<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-Q


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

                  For the Quarterly Period Ended JUNE 30, 1998

                         Commission File Number 0-13808

                            HOUSING PROGRAMS LIMITED
                       (A California Limited Partnership)

                  I.R.S. Employer Identification No. 95-3906167

                         9090 WILSHIRE BLVD., SUITE 201
                           BEVERLY HILLS, CALIF. 90211

                         Registrant's Telephone Number,
                       Including Area Code (310) 278-2191



Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve 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_____


<PAGE>   2

                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                               INDEX TO FORM 10-Q

                       FOR THE QUARTER ENDED JUNE 30, 1998


<TABLE>
<S>                                                                                      <C>
PART I.  FINANCIAL INFORMATION

               Item 1.  Financial Statements

                      Balance Sheets, June 30, 1998 and December 31, 1997 .................1

                      Statements of Operations,
                              Six and Three Months Ended June 30, 1998 and 1997............2

                      Statement of Partners' Deficiency,
                              Six Months Ended June 30, 1998 ..............................3

                      Statements of Cash Flow,
                              Six Months Ended June 30, 1998 and 1997......................4

                      Notes to Financial Statements .......................................5

               Item 2.  Management's Discussion and Analysis of Financial
                               Condition and Results of Operation.........................11


PART II.  OTHER INFORMATION

               Item 1.  Legal Proceedings.................................................14

               Item 6.  Exhibits and Reports on Form 8-K..................................14

               Signatures     ............................................................15

</TABLE>



<PAGE>   3


                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                 BALANCE SHEETS

                       JUNE 30, 1998 AND DECEMBER 31, 1997

                                     ASSETS

<TABLE>
<CAPTION>
                                                               1998
                                                            (Unaudited)             1997
                                                            ------------         ------------
<S>                                                         <C>                  <C>         
INVESTMENTS IN LIMITED PARTNERSHIPS
       (Notes 1 and 2)                                      $ 13,558,015         $ 13,409,054

CASH AND CASH EQUIVALENTS (Note 1)                             1,460,143            1,162,398

OTHER ASSETS                                                       3,200                   --
                                                            ------------         ------------

   TOTAL ASSETS                                             $ 15,021,358         $ 14,571,452
                                                            ============         ============



                LIABILITIES AND PARTNERS' DEFICIENCY

LIABILITIES:
 Notes payable (Notes 3 and 6)                              $  8,669,743         $  8,669,743
 Accrued fees and expenses due general partners (Note 4)       1,725,701            1,562,552
 Accrued interest payable (Notes 3 and 6)                     10,315,393            9,921,172
 Accounts payable                                                 78,440                3,855
                                                            ------------         ------------

                                                              20,789,277           20,157,322
                                                            ------------         ------------


COMMITMENTS AND CONTINGENCIES (Notes 2, 4 and 5)

PARTNERS' DEFICIENCY:
 General partners                                               (308,425)            (306,605)
 Limited partners                                             (5,459,494)          (5,279,265)
                                                            ------------         ------------

                                                              (5,767,919)          (5,585,870)
                                                            ------------         ------------
 TOTAL LIABILITIES AND PARTNERS'
     DEFICIENCY                                             $ 15,021,358         $ 14,571,452
                                                            ============         ============

</TABLE>


   The accompanying notes are an integral part of these financial statements.

<PAGE>   4

                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                            STATEMENTS OF OPERATIONS
                SIX AND THREE MONTHS ENDED JUNE 30, 1998 AND 1997
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                        Six months       Three months        Six months         Three months
                                                          ended             ended              ended               ended
                                                      June 30, 1998      June 30, 1998      June 30, 1997       June 30, 1997
                                                      -------------      -------------      --------------      --------------
<S>                                                   <C>                <C>                <C>                 <C>        
INTEREST INCOME                                        $    29,665         $    14,315         $    24,996         $    12,958
                                                       -----------         -----------         -----------         -----------

OPERATING EXPENSES:
     Management fees - general partner (Note 4)            246,480             123,240             263,326             131,663
     General and administrative (Note 4)                    39,002              20,510              32,131              17,918
     Legal and accounting (Note 4)                          77,305              26,243              74,624              30,141
     Interest (Notes 3 and 4)                              411,812             205,906             505,563             252,781
                                                       -----------         -----------         -----------         -----------

          Total operating expenses                         774,599             375,899             875,644             432,503
                                                       -----------         -----------         -----------         -----------

LOSS FROM OPERATIONS                                      (744,934)           (361,584)           (850,648)           (419,545)

DISTRIBUTIONS FROM LIMITED
     PARTNERSHIPS RECOGNIZED
     AS INCOME                                             378,885             261,317             439,020             305,164

EQUITY IN INCOME OF LIMITED
     PARTNERSHIPS AND AMORTIZATION
     OF ACQUISITION COSTS (Note 2)                         184,000              92,000              72,756              36,378
                                                       -----------         -----------         -----------         -----------

NET LOSS BEFORE EXTRAORDINARY GAIN                     $  (182,049)        $    (8,267)        $  (338,872)        $   (78,003)
                                                       ===========         ===========         ===========         ===========

NET LOSS PER LIMITED PARTNERSHIP
      INTEREST BEFORE EXTRAORDINARY GAIN               $       (15)        $        (1)        $       (27)        $        (6)
                                                       ===========         ===========         ===========         ===========

EXTRAORDINARY GAIN -
     DEBT FORGIVENESS (NOTE 3)                                  --                  --           2,149,096           2,149,096
                                                       -----------         -----------         -----------         -----------

NET INCOME (LOSS) AFTER EXTRAORDINARY GAIN             $  (182,049)        $    (8,267)        $ 1,810,224         $ 2,071,093
                                                       ===========         ===========         ===========         ===========

NET INCOME (LOSS) PER LIMITED PARTNERSHIP
      INTEREST AFTER EXTRAORDINARY GAIN                $       (15)        $        (1)        $       146         $       167
                                                       ===========         ===========         ===========         ===========

</TABLE>



   The accompanying notes are an integral part of these financial statements.

<PAGE>   5


                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                       STATEMENTS OF PARTNERS' DEFICIENCY
                         SIX MONTHS ENDED JUNE 31, 1998
                                   (Unaudited)



<TABLE>
<CAPTION>
                                         General             Limited
                                         Partners            Partners             Total
                                        -----------         -----------         -----------
<S>                                     <C>                 <C>                 <C>         
PARTNERSHIP INTERESTS                                            12,368
                                                            ===========


DEFICIENCY, January 1, 1998             $  (306,605)        $(5,279,265)        $(5,585,870)

     Net loss for the six months
      ended June 30, 1998                    (1,820)           (180,229)           (182,049)
                                        -----------         -----------         -----------

DEFICIENCY, June 30, 1998               $  (308,425)        $(5,459,494)        $(5,767,919)
                                        ===========         ===========         ===========

</TABLE>


   The accompanying notes are an integral part of these financial statements.

<PAGE>   6

                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                            STATEMENTS OF CASH FLOWS
                     SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                               1998                1997
                                                                           -----------         -----------
<S>                                                                        <C>                 <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net (loss) income                                                     $  (182,049)        $ 1,810,224
     Adjustments to reconcile net loss to net
       cash provided by operating activities:
         Equity in income of limited partnerships
           and amortization of acquisition costs                              (184,000)            (72,756)
         Extraordinary gain - Debt forgiveness                                      --          (2,149,096)
         Increase in other assets                                               (3,200)                 --
         Increase in accrued interest payable                                  394,221             374,538
         Increase in accrued fees and expenses due general partners            163,149             163,329
         Increase (decrease) in accounts payable                                74,585             (12,551)
                                                                           -----------         -----------

           Net cash provided by operating activities                           262,706             113,688
                                                                           -----------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Distributions from limited partnerships
       recognized as a return of capital                                        35,039             205,101
                                                                           -----------         -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                      297,745             318,789

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                               1,162,398             948,476
                                                                           -----------         -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                   $ 1,460,143         $ 1,267,265
                                                                           ===========         ===========

</TABLE>


   The accompanying notes are an integral part of these financial statements.
<PAGE>   7

                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 1998


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      GENERAL

      The information contained in the following notes to the financial
      statements is condensed from that which would appear in the annual audited
      financial statements; accordingly, the financial statements included
      herein should be reviewed in conjunction with the financial statements and
      related notes thereto contained in the Housing Programs Limited (the
      "Partnership") annual report for the year ended December 31, 1997.
      National Partnership Investments Corp. ("NAPICO") is a general partner for
      the Partnership. Accounting measurements at interim dates inherently
      involve greater reliance on estimates than at year end. The results of
      operations for the interim period presented are not necessarily indicative
      of the results for the entire year.

      In the opinion of NAPICO, the accompanying unaudited financial statements
      contain all adjustments (consisting primarily of normal recurring
      accruals) necessary to present fairly the financial position of the
      Partnership at June 30, 1998 and the results of operations for the six and
      three months then ended and changes in cash flows for the six months then
      ended.

      ORGANIZATION

      The Partnership is a limited partnership which was formed under the laws
      of the State of California on May 15, 1984. On September 12, 1984, the
      Partnership offered 3,000 units consisting of 6,000 limited partnership
      interests and warrants to purchase a maximum of 6,000 additional limited
      partnership interests through a public offering .

      The general partners of the Partnership are NAPICO, Housing Programs
      Corporation II and Coast Housing Investment Associates ("CHIA"). LBI Group
      Inc. owns 100 percent of the stock of Housing Programs Corporation II.
      NAPICO is a wholly owned subsidiary of Casden Investment Corporation,
      which is wholly owned by Alan I. Casden. CHIA is a limited partnership
      formed under the California Limited Partnership Act and consists of
      Messrs. Nicholas G. Ciriello, an unrelated individual, as general partner
      and Charles H. Boxenbaum, as limited partner.

      USE OF ESTIMATES

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



                                       5
<PAGE>   8


                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                  JUNE 30, 1998


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      METHOD OF ACCOUNTING FOR INVESTMENT IN LIMITED PARTNERSHIPS

      The investments in local limited partnerships are accounted for on the
      equity method. Acquisition, selection fees and other costs related to the
      acquisition of the projects have been capitalized to the investment
      account and amortized on a straight line basis over the estimated lives of
      the underlying assets.

      NET LOSS PER LIMITED PARTNERSHIP INTEREST

      Net income (loss) per limited partnership interest was computed by
      dividing the limited partners' share of net income (loss) by the number of
      limited partnership interests outstanding during the year. The number of
      limited partnership interests was 12,368 for all years presented.

      CASH AND CASH EQUIVALENTS

      Cash and cash equivalents consist of cash and bank certificates of deposit
      with an original maturity of three months or less. The Partnership has its
      cash and cash equivalents on deposit primarily with one money market
      mutual fund. Such cash and cash equivalents are uninsured.

      INCOME TAXES

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

      IMPAIRMENT OF LONG-LIVED ASSETS

      The Partnership reviews long-lived assets to determine if there has been
      any permanent impairment whenever events or changes in circumstances
      indicate that the carrying amount of the asset may not be recoverable. If
      the sum of the expected future cash flows is less than the carrying amount
      of the assets, the Partnership recognizes an impairment loss.

NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS

      The Partnership currently holds limited partnership interests in 17
      limited partnerships. The 17 lower-tier limited partnerships own
      residential rental projects consisting of a total of 2,542 apartment
      units. The mortgage loans encumbering these projects are insured by United
      States Department of Housing and Urban Development ("HUD") or state
      governmental agencies.



                                       6
<PAGE>   9

                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                  JUNE 30, 1998


NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

      The Partnership, as a limited partner, is entitled to 99 percent of the
      income and losses of the lower-tier limited partnerships.

      Equity in losses of limited partnerships is recognized in the financial
      statements until the limited partnership investment account is reduced to
      a zero balance. Losses incurred after the investment account is reduced to
      zero are not recognized.

      Distributions from the limited partnerships are recognized as a reduction
      of capital until the investment balance has been reduced to zero or a
      negative amount equal to future capital contributions required.
      Subsequent distributions are recognized as income.

      The following is a summary of the Partnership's investment in lower-tier
      limited partnerships for the six and three months ended June 30, 1998:

<TABLE>
<S>                                                                         <C>        
               Balance, beginning of period                                 $13,409,054
               Amortization of acquisition costs                                (16,000)
               Equity in income of limited partnerships                         200,000
               Distribution recognized as return of capital                     (35,039)
                                                                            -----------

                 Balance, end of period                                     $13,558,015
                                                                            ===========
</TABLE>

      The difference between the investment per the accompanying balance sheets
      at June 30, 1998 and December 31, 1997, and the deficiency per the
      unaudited combined estimated statements of operations is due primarily to
      cumulative unrecognized equity in losses of certain limited partnerships,
      costs capitalized to the investment account and cumulative distributions
      recognized as income.

      The following are unaudited combined estimated statements of operations
      for the six and three months ended June 30, 1998 and 1997 for the limited
      partnerships in which the Partnership has investments:


<TABLE>
<CAPTION>
                              Six months        Three months         Six months          Three months
                                ended              ended               ended                ended
                            June 30, 1998       June 30, 1998       June 30, 1997       June 30, 1997
                            -------------       -------------       --------------      -------------
<S>                         <C>                 <C>                 <C>                 <C>        
INCOME
   Rental and Other          $ 8,816,000         $ 4,408,000         $ 8,968,000         $ 4,484,000
                             -----------         -----------         -----------         -----------

EXPENSES
   Depreciation                1,720,000             860,000           1,766,000             883,000
   Interest                    1,724,000             862,000           1,820,000             910,000
   Operating                   5,618,000           2,809,000           5,964,000           2,982,000
                             -----------         -----------         -----------         -----------

       Total expenses          9,062,000           4,531,000           9,550,000           4,775,000
                             -----------         -----------         -----------         -----------

NET LOSS                     $  (246,000)        $  (123,000)        $  (582,000)        $  (291,000)
                             ===========         ===========         ===========         ===========

</TABLE>


                                       7

<PAGE>   10

                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                  JUNE 30, 1998



NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

      Under recently adopted law and policy, HUD has determined not to renew HAP
      contracts on their existing terms. In connection with renewals of the
      housing assistance payments contracts ("HAP Contracts") under such new law
      and policy, the amount of rental assistance payments under renewed HAP
      Contracts will be based on market rentals instead of above market rentals,
      which was generally the case under existing HAP Contracts. As a result,
      existing HAP Contracts that are renewed in the future on projects insured
      by the Federal Housing Administrative of HUD ("FHA") will not provide
      sufficient cash flow to permit owners of properties to meet the debt
      service requirements of these existing FHA-insured mortgages. In order to
      address the reduction in payments under HAP Contracts as a result of this
      new policy, the Multi-family Assisted Housing Reform and Affordability Act
      of 1997 ("MAHRAA"), which was adopted in October 1997, provides for the
      restructuring of mortgage loans insured by the FHA with respect to
      properties subject to HAP Contracts that have been renewed under the new
      policy. The restructured loans will be held by the current lender or
      another lender. Under MAHRAA, an FHA-insured mortgage loan can be
      restructured to reduce the annual debt service on such loan. There can be
      no assurance that the Partnership will be permitted to restructure its
      mortgage indebtedness pursuant to the new HUD rules implementing MAHRAA or
      that the Partnership would choose to restructure such mortgage
      indebtedness if it were eligible to participate in the MAHRAA program. It
      should be noted that there are uncertainties as to the economic impact on
      the Partnership of the combination of the reduced payments under the HAP
      Contracts and the restructuring of the existing FHA-insured mortgage loans
      under MAHRAA. Accordingly, the General Partners are unable to predict with
      certainty their impact on the Partnership's future cash flow.

      A real estate investment trust ("REIT") organized by affiliates of NAPICO
      has advised the Partnership that it intends to make a proposal to purchase
      from the Partnership certain of the limited partnership interests held for
      investment by the Partnership.

      The REIT proposes to purchase such limited partnership interests for cash,
      which it plans to raise in connection with a private placement of its
      equity securities. The purchase is subject to, among other things, (i)
      consummation of such private placement by the REIT; (ii) the purchase of
      the general partnership interests in the local limited partnerships by the
      REIT; (iii) the approval of HUD and certain state housing finance
      agencies; (iv) the consent of the limited partners to the sale of the
      local limited partnership interests held for investment by the
      Partnership; and (v) the consummation of a minimum number of purchase
      transactions with other NAPICO affiliated partnerships. As of June 30,
      1998, the REIT had completed buy-out negotiations with a majority of the
      general partners of the local limited partnerships it proposes to
      purchase.

      A consent solicitation statement will be sent to the limited partners
      setting forth the terms and conditions of the purchase of the limited
      partners' interests held for investment by the Partnership, together with
      certain amendments to the Partnership Agreement and other disclosures of
      various conflicts of interest in connection with the proposed transaction.



                                       8
<PAGE>   11

                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                  JUNE 30, 1998



NOTE 3 - NOTES PAYABLE

      Certain of the Partnership's investments involved purchases of partnership
      interests from partners who subsequently withdrew from the operating
      partnership. The Partnership is obligated for non-recourse notes payable
      of $8,669,743 to the sellers of the partnership interests, bearing
      interest at 9.5 percent per annum to the various sellers of the
      partnership interests. The notes have principal maturity dates ranging
      from December 31, 1999 to December 2001 or upon sale or refinancing of the
      underlying partnership properties. These obligations and the related
      interest are collateralized by the Partnership's investment in the
      investee limited partnerships and are payable only out of cash
      distributions from the investee partnerships, as defined in the notes.
      Unpaid interest is due at maturity of the notes.

      During 1997, the lower-tier partnership that owns Deep Lake Hermitage
      Apartments ("Deep Lake") consummated the sale of the apartment complex for
      $4,800,000. There were two notes payable by the Partnership to sellers of
      interests in the lower-tier partnership that owns the Deep Lake property
      in the aggregate principal amount of $1,500,000, which were secured by the
      Partnership's interest in the local limited partnership. The notes had
      accrued interest of $1,650,696, for a total amount due of $3,150,696. The
      Partnership entered into an agreement with the note holders, who accepted
      a reduced payment of $1,001,600 in full satisfaction of all obligations,
      in order to enable the sale of property. This was paid by the lower tier
      partnership from proceeds of the sale, and approximated the Partnership's
      investment balance in Deep Lake. In addition, the apartment complex had a
      first mortgage note of approximately $3,500,000 which was paid off from
      proceeds of the sale. In 1997, the Partnership recognized an extraordinary
      gain of $2,149,096 from the forgiveness of the debt.

NOTE 4 - FEES AND EXPENSES DUE TO GENERAL PARTNERS

      Under the terms of the Restated Certificate and Agreement of the Limited
      Partnership, the Partnership is obligated to the general partners for an
      annual management fee equal to 0.5 percent of the original invested assets
      of the limited partnerships. Invested assets is defined as the costs of
      acquiring project interests including the proportionate amount of the
      mortgage loans related to the Partnership's interests in the capital
      accounts of the respective limited partnerships.

      As of June 30, 1998, the fees and expenses due the general partners
      exceeded the Partnership's cash. The general partners, during the
      forthcoming year, will not demand payment of amounts due in excess of such
      cash or such that the Partnership would not have sufficient operating
      cash; however, the Partnership will remain liable for all such amounts.

NOTE 5 - CONTINGENCIES

      NAPICO is a plaintiff in various lawsuits and has also been named as
      defendant in other lawsuits arising from transactions in the ordinary
      course of business. In the opinion of NAPICO, the claims will not result
      in any material liability to the Partnership.



                                       9
<PAGE>   12

                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                  JUNE 30, 1998



NOTE 5 - CONTINGENCIES (CONTINUED)

      The Partnership has assessed the potential impact of the Year 2000
      computer systems issue on its operations. The Partnership believes that no
      significant actions are required to be taken by the Partnership to address
      the issue and that the impact of the Year 2000 computer systems issue will
      not materially affect the Partnership's future operating results or
      financial condition.

NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS

      Statement of Financial Accounting Standards No. 107, "Disclosure about
      Fair Value of Financial Instruments," requires disclosure of fair value
      information about financial instruments, when it is practicable to
      estimate that value. The notes payable are collateralized by the
      Partnership's investments in investee limited partnerships and are payable
      only out of cash distributions from the investee partnerships. The cash
      flow generated by operations of the investee limited partnerships, which
      account for the Partnership's primary source of revenues, are subject to
      various government rules, regulations and restrictions which make it
      impracticable to estimate the fair value of the notes payable and related
      accrued interest. The carrying amount of other assets and liabilities
      reported on the balance sheets that require such disclosure approximates
      fair value due to their short-term maturity.



                                       10
<PAGE>   13


                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                  JUNE 30, 1998


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

      LIQUIDITY AND CAPITAL RESOURCES

      The Partnership's primary sources of funds include interest income on
      money market accounts and certificates of deposit and distributions from
      limited partnerships in which the Partnership has invested. It is not
      expected that any of the local limited partnerships in which the
      Partnership has invested will generate cash flow sufficient to provide for
      distributions to the Partnership's limited partners in any material
      amount.

      RESULTS OF OPERATIONS

      Partnership revenues consist primarily of interest income earned on
      certificates of deposit and other temporary investment of funds. The
      Partnership also receives distributions from the lower-tier limited
      partnerships in which it has invested.

      Distributions received from limited partnerships are recognized as return
      of capital until the investment balance has been reduced to zero or to a
      negative amount equal to future capital contributions required.
      Subsequent distributions received are recognized as income.

      Except for certificates of deposit and money market funds, the
      Partnership's investments consist entirely of interests in other limited
      partnerships owning government assisted housing projects. Available cash
      is invested to provide interest income as reflected in the statements of
      operations. These funds can be converted to cash to meet obligations as
      they arise. The Partnership intends to continue investing available funds
      in this manner.

      A recurring partnership expense is the annual management fee. The fee is
      payable to the General Partners of the Partnership and is calculated at .5
      percent of the Partnership's invested assets. The management fee is paid
      to the General Partners for their continuing management of partnership
      affairs. The fee is payable beginning with the month following the
      Partnership's initial investment in a local limited partnership.
      Management fees were $246,480 and $263,326 for the six months ended June
      30, 1998 and 1997, respectively. The fees have decreased due to the sale
      of a property owned by a local partnership in 1997, which reduced the
      invested assets.

      The Partnership is obligated on non-recourse notes payable of $8,669,743
      at June 30, 1998 and December 31, 1997, which bear interest at 9.5 percent
      per annum and have principal maturities ranging from December 1999 to
      December 2001. Effective January 1, 1995, the interest rate for two notes
      totaling $1,500,000 changed from 9.5 percent to 12.5 percent per the terms
      of the notes, and the note holders accepted a reduced payment of
      $1,000,000 in full satisfaction of all obligations in 1997 in connection
      with the sale of the related property. The notes and related interest are
      payable from cash flow generated from operations of the related rental
      properties as defined in the notes. These obligations are collateralized
      by the Partnership's investments in the limited partnerships. Unpaid
      interest is due at maturity of the notes.


                                       11
<PAGE>   14

                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                  JUNE 30, 1998


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

      RESULTS OF OPERATION (CONTINUED)

      Operating expenses, other than management fees and interest expense,
      consist of legal and accounting fees for services rendered to the
      Partnership and administrative expenses, which were generally consistent
      for periods presented. Legal and accounting fees were $77,300 and $74,600
      for the six months ended June 30, 1998 and 1997, respectively. General and
      administrative expenses were $39,000 and $32,100 for the periods ended
      June 30, 1998 and 1997, respectively.

      The Partnership accounts for its investments in the local limited
      partnerships on the equity method, thereby adjusting its investment
      balance by its proportionate share of the income or loss of the local
      limited partnerships. Losses incurred after the limited partnership
      investment account is reduced to zero are not recognized.

      During the year ended December 31, 1997, the lower-tier partnership that
      owns Deep Lake consummated the sale of the apartment complex for
      $4,800,000. There were two notes payable by the Partnership to sellers of
      interests in the lower-tier partnership that owns the Deep Lake property
      in the aggregate principal amount of $1,500,000, which were secured by the
      Partnership's interest in the local limited partnership. The notes had
      accrued interest of $1,650,696, for a total amount due of $3,150,696. The
      Partnership entered into an agreement with the note holders, who accepted
      a reduced payment of $1,001,600 in full satisfaction of all obligations,
      in order to enable the sale of property. This was paid by the lower tier
      partnership from proceeds of the sale, and approximated the Partnership's
      investment balance in Deep Lake. In addition, the apartment complex had a
      first mortgage note of approximately $3,500,000 which was paid off from
      proceeds of the sale. The Partnership recognized an extraordinary gain of
      $2,149,096 from the forgiveness of the debt in the second quarter of 1997.

      Under recently adopted law and policy, HUD has determined not to renew HAP
      contracts on their existing terms. In connection with renewals of the
      housing assistance payments contracts ("HAP Contracts") under such new law
      and policy, the amount of rental assistance payments under renewed HAP
      Contracts will be based on market rentals instead of above market rentals,
      which was generally the case under existing HAP Contracts. As a result,
      existing HAP Contracts that are renewed in the future on projects insured
      by the Federal Housing Administrative of HUD ("FHA") will not provide
      sufficient cash flow to permit owners of properties to meet the debt
      service requirements of these existing FHA-insured mortgages. In order to
      address the reduction in payments under HAP Contracts as a result of this
      new policy, the Multi-family Assisted Housing Reform and Affordability Act
      of 1997 ("MAHRAA"), which was adopted in October 1997, provides for the
      restructuring of mortgage loans insured by the FHA with respect to
      properties subject to HAP Contracts that have been renewed under the new
      policy. The restructured loans will be held by the current lender or
      another lender. Under MAHRAA, an FHA-insured mortgage loan can be
      restructured to reduce the annual debt service on such loan. There



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<PAGE>   15


                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                  JUNE 30, 1998

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

      RESULTS OF OPERATION (CONTINUED)

      can be no assurance that the Partnership will be permitted to restructure
      its mortgage indebtedness pursuant to the new HUD rules implementing
      MAHRAA or that the Partnership would choose to restructure such mortgage
      indebtedness if it were eligible to participate in the MAHRAA program. It
      should be noted that there are uncertainties as to the economic impact on
      the Partnership of the combination of the reduced payments under the HAP
      Contracts and the restructuring of the existing FHA-insured mortgage loans
      under MAHRAA. Accordingly, the General Partners are unable to predict with
      certainty their impact on the Partnership's future cash flow.

      A real estate investment trust ("REIT") organized by affiliates of NAPICO
      has advised the Partnership that it intends to make a proposal to purchase
      from the Partnership certain of the limited partnership interests held for
      investment by the Partnership.

      The REIT proposes to purchase such limited partnership interests for cash,
      which it plans to raise in connection with a private placement of its
      equity securities. The purchase is subject to, among other things, (i)
      consummation of such private placement by the REIT; (ii) the purchase of
      the general partnership interests in the local limited partnerships by the
      REIT; (iii) the approval of HUD and certain state housing finance
      agencies; (iv) the consent of the limited partners to the sale of the
      local limited partnership interests held for investment by the
      Partnership; and (v) the consummation of a minimum number of purchase
      transactions with other NAPICO affiliated partnerships. As of June 30,
      1998, the REIT had completed buy-out negotiations with a majority of the
      general partners of the local limited partnerships it proposes to
      purchase.

      A consent solicitation statement will be sent to the limited partners
      setting forth the terms and conditions of the purchase of the limited
      partners' interests held for investment by the Partnership, together with
      certain amendments to the Partnership Agreement and other disclosures of
      various conflicts of interest in connection with the proposed transaction.




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<PAGE>   16

                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                  JUNE 30, 1998



PART II.    OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of June 30, 1998, NAPICO was a plaintiff or defendant in several lawsuits.
None of these suits are related to the Partnership. In the opinion of NAPICO,
the claims will not result in any material liability to the Partnership.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a)      No reports on Form 8-K were filed during the quarter ended
                  June 30, 1998.




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<PAGE>   17

                            HOUSING PROGRAMS LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                  JUNE 30, 1998

                                   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.


                                 HOUSING PROGRAMS LIMITED
                                 (a California limited partnership)



                                 By:   National Partnership Investments Corp.
                                       General Partner


                                       /s/ BRUCE NELSON
                                       --------------------------------------
                                       Bruce Nelson
                                       President


                                 Date:  8/14/98
                                      ---------------------------------------


                                       /s/ CHARLES H. BOXENBAUM
                                       --------------------------------------
                                       Charles H. Boxenbaum
                                       Chief Executive Officer


                                 Date:  8/14/98
                                      ---------------------------------------



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