction and other standards and
(c) various contingency reserves required in connection with such government assistance programs. Government-assisted housing is also subject to special conditions and risks including, but not limited to, (a) general surveillance by the appropriate
governmental assistance agency, which may include the application of rental and other guidelines affecting tenant eligibility, operating costs and rental levels, (b) maintenance of a reserve fund for replacements in an amount paid concurrently with
amortization of the mortgage and in addition to payments of principal and interest, restricted such that withdrawals from the fund are subject to the prior approval of the appropriate governmental agency, (c) compliance with HUD regulations
regarding management of the premises, (d) limitations on salability, as contained in regulatory agreements with the appropriate governmental assistance agency, (e) limitations on rent increases, and (f) the uncertain effects of changes in complex
rules and regulations governing such government-assisted programs, or changes in the manner in which those regulations are interpreted.



Government assistance payments may be reduced in the event that a project rents less than 100% of its units eligible for rental subsidies to qualified low
income tenants. HUD generally elects to reduce subsidies only in the event that occupancy levels for qualified tenants drop below 95% for a period of two years. Finally, HUD commitments are



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subject to HUDs
appropriation of federal funds sufficient to meet its obligations in any given year. Certain legislative initiatives and governmental budget negotiations could result in a reduction of funds available for the various HUD-administered housing
programs and could also result in new limitations on subsidized rent levels. This in turn could adversely impact the net operating income generated by the Properties.



Real property investments are subject to varying degrees of risk. Revenues and property values may be adversely affected by
the general economic climate, the local economic climate and local real estate conditions, including (i) the perceptions of prospective tenants of the attractiveness of the property; (ii) the ability to retain qualified individuals to provide
adequate management and maintenance of the property; (iii) the inability to collect rent due to bankruptcy or insolvency of tenants or otherwise; and (iv) increased operating costs. Real estate values may also be adversely affected by such factors
as applicable laws, including tax laws, interest rates levels and the availability of financing.



The availability of a pool of qualified and interested buyers for the Investment Partnerships remaining assets is critical to the Investment Partnerships ability to realize the fair market
values of such properties at the time of their final dispositions. Demand by buyers of multi-family apartment properties is affected by many factors, including the size, quality, age, condition and location of the subject property, potential
environmental liability concerns, the existing debt structure, the liquidity in the debt and equity markets for asset acquisitions, the general level of market interest rates and the general and local economic climates. In addition, because of the
government restrictions on rental revenues and the related capital expenditure reserve requirements and cash flow distribution limitations, there are a limited number of potential buyers in the market for government subsidized, low-income housing
properties such as those in which the Investment Partnership has invested. Furthermore, the current uncertainty regarding potential future reductions in the level of federal government assistance for these programs may further restrict the
Properties marketability.



The Properties are subject to
substantial debt, in many cases including seller financing on which interest has accrued since the Investment Partnership invested in the Properties. Most of the Properties are dependent upon continuing government subsidies. In addition, many of the
Properties are located in market areas that would not support current rents. Finally, most of the Properties are subject to use restrictions that limit their use to low-income housing beyond the end of the tax credit compliance period.



The ownership structure of the Investment Partnerships investments
through Operating Partnerships could adversely impact the timing of the Investment Partnerships planned dispositions of its remaining assets and the amount of proceeds received from such dispositions. It is possible that the general partners
of the Operating Partnerships could have economic or business interests which are inconsistent with those of the Investment Partnership. Given the limited rights which the Investment Partnership has under the terms of the Operating Partnership
agreements, any conflict between the partners could result in delays in completing a sale of the related operating property and could lead to an impairment in the marketability of the property to third parties for purposes of achieving the highest
possible sale price.



For these and other reasons, in
Managements judgment, it is likely that proceeds will not be in excess of the debt financing, liabilities of the Properties of the Operating Partnership, expenses of sale and liabilities from the sale of the Properties of the Investment
Partnership; therefore, it is likely that the sale proceeds will not be sufficient to make any distribution to the Unit holders and, depending on the Unit holders tax situation, the Unit holder may incur tax liability without cash
distributions to pay the taxes resulting from those sales.



Properties



As of March 31, 2003, average occupancy of the Properties was 93.9%.



The financial performance of the Operating Partnerships will be impacted by the competition from comparable properties in their local market areas. The occupancy levels achievable at the Properties and the rental rates at
the non-subsidized Properties are largely a function of supply and demand in the markets. In many markets across the country, development of new multi-family properties has increased significantly over the past two years. Existing apartment
properties in such markets could be expected to experience increased vacancy levels, declines in effective rental rates and, in some cases, declines in estimated market values as a result of the increased competition. There are no assurances that
these competitive pressures will not adversely affect the operations and/or market values of the Operating Partnerships in the future and, in particular, subsequent to the expiration of any existing subsidy agreements.



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A Detroit, Michigan Property



During 1998,
an impairment loss in the amount of $4,100,000 was recorded with respect to the Research Park project in Detroit, Michigan, which is owned by one of the Operating Partnerships. The loss was recorded under the requirements of Financial Accounting
Standards Board Statement No. 121 (SFAS No. 121), Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. SFAS No. 121 required impairment losses to be recognized for long-lived assets
used in operations when indicators of impairment are present and the undiscounted cash flows are not sufficient to recover the assets carrying amount. During 1999, the Property continued to have cash flow problems relating to higher than
desired vacancy and high maintenance costs. Effective June 1, 1999, a new management company was hired for the property. In addition, the managing general partner of the Operating Partnership continued to negotiate with the Michigan State Housing
Development Authority to work out a solution to enable the property to generate positive cash flow. During 2000 and 2001, the Property continued to experience significant cash flow and vacancy problems. In April of 2002, the Existing Condition
Analysis for Research Park revealed current needs of approximately $4,616,933 in repairs, or $18,844/unit. Its Real Estate Assessment Center (REAC) scores were low, and it failed a Michigan State Housing Development Authority
(MSHDA) inspection. As a result of its REAC score, the Property was forced into HUDs Departmental Enforcement Center. (In accordance with HUD requirements.) The Operating Partnership retained an outside consultant to prepare a
Management Improvement and Operating Plan (the MIO Plan) and submitted the MIO Plan to HUD on August 8, 2002.



A MIO Plan is usually a 6-month plan; however, owing to Research Parks condition, HUD permitted a 1-year plan. The original MIO Plan was not
accepted by HUD. Revisions were delivered to HUD in November 2002; HUD has accepted the resubmitted MIO Plan. The resubmitted MIO Plan indicates that $414,000 needs to be invested over the 1-year plan to correct deficiencies. In April 2003, HUD
Chicago gave written approval that the property has been removed from Enforcement.



As of March 31, 2003, the Partnership has contributed approximately $434,000 for HVAC repairs and replacement, oversight of such work, utility bills, reduction of payables, legal fees and MIO Plan consulting fees.



For the first nine months of 2002, occupancy remained very low,
further impairing cash flow, causing a further increase in the payables and calling into question the continued economic viability of the Property and the Operating Partnerships ability to continue to make mortgage payments. If the Operating
Partnership loses HUD subsidies, is unable to continue making mortgage payments or otherwise defaults on its obligations to MSHDA, MSHDA could foreclose on the Property, causing recapture of tax credits and cancellation of indebtedness income. In
addition, in an effort to resolve outstanding issues, the managing general partner of the Operating Partnership is in the process of negotiating a purchase and sales agreement with MHT Housing, Inc., a Michigan nonprofit corporation, for the sale of
the general partners interest in the Research Park Operating Partnership and the Young Manor Operating Partnership, also located in Detroit. The agreement is also expected to confer on MHT Housing, Inc. or an affiliate, an option to purchase
both Properties at the end of the compliance period (December 31, 2004) for the value of the debt at that time. The managing general partner of the Operating Partnership has received MSHDAs approval of the terms of the sales, which would
involve the assumption of certain debt and MSHDAs forgiveness of other debt and would not produce any cash for the Operating Partnership or the Investment Partnership. If the sale is consummated, depending on the amount of debt that MSHDA
forgives, the amount of ordinary income to the Unit holders could be significant. If the Unit holders have suspended passive losses, however, such passive losses may be available to offset some or all of the cancellation of indebtedness income from
the Research Park Operating Partnership and the Young Manor Operating Partnership. Each Unit holders tax situation may be different and there can be no assurance that the final plan of restructuring will not result in further adverse tax
consequences.



As part of the Propertys work-out strategy,
beginning October 2002, the Operating Partnership retained Southeastern Michigan Housing, L.L.C. to manage Research Park. Operationally, the Property is improving although still operating at a cash flow deficit, largely because of costs related to
the turnover of vacant units and higher utility costs. The occupancy rate has increased from 60% to 84% since October. The new management has developed an aggressive marketing plan and is working with the community to address security issues.



As part of a plan of restructuring, the General Partner sought
the consent of the Unit holders for a restructuring of the debt, a sale of the General Partners interests in Research Park Partnership and the Young Manor Partnership the ultimate sale of the Properties at the end of the compliance period, and
a combining of the Research Park and Young Manor partnerships. The consent solicitation was approved by the Unit holders on January 30, 2003. In addition to the sale of the general partner interest, the General Partner is negotiating with the trade
payable creditors to accept reduced payments. As of March 2003, payables incurred during the period of the previous management company have been



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reduced to $184,000 through
payments from the Investment Partnerships reserves and agreement with trade creditors for the reduction of debt.



Even with the Unit holders approval for the sale plan, and MSHDAs approval, there can be no assurance that the sale will be consummated, or
how these matters will be resolved. If the sale is not finalized or operations continue with impaired cash flow, the financial feasibility of the Property would not look good and a foreclosure of the mortgage by MSHDA could occur. The foreclosure
and dissolution of the Operating Partnership could create a potential tax gain to the Unit holders and potential recapture of tax credits and no cash would be available for distribution to the Unit holders. At this time, there is no assurance as to
how these matters will be resolved.



A Greenville, Michigan Property



A
Greenville, Michigan Property has experienced continuing cash flow deficits. The property has not adequately funded reserves for taxes, insurance and replacement. As of December 2001, the property was deficient in the payment of real estate taxes
and received advances from Rural Development to pay the delinquent taxes. As a result, the property is in technical default of the loan agreement and may receive a Notice of Acceleration of Debt from the Rural Development Authority.
Currently the rental assistance payments due the Partnership are being withheld to apply to the advances from Rural Development. The managing general partner of the Operating Partnership has been working with the Rural Development Authority to
resolve the cash flow problems; however, there can be no assurance as to how these matters will be resolved. As part of a work-out strategy, the managing general partner has entered into a purchase and sale contract to sell the Property. This sale
was approved by the Partnership as Limited Partner of the Operating Partnership and by the Unit holders. If the Property transfer takes place prior to the end of the 15-year compliance period, the LIHTCs must be bonded. The bonds must cover 58
months beyond the 15-year compliance period. A LIHTC recapture bond has been obtained, but the price of the bond to be paid out of the sale proceeds has yet to be determined and will vary depending on the sale date of the property. The goal is to
close on the sale of the property early in 2004. The property continues to experience cash flow difficulties and has deferred maintenance costs whenever possible.



A Scottsville, Michigan Property



A Scottsville Michigan Property has experienced cash flow difficulties and
was unable to fully fund its replacement reserve required by the Rural Development Authority, or to pay tax and insurance expense at year end. The managing general partner of the Operating Partnership has been working with the Rural Development
Authority to attempt to resolve these problems; however, there can be no assurance as to how these matters will be resolved.



Two Petoskey, Michigan Properties



Two Operating Partnerships that own Properties in Petoskey, Michigan merged into one on August 29, 2002. Both are similar
properties with the same managing general partner and are located next to each other. The merger should have no effect on the Unit holders. It was undertaken principally to combine replacement reserves for capital improvements at the two Properties.
It will enable both Properties to make necessary repairs out of the replacement reserve account and not have to depend on excess operating cash flow.



Four Oklahoma Properties



The four Oklahoma Properties have completed the HUD Restructuring Mark to Market Program. The debt on each Property was
restructured by HUD into two pieces  a term debt and a promissory note piece paid out of cash flows. A portion of the debt was used to fund additional replacement reserves for capital improvement projects. A capital improvement project began
in 2001, funded largely from the replacement reserve and was completed in 2002. In addition, some capital improvement projects such as siding and roofs at three of the Properties will be funded from future cash flows.



Other Property Issues



As of March 31, 2003, seven other Properties have cash flow difficulties as
many of the Properties rents have not increased as much as expenses. For most of the Properties in the portfolio, any reduction in occupancy or increase in operating utility or insurance expense can result in cash flow problems since many of
the Properties continue to operate at the edge of break-even.



One Property located in Columbus, Ohio has a loan due at December 31, 2003. The principal and accrued interest at March 31, 2003 is $3,530,000. Since the Property is at the end of its compliance period, it will probably be sold
before or as the note comes due.



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Three other Properties located
in Columbus, Ohio were damaged by hail in the fall of 2002. The damage was covered by insurance but the repairs are not scheduled to begin until late spring of 2003. The insurance payment for one property of $222,000 was paid directly to the
property and is currently being held in escrow for the repairs to begin.



Liquidity and Capital Resources



Liquidity is defined as an entitys ability to meet its current and long-term financial obligations. If a Property were to lose its rent subsidy, interest subsidy or mortgage insurance, the Operating Partnership holding
such Property might be unable to fund expenses on an ongoing basis.



Liquidity shortfalls might be covered by federal governmental subsidy programs, by state and local agencies, or by funds from the Investment Partnership reserves, although there is no assurance that such sources would be available
or, if available, sufficient to cover any liquidity shortfall. A liquidity shortfall, for whatever reason, might result in a sale, refinancing, or foreclosure of the Property, any one of which could have material adverse tax consequences to a Unit
holder, including a partial recapture of previously allocated LIHTCs.



The Multifamily Assisted Housing Reform and Affordability Act of 1997, Public Law 105-65, effective October 1, 1997, established a debt restructuring program applicable to all HUD-Insured projects with rents above those of comparable
properties in local markets. Under the program, subsidized rent levels generally are reduced to market levels and the debt may be restructured into two or three mortgages. The first mortgage loan is set at a level supportable by the lower subsidized
rents, and the second and third mortgage loans are payable only out of cash flow after other approved expenses and sale or refinancing proceeds. In many cases, rent subsidies will become tenant-based, meaning that the subsidies may move with the
tenants. However, for certain projects, such as those that predominately serve elderly or disabled families or are located in markets with an inadequate supply of affordable housing, the rent subsidies may continue to be project-based.



HUD has entered into contracts to carry out the restructuring with state
housing finance agencies and others (Participating Administrative Entities or PAEs). Owners who have engaged in adverse financial or managerial actions are barred from participating in the restructuring program.



The Operating Partnerships own eight Properties whose Section 8 contracts will
expire in fiscal year 2003, and are not subject to optional renewal by the owner. The General Partner expects that Section 8 contracts for all of these Properties will be renewed by HUD at current levels until at least the end of fiscal year 2003,
although there can be no assurance that HUD will do so. In addition, the Managing General Partner and HUD have completed a restructuring proposal that provides for rehabilitation, a reduction of rents and a corresponding reduction of debt service on
four Oklahoma Properties. Although it is not anticipated, additional Properties may become subject to the restructuring program. The General Partner will work with the general partners of the Operating Partnerships to seek to renew all expiring
Section 8 contracts, and if required or appropriate, to participate in the program to restructure loans and rent subsidies.



Restructuring could affect demand for and cash flow of many of the Properties, as well as potentially create debt forgiveness taxable income. Moreover, a
shift to tenant-based subsidies could lead over time to lower occupancies and lower rents, adversely affecting cash flow. The General Partner is monitoring the development of HUD policy guidance and legislation. The General Partner is unable to
predict with certainty the impact of HUD program restructuring on the Operating Partnerships, but it is possible that a restructuring could have a material adverse effect on one or more of the Operating Partnerships, which in turn could have a
material adverse effect on the Investment Partnership.



At March
31, 2003 restricted cash was $4,880,000. The restricted cash was composed of the Investment Partnership reserve of $61,000 and Operating Partnership reserves of $4,819,000. Deposits and withdrawals from Operating Partnership reserves are generally
regulated by a governing federal, state or local agency. Investment Partnership reserves are available to fund repairs and maintenance as well as operational expenses, while the reserves maintained by an Operating Partnership are typically available
only for the Property owned by such Operating Partnership. Historically, the Investment Partnership reserve has been available to fund obligations of the Investment Partnership, including the management fee payable by the Investment Partnership to
the General Partner. As of March 31, 2003 the General Partner voluntarily deferred payment of $1,613,000 of its supervisory and program management fees. The General Partner is under no obligation to continue to defer these fees, and there can be no
assurance that the Investment Partnership reserve will be sufficient to satisfy the liquidity requirements of any given Operating Partnership in the event that the reserves of such Operating Partnership are insufficient for this purpose.



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Low-income housing projects
frequently generate limited cash flow and, therefore, the potential for cash flow deficits exists. The General Partner does not anticipate that the Investment Partnership will distribute cash to Unit holders in circumstances other than refinancing
or disposition of its investments in the Operating Partnerships. Moreover, especially in light of the reduced availability of subsidies and the consequent reduction in market value of the Properties, there can be no assurance of cash distributions
in the event of refinancing or disposition. Therefore, it is likely that any sale proceeds will not be sufficient to make any distribution to the Unit holders and depending on the Unit holders tax situation, the Unit holder may incur tax
liability without cash distributions to pay the taxes resulting from those sales.



Results of Operations



The March 31, 2003 net loss of $1,084,000 increased by 17.20% from the March 31, 2002 net loss of $925,000. The reasons for the differences are discussed
below.



Total revenues increased $99,000 (3.3%) in 2003 when
comparing the three months ended March 31, 2003 and 2002.



Total
expenses exclusive of depreciation and interest for the three months ended March 31, 2003 and 2002 were $2,705,000 and $2,402,000 respectively. The $303,000 increase in expenses between 2003 and 2002 primarily relates to an increase in
administrative expense of $53,000 (11.4%), an increase in operating and maintenance expense of $95,000 (16.1%), an increase in utilities expense of $123,000 (25.1%) and an increase in taxes and insurance of $33,000 (6.2%). The increase in
administrative expense is related to an increase in senior activity services at one of the Properties, an increase in advertising expenses at several of the Properties to rent units, and an increase in investor services expense for the Investment
Partnership. The increased operating and maintenance expense is in large part due to the Detroit, Michigan property incurring additional costs to rehab units to re-rent them and incurring additional security costs. In addition, repairs expense has
increased due to the age of all the properties. There was also increased snow removal expense in 2003 due to the heavier than average snowfall for the Midwest Properties. The increase in utility expense is due mainly to the harsh winter and the
increase in heating costs. The increase in taxes and insurance is due to the increasing cost of both property and employee insurance and an increase in real estate tax at one Property.



In recent years rental income, after HUD rent adjustments, has not been increasing at a rate equivalent to increases in
expenses (excluding depreciation and interest). To date, inflation has not had a significant impact on the Partnerships combined operations. However, rent levels of the Properties are generally limited by the requirements of the LIHTC and are
subject to strict governmental regulation. In the event of significant inflation, including increases in the price of utilities resulting from general increases in the cost of energy or a general increase in insurance costs, the Operating
Partnerships may be unable to increase rents sufficiently to compensate for increases in expenses. Due to changes in HUD programs, future increase in subsidy income may be limited.



Other



The Operating Partnerships carry comprehensive liability, fire, flood, extended coverage and rental loss insurance with
respect to their Properties with insured limits and policy specifications that management believes are customary for similar properties. There are, however, certain types of losses (generally of a catastrophic nature such as wars, floods or
earthquakes) which may be either uninsurable, or, in managements judgment, not economically insurable. Should an uninsured loss occur, the Investment Partnership could lose both its invested capital in and anticipated profits from the affected
Property and could experience recapture of previously earned tax credits.



Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may become liable for the costs of the investigation, removal and remediation of
hazardous or toxic substances on, under, in or migrating from such property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. The
Investment Partnership is not aware of any notification by any private party or governmental authority of any non-compliance, liability or other claim in connection with environmental conditions at any of its Properties that it believes will involve
any expenditure which would be material to the Investment Partnership, nor is the Investment Partnership aware of any environmental condition with respect to any of its Properties that it believes will involve any such material expenditure. However,
there can be no assurance that any non-compliance, liability, claims or expenditure will not arise in the future.



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Critical Accounting Policies



These
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which requires a Registrant to make certain estimates and assumptions. A summary of significant accounting policies
is disclosed in Note 1 to the financial statements included in the Investment Partnerships 2002 annual report. The following section is a summary of certain aspects of those accounting policies that may require subjective or complex judgments
and are most important to the portrayal of Registrants financial condition and results of operations. Registrant believes that there is a low probability that the use of different estimates or assumptions in making these judgments would result
in materially different amounts being reported on the financial statements.



|- |  | Registrant combines its Operating Partnerships and eliminates intercompany transactions.
|- |  | ----------------------------------------------------------------------------------------

|- |  | If the carrying value of a property exceeds the estimated amount recoverable through future operations on an undiscounted basis, Registrant records a property at the
lower of its carry value or its estimated fair value.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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ITEM 3. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RIS
K



None



ITEM 4. CONTROLS AND PROCEDURE
S



Based on the most
recent evaluation, which was completed within 90 days of the filing of the Form 10-Q, the Investment Partnerships General Partners Chief Executive Officer and Chief Financial Officer believe the Investment Partnerships disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are effective. There were not any significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of
their evaluation, nor were there any corrective actions with regard to significant deficiencies and material weaknesses.



PART II. OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



None



ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS



None



ITEM 3. DEFAULTS UPON SENIOR SECURITIES



None



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



By Consent Solicitation dated December 9, 2002, the General Partner sought approval of the Unit holders for
the combination of RP Limited Dividend Housing Association Limited Partnership and YM Limited Dividend Housing Association Limited Partnership, the sale by the General Partner of the general partnership interest in the resulting partnership, and the
issuance of an option to the proposed purchaser of the general partnership interest to purchase the properties of the combined partnership in 2005.



Votes representing 593,058 Units were cast for the approval, 6,350 Units were cast against the approval, 0 Units abstained, and there were
00 broker non-votes.



ITEM 5. OTHER INFORMATIO
N



None



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|            
|------------
|Exhibit 99.1
|            
|Exhibit 99.2





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SIGNATURE
S



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized



NATIONAL HOUSING TRUST LIMITED
PARTNERSHIp

(Registrant)



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|Date May 15, 2003 |  |  |  | By:
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