<PAGE>

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

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
                     of the Securities Exchange Act of 1934
                       for the quarter ended June 30, 1999


                             Commission File Number
                                     0-17669
                                     -------


                   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



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
                                     ---    ---

                                       1
<PAGE>

                   NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
                         A DELAWARE LIMITED PARTNERSHIP
                             June 30, 1999 FORM 10-Q

                                TABLE OF CONTENTS



PART I  FINANCIAL INFORMATION                                          PAGE NO.
-----------------------------                                          --------

Item 1.     Unaudited Combined Financial Statements


      Combined Balance Sheets.............................................3

      Combined Statements of Operations ..................................5

      Combined Statements of Cash Flows...................................7

      Notes to Combined Financial Statements..............................8

Item 2.     Management's Discussion and Analysis of
            Financial Condition and Results
            of Operations.................................................9

Item 3.     Quantitative and Qualitative Disclosures about Market Risk ..14

PART II   OTHER INFORMATION
---------------------------

      Other Information..................................................16

      Signatures.........................................................17

                                       2
<PAGE>

                   NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
            AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
     COMBINED BALANCE SHEETS JUNE 30, 1999 (UNAUDITED) AND DECEMBER 31, 1998
                                 (In Thousands)




                                               June 30           December 31
ASSETS                                          1999                1998
----------------------------------------     -------------      -------------

Current Assets:
     Cash and cash equivalents             $          844     $          982
     Tenants' security deposits                       463                412
     Mortgage escrow deposits                         835                616
     Prepaid expenses and other assets                749                823
                                             -------------      -------------
          Total current assets                      2,891              2,833
                                             -------------      -------------


Restricted Cash:                                    5,877              5,829
                                             -------------      -------------

Rental property:
     Buildings and improvements                    72,066             71,420
     Furniture and equipment                        2,473              2,449
                                             -------------      -------------
                                                   74,539             73,869
       Less accumulated depreciation             (25,723)           (24,327)
                                             -------------      -------------
                                                   48,816             49,542
     Land                                           3,305              3,305
                                             -------------      -------------
                                                   52,121             52,847
                                             -------------      -------------

          Total assets                     $       60,889     $       61,509
                                             =============      =============

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

                                       3
<PAGE>

                   NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
            AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
                       COMBINED BALANCE SHEETS, CONTINUED
                     (In Thousands, except Investment Units)

<TABLE>
<CAPTION>

LIABILITIES AND PARTNERS' CAPITAL                      June 30, 1999     December 31, 1998
-------------------------------------------------     ---------------   -------------------
                                                        (Unaudited)
<S>                                                    <C>                 <C>

Current liabilities:
     Accounts payable and accrued expenses              $     2,687        $     2,122
     Rents received in advance                                   75                 43
     Deposits held                                              463                445
     Accrued interest on mortgage notes payable                 144                262
     Current maturities of term debt                          1,000              1,000
                                                        -----------        -----------

          Total current liabilities                           4,369              3,872
                                                        -----------        -----------

Term debt, less current maturities:
     Mortgage notes payable                                  40,035             40,510
     Promissory notes, including accrued
        interest payable                                     29,435             28,531
                                                        -----------        -----------
                                                             69,470             69,041
                                                        -----------        -----------


Partners' capital:
     General Partners:
       NHT, Inc.                                                (18)               (17)
       Other Operating General Partners                         (91)               (75)

     Limited partners:
       Issued and outstanding 1,014,668
          investment units                                  (12,841)           (11,312)
                                                        -----------        -----------

                                                            (12,950)           (11,404)
                                                        -----------        -----------

          Total liabilities and partners' capital       $    60,889        $    61,509
                                                        ===========        ===========
</TABLE>
                     The accompanying notes are an integral
                   part of the combined financial statements.

                                       4
<PAGE>

                   NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
            AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
                  COMBINED STATEMENTS OF OPERATIONS (UNAUDITED)
                FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
                     (In Thousands, except per Unit Amounts)


                                                     1999           1998
                                                   -------        -------
Revenues:
     Rental revenues                               $ 2,903        $ 2,943
     Other income                                       99             60
                                                   -------        -------

        Total revenues                               3,002          3,003
                                                   -------        -------

Expenses:
     Administration                                    367            395
     Operating and maintenance                         633            809
     Management fees                                   260            239
     Partnership asset management fees                  80             81
     Utilities                                         350            320
     Taxes and insurance                               434            447
     Depreciation and amortization                     714            735
                                                   -------        -------

        Total expenses                               2,838          3,026
                                                   -------        -------

        Income (loss) from rental operations           164            (23)
                                                   -------        -------

Other revenues and (expenses):
     Interest income                                    47             48
     Interest expense                                 (848)          (821)
                                                   -------        -------


          Net loss                                 $  (637)       $  (796)
                                                   =======        =======



Net loss per limited partnership unit              $ (0.63)       $ (0.78)
                                                   =======        =======

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

                                       5
<PAGE>

                   NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
            AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
                  COMBINED STATEMENTS OF OPERATIONS (UNAUDITED)
                 FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                     (In Thousands, except per Unit Amounts)

<TABLE>
<CAPTION>
                                                                   1999           1998
                                                                 -------        -------
<S>                                                              <C>            <C>
Revenues:
     Rental revenues                                             $ 5,814        $ 5,876
     Other income                                                    206            117
                                                                 -------        -------

        Total revenues                                             6,020          5,993
                                                                 -------        -------

Expenses:
     Administration                                                  801            839
     Operating and maintenance                                     1,296          1,397
     Management fees                                                 583            590
     Partnership asset management fees                               160            162
     Utilities                                                       733            724
     Taxes and insurance                                             908            878
     Depreciation and amortization                                 1,409          1,471
                                                                 -------        -------

        Total expenses                                             5,890          6,061
                                                                 -------        -------

        Income (loss) from rental operations                         130            (68)
                                                                 -------        -------

Other revenues and (expenses):
     Interest income                                                  95             97
     Interest expense                                             (1,714)        (1,663)
                                                                 -------        -------

          Net loss before extraordinary gain                      (1,489)        (1,634)
          Extraordinary gain (Note B)                                 --            214
                                                                 -------        -------

          Net loss                                               $(1,489)       $(1,420)
                                                                 =======        =======


Net loss per limited partnership unit before extraordinary
  gain                                                             (1.47)         (1.61)

Extraordinary gain per limited partnership unit                       --           0.21
                                                                 -------        -------

Net loss per limited partnership unit                            $ (1.47)       $ (1.40)
                                                                 =======        =======

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

                                       6
<PAGE>

                   NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
            AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
                  COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED)
                 FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                                 (In Thousands)

                                                           1999           1998
                                                         -------        -------
Cash flows from operating activities:
     Net loss                                            $(1,489)       $(1,420)
     Adjustments to reconcile net loss to net cash
      provided by operating activities:
          Depreciation and amortization                    1,409          1,471
          Accrued interest on promissory notes               848            811
          Extraordinary gain                                  --           (200)
          Bankruptcy related reserves                         --            200
     Changes in operating assets and liabilities:
          Increase in deposits, prepaids and other
              assets                                        (209)          (312)
          Increase in accounts payable
              and accrued expenses                           565            446
          (Decrease) increase in other current
              liabilities                                    (68)             1
                                                         -------        -------
Cash provided by operations                                1,056            997
                                                         -------        -------

Investing activities:
     Additions to buildings, furniture and
        equipment, net                                      (670)          (399)
     Deposits to restricted cash, net                        (48)          (249)
                                                         -------        -------
        Cash used for investing activities                  (718)          (648)
                                                         -------        -------

Financing Activities:
     General partners cash distributions                     (57)           (13)
     Additions to term debt                                   56            120
     Payments of term debt                                  (475)          (506)
                                                         -------        -------
       Net cash used for financing activities               (476)          (399)
                                                         -------        -------

Decrease in cash and cash equivalents                       (138)           (50)

Cash and cash equivalents beginning of  year                 982            968
                                                         -------        -------

Cash and cash equivalents end of period                  $   844        $   918
                                                         =======        =======

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

                                       7
<PAGE>

                 NATIONAL HOUSING TRUST LIMITED PARTNERSHIP AND
              ITS SUBSTANTIALLY WHOLLY OWNED OPERATING PARTNERSHIPS
                                   (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 (Investment Partnership) and the Operating
Partnerships in which it has acquired a significant limited partnership
interest.

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 1998 Annual Report on Form 10-K
for additional disclosures including a summary of the Partnership's accounting
policies which are not significantly different.


 NOTE B - BANKRUPTCY - OPERATING PARTNERSHIPS

During March 1996, two Operating Partnerships which had purchased apartment
projects in Fort Worth, Texas filed for bankruptcy. The bankruptcy filing
followed unsuccessful negotiations with the lender (HUD) and the foreclosure
actions by a Texas bank which purchased the loans from HUD. During 1997,
attempts to reorganize the Operating Partnerships were unsuccessful and the
Texas bank was permitted to complete its foreclosure actions and purchase the
apartment projects at the foreclosure sales. In connection with the foreclosure
action, the Operating Partnerships were relieved of any obligation related to
the nonrecourse mortgage debt. At December 31, 1997, the Operating Partnerships
had accumulated cash of $216,000 which was in contention and, accordingly, was
charged against the extraordinary gain and a reserve established pending the
resolution of the bankruptcy hearing scheduled for March 26, 1998 to determine
the ownership of the cash.

The hearing to dismiss the bankruptcy and determine the ownership of the cash
was held on March 26, 1998. The Court entered an order denying the bank's motion
for payment of cash collateral and granted the motion to dismiss the bankruptcy.
The bank has filed an appeal. The Court has dismissed the bank's appeal with
respect to Springchase Operating Partnership. The bank also filed suit against
Springchase Operating Partnership in the State District Court in Dallas County
Texas and sought an injunction against Springchase Operating Partnership. The
injunction was denied by the State District Court and the case was subsequently
dismissed. With respect to the Trinidad Operating Partnership, the bankruptcy
court dismissed the bank's appeal. While these matters are not completely
resolved and there can be no assurance as to how they will be resolved, in the
opinion of management the Operating Partnerships should prevail and,
accordingly, the resultant reserve was reversed and recorded as an extraordinary
gain in the financial statements in 1998. These partnerships were liquidated in
1998 paying remaining Operating Partnership liabilities out of available
Operating Partnership cash. Any cash in excess of liabilities was distributed to
the Investment Partnership. No distributions will be made to the Unit holders.

                                       8
<PAGE>

ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

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 (the
"Properties") eligible for the low-income housing tax credit ("LIHTC"). 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 (see Properties below) are expected to be dissolved in 1999.

Each Operating Partnership's Property qualifies for the LIHTC. The LIHTC 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 LIHTC, 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 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 holders of Units of limited partnership interest in the
Investment Partnership (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 and are
anticipated to continue until 2001. 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 $2.10 of credit per unit in 1999;
approximately $ .35 of credit per unit in 2000; and approximately $ .20 of
credit per unit in 2001.

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. For these and other reasons, there
can be no assurance that the sale of the Properties will produce sales proceeds
to the Operating Partnerships in excess of the debt financing and the expenses
of sale; nor can there be any assurance that distributions of the sales
proceeds, if any, from the Operating Partnerships to the Investment Partnership
will exceed the Investment Partnership's accumulated liabilities. Accordingly,
upon sale of the Properties, there can be no assurance that any funds will be
distributed to unit holders or, if funds are distributed, that the funds will be
sufficient to enable Unit holders to pay taxes arising from such sales.

The Investment Partnership recognizes the importance of minimizing the number
and seriousness of any disruptions that may occur as a result of Year 2000 and
has adopted a compliance program. The Investment Partnership has completed the
inventory of its information technology and other electronic assets (such as,
but not limited to, data network equipment, non-information technology systems,
including embedded systems that operate security systems, phone systems, fax
systems, energy management systems and other systems) used in the Investment
Partnership's business that may be affected by Year 2000 issues and the related
assessment of those assets Year 2000 compliance. The Investment Partnership has
completed its assessment of its primary information technology infrastructure
and has completed the inventory and assessment of 60% of the technology

                                       9
<PAGE>

infrastructure of the Operating Partnerships. The Investment Partnership expects
to complete the inventory and assessment of the rest of the Operating
Partnerships by October 31, 1999.

The Investment Partnership completed an analysis of its vendors and service
providers that are critical to the Investment Partnership's business to
determine whether they are Year 2000 compliant. The Investment Partnership has
requested a survey from all the Operating Partnerships, but cannot guarantee
that all vendors or service providers of the Operating Partnerships will respond
to the Operating Partnership's surveys, and therefore the Investment Partnership
may not be able to determine Year 2000 compliance of those vendors or service
providers. At that time, the Operating Partnerships will determine the extent to
which the Operating Partnerships will be able to replace non-compliant vendors.
Due to the lack of alternative sources, there may be instances in which the
Operating Partnerships will have no alternative but to remain with non-compliant
vendors or service providers.

The Investment Partnership believes that its upgrading and systems replacement
will be implemented and tested by October 31, 1999. The Investment Partnership
believes that this should provide adequate time to further correct any problems
that did not surface during the implementation and testing for those systems.

In addition to those systems within the Investment Partnership's control, the
Operating Partnerships' control and the control of their vendors and suppliers,
there are other systems that could have an impact on the Investment
Partnership's and Operating Partnerships' businesses and which may not be Year
2000 compliant by January 1, 2000. Those systems could affect the operations of
the multi-family rental real estate industry or the economy as a whole. These
systems are outside of the Investment Partnership's control or influence and
their compliance may not be verified by the Partnership; however, these systems
could adversely affect the Partnership's financial condition or results of
operations.

If the Investment Partnership or Operating Partnerships are not successful in
implementing their Year 2000 compliance plan, the Investment Partnership may
suffer a material adverse impact on its combined results of operations and
financial condition. Because of the importance of addressing the Year 2000
problem, the Investment Partnership expects to develop contingency plans if it
determines that the compliance plans will not be implemented by October 31,
1999.

To date, the Investment Partnership estimates the cost not to exceed $50,000 to
update its information technology and other electronic assets. Upon receipt of
all the Operating Partnerships' surveys, an estimation of the cost to become
Year 2000 compliant will be made.


Properties
----------

As of June 30, 1999, average occupancy of the Properties was 95%.

Two Fort Worth Texas Properties
-------------------------------
Two properties located in Ft. Worth, Texas had experienced cash flow
difficulties and a decline in value (See Note B of the Combined Financial
Statements). During 1993, the General Partner resolved a dispute with a former
Managing General Partner who had not made mortgage payments on one of the
properties and failed to comply with its Operating Deficit Guarantee. Due to the
nonpayment of the two properties' mortgages by the former Managing General
Partner, the mortgages were assigned to the U.S. Department of Housing and Urban
Development (HUD). In September 1995, HUD auctioned off the mortgage loans for
these properties. The General Partner bid on the mortgage loans, but a Texas
bank was the successful bidder. The General Partner attempted to negotiate with
the bank, seeking a consensual agreement to restructure the debt. The bank
responded with a notice dated March 12, 1996 accelerating the maturity of the
indebtedness under the Notes, demanding payment in full and giving notice that
if the indebtedness was not paid in full, the bank would cause the trustee under
the deeds of trust securing the Notes to conduct a foreclosure sale on April 2,
1996.

The General Partner, after evaluating the consequences of foreclosure and as
part of a strategy to minimize the effect to the investors, filed, on March 26,
1996 with respect to Trinidad Apartments Limited Partnership and on

                                       10
<PAGE>

March 28, 1996 with respect to Springchase Apartments Limited Partnership, in
the United States District Court for the Northern District of Texas, Fort Worth
Division (the"Court"), Case #496-41284 and Case #496-4136 respectively,
petitions for relief under Chapter 11 to enable the Operating Partnerships to
reorganize. On October 22, 1997, the Court entered an order denying confirmation
of the plans of reorganization and granted the bank relief from the automatic
stay of foreclosure. On December 2, 1997, a foreclosure sale was held and the
Properties were transferred to the bank.

Because each investor's tax situation is different, the consequences of the
foreclosure was different based upon each investor's previous use of tax credits
and passive losses. However, in general, the foreclosure caused a recapture of a
portion of the LIHTCs previously received by the investors, the reduction of
LIHTCs in future years, an interest charge under the Internal Revenue Code on
LIHTCs recaptured, and a tax gain on disposition of the property as a result of
the foreclosure. The Schedule K-1 for the year ended December 31, 1997 included
a $.48 per Unit recapture of tax credits with a corresponding estimated interest
charge of $.23 per unit. The passive gain relating to the disposition of the two
Properties as a result of foreclosure was less than the 1997 passive losses
passed through from the remaining 29 Operating Partnerships. In addition tax
credits are reduced in each of 1998, 1999, 2000, and 2001 by the loss of the two
Properties' credits. This reduction is estimated to be approximately $.19 per
unit. (For an estimate of future credits after this reduction see General above
in the MD&A).

A hearing to dismiss the bankruptcy was held on March 26, 1998. The Court
entered an order denying the bank's motion for payment of cash collateral and
granted motions to dismiss the bankruptcy. The bank filed an appeal to preserve
its rights to file an appeal. The Court has dismissed the bank's appeal with
respect to Springchase Operating Partnership. The bank also filed suit against
Springchase Operating Partnership in the State District Court in Dallas County
Texas and sought an injunction against Springchase Operating Partnership. The
injunction was denied by the State District Court and the case was subsequently
dismissed. With respect to the Trinidad Operating Partnership, the Court
dismissed the bank's appeal. While these matters are not completely resolved and
there can be no assurance as to how they will be resolved, in the opinion of
management the Operating Partnerships should prevail. These 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 Investment Partnership. No distributions will be made to Unit
holders.

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, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of".
FAS No. 121 requires 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. Indicators present during 1998 for this Operating Partnership include
cash flow from operations that was less than the debt service on the property;
however, debt service was paid by allowing trade payables to become larger and
more delinquent. Therefore, an assessment was done to evaluate the undiscounted
cash flows, which were not sufficient to recover the assets' carrying amount.
Based on this assessment, an impairment loss of $4,100,000 was recognized to
reduce the carrying amount of the property to its estimated fair value of
$4,300,000. Through second quarter 1999, the cash flow problems continue. The
Managing General Partner is in negotiations with the Michigan State Housing
Development Authority to work out a solution to enable the property to generate
positive cash flow. In addition, in May, effective June 1, 1999, a new
management company was hired for the property. 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 funded reserves for taxes, insurance and replacement
reserves adequately and is deficient in the payment of real estate taxes. The
managing general partner 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.

                                       11
<PAGE>

Four Oklahoma Properties
------------------------
The four Oklahoma Properties potentially could become part of the HUD
Restructuring Mark to Market Program (See further detail in Liquidity and
Capital Resources). Restructuring could significantly reduce the cash flow of
the Properties potentially causing the Properties to be unable to cover their
expenses, as well as, potentially creating debt forgiveness taxable income.

Other Property Issues
---------------------
Through second quarter 1999, two other Properties are experiencing some slight
cash flow difficulties.


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 governmental rent,
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.

Material changes have been made and additional changes have been proposed by
various Members of Congress and the Clinton Administration in the programs of
the U.S. Department of Housing and Urban Development. The Multifamily Assisted
Housing Reform and Affordability Act of 1997, Public Law 105-65, effective
October 1, 1997, continued for fiscal year 1998 (October 1, 1997 through
September 30, 1998) a debt restructuring demonstration first enacted for fiscal
year 1997. With certain modifications, the demonstration program became a
permanent program in fiscal year 1999, applicable to all projects with rents
above those of comparable properties in local markets. Under the program,
subsided rent levels generally are reduced to market levels and the debt may be
restructured into two mortgages. The first mortgage loan is set at a level
supportable by the lower subsidized rents, and the second mortgage loan is
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").
The PAEs have authority to set rents above the comparable rents for only 20% of
their inventory each year. These rents will be based on approved project
budgets, and are capped at 120% of FMRs, except for up to 5% of the inventory,
which can have budget-based rents above 120% of FMRs based on a showing of
special need. Owners who have engaged in adverse financial or managerial actions
are barred from participating in the restructuring program.

The Operating Partnerships own sixteen Properties whose Section 8 contracts have
expired or will expire in fiscal year 1999 or 2000, and are not subject to
optional renewal by the owner. The General Partner expects that Section 8
contracts for all of these fifteen Properties will be renewed by HUD at current
levels until at least the end of fiscal year 1999, although there can be
assurance that HUD will do so. Seven of these properties have rents in excess of
100% of HUD-established fair market rents. The rents at some or all of these
Properties may also be above comparable rents as determined by HUD and therefore
could be subject to HUD restructuring. 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. Of the Investment Partnership's
remaining projected LIHTCs, approximately 20% is attributable to these Operating
Partnerships.

                                       12
<PAGE>

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 preparing for the
potential impact of the restructuring of HUD programs and 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 June 30, 1999 restricted cash was $5,877,000. The restricted cash was
composed of the Investment Partnership reserve of $515,000 and Operating
Partnership reserves of $5,362,000. 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 December 31, 1998 the General Partner voluntarily deferred payment of
$443,000 of its Management Fee. The General Partner is under no obligation to
continue to defer this fee, 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.

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, there can be no assurance of cash
distributions in the event of refinancing or disposition.


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

The June 30, 1999 net loss of $1,489,000 increased 4.9% from the June 30, 1998
net loss of $1,420,000. The reasons for the differences are discussed below.

An extraordinary gain of $214,000 was recorded in first quarter 1998 as a result
of the foreclosure and debt extinguishment on the two Fort Worth, Texas
properties (see Note B).

Total revenue increased $27,000 (0.5%) when comparing the six months ended June
30, 1999 and 1998.

Total expenses exclusive of depreciation and interest for the six months ended
June 30, 1999 and 1998 were $4,481,000 and $4,590,000, respectively. The
$109,000 (2.4%) decrease in expenses between 1999 and 1998 primarily relates to
an decrease in operating and maintenance expense of $101,000 (7.2%), a decrease
in administrative costs of $38,000 (4.5%), and an increase in taxes and
insurance expense of $30,000 (3.4%). The decrease in operating and maintenance
expenses relates to several properties increase capital improvements as compared
to maintenance improvements. The decrease in administrative costs relates to
less legal and bad debt expense on several of the properties. The increase in
taxes and insurance expense relates to a couple properties increase in employee
related tax items and real estate tax and insurance increases.

In recent years rental income, after the 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
Partnerships' combined operations. However, rent levels of the Properties are
generally limited by the requirements of the low-income housing tax credit and
are subject to strict governmental regulation. In the event of significant
inflation, the Operating Partnerships may be unable to increase rents
sufficiently to compensate for increases in expenses. Due to the changes in HUD
programs, future increases in subsidy income may be limited.

                                       13
<PAGE>

ITEM 3    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Certain Factors Affecting Future Operating Results
--------------------------------------------------

The following factors could cause actual results to differ materially from
historical results or those anticipated:

Risks of Government-Assisted Housing Complexes
----------------------------------------------
In certain respects government-assisted housing complexes differ from
conventional housing complexes. These 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 assistance agency, (c) compliance
with the 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 subject to the appropriation of federal funds
sufficient to meet its obligations in any given year. At the present time,
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 Estate Investment Risks
----------------------------
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 rate levels and the availability
of financing.

Effect of Uninsured Loss
------------------------
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.

Possible Environmental Liabilities
----------------------------------
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.

                                       14
<PAGE>

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, claim or expenditure will not arise in the future.

Competition
-----------
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.

Impact of Operating Partnership Structure
-----------------------------------------
The ownership 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.

Availability of a Pool of Qualified Buyers
------------------------------------------
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 the Investment Partnership has invested in. Furthermore, the current
uncertainty regarding potential future reductions in the level of federal
government assistance for these programs may further restrict the Properties'
marketability.

Inflation
---------
The Investment Partnership completed its tenth year of operations in 1998. To
date, the effects of inflation and changes in prices on the Investment
Partnership's operating results have not been significant. In the future, with
regard to the Operating Partnerships, contract rental rates under "Section 8"
agreements may be in certain cases increased at the discretion of the Department
of Housing and Urban Development to cover increases in operating expenses due to
inflation, but there can be no assurance that HUD will do so.

                                       15
<PAGE>

PART II.  OTHER INFORMATION
---------------------------


ITEM 1.              LEGAL PROCEEDINGS

                     None

ITEM 2.              CHANGES IN SECURITIES

                     None

ITEM 3.              DEFAULTS UPON SENIOR SECURITIES

                     None

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

                     None

ITEM 5.              OTHER INFORMATION

                     None

ITEM 6.              EXHIBITS AND REPORTS ON FORM 8-K

                     Exhibit 27 - Financial Data Schedule

                                       16
<PAGE>

                                   SIGNATURES

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)



Date   August 11, 1999                   By /s/ James A. Bowman
       ----------------                     ------------------------------------
                                         James A. Bowman
                                         President, NHT, Inc.



Date   August 11, 1999                   By /s/ Susan E. Basting
       ----------------                     ------------------------------------
                                         Susan E. Basting
                                         Treasurer, NHT, Inc.

                                       17