SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
          OF 1934

                    For the fiscal year ended December 31, 2002

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          ACT OF 1934

                  For the transition period _________to _________

                         Commission file number 0-09262

                         REAL ESTATE ASSOCIATES LIMITED
                 (Name of small business issuer in its charter)

         California                                            95-3187912
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                           Identification No.)

                         55 Beattie Place, PO Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                                 (864) 239-1000
                            Issuer's telephone number

           Securities registered under Section 12(b) of the Exchange Act:

                                      None

           Securities registered under Section 12(g) of the Exchange Act:

                      16,323 Limited Partnership Interests
                                (Title of class)

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  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 ninety days.
Yes   X    No ____

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB.
[X]

State Issuer's revenue for its most recent fiscal year - None.

State the aggregate  market value of the voting  Partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  Partnership
interests  were sold,  or the average bid and asked  prices of such  Partnership
interests,  as of December  31,  2002.  No market for the  Registrant's  limited
partnership  interests exists, and, therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None


<PAGE>



The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  The discussions of the  Registrant's
business  and  results  of  operations,   including  forward-looking  statements
pertaining to such matters,  do not take into account the effects of any changes
to the  Registrant's  business  and results of  operations.  Actual  results may
differ  materially  from those described in the  forward-looking  statements and
will  be  affected  by  a  variety  of  risks  and  factors  including,  without
limitation:  national and local economic  conditions;  the terms of governmental
regulations that affect the Registrant and interpretations of those regulations;
the competitive  environment in which the Registrant operates;  financing risks,
including the risk that cash flows from  operations may be  insufficient to meet
required  payments of  principal  and  interest;  real estate  risks,  including
variations  of real  estate  values and the  general  economic  climate in local
markets and competition for tenants in such markets; and possible  environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

                                     PART I

Item 1.  Description of Business

Real  Estate  Associates  Limited  ("REAL"  or the  "Partnership")  is a limited
partnership  which  was  formed  under the laws of the  State of  California  on
September 15, 1977. On October 27, 1978, Real Estate Associates  Limited offered
16,500 units of Limited Partnership  Interests through a public offering managed
by E.F. Hutton Inc. The Partnership  received  $16,500,000 in subscriptions  for
units of Limited  Partnership  Interests  (at $1,000 per unit) during the period
October 27, 1978 to August 31,  1979,  pursuant to a  registration  statement on
Form S-11.  Since this  transaction,  the Partnership has not received,  nor are
limited  partners  required  to  make,  additional  capital  contributions.  The
Partnership  shall be dissolved only upon the expiration of 53 complete calendar
years  (December 31, 2031) from the date of the formation of the  Partnership or
the  occurrence  of other events as  specified  in the terms of the  Partnership
agreement.

The general partner of Real Estate  Associates  Limited is National  Partnership
Investments Corp.  ("NAPICO"),  a California Corporation (the "Corporate General
Partner"). The business of REAL is conducted primarily by NAPICO.

Prior to December  30,  1998,  NAPICO was a wholly  owned  subsidiary  of Casden
Investment  Corporation  ("CIC"),  which is wholly owned by Alan I.  Casden.  On
December 30, 1998, Casden Properties Operating Partnership, L.P. (the "Operating
Partnership"),  a majority owned  subsidiary of Casden  Properties  Inc., a real
estate investment trust organized by Alan I. Casden, purchased a 95.25% economic
interest in NAPICO.

On December 3, 2001, Casden Properties Inc., entered into a merger agreement and
certain other  transaction  documents with  Apartment  Investment and Management
Company,  ("AIMCO"), a publicly traded real estate investment trust, and certain
of its subsidiaries, pursuant to which, on March 11, 2002, AIMCO acquired Casden
Properties Inc. and its subsidiaries,  including 100% of the outstanding capital
stock of NAPICO.  Prior to March 11, 2002, Casden Properties Inc. owned a 95.25%
economic  interest  in  NAPICO,  with the  balance  owned by  Casden  Investment
Corporation ("CIC").  CIC, which is wholly owned by Alan I. Casden, owned 95% of
the voting common stock of NAPICO prior to March 11, 2002.

REAL holds limited partnership interests in nine local limited partnerships (the
"Local Partnerships") as of December 31, 2002. In December 1998, the Partnership
sold its interest in nine Local  Partnerships  to the Operating  Partnership and
its interest in one Local  Partnership  was redeemed in September  1998. Each of
the limited  partnerships  owns a low income housing project which is subsidized
and/or has a mortgage  note  payable to or insured by agencies of the federal or
local government.


<PAGE>





The Local  Partnerships  in which REAL has invested  were,  at least  initially,
organized by private developers who acquired the sites, or options thereon,  and
applied  for  applicable  mortgage  insurance  and  subsidies.  REAL  became the
principal limited partner in these Local  Partnerships  pursuant to arm's-length
negotiations with these developers, or others, who act as general partners. As a
limited partner,  REAL's  liability for obligations of the Local  Partnership is
limited to its investment.  The local general  partner of the Local  Partnership
retains responsibility for developing, constructing,  maintaining, operating and
managing  the  property   owned  by  the  Local   Partnership.   Under   certain
circumstances  of default,  REAL has the right to replace the general partner of
the  Local  Partnerships,  but  otherwise  does not  exercise  control  over the
activities and  operations,  including  refinancing or selling  decisions of the
Local Partnerships.

Although  each of the Local  Partnerships  in which REAL has invested  generally
owns a project  which must  compete in the market  place for  tenants,  interest
subsidies and rent  supplements from  governmental  agencies make it possible to
offer  these  dwelling  units  to  eligible  "low  income"  tenants  at  a  cost
significantly  below the  market  rate for  comparable  conventionally  financed
dwelling units in the area.

The  Partnership  does not have any  employees.  Services are  performed for the
Partnership by the Corporate General Partner and agents retained by it.

In order to stimulate  private  investment  in low income  housing,  the federal
government  and  certain  state and local  agencies  have  provided  significant
ownership  incentives,   including  among  others,   interest  subsidies,   rent
supplements,  and mortgage insurance, with the intent of reducing certain market
risks and  providing  investors  with  certain tax  benefits,  plus limited cash
distributions  and the  possibility of long-term  capital  gains.  There remain,
however,  significant  risks.  The long-term nature of investments in government
assisted housing limits the ability of REAL to vary its portfolio in response to
changing  economic,  financial and investment  conditions;  such investments are
also subject to changes in local economic circumstances and housing patterns, as
well as rising operating costs, vacancies, rent collection difficulties,  energy
shortages and other factors  which have an impact on real estate  values.  These
projects also require greater management expertise and may have higher operating
expenses than conventional housing projects.

Under recently adopted law and policy,  the United States  Department of Housing
and Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment  ("HAP")  Contracts  on a long  term  basis on the  existing  terms.  In
connection with renewals of the 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 may be the case under
existing HAP Contracts.  The payments under the renewed HAP Contracts may not be
in an amount  that  would  provide  sufficient  cash  flow to  permit  owners of
properties  subject to HAP  Contracts to meet the debt service  requirements  of
existing  loans  insured by the Federal  Housing  Administration  of HUD ("FHA")
unless such mortgage loans are  restructured.  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")  provides for
the  restructuring  of  mortgage  loans  insured  by the  FHA  with  respect  to
properties  subject  to the  Section 8 program.  Under  MAHRAA,  an  FHA-insured
mortgage  loan can be  restructured  into a first  mortgage  loan  which will be
amortized on a current basis and a low interest  second mortgage loan payable to
FHA which will only be payable on  maturity  of the first  mortgage  loan.  This
restructuring results in a reduction in annual debt service payable by the owner
of the  FHA-insured  mortgage  loan and is  expected  to result in an  insurance
payment from FHA to the holder of the  FHA-insured  loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties  serving  families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.

When the HAP  Contracts are subject to renewal,  there can be no assurance  that
the  Local  Partnerships  in which the  Partnership  has an  investment  will be
permitted to restructure its mortgage  indebtedness  under MAHRAA.  In addition,
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 is uncertain.

Laws  benefiting   disabled  persons  may  result  in  the  Local  Partnerships'
incurrence of unanticipated expenses.  Under the Americans with Disabilities Act
of 1990,  or ADA,  all places  intended to be used by the public are required to
meet certain Federal requirements related to access and use by disabled persons.
Likewise,  the Fair Housing Amendments Act of 1988, or FHAA,  requires apartment
properties  first  occupied  after  March  13,  1990  to be  accessible  to  the
handicapped.  These  and  other  Federal,  state  and  local  laws  may  require
modifications to the Local Partnership's  properties, or restrict renovations of
the properties.  Noncompliance with these laws could result in the imposition of
fines or an award of damages to private  litigants  and also could  result in an
order to correct any  non-complying  feature,  which could result in substantial
capital  expenditures.  Although the Corporate General Partner believes that the
Local  Partnership's  properties are  substantially  in compliance  with present
requirements,  the Local Partnerships may incur unanticipated expenses to comply
with the ADA and the FHAA.

During 2002, the projects in which REAL had invested were substantially  rented.
The  following  is a schedule  of the status as of  December  31,  2002,  of the
projects  owned by Local  Partnerships  in which REAL is a limited  partner  (in
thousands).

                SCHEDULE OF PROJECTS OWNED BY LOCAL PARTNERSHIPS
                         IN WHICH REAL HAS AN INVESTMENT
                                DECEMBER 31, 2002

<TABLE>
<CAPTION>

                                     Financed        Units
                                     Insured       Authorized    Percentage of Percentage of
                                       And         For Rental     Total Units   Total Units
                         No. of    Subsidized    Assistance Under   Occupied     Occupied
                          Units      Under         Section 8          2002        2001

   Name and Location

<S>                        <C>                          <C>           <C>           <C>
Belleville Manor           32          (B)              32            93%           97%
Marion, KY

Bethel Towers              146         (A)              53            96%           95%
Detroit, MI

Cherry Hill Place          186         (D)             186           100%          100%
Inkster, MI

Clinton Apts.              24          (B)              24            89%           92%
Clinton, KY

Northwood Village          72          (C)              72            95%           95%
Emporia, VA

Ridgeview Estates          32          (C)              13             76%          79%
Lewisburg, WV

Wedgewood Village          32          (C)              32            100%         100%
Ripley, WV

W. Lafeyette Apts.         49          (C)              49             92%          98%
W. Lafeyette, OH

Williamson Towers          76           (B)             76            99%           98%
Williamson, WV
TOTALS                    649                          537
</TABLE>

(A)    The mortgage is insured by the Federal Housing  Administration  under the
       provisions of Section 236 of the National Housing Act.

(B)    The mortgage is insured by the Federal Housing  Administration  under the
       provisions of Section 221 (d)(4) of the National Housing Act.

(C)    The mortgage is insured by FMHA under the Provision of Section 515.

(D)    The mortgage is funded by MSHDA bonds.

The following table details the Partnership's ownership percentages of the Local
Partnerships  and the cost of acquisition of such  ownership.  All interests are
limited partner  interests.  Also included is the total mortgage  encumbrance on
each  property  for each of the Local  Partnerships  as of December 31, 2002 (in
thousands).

<TABLE>
<CAPTION>

                                   Real Estate
                                   Associates
                                       Limited      Original Cost
                                     Percentage      of Ownership   Mortgage    Notes Payable and
           Partnership                Interest         Interest       Note      Accrued Interest

<S>                                      <C>            <C>         <C>              <C>
 Belleville Manor, Ltd.                  99%            $ 109       $    526         $    8
 Bethel Towers, Ltd.                     99%              305          2,784              1
 Cherry Hill, Ltd.                       98%            1,100          4,220             28
 Clinton Apts.                           95%               87            121              1
 Emporia, Ltd.                           95%              257          1,120             --
 Roebern, Ltd.                           50%               78            571            290
 Bernroe, LTd.                           50%               82            560             82
 W. Lafeyette, Ltd.                      95%              147            921            222
 Williamson Towers Assoc.                99%              445          2,270             15
                                                                    $ 13,093         $  647
</TABLE>

Although each Local  Partnership in which the  Partnership  has invested owns an
apartment complex which must compete with other apartment complexes for tenants,
government  mortgage  interest and rent subsidies make it possible to rent units
to eligible  tenants at below  market  rates.  In general,  this  insulates  the
Properties from market competition.


<PAGE>



Item 2.  Description of Properties

See "Item 1" for the real estate owned by the Partnership  through the ownership
of limited partnership interests in Local Partnerships.

Item 3.  Legal Proceedings

On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership  interests  in Real Estate  Associates  Limited  III (an  affiliated
partnership in which NAPICO is the corporate  general partner) and two investors
holding an  aggregate  of five units of limited  partnership  interests  in Real
Estate Associates  Limited VI (an affiliated  partnership in which NAPICO is the
corporate  general  partner)  commenced an action in the United States  District
Court for the Central District of California against the Partnership, NAPICO and
certain other  defendants.  The complaint  alleged that the defendants  breached
their  fiduciary  duty  to  the  limited  partners  of  certain  NAPICO  managed
partnerships  and  violated  securities  laws by  making  materially  false  and
misleading statements in the consent solicitation statements sent to the limited
partners  of  such  partnerships   relating  to  approval  of  the  transfer  of
partnership interests in limited partnerships, owning certain of the properties,
to affiliates of Casden  Properties  Inc.,  organized by an affiliate of NAPICO.
The plaintiffs  sought  equitable  relief,  as well as compensatory  damages and
litigation  related costs.  On August 4, 1999, one investor  holding one unit of
limited  partnership  interest in Housing Programs  Limited (another  affiliated
partnership  in which  NAPICO is the  corporate  general  partner)  commenced  a
virtually  identical  action in the United States District Court for the Central
District  of  California  against  the  Partnership,  NAPICO and  certain  other
entities.  The second action was subsumed in the first action, and was certified
as a  class  action.  On  August  21,  2001,  plaintiffs  filed  a  supplemental
complaint,  which added new claims,  including a  rescission  of the transfer of
partnership  interests  and an  accounting.  The matter was tried in October and
November  2002. In November  2002, the jury returned  special  verdicts  against
NAPICO and certain other defendants in the amount of approximately $25.2 million
for  violations of securities  laws and against NAPICO for  approximately  $67.3
million for  breaches of  fiduciary  duty.  In  addition,  the jury  awarded the
plaintiffs  punitive damages against NAPICO of approximately  $92.5 million.  On
April  3,  2003,  the  judge  entered  certain  orders  in  connection  with the
litigation that denied defendants' motion for a new trial and set April 28, 2003
as the date for entry of judgment against NAPICO and certain other defendants in
the amount of $25.2 million for violations of securities laws and against NAPICO
for $67.3 million for breaches of fiduciary  duty,  both amounts plus  interest,
subject to plaintiffs' agreement to reducing the jury award for punitive damages
against NAPICO from $92.5 million to $2.6 million. While the case is expected to
be appealed,  the entire matter is the  responsibility of the former shareholder
of  Casden  Properties  Inc.  pursuant  to  the  documents  related  to  AIMCO's
acquisition of Casden Properties Inc., which was completed in March 2002.

The Corporate  General  Partner of the  Partnership is involved in various other
lawsuits  arising from  transactions in the ordinary course of business.  In the
opinion of management  and the Corporate  General  Partner,  the claims will not
result in any material liability to the Partnership.


<PAGE>



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

No matters were submitted to a vote of the unit holders through the solicitation
of proxies or otherwise during the quarter ended December 31, 2002.


<PAGE>






                                     PART II

Item  5.  Market  for  the  Registrant's   Partnership   Interests  and  Related
Partnership Matters

The Limited  Partnership  Interests are not traded on a public exchange but were
sold through a public offering managed by E.F. Hutton Inc. It is not anticipated
that any public market will develop for the purchase and sale of any Partnership
interest,  therefore an investor  may be unable to sell or otherwise  dispose of
his or her interest in the  Partnership.  Limited  Partnership  Interests may be
transferred only if certain  requirements  are satisfied.  At December 31, 2002,
there  were 820  registered  holders  of  16,323  units of  limited  partnership
interest in REAL. The  Partnership has invested in certain  government  assisted
projects  under  programs  which in many  instances  restrict  the  cash  return
available to Project  owners.  The  Partnership was not designed to provide cash
distributions   to  investors  in   circumstances   other  than  refinancing  or
disposition  of its investment in the limited  partnerships.  In March 1999, the
Partnership  made  distributions  of  approximately  $3,861,000  to the  limited
partners and  approximately  $39,000 to the general  partners,  primarily  using
proceeds from the sale of the partnership interests. No other distributions have
been made since the inception of the Partnership.

AIMCO and its affiliates owned 3,028 limited partnership units, or 18.55% of the
outstanding  units (the "Units") in the  Partnership at December 31, 2002. It is
possible that AIMCO or its affiliates will acquire  additional  units of limited
partnership interest in the Partnership in exchange for cash or a combination of
cash and units in the  operating  partnership  of AIMCO.  Under the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of  matters,  which  would  include  voting on
certain  amendments  to the  Partnership  Agreement  and  voting to  remove  the
Corporate General Partner. Although the Corporate General Partner owes fiduciary
duties to the limited partners of the Partnership, the Corporate General Partner
also owes fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the
duties of the Corporate General Partner,  as corporate  general partner,  to the
Partnership  and its limited  partners may come into conflict with the duties of
the Corporate General Partner to AIMCO, as its sole stockholder.

Item 6.  Management's Discussion and Analysis or Plan of Operation

This item should be read in conjunction with the financial  statements and other
items contained elsewhere in this report.

The Corporate  General  Partner  monitors  developments in the area of legal and
regulatory   compliance  and  is  studying  new  federal  laws,   including  the
Sarbanes-Oxley  Act of 2002. The Sarbanes-Oxley Act of 2002 mandates or suggests
additional compliance measures with regard to governance,  disclosure, audit and
other areas.  In light of these changes,  the  Partnership  expects that it will
incur higher expenses related to compliance, including increased legal and audit
fees.

Liquidity

The Partnership  continues to generate  recurring  operating  losses and suffers
from a  lack  of  cash  to  meet  obligations  due at  December  31,  2002.  The
Partnership's  primary  source of funds  includes  interest  income  earned from
investing available cash and cash distributions from Local Partnerships in which
the  Partnership  has  invested.   The  Partnership  received  distributions  of
approximately  $32,000 during the year ended December 31, 2002;  however it does
not anticipate a significant  increase in the amount of  distributions  received
from Local  Partnerships  during the next twelve months.  The Corporate  General
Partner  may approve  advances  to the  Partnership  to fund  certain  operating
expenses;  however it is not required to take such  action.  Due to this lack of
liquidity,  there is  substantial  doubt  about  the  Partnership's  ability  to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments  to reflect the possible  future effects of the  recoverability  and
classification of assets or amounts and  classifications of liabilities that may
result from this uncertainty.

Except for money  market  funds,  the  Partnership's  investments  are  entirely
interests in other Local Partnerships owning government assisted projects. Funds
temporarily not required for such  investments in projects are invested in money
market funds which  provide  interest  income as reflected in the  statements of
operations.  These  investments  can  be  readily  converted  to  cash  to  meet
obligations as they arise.

Results of Operations

The  Partnership,  as a limited  partner,  does not  exercise  control  over the
activities and  operations,  including  refinancing or selling  decisions of the
Local Partnerships.  Accordingly, the Partnership accounts for its investment in
the Local Partnerships using the equity method. Thus the individual  investments
are  carried  at cost plus the  Partnership's  share of the Local  Partnership's
profits  less the  Partnership's  share of the Local  Partnership's  losses  and
distributions  and impairment  charges.  However,  since the  Partnership is not
legally  liable  for  the  obligations  of  the  Local  Partnerships,  or is not
otherwise committed to provide additional support to them, it does not recognize
losses  once its  investment  in each of the Local  Partnerships  reaches  zero.
Distributions  from the Local  Partnerships  are accounted for as a reduction of
the  investment  balance  until  the  investment  balance  is  reduced  to zero.
Subsequent  distributions  received are recognized as income in the accompanying
statements  of  operations.  For those  investments  where the  Partnership  has
determined that the carrying value of its investments approximates the estimated
fair value of those investments, the Partnership's policy is to recognize equity
in  income  of the  Local  Partnerships  only  to the  extent  of  distributions
received,  and amortization of acquisition costs from those Local  Partnerships.
During the year ended December 31, 2002, the  Partnership  recognized  equity in
income only to the extent of  distributions  received of  approximately  $32,000
from  Local  Partnerships.   During  the  year  ended  December  31,  2001,  the
Partnership  recognized  equity  in  loss of  approximately  $7,000  from  Local
Partnerships. During the years ended December 31, 2002 and 2001, the Partnership
received  approximately $9,000 and $9,000,  respectively,  in distributions from
Local  Partnerships  that  were  recognized  as  income  in  the  statements  of
operations since the Partnership's investment in the Local Partnerships had been
reduced to zero.

At  December  31,  2002,  the  investment  balance  in eight  of the nine  Local
Partnerships had been reduced to zero. Partnership revenues consist primarily of
interest  income  earned  on  temporary  investment  of funds not  required  for
investment in Local Partnerships.

An annual  management  fee is payable to the  Corporate  General  Partner of the
Partnership  and is  calculated  at 0.5  percent of the  Partnership's  invested
assets.  The  management  fee is paid to the Corporate  General  Partner for its
continuing  management of the Partnership  affairs. The fee is payable beginning
with  the  month  following  the  Partnership's  initial  investment  in a Local
Partnership.  Management fees were approximately  $106,000 for each of the years
ended December 31, 2002 and 2001.

Operating  expenses,  exclusive  of the  management  fee,  consist  of legal and
accounting  fees for  services  rendered  to the  Partnership  and  general  and
administrative  expenses.  Legal and accounting fees were approximately  $76,000
and  $89,000  for the years  ended  December  31,  2002 and 2001,  respectively.
General and administrative  expenses were approximately  $60,000 and $46,000 for
the years ended December 31, 2002 and 2001, respectively.

Under recently adopted law and policy,  the United States  Department of Housing
and Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment  ("HAP")  Contracts  on a long  term  basis on the  existing  terms.  In
connection with renewals of the 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 may be the case under
existing HAP Contracts.  The payments under the renewed HAP Contracts may not be
in an amount  that  would  provide  sufficient  cash  flow to  permit  owners of
properties  subject to HAP  Contracts to meet the debt service  requirements  of
existing  loans  insured by the Federal  Housing  Administration  of HUD ("FHA")
unless such mortgage loans are  restructured.  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")  provides for
the  restructuring  of  mortgage  loans  insured  by the  FHA  with  respect  to
properties  subject  to the  Section 8 program.  Under  MAHRAA,  an  FHA-insured
mortgage  loan can be  restructured  into a first  mortgage  loan  which will be
amortized on a current basis and a low interest  second mortgage loan payable to
FHA which will only be payable on  maturity  of the first  mortgage  loan.  This
restructuring results in a reduction in annual debt service payable to the owner
of the  FHA-insured  mortgage  loan and is  expected  to result in an  insurance
payment from FHA to the holder of the  FHA-insured  loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties  serving  families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.

When the HAP  Contracts are subject to renewal,  there can be no assurance  that
the local limited  partnerships  in which the Partnership has an investment will
be permitted to restructure its mortgage indebtedness under MAHRAA. In addition,
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 is uncertain.

AIMCO and its affiliates owned 3,028 limited partnership units, or 18.55% of the
outstanding  units (the "Units") in the  Partnership at December 31, 2002. It is
possible that AIMCO or its affiliates will acquire  additional  units of limited
partnership interest in the Partnership in exchange for cash or a combination of
cash and units in the  operating  partnership  of AIMCO.  Under the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of  matters,  which  would  include  voting on
certain  amendments  to the  Partnership  Agreement  and  voting to  remove  the
Corporate General Partner. Although the Corporate General Partner owes fiduciary
duties to the limited partners of the Partnership, the Corporate General Partner
also owes fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the
duties of the Corporate General Partner,  as corporate  general partner,  to the
Partnership  and its limited  partners may come into conflict with the duties of
the Corporate General Partner to AIMCO, as its sole stockholder.

Recent Accounting Pronouncements

In  January  2003,  the  FASB  issued  FASB  Interpretation  No.  46  ("FIN46"),
"Consolidation of Variable Interest Entities,  an Interpretation of ARB No. 51".
FIN46 requires  certain  variable  interest  entities to be  consolidated by the
primary  beneficiary of the entity if the equity  investors in the entity do not
have the  characteristics  of a  controlling  financial  interest or do not have
sufficient  equity at risk for the  entity to  finance  its  activities  without
additional subordinated financial support from other parties. FIN46 is effective
for all new variable  interest  entities  created or acquired  after January 31,
2003. For variable  interest  entities  created or acquired prior to February 1,
2003,  the  provisions  of FIN46 must be applied for the first interim or annual
period  beginning after June 15, 2003. The  Partnership is currently  evaluating
the  effect,  if any,  that the  adoption  of FIN46 will have on its  results of
operations and financial condition.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note 2 - Organization and Summary of Significant  Accounting Policies" which is
included in the financial  statements  in "Item 7.  Financial  Statements".  The
Corporate  General  Partner  believes that the  consistent  application of these
policies enables the Partnership to provide readers of the financial  statements
with useful and reliable  information about the Partnership's  operating results
and financial  condition.  The preparation of financial statements in conformity
with accounting  principles generally accepted in the United States requires the
Partnership to make estimates and  assumptions.  These estimates and assumptions
affect  the  reported  amounts  of  assets  and  liabilities  at the date of the
financial statements as well as reported amounts of revenues and expenses during
the  reporting  period.  Actual  results  could  differ  from  these  estimates.
Judgments  and  assessments  of  uncertainties  are  required  in  applying  the
Partnership's  accounting  policies in many areas.  The  following may involve a
higher degree of judgment and complexity.

Method of Accounting for Investments in Limited Partnerships

The  Partnership,  as a limited  partner,  does not  exercise  control  over the
activities and operations,  including  refinancing or selling decisions,  of the
Local Partnerships. Accordingly, the Partnership accounts for its investments in
the Local  Partnerships  using the equity method.  The  Partnership is allocated
profits and losses of the Local Partnerships based upon its respective ownership
percentage (between 50% and 99%).  Distributions of surplus cash from operations
from most of the Local  Partnerships  are restricted by the Local  Partnerships'
Regulatory  Agreements  with the United  States  Department of Housing and Urban
Development  ("HUD").  These  restrictions  limit the distribution to a portion,
generally  less than 10%, of the initial  invested  capital.  The excess surplus
cash is  deposited  into a  residual  receipts  reserve,  of which the  ultimate
realization by the  Partnership  is uncertain as HUD frequently  retains it upon
sale or  dissolution  of the Local  Partnership.  The  Partnership  is allocated
profits and losses and receives  distributions  from  refinancings  and sales in
accordance with the Local Partnerships' partnership agreements. These agreements
usually limit the Partnership's  distributions to an amount  substantially  less
than its ownership percentage in the Local Partnership.

The individual  investments are carried at cost plus the Partnership's  share of
the  Local  Partnership's  profits  less the  Partnership's  share of the  Local
Partnership's  losses,  distributions  and  impairment  charges.  See  "Note 2 -
Organization and Summary of Significant  Accounting  Policies" for a description
of the  impairment  policy.  The  Partnership  is not  legally  liable  for  the
obligations of the Local Partnerships and is not otherwise  committed to provide
additional  support to them.  Therefore,  it does not recognize  losses once its
investment in each of the Local  Partnerships  reaches zero.  Distributions from
the Local  Partnerships  are  accounted  for as a  reduction  of the  investment
balance until the  investment  balance is reduced to zero.  When the  investment
balance  has  been  reduced  to  zero,  subsequent  distributions  received  are
recognized as income in the accompanying statements of operations.

For those  investments  where the  Partnership  has determined that the carrying
value  of its  investments  approximates  the  estimated  fair  value  of  those
investments,  the  Partnership's  policy is to recognize equity in income of the
Local Partnerships only to the extent of distributions received and amortization
of acquisition costs from those Local Partnerships.  Therefore,  the Partnership
limits its recognition of equity earnings to the amount it expects to ultimately
realize.



<PAGE>



Item 7.  Financial Statements

REAL ESTATE ASSOCIATES LIMITED

                          LIST OF FINANCIAL STATEMENTS


Report of Ernst & Young,  LLP Independent  Auditors as of and for the year ended
December 31, 2002

Report of  Deloitte  & Touche,  LLP,  Independent  Auditors,  for the year ended
December 31, 2001

Balance Sheet - December 31, 2002

Statements of Operations - Years ended December 31, 2002 and 2001

Statements of Changes in Partners'  (Deficiency)  Equity - Years ended  December
31, 2002 and 2001

Statements of Cash Flows - Years ended December 31, 2002 and 2001

      Notes to Financial Statements



<PAGE>


                    Report of Independent Public Accountants



The Partners
Real Estate Associates Limited


We have audited the accompanying balance sheet of Real Estate Associates Limited
as of December 31, 2002,  and the related  statements of  operations,  partners'
(deficiency)  equity and cash  flows for the year then  ended.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our  audit.  We did not  audit  the  financial  statements  of  certain  limited
partnerships,  the  investments  in  which  are  reflected  in the  accompanying
financial  statements using the equity method of accounting.  The investments in
these  limited  partnerships  represent a  substantial  portion of the  investee
information  in Note 3 and Note 8. The  financial  statements  of these  limited
partnerships were audited by other auditors whose reports have been furnished to
us, and our  opinion,  insofar as it relates to the amounts  included  for these
limited partnerships, is based solely on the reports of the other auditors.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audit and the reports of the other  auditors
provide a reasonable basis for our opinion.

In our opinion,  based on our audit and the reports of the other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the financial  position of Real Estate Associates  Limited at December 31, 2002,
and the results of its  operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership will continue as a going concern.  As more fully described in Note 1
to the financial  statements,  the Partnership  continues to generate  recurring
operating losses and suffers from inadequate  liability.  These conditions raise
substantial  doubt  about  the  Partnership's  ability  to  continue  as a going
concern.  Management's  plans in regard to these  matters are also  described in
Note 1. The financial  statements do not include any  adjustments to reflect the
possible future effects on the  recoverability  and  classification of assets or
the amounts and  classification  of liabilities that may result from the outcome
of this uncertainty.


                                                            /s/Ernst & Young LLP
Greenville, South Carolina
April 14, 2003



<PAGE>



         REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
Real Estate Associates Limited
(A California limited partnership)

We have audited the accompanying statements of operations,  changes in partners'
(deficiency)  equity  and  cash  flows  of Real  Estate  Associates  Limited  (a
California  limited  partnership)  for the year ended  December 31, 2001.  These
financial   statements  are  the   responsibility   of  the  management  of  the
Partnership.  Our  responsibility  is to express  an opinion on these  financial
statements  based on our audit.  We did not audit the  financial  statements  of
certain  limited  partnerships,  the  investments  in which are reflected in the
accompanying  financial statements using the equity method of accounting.  These
limited partnerships represent a substantial portion of the investee information
in Note 2 to the financial statements. The financial statements of these limited
partnerships  were audited by other auditors.  Their reports have been furnished
to us and our opinion,  insofar as it relates to the amounts  included for these
limited partnerships, is based solely on the reports of the other auditors.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial statement presentation.  We believe our audit and the reports of other
auditors provide a reasonable basis for our opinion.

In our  opinion,  based on our  audit and the  reports  of other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the results of operations and cash flows of Real Estate  Associates  Limited for
the year ended  December  31,  2001 in  conformity  with  accounting  principles
generally accepted in the United States of America.


DELOITTE & TOUCHE LLP

Los Angeles, California
March 22, 2002


<PAGE>





                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                                  BALANCE SHEET
                                 (in thousands)

                                DECEMBER 31, 2002



                           Assets

  Investments in limited partnerships (Note 3)                $   658
  Cash and cash equivalents                                         -
       Total assets                                           $   658

        Liabilities and partners'(deficiency) equity

Liabilities:
  Advances from affiliates                                    $    67
  Accounts payable and accrued expenses                           149
  Accrued fees due to affiliates (Note 4)                         229
                                                                  445

Commitments and contingencies (Note 5)

Partners' (deficiency) equity:                                   (125)
  General partner                                                 338
  Limited partners                                                213

       Total liabilities and partners' (deficiency) equity    $   658


                   See Accompanying Notes to Financial Statements



<PAGE>


                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                            STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)

<TABLE>
<CAPTION>

                                                            Years Ended December 31,
                                                            2002                2001

<S>                                                     <C>                 <C>
Interest income                                         $     --            $    --

Operating expenses:
  Legal and accounting                                        76                 89
  Management fees - general partner (Note 4)                 106                106
  General and administrative (Note 4)                         60                 46
      Total operating expenses                               242                241

Loss from Partnership operations                            (242)              (241)
Distributions from limited partnerships
    recognized as income (Note 3)                              9                  9
Equity in income (loss) of limited partnerships and
     amortization of acquisition costs (Note 3)               32                 (7)

Net loss                                                $   (201)           $  (239)

Net loss allocated to general partner (1%)                    (2)                (2)
Net loss allocated to limited partners (99%)                (199)              (237)
                                                        $   (201)           $  (239)

Net loss per limited partnership interest (Note 2)      $    (12)           $   (15)


                   See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>


                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

               STATEMENTS OF CHANGES IN PARTNERS' (DEFICIENCY) EQUITY
                        (in thousands, except unit data)

<TABLE>
<CAPTION>



                                                     General        Limited
                                                    Partners        Partners        Total
<S>                                                                  <C>
Partnership interests (A)                                            16,323

Partners' (deficiency) equity,
  January 1, 2001                                     (121)             774            653

Net loss for the year ended
  December 31, 2001                                     (2)            (237)          (239)

Partners' (deficiency) equity,
  December 31, 2001                                   (123)             537            414

Net loss for the year ended
  December 31, 2002                                     (2)            (199)          (201)

Partners' (deficiency) equity,
  December 31, 2002                                $  (125)        $    338        $   213


(A)Consists of 16,323  units at December  31, 2002 and 16,500  units at December
   31, 2001. During 2002, 177 units were abandoned (Note 7).

                   See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>


                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                            STATEMENTS OF CASH FLOWS

                                 (in thousands)

<TABLE>
<CAPTION>

                                                                 Years Ended December 31,
                                                                    2002            2001

Cash flows from operating activities:
<S>                                                           <C>                 <C>
  Net loss                                                    $   (201)           $   (239)
  Adjustments to reconcile net loss to net cash provided
    by (used in) operating activities:
      Equity in (income)loss of limited partnerships and
        amortization of acquisition costs                          (32)                  7
      Increase in accrued fees due to affiliates                    135                117
      (Decrease) increase in accounts payable and
            accrued expenses                                        (1)                117
         Net cash (used in) provided by operating activities       (99)                  2

Cash flows from investing activities:
  Distributions from limited partnership recognized
   as reduction of investment balance                               32                  40
  Capital Contributions to limited partnerships                     --                 (44)
         Net cash provided by (used in) investing activities        32                  (4)

Cash flows from financing activities:
  Advances from affiliates                                          67                   --

Net decrease in cash and cash equivalents                           --                   (2)

Cash and cash equivalents, beginning of year                        --                    2

Cash and cash equivalents, end of year                        $     --            $      --

                   See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>

                         REAL ESTATE ASSOCIATES LIMITED
                       (A California limited partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2002

1.  Going Concern

The Partnership  continues to generate  recurring  operating  losses and suffers
from a  lack  of  cash  to  meet  obligations  due at  December  31,  2002.  The
Partnership's  primary  sources of funds  include  interest  income  earned from
investing available cash and cash distributions received from Local Partnerships
in which the Partnership has invested. The Partnership received distributions of
approximately  $32,000 during the year ended December 31, 2002; however, it does
not anticipate a significant  increase in the amount of  distributions  received
from Local  Partnerships  during the next twelve months.  The Corporate  General
Partner  may approve  advances  to the  Partnership  to fund  certain  operating
expenses;  however,  it is not  required to take such action.  Management  is in
discussions with the Corporate General Partner to fund the current shortfall. In
addition,  management is in negotiations  with the general partner of one of the
local  limited  partnerships  in which  the  Partnership  has  invested  for the
refinancing of the investment  property owned by the local limited  partnership.
However,  there is no assurance  that these actions will be  successful.  Due to
this lack of  liquidity,  there is  substantial  doubt  about the  Partnership's
ability to continue as a going concern.  The financial statements do not include
any adjustments to reflect the possible future effects of the recoverability and
classification of assets or amounts and  classifications of liabilities that may
result from this uncertainty.

2.  Organization and Summary of Significant Accounting Policies

Organization

Real  Estate  Associates  Limited  (the  "Partnership")  was  formed  under  the
California  Limited  Partnership  Act on September 15, 1977. The Partnership was
formed to invest either directly or indirectly in other  partnerships  which own
and  operate  primarily  federal,  state and local  government-assisted  housing
projects.  The  general  partner  is  National  Partnership   Investments  Corp.
("NAPICO"),  a California  Corporation (the "Corporate  General  Partner").  The
Partnership  shall be dissolved only upon the expiration of 53 complete calendar
years  (December 31, 2031) from the date of the formation of the  Partnership or
the  occurrence  of other events as  specified  in the terms of the  Partnership
agreement. The business of the Partnership is conducted primarily by NAPICO.

Prior to December  30,  1998,  NAPICO was a wholly  owned  subsidiary  of Casden
Investment  Corporation  ("CIC"),  which is wholly owned by Alan I.  Casden.  On
December 30, 1998, Casden Properties Operating Partnership, L.P. (the "Operating
Partnership"),  a majority owned  subsidiary of Casden  Properties  Inc., a real
estate investment trust organized by Alan I. Casden, purchased a 95.25% economic
interest in NAPICO. The remaining economic interest, including a majority of the
voting common stock, continues to be owned by CIC.

 On December 3, 2001,  Casden  Properties Inc.,  entered into a merger agreement
and certain other transaction documents with Apartment Investment and Management
Company,  ("AIMCO"), a publicly traded real estate investment trust, and certain
of its subsidiaries, pursuant to which, on March 11, 2002, AIMCO acquired Casden
Properties Inc. and its subsidiaries,  including 100% of the outstanding capital
stock of NAPICO.  Prior to March 11, 2002, Casden Properties Inc. owned a 95.25%
economic  interest  in  NAPICO,  with the  balance  owned by  Casden  Investment
Corporation ("CIC").  CIC, which is wholly owned by Alan I. Casden, owned 95% of
the voting common stock of NAPICO prior to March 11, 2002.

The  general  partner  has a one  percent  interest in profits and losses of the
Partnership.  The limited  partners  have the  remaining 99 percent  interest in
proportion to their respective  investments.  A withdrawal amendment was entered
into as of September  12, 2002 and became  effective 90 days  thereafter  by and
among NAPICO and Charles  Boxenbaum,  whereby  Boxenbaum's  45% general  partner
interest was converted to that of a limited partner in the Partnership  entitled
to participate  in the profits and losses of the  Partnership in an amount equal
to 45% of the  amounts  otherwise  allocable  to  the  general  partners  by the
Partnership. The Corporate General Partner is the sole remaining general partner
of the Partnership.

Upon total or partial  liquidation  of the  Partnership  or the  disposition  or
partial  disposition of a project or project  interest and  distribution  of the
proceeds,  the  general  partners  will  be  entitled  to a  liquidation  fee as
stipulated  in the  Partnership  agreement.  The  limited  partners  will have a
priority return equal to their invested  capital  attributable to the project(s)
or project interest(s) sold and shall receive from the sale of the project(s) or
project  interest(s) an amount sufficient to pay state and federal income taxes,
if any,  calculated  at the maximum rate then in effect.  The general  partners'
liquidation fee may accrue but shall not be paid until the limited partners have
received distributions equal to 100 percent of their capital contributions.

Basis of Presentation

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  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.

Method of Accounting for Investments in Limited Partnerships

The investments in limited  partnerships are accounted for on the equity method.
Acquisition,  selection  and  other  costs  related  to the  acquisition  of the
projects  are  capitalized  as  part of the  investment  account  and are  being
amortized by the straight line method over the estimated lives of the underlying
assets, which is generally 30 years.

Net Loss Per Limited Partnership Interest

Net (loss) income per limited partnership  interest was computed by dividing the
limited  partners'  share  of net  loss by the  number  of  limited  partnership
interests  outstanding  during  the  year.  The  number of  limited  partnership
interests was 16,323 and 16,500 at December 31, 2002 and 2001, respectively.

Cash and Cash Equivalents

The  Partnership  has no cash and cash  equivalents  at December  31,  2002.  At
certain  times,  the amount of cash  deposited at a bank may exceed the limit on
insured  deposits.  Cash balances are  maintained  by an  affiliated  management
company on behalf of affiliated entities in cash concentration accounts.

Impairment of Long-Lived Assets

The  Partnership  reviews its  investments in 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. No
impairment  losses were recognized  during the years ended December 31, 2002 and
2001, respectively.

Fair Value of Financial Instruments

Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures About
Fair  Value  of  Financial  Instruments,"  requires  disclosure  of  fair  value
information about significant  financial  instruments.  The Partnership believes
that the carrying amount of other assets and liabilities reported on the balance
sheet  that  require  such  disclosure  approximates  fair  value  due to  their
short-term maturity.

Segment Reporting

SFAS  No.  131,   "Disclosure  about  Segments  of  an  Enterprise  and  Related
Information"  established standards for the way that public business enterprises
report information about operating  segments in annual financial  statements and
requires that those  enterprises  report  selected  information  about operating
segments in interim financial reports.  SFAS No. 131 also establishes  standards
for related disclosures about products and services, geographic areas, and major
customers.  As defined in SFAS No. 131, the  Partnership has only one reportable
segment.

Recent Accounting Pronouncements

In August 2001, the Financial  Accounting  Standards  Board issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived  Assets".  SFAS No. 144
provides  accounting  guidance for  financial  accounting  and reporting for the
impairment or disposal of long-lived  assets.  SFAS No. 144 supersedes  SFAS No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed Of". SFAS No. 144 is effective for fiscal years  beginning
after December 15, 2001. The Partnership  adopted SFAS No. 144 effective January
1, 2002. The adoption did not have a material  effect on the financial  position
or results of operations for the Partnership.

In April 2002,  the Financial  Accounting  Standards  Board issued SFAS No. 145,
"Rescission of FASB  Statements  No. 4, 44 and 64". SFAS No. 4 "Reporting  Gains
and Losses from Extinguishment of Debt," required that all gains and losses from
extinguishment  of  debt  be  aggregated  and,  if  material,  classified  as an
extraordinary item. SFAS No. 145 rescinds SFAS No. 4, and accordingly, gains and
losses from extinguishment of debt should only be classified as extraordinary if
they are  unusual in nature and occur  infrequently.  Neither of these  criteria
applies to the Partnership. SFAS No. 145 is effective for fiscal years beginning
after May 15, 2002 with early adoption an option.  The Partnership  adopted SFAS
No. 145 effective  April 1, 2002. The adoption did not have a material effect on
the financial position or results of operations for the Partnership.

In  January  2003,  the  FASB  issued  FASB  Interpretation  No.  46  ("FIN46"),
"Consolidation of Variable Interest Entities,  an Interpretation of ARB No. 51."
FIN46 requires  certain  variable  interest  entities to be  consolidated by the
primary  beneficiary of the entity if the equity  investors in the entity do not
have the  characteristics  of a  controlling  financial  interest or do not have
sufficient  equity at risk for the  entity to  finance  its  activities  without
additional subordinated financial support from other parties. FIN46 is effective
for all new variable  interest  entities  created or acquired  after January 31,
2003. For variable  interest  entities  created or acquired prior to February 1,
2003,  the  provisions  of FIN46 must be applied for the first interim or annual
period  beginning after June 15, 2003. The  Partnership is currently  evaluating
the  effect,  if any,  that the  adoption  of FIN46 will have on its  results of
operations and financial condition.

3.  Investments in Limited Partnerships

As of December 31, 2002, the Partnership holds limited partnership  interests in
nine limited partnerships (the "Local Partnerships"). The Local Partnerships own
residential low income rental projects  consisting of 649 apartment  units.  The
mortgage  loans  of  these  projects  are  payable  to  or  insured  by  various
governmental agencies.

The  Partnership,  as a limited  partner,  does not  exercise  control  over the
activities and operations,  including  refinancing or selling decisions,  of the
Local Partnerships. Accordingly, the Partnership accounts for its investments in
the Local  Partnerships  using the equity method.  The  Partnership is allocated
profits and losses of the Local Partnerships based upon its respective ownership
percentage (between 50% and 99%).  Distributions of surplus cash from operations
from most of the Local  Partnerships  are restricted by the Local  Partnerships'
Regulatory  Agreements  with the United  States  Department of Housing and Urban
Development  ("HUD").  These  restrictions  limit the distribution to a portion,
generally  less than 10%, of the initial  invested  capital.  The excess surplus
cash is  deposited  into a  residual  receipts  reserve,  of which the  ultimate
realization by the  Partnership  is uncertain as HUD frequently  retains it upon
sale or  dissolution  of the Local  Partnership.  The  Partnership  is allocated
profits and losses and receives  distributions  from  refinancings  and sales in
accordance with the Local Partnerships' partnership agreements. These agreements
usually limit the Partnership's  distributions to an amount  substantially  less
than its ownership percentage in the Local Partnership.

The individual  investments are carried at cost plus the Partnership's  share of
the  Local  Partnership's  profits  less the  Partnership's  share of the  Local
Partnership's  losses,  distributions  and  impairment  charges.  See  "Note 2 -
Organization and Summary of Significant  Accounting  Policies" for a description
of the  impairment  policy.  The  Partnership  is not  legally  liable  for  the
obligations of the Local Partnerships and is not otherwise  committed to provide
additional  support to them.  Therefore,  it does not recognize  losses once its
investment in each of the Local  Partnerships  reaches zero.  Distributions from
the Local  Partnerships  are  accounted  for as a  reduction  of the  investment
balance until the  investment  balance is reduced to zero.  When the  investment
balance  has  been  reduced  to  zero,  subsequent  distributions  received  are
recognized as income in the accompanying statements of operations.

For those  investments  where the  Partnership  has determined that the carrying
value  of its  investments  approximates  the  estimated  fair  value  of  those
investments,  the  Partnership's  policy is to recognize equity in income of the
Local Partnerships only to the extent of distributions received and amortization
of acquisition costs from those Local Partnerships.  Therefore,  the Partnership
limits its recognition of equity earnings to the amount it expects to ultimately
realize.

At  December  31,  2002,  the  investment  balance  in eight  of the nine  Local
Partnerships had been reduced to zero.

The following is a summary of the investments in Local Partnerships for the year
ended December 31, 2002 (in thousands):

Investment balance, beginning of year              $ 658
Equity in income of limited partnerships              35
Amortization of acquisition
 costs                                                (3)
Distributions from limited partnerships
  recognized as a reduction of investment
  balance                                            (32)
Investment balance, end of year                   $  658

The  difference  between the  investment  in the  accompanying  balance sheet at
December 31, 2002 and the deficit per the Local Partnership's combined financial
statements is due primarily to the cumulative  unrecognized  equity in losses of
certain Local  Partnerships,  impairment  losses recognized on the Partnership's
investments,   costs  capitalized  to  the  investment  account  and  cumulative
distributions recognized as income.

Selected  financial  information  from  the  combined  financial  statements  at
December 31, 2002 and for each of the two years in the period ended December 31,
2002, of the Local Partnerships in which the Partnership has investments:


            Condensed Combined Balance Sheet of the Local Partnerships
                                 (in thousands)

                                                    December 31,
                                                         2002
Assets
  Land                                                 $   711
  Building and improvements, net of accumulated
   depreciation of approximately $17,634                 5,202
  Other Assets                                           3,725
Total Assets                                           $ 9,638

Liabilities and Partners Deficit:
Liabilities:
  Mortgage notes payable                               $13,093
  Notes payable                                            486
  Other liabilities                                        683
                                                        14,262
Partners' deficit                                       (4,624)

Total liabilities and Partners' Deficit                $ 9,638

        Condensed Combined Results of Operations of the Local Partnerships
                                 (in thousands)
                                                       Years ended December 31,
                                                         2002            2001
Revenues:
Rental income                                           $3,864         $3,876
Other income                                               183            176
  Total revenues                                         4,047          4,052

Expenses:
Operating expenses                                       2,522          2,521
Financial expenses                                         807            871
Depreciation                                               691            687
Total expenses                                           4,020          4,079

Net income (loss)                                       $   27         $  (27)


NAPICO or one of its affiliates,  is the general partner and property management
agent for certain Local Partnerships  included above. The Local Partnerships pay
the affiliate property management fees in the amount of 5% of their gross rental
revenues and data processing fees. The amounts paid were  approximately  $12,000
and $11,000 for the years ended December 31, 2002 and 2001, respectively.

Under recently adopted law and policy,  the United States  Department of Housing
and Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment  ("HAP")  Contracts  on a long  term  basis on the  existing  terms.  In
connection with renewals of the 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 may be the case under
existing HAP Contracts.  The payments under the renewed HAP Contracts may not be
in an amount  that  would  provide  sufficient  cash  flow to  permit  owners of
properties  subject to HAP  Contracts to meet the debt service  requirements  of
existing  loans  insured by the Federal  Housing  Administration  of HUD ("FHA")
unless such mortgage loans are  restructured.  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")  provides for
the  restructuring  of  mortgage  loans  insured  by the  FHA  with  respect  to
properties  subject  to the  Section 8 program.  Under  MAHRAA,  an  FHA-insured
mortgage  loan can be  restructured  into a first  mortgage  loan  which will be
amortized on a current basis and a low interest  second mortgage loan payable to
FHA which will only be payable on  maturity  of the first  mortgage  loan.  This
restructuring results in a reduction in annual debt service payable to the owner
of the  FHA-insured  mortgage  loan and is  expected  to result in an  insurance
payment from FHA to the holder of the  FHA-insured  loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties  serving  families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.

When the HAP  Contracts are subject to renewal,  there can be no assurance  that
the  Local  Partnerships  in which the  Partnership  has an  investment  will be
permitted to restructure its mortgage  indebtedness  under MAHRAA.  In addition,
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 is uncertain.

4.  Transactions with Affiliated Parties

Under the terms of the Restated  Certificate and Agreement of Limited  Partners,
the Partnership is obligated to NAPICO for an annual  management fee equal to .5
percent of the  invested  assets.  Invested  assets are  defined as the costs of
acquiring project interests,  including the proportionate amount of the mortgage
loans  related to the  Partnership's  interest  in the  capital  accounts of the
respective partnerships. The management fee incurred for each of the years ended
December 31, 2002 and 2001, was  approximately  $106,000.  The unpaid balance at
December 31, 2002 is approximately $229,000.

The Partnership  reimburses  NAPICO for certain  expenses.  The reimbursement to
NAPICO was approximately $8,000 and $9,000 for the years ended December 31, 2002
and 2001, respectively, and is included in general and administrative expenses.

AIMCO and its affiliates owned 3,028 limited partnership units, or 18.55% of the
outstanding  units (the "Units") in the  Partnership at December 31, 2002. It is
possible that AIMCO or its affiliates will acquire  additional  units of limited
partnership interest in the Partnership in exchange for cash or a combination of
cash and units in the  operating  partnership  of AIMCO.  Under the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of  matters,  which  would  include  voting on
certain  amendments  to the  Partnership  Agreement  and  voting to  remove  the
Corporate General Partner. Although the Corporate General Partner owes fiduciary
duties to the limited partners of the Partnership, the Corporate General partner
also owes fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the
duties of the Corporate General Partner,  as corporate  general partner,  to the
Partnership  and its limited  partners may come into conflict with the duties of
the Corporate General Partner to AIMCO, as its sole stockholder.

5.  Contingencies

On August 27, 1998, two investors holding an aggregate of eight units of limited
partnership  interests  in Real Estate  Associates  Limited  III (an  affiliated
partnership in which NAPICO is the corporate  general partner) and two investors
holding an  aggregate  of five units of limited  partnership  interests  in Real
Estate Associates  Limited VI (an affiliated  partnership in which NAPICO is the
corporate  general  partner)  commenced an action in the United States  District
Court for the Central District of California against the Partnership, NAPICO and
certain other  defendants.  The complaint  alleged that the defendants  breached
their  fiduciary  duty  to  the  limited  partners  of  certain  NAPICO  managed
partnerships  and  violated  securities  laws by  making  materially  false  and
misleading statements in the consent solicitation statements sent to the limited
partners  of  such  partnerships   relating  to  approval  of  the  transfer  of
partnership interests in limited partnerships, owning certain of the properties,
to affiliates of Casden  Properties  Inc.,  organized by an affiliate of NAPICO.
The plaintiffs  sought  equitable  relief,  as well as compensatory  damages and
litigation  related costs.  On August 4, 1999, one investor  holding one unit of
limited  partnership  interest in Housing Programs  Limited (another  affiliated
partnership  in which  NAPICO is the  corporate  general  partner)  commenced  a
virtually  identical  action in the United States District Court for the Central
District  of  California  against  the  Partnership,  NAPICO and  certain  other
entities.  The second action was subsumed in the first action, and was certified
as a  class  action.  On  August  21,  2001,  plaintiffs  filed  a  supplemental
complaint,  which added new claims,  including a  rescission  of the transfer of
partnership  interests  and an  accounting.  The matter was tried in October and
November  2002. In November  2002, the jury returned  special  verdicts  against
NAPICO and certain other defendants in the amount of approximately $25.2 million
for  violations of securities  laws and against NAPICO for  approximately  $67.3
million for  breaches of  fiduciary  duty.  In  addition,  the jury  awarded the
plaintiffs  punitive damages against NAPICO of approximately  $92.5 million.  On
April  3,  2003,  the  judge  entered  certain  orders  in  connection  with the
litigation that denied defendants' motion for a new trial and set April 28, 2003
as the date for entry of judgment against NAPICO and certain other defendants in
the amount of $25.2 million for violations of securities laws and against NAPICO
for $67.3 million for breaches of fiduciary  duty,  both amounts plus  interest,
subject to plaintiffs' agreement to reducing the jury award for punitive damages
against NAPICO from $92.5 million to $2.6 million. While the case is expected to
be appealed,  the entire matter is the  responsibility of the former shareholder
of  Casden  Properties  Inc.  pursuant  to  the  documents  related  to  AIMCO's
acquisition of Casden Properties Inc., which was completed in March 2002.

The Corporate  General  Partner of the  Partnership is involved in various other
lawsuits  arising from  transactions in the ordinary course of business.  In the
opinion of management  and the Corporate  General  Partner,  the claims will not
result in any material liability to the Partnership.

6.  Income Taxes

The  Partnership  is not taxed on its income.  The  partners  are taxed in their
individual  capacities based upon their  distributive share of the Partnership's
taxable  income  or  loss  and are  allowed  the  benefits  to be  derived  from
off-setting  their  distributive  share of the tax losses against taxable income
from other sources  subject to passive loss  limitations.  The taxable income or
loss differs from  amounts  included in the  statements  of  operations  because
different  methods are used in determining the losses of the Local  Partnerships
as  discussed  below.  The tax  loss  is  allocated  to the  partner  groups  in
accordance with Section 704(b) of the Internal Revenue Code and therefore is not
necessarily proportionate to the interest percentage owned.

A reconciliation is as follows:

                                                  Years Ended December 31,
                                                     2002            2001
                                                       (in thousands)

Net loss per financial statements                  $ (201)          $ (239)

  Other                                                161             173
  Partnership's share of limited local
   Partnership                                           8              25
Loss per tax return                                 $ (32)          $ (41)
Net loss per limited partnership interest          $ (1.94)         $ (2.49)

The following is a reconciliation between the Partnership's reported amounts and
the federal tax basis of net assets:

                                                   December 31, 2002
                                                     (in thousands)

      Net assets as reported                           $    213
      Add (deduct):
       Investment in Partnerships                        (6,338)
        Deferred offering costs                           2,568
       Other                                                308
      Net deficit - federal tax basis                  $ (3,249)

7.       Abandonment Of Limited Partnership Units

In 2002, the number of Limited  Partnership  Units decreased by 177 units due to
limited  partners  abandoning  their  units.  In  abandoning  his or her Limited
Partnership  Unit(s),  a limited  partner  relinquishes  all right,  title,  and
interest in the partnership as of the date of abandonment.  However, the limited
partner is allocated  his or her share of net income or loss for that year.  The
income or loss per Limited  Partnership  Unit in the  accompanying  consolidated
statements of operations is calculated based on the number of units  outstanding
at the beginning of the year.


<PAGE>



Note 8 - Real Estate and Accumulated Depreciation of Local Partnerships in which
Real Has Invested

The  following  is a  summary  of  real  estate,  accumulated  depreciation  and
encumbrances  of  the  Local   Partnerships  in  which  REAL  has  invested  (in
thousands):

<TABLE>
<CAPTION>

                                          Buildings
                                             And
                                          Related
                                          Personal              Accumulated      Date of
      Description       EncumbranceLand   Property Total(2)(3)  Depreciation(3) Construction

<S>                        <C>            <C>         <C>       <C>               <C>  <C>
Belleville Manor, Ltd.     (1)      --    $  812      $   812   $    579          1978-1979

Bethel Towers, Ltd.        (1)      67     4,026        4,093      3,282           pre 1977

Cherry Hills, Ltd.         (1)     448     8,195        8,643      5,802         1978-1980

Clinton Apts.              (1)      50       557          607        527          1977-1980

Emporia, Ltd.              (1)      40     2,586        2,626      2,079          1978-1980

Roebern, Ltd.              (1)      26     1,009        1,035        942          1978-1979

Bernroe, Ltd.              (1)      45     1,094        1,139        965          1978-1979

W. Lafeyette Ltd.          (1)      35     1,263        1,298      1,080          1979-1980

Williamson Towers, Ltd.    (1)      --     3,294        3,294      2,378          1979-1981

Total                      (1)     711   $22,836      $23,547   $ 17,634
</TABLE>

(1) Schedule of Encumbrances

(1)       Schedule of Encumbrances

<TABLE>
<CAPTION>

                                                                  Notes
                                                                Payable and
                                                   Mortgage       Accrued
Partnership Name                                    Notes        Interest      Total
                                                              (in thousands)
<S>                                             <C>            <C>           <C>
Belleville Manor, Ltd.                          $    526       $      8      $    534
Bethel Towers, Ltd.                                2,784              1         2,785
Cherry Hill, Ltd.                                  4,220             28         4,248
Clinton Apts.                                        121              1           122
Emporia, Ltd.                                      1,120             --         1,120
Roebern, Ltd.                                        571            290           861
Bernroe, Ltd.                                        560             82           642
W. Lafeyette Ltd.                                    921            222         1,143
Williamson Towers, Ltd.                            2,270             15         2,285
Total - December 31, 2002                       $ 13,093       $    647      $ 13,740
</TABLE>

(2) Reconciliation of real estate and accumulated depreciation

                                                 Years Ended December 31,
                                                   2002           2001
                                                      (in thousands)
Real Estate:
Balance at beginning of year                     $ 23,418       $ 23,226
Improvements during the year                          129            192
Balance at end of period                         $ 23,547       $ 23,418


                                                 Years Ended December 31,
                                                    2002          2001
                                                      (in thousands)
Accumulated Depreciation:
Balance at beginning of year                      $ 16,943      $ 16,256
Depreciation expense for the period                    691           687
Balance at end of year                            $ 17,634      $ 16,943



<PAGE>



Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
     Financial Disclosure

Effective  August 29,  2002,  the  Registrant  dismissed  its prior  Independent
Auditors, Deloitte & Touche LLP ("Deloitte") and retained as its new Independent
Auditors,  Ernst & Young LLP.  Deloitte's  Independent  Auditors'  Report on the
Registrant's  financial statements for the calendar year ended December 31, 2001
did not  contain an adverse  opinion or a  disclaimer  of  opinion,  and was not
qualified or modified as to uncertainty,  audit scope or accounting  principles.
The  decision to change  Independent  Auditors  was  approved  by the  Corporate
General  Partner.  During the  calendar  year ended 2001 and through  August 29,
2002,  there were no  disagreements  between the  Registrant and Deloitte on any
matter of accounting principles or practices, financial statement disclosure, or
auditing  scope  or  procedure  which  disagreements  if  not  resolved  to  the
satisfaction of Deloitte,  would have caused it to make reference to the subject
matter of the disagreements in connection with its reports.

Effective  August 29,  2002,  the  Registrant  engaged  Ernst & Young LLP as its
Independent Auditors.  During the last two calendar years and through August 29,
2002,  the  Registrant  did not consult  Ernst & Young LLP  regarding any of the
matters or events set forth in Item 304 (a)(2)(i) and (ii) of Regulation S-B.


<PAGE>



                                    PART III

Item 9.  Directors and Executive Officers of the Registrant

Real Estate  Associates  Limited (the  "Partnership" or the "Registrant") has no
officers or  directors.  The general  partner  responsible  for  conducting  the
business  of  the  Partnership  is  National  Partnership   Investments  Corp  a
California Corporation ("NAPICO" or the "Corporate General Partner").

The names and ages of, as well as the positions and offices held by, the present
directors  and executive  officers of NAPICO are set forth below:  The Corporate
General  Partner  manages and controls  substantially  all of the  Partnership's
affairs and has general  responsibility  and  ultimate  authority in all matters
affecting its business.  There are no family relationships  between or among any
directors or officers.

Peter K. Kompaniez              58    Director
David R. Robertson              37    President, Chief Executive Officer
                                       and Director
Michael J. Hornbrook            48    Executive Vice President and Chief
                                       Operating Officer
Jeffrey H. Sussman              37    Senior Vice President, General
                                       Counsel and Secretary
Brian H. Shuman                 40    Senior Vice President and Chief
                                       Financial Officer

Peter K.  Kompaniez  has been a Director  of NAPICO  since  April 1,  2000.  Mr.
Kompaniez  has been  Vice  Chairman  of the  Board  of  Directors  of  Apartment
Investment and Management  Company  ("AIMCO")  since July 1994 and was appointed
President of AIMCO in July 1997.

David R. Robertson has been President, Chief Executive Officer and a Director of
NAPICO since October 2002.  Mr.  Robertson is also  Executive  Vice President of
AIMCO  and  is  responsible  for  property  operations,   asset  management  and
transaction   activities   within  AIMCO   Capital's   portfolio  of  affordable
properties. Prior to joining AIMCO, Mr. Robertson was a member of the investment
banking group at Smith Barney from 1991 to 1996,  where he was  responsible  for
real estate investment  banking  transactions in the western United States,  and
was part of the Smith Barney team that managed  AIMCO's  initial public offering
in 1994.  From February 1996 until  February  2002,  when Mr.  Robertson  joined
AIMCO, he was the Chairman and Chief Executive Officer of Robeks Corporation,  a
privately held chain of specialty food stores.

Michael J.  Hornbrook has been  Executive Vice President of NAPICO since January
2002 and became Chief Operating  Officer of NAPICO in April 2002. Mr.  Hornbrook
is also  Senior  Vice  President  of AIMCO  and is  responsible  for tax  credit
placement activities and transactions involving properties in AIMCO's affordable
housing portfolio  located in the western United States.  Prior to January 2002,
Mr.  Hornbrook  was a partner in the law firm of McGuire Woods LLP in the firm's
Chicago office and  specialized in the area of real estate law with a particular
focus on affordable  housing and tax credits.  Mr. Hornbrook was the Chairman of
the firm's Affordable Housing Group.

Jeffrey H.  Sussman is Senior Vice  President,  General  Counsel and  Secretary,
having joined NAPICO in 1998. Mr.  Sussman is responsible  for the legal affairs
of NAPICO and its affiliates. Prior to joining NAPICO in April 1998, Mr. Sussman
was an associate with the law firm of Rus, Miliband, Williams & Smith in Irvine,
California.  His practice  emphasized real estate finance and insolvency law and
included the representation of borrowers,  lenders, and court-appointed trustees
in matters involving apartment complexes, retail centers and hotels.


<PAGE>



Brian H. Shuman is Senior Vice  President and Chief  Financial  Officer,  having
joined NAPICO in 2000.  Mr. Shuman is responsible  for the financial  affairs of
NAPICO,  as well as the limited  partnerships  sponsored  by it. From 1996 until
joining  NAPICO in August  2000,  Mr.  Shuman was Vice  President  - Finance for
Preferred Health  Management  Inc., the largest provider of worker  compensation
diagnostic  imaging  services in California  formed in 1996, and was responsible
for establishing and managing the accounting,  billing, collection, treasury and
financial  reporting  departments.  From  1994  to  1996,  Mr.  Shuman  was  the
Controller  for DVI Business  Credit  Corporation,  which  provides  asset based
lending to a wide range of health concerns.

The executive  officers and directors of the Corporate  General  Partner fulfill
the obligations of the Audit Committee and oversee the  Partnership's  financial
reporting process on behalf of the Corporate General Partner. Management has the
primary  responsibility  for the financial  statements and the reporting process
including  the  systems  of  internal  controls.  In  fulfilling  its  oversight
responsibilities,  the executive officers and directors of the Corporate General
Partner reviewed the audited  financial  statements with management  including a
discussion  of the  quality,  not  just  the  acceptability,  of the  accounting
principles,  the  reasonableness  of significant  judgments,  and the clarity of
disclosures in the financial statements.

The executive  officers and directors of the Corporate  General Partner reviewed
with the independent auditors,  who are responsible for expressing an opinion on
the conformity of those audited  financial  statements  with generally  accepted
accounting  principles,  their  judgments  as  to  the  quality,  not  just  the
acceptability,  of the Partnership's accounting principles generally accepted in
the United  States and such other  matters as are required to be discussed  with
the  Audit  Committee  or its  equivalent  under  auditing  standards  generally
accepted in the United States.  In addition,  the Partnership has discussed with
the  independent  auditors the auditors'  independence  from  management and the
Partnership  including  the matters in the written  disclosures  required by the
Independence  Standards  Board and  considered  the  compatibility  of non-audit
services with the auditors' independence.

The executive  officers and directors of the Corporate General Partner discussed
with the  Partnership's  independent  auditors  the overall  scope and plans for
their audit. In reliance on the reviews and discussions  referred to above,  the
executive  officers and directors of the Corporate General Partner have approved
the  inclusion of the audited  financial  statements  in the Form 10-KSB for the
year  ended  December  31,  2002 for filing  with the  Securities  and  Exchange
Commission.

The Corporate  General Partner has reappointed  Ernst & Young LLP as independent
auditors to audit the financial statements of the Partnership for 2003. Fees for
2002 were  audit  services  of  approximately  $31,000  and  non-audit  services
(principally tax-related) of approximately $16,000.

Item 10. Executive Compensation

None of the directors and officers of the Corporate General Partner received any
remuneration from the Partnership during the year ended December 31, 2002.


<PAGE>



Item 11. Security Ownership of Certain Beneficial Owners and Management

(a)      Security Ownership of Certain Beneficial Owners

The general partners own all of the outstanding general partnership interests of
REAL  III;  except  as  noted  below,  no  person  or  entity  is  known  to own
beneficially in excess of 5% of the outstanding limited partnership interests.


         Entity                     Number of Units         Percentage
AIMCO Properties, L.P.                  3,028                  18.55%

AIMCO Properties,  L.P. is ultimately  controlled by AIMCO. Its business address
is Stanford Place 3, 4582 S. Ulster Parkway, Suite 1100, Denver, Colorado 80237

(b)None of the  officers  and  directors of the  Corporate  General  Partner own
directly or beneficially any limited partnership interests in the Partnership.

Item 12.  Certain Relationships and Related Transactions

Under the terms of the Restated  Certificate and Agreement of Limited  Partners,
the Partnership is obligated to NAPICO for an annual  management fee equal to .5
percent of the  invested  assets.  Invested  assets are  defined as the costs of
acquiring project interests,  including the proportionate amount of the mortgage
loans  related to the  Partnership's  interest  in the  capital  accounts of the
respective partnerships. The management fee incurred for each of the years ended
December 31, 2002 and 2001, was  approximately  $106,000.  The unpaid balance at
December 31, 2002 is approximately $229,000.

The Partnership  reimburses  NAPICO for certain  expenses.  The reimbursement to
NAPICO was approximately $8,000 and $9,000 for the years ended December 31, 2002
and 2001, respectively, and is included in general and administrative expenses.

AIMCO and its affiliates owned 3,028 limited partnership units, or 18.55% of the
outstanding  units (the "Units") in the  Partnership at December 31, 2002. It is
possible that AIMCO or its affiliates will acquire  additional  units of limited
partnership interest in the Partnership in exchange for cash or a combination of
cash and units in the  operating  partnership  of AIMCO.  Under the  Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of  matters,  which  would  include  voting on
certain  amendments  to the  Partnership  Agreement  and  voting to  remove  the
Corporate General Partner. Although the Corporate General Partner owes fiduciary
duties to the limited partners of the Partnership, the Corporate General partner
also owes fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the
duties of the Corporate General Partner,  as corporate  general partner,  to the
Partnership  and its limited  partners may come into conflict with the duties of
the Corporate General Partner to AIMCO, as its sole stockholder.


<PAGE>



Item 13. Exhibits and Reports on Form 8-K

Exhibits

            Exhibit 3 Articles of  incorporation  and bylaws:  The Registrant is
            not incorporated. The Partnership Agreement was filed with Form S-11
            registration #260561, incorporated by reference.

            Exhibit 10 Material Contracts:  The Registrant is not a party to any
            material  contracts,   other  than  the  restated   certificate  and
            agreement  of limited  partnership  dated  September 15, 1979 as
            previously  filed and which is incorporated by reference.


         Exhibit 16 Letter  dated August 29, 2002 from the  Registrant's  former
            independent   accountants   regarding  its   concurrence   with  the
            statements  made by the Registrant  incorporated by reference to the
            Registrant's Current Report on Form 8-K dated September 6, 2002.

            Exhibit 99 Certification of Chief   Executive   Officer   and  Chief
            Financial Officer.

            Exhibit 99.1 Independent Auditors Report for Belleville Manor, Ltd.

            Exhibit 99.2 Independent Auditors Report for Bethel Towers, Ltd.

            Exhibit 99.3 Independent Auditors Report for Clinton Apts.

            Exhibit 99.4 Independent Auditors Report for W. Lafeyette, Ltd.

            Exhibit  99.5 Independent Auditors  Report  for  Williamson   Towers
            Association.

Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended December 31, 2002.

Item 14.  Controls and Procedures

The principal executive officer and principal financial officer of the Corporate
General Partner, who are the equivalent of the Partnership's principal executive
officer and principal financial officer,  respectively,  have, within 90 days of
the filing  date of this  annual  report,  evaluated  the  effectiveness  of the
Partnership's  disclosure  controls and  procedures  (as defined in Exchange Act
Rules 13a-14(c) and 15d-14(c)) and have determined that such disclosure controls
and  procedures  are  adequate.  There have been no  significant  changes in the
Partnership's  internal  controls or in other  factors that could  significantly
affect the  Partnership's  internal  controls since the date of evaluation.  The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.


<PAGE>



                                   SIGNATURES


In accordance  with the  requirements of Section 13 or 15(d) of the Exchange Act
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                               REAL ESTATE ASSOCIATES LIMITED
                               (a California Limited Partnership)

                                    By:   NATIONAL PARTNERSHIP INVESTMENTS CORP.
                                          Corporate General Partner


                                    By:   /s/Peter K. Kompaniez
                                          Peter K. Kompaniez
                                          Director

                                    By:   /s/David R. Robertson
                                          David R. Robertson
                                          President, Chief Executive Officer
                                          and Director

                                    By:   /s/Brian H. Shuman
                                          Brian H. Shuman
                                          Senior Vice President and
                                          Chief Financial Officer

                                    Date: April 18, 2003

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.

/s/Peter K. Kompaniez         Director                     Date:  April 18, 2003
Peter K. Kompaniez



/s/David R. Robertson         President, Chief Executive    Date: April 18, 2003
David R. Robertson             Officer and Director



/s/Brian H. Shuman            Senior Vice President and     Date: April 18, 2003
Brian H. Shuman                 Chief Financial Officer



<PAGE>



                                  CERTIFICATION


I, David R. Robertson, certify that:


1. I have reviewed  this annual report on Form 10-KSB of Real Estate  Associates
Limited;


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


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


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


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


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      annual report (the "Evaluation Date"); and


      c) Presented in this annual report our conclusions about the effectiveness
      of the disclosure  controls and  procedures  based on our evaluation as of
      the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date:  April 18, 2003

                                    /s/David R. Robertson
                                    David R. Robertson
                                    President and Chief  Executive   Officer  of
                                    National Partnership Investments Corp.,
                                    equivalent of the chief executive officer of
                                    the Partnership


<PAGE>



                                  CERTIFICATION


I, Brian H. Shuman, certify that:


1. I have reviewed  this annual report on Form 10-KSB of Real Estate  Associates
Limited;


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


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


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


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


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      annual report (the "Evaluation Date"); and


      c) Presented in this annual report our conclusions about the effectiveness
      of the disclosure  controls and  procedures  based on our evaluation as of
      the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date:  April 18, 2003

                                /s/Brian H. Shuman
                                Brian H. Shuman
                                Senior  Vice   President  and  Chief   Financial
                                Officer  of  National  Partnership   Investments
                                Corp.,   equivalent   of  the  chief   financial
                                officer of the Partnership


<PAGE>



                         REAL ESTATE ASSOCIATES LIMITED
                                  EXHIBIT INDEX


Exhibit  Description of Exhibit

3    Articles of incorporation  and bylaws:  The Registrant is not incorporated.
     The Partnership  Agreement was filed with Form S-11  registration  #260561,
     incorporated by reference.

10   Material  Contracts:  The  Registrant  is  not  a  party  to  any  material
     contracts,  other than the restated  certificate  and  agreement of limited
     partnership  dated  September  15,  1979 as  previously  filed and which is
     incorporated by reference.

16   Letter  dated  August 29,  2002 from the  Registrant's  former  independent
     accountants  regarding  its  concurrence  with the  statements  made by the
     Registrant  incorporated by reference to the Registrant's Current Report on
     Form 8-K dated September 6, 2002.

  99       Certification of Chief Executive Officer and Chief Financial Officer.

  99.1   Independent Auditors Report for Belleville Manor, Ltd.

  99.2   Independent Auditors Report for Bethel Towers, Ltd.

  99.3   Independent Auditors Report for Clinton Apts.

  99.4   Independent Auditors Report for W. Lafeyette, Ltd.

  99.5   Independent Auditors Report for Williamson Towers Association.



<PAGE>




Exhibit 99.0


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002



In connection  with the Annual  Report on Form 10-KSB of Real Estate  Associates
Limited (the "Partnership"),  for the year ended December 31, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"),  David
R.  Robertson,  as  the  equivalent  of  the  chief  executive  officer  of  the
Partnership,  and Brian H.  Shuman,  as the  equivalent  of the chief  financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

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

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


                                           /s/David R. Robertson
                                    Name:  David R. Robertson
                                    Date:  April 18, 2003


                                           /s/Brian H. Shuman
                                    Name:  Brian H. Shuman
                                    Date:  April 18, 2003


This  certification  accompanies  the  Report  pursuant  to  Section  906 of the
Sarbanes-Oxley  Act of 2002 and shall not,  except to the extent required by the
Sarbanes-Oxley  Act of 2002, be deemed filed by the  Partnership for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.


<PAGE>


Exhibit 99.1

                          INDEPENDENT AUDITORS' REPORT



To the Partners
Belleville Manor Apartments, Ltd.
(A Limited Partnership)

We have audited the accompanying  balance sheet of Belleville Manor  Apartments,
Ltd., Project No.  083-35219-L8-PM-PAH  (a limited partnership),  as of December
31, 2002,  and the related  statement  of income,  and cash flows and changes in
partners'  deficit for the year then ended.  These financial  statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We have  conducted our audit in accordance  with  auditing  standards  generally
accepted  in the United  States of America  and  Government  Auditing  Standards
issued by the Comptroller General of the United States.  Those standards require
that we plan and perform the audit to obtain reasonable  assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Belleville Manor Apartments,
Ltd. at December 31, 2002,  and the results of its operations and cash flows and
changes  in  partners'  deficit  for the  year  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued a report dated January 31, 2003, on our
consideration of Belleville Manor Apartments' internal control and reports dated
January 31, 2003, on its  compliance  with specific  requirements  applicable to
major HUD programs and specific  requirements  applicable  to  Affirmative  Fair
Housing.

The accompanying  supplementary  information (shown on pages 13-21) is presented
for  purposes of  additional  analysis  and is not a required  part of the basic
financial  statements.  Such  information  has been  subjected  to the  auditing
procedures  applied in the audit of the basic  financial  statements and, in our
opinion,  is fairly stated in all material respects in relation to the financial
statements taken as a whole.


Burkhalter & Ryan, P.C.
January 31, 2003


<PAGE>


Exhibit 99.2

                          INDEPENDENT AUDITORS' REPORT



To the Partners
Bethel Towers Limited
Dividend Housing Association
Detroit, Michigan

Gentlemen:

I have audited the accompanying  Balance Sheet of Bethel Towers Limited Dividend
Housing  Association,   (a  Michigan  limited  partnership),   FHA  Project  No.
044-27-NI-RAP,  MSHDA  No.  213,  as of  December  31,  2002,  and  the  related
Statements of Profits and Loss,  Changes in  Accumulated  Earnings and Partners'
Equity  (Deficit)  and Cash  Flows  for the year  then  ended.  These  financial
statements  are  the   responsibility  of  the  Partnership's   management.   My
responsibility  is to express an opinion on these financial  statements based on
my audit.

I have  conducted our audit in  accordance  with  auditing  standards  generally
accepted  in the  United  States  of  America  and the  standard  applicable  to
financial  audits  contained  in  Government  Auditing  Standards  issued by the
Comptroller  General of the United States.  Those standards  require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial statement presentation.  I believe that my audit provides a reasonable
basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the financial  position of Bethel Towers  Dividend  Housing
Association,  FHA Project No. 044-27-NI-RAP MSHDA No. 213, at December 31, 2002,
and the results of its operations,  the changes in its accumulated  earnings and
partners'  equity  (deficit)  and its  cash  flows  for the year  then  ended in
conformity with accounting principles generally accepted in the United States of
America.

My audit was  conducted  for the  purpose  of  forming  an  opinion on the basic
financial  statements  taken as a whole.  The  additional  information of Bethel
Towers Limited Dividend Housing Association FHA Project No.  044-27-NI-RAP MSHDA
No. 213 on pages 12 through 22 is presented for purposes of additional  analysis
and are not a required part of the basic financial  statements.  This additional
information  is  the  responsibility  of  the  partnership's  management.   Such
information has been subjected to the auditing  procedures  applied in the audit
of the basic financial  statements and, in my opinion,  is fairly presented,  in
all material respects,  in relation to the basic financial statements taken as a
whole.

In accordance  with  Government  Auditing  Standards I have also issued a report
dated  January 22,  2003,  on my  consideration  of the  partnership's  internal
control structure and on its compliance with laws and regulations.

I and prior  auditors  have  previously  audited and  expressed  an  unqualified
opinion on the financial  statements of Bethel Towers Limited  Dividend  Housing
Association  for the years 1976 through  2001.  In my opinion,  and relying upon
prior auditors opinions,  the supplemental data included on page 22, relating to
the years 1976 through  2002, is fairly  stated,  in all material  respects,  in
relation to the basic financial statements from which it has been derived.

J. Michael Woodgate, P.C. January 22, 2003


<PAGE>


Exhibit 99.3

                          INDEPENDENT AUDITORS' REPORT



To the Partners
Clinton Apartments, Ltd.
(A Limited Partnership)

We have audited the  accompanying  balance  sheet of Clinton  Apartments,  Ltd.,
Project No.  083-35225-L8-PM-PAH  (a limited  partnership),  as of December  31,
2002,  and the  related  statement  of  income,  and cash  flows and  changes in
partners'  deficit for the year then ended.  These financial  statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We have  conducted our audit in accordance  with  auditing  standards  generally
accepted  in the United  States of America  and  Government  Auditing  Standards
issued by the Comptroller General of the United States.  Those standards require
that we plan and perform the audit to obtain reasonable  assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Clinton  Apartments,  Ltd. at
December 31, 2002,  and the results of its operations and cash flows and changes
in  partners'  deficit  for the year then ended in  conformity  with  accounting
principles generally accepted in the United States of America.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued a report dated February 3, 2003, on our
consideration of Clinton Apartments' internal control and reports dated February
3, 2003, on its compliance  with specific  requirements  applicable to major HUD
programs and specific requirements applicable to Affirmative Fair Housing.

The accompanying  supplementary  information (shown on pages 13-21) is presented
for  purposes of  additional  analysis  and is not a required  part of the basic
financial  statements.  Such  information  has been  subjected  to the  auditing
procedures  applied in the audit of the basic  financial  statements and, in our
opinion,  is fairly stated in all material respects in relation to the financial
statements taken as a whole.


Burkhalter & Ryan, P.C.
February 3, 2003


<PAGE>


Exhibit 99.4

                          INDEPENDENT AUDITORS' REPORT

To the Partners
West Lafayette, Ltd.

We have audited the accompanying balance sheets of West Lafayette, Ltd. (an Ohio
limited partnership), FmHA Project No. 0H16-R000-008  (the"Partnership"),  as of
December 31, 2002 and 2001 and the related statements of operations,  changes in
partners'  deficiency and cash flows for the years then ended.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted  our audits in accordance  with U.S.  generally  accepted  auditing
standards  and  the  standards  applicable  to  financial  audits  contained  in
Government  Auditing  Standards issued by the Comptroller  General of the United
States.  Those  standards  require  that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting  principles used and significant  estimates made by the
Partnership's  management, as well as evaluating the overall financial statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of West  Lafayette,  Ltd. as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in conformity with U.S. generally  accepted  accounting
principles.

The  financial  statements  have been  prepared  assuming the  Partnership  will
continue as a going concern. As discussed in Note 5 to the financial statements,
the  Partnership's  recurring  losses and negative  cash flow raise  substantial
doubt  about  the  Partnership's   ability  to  continue  as  a  going  concern.
Management's  plans  regarding  these  matters  are  described  in Note  5.  The
financial  statements do no include any  adjustments  that might result from the
outcome of this uncertainty.

In accordance with Government Auditing  Standards,  we have also issued a report
dated March 27, 2003, on our consideration of the Partnership's internal control
over  financial  reporting  and on our  tests  of its  compliance  with  certain
provisions  of laws,  regulations,  contracts  and  grants.  That  report  is an
integral  part of an audit  performed in  accordance  with  Government  Auditing
Standards and should be read in conjunction  with this report in considering the
results of our audit.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The  accompanying  additional  financial
data (shown on pages 11 through 17) are  presented for the purpose of additional
analysis and are not a required  part of the basic  financial  statements.  This
additional   information  is  the   responsibility  of  the  Partnership.   Such
information has been subjected to the auditing  procedures  applied in our audit
of the basic financial  statements and, in our opinion,  is fairly stated in all
material respects when considered in relation to the basic financial  statements
taken as a whole.

Altschuler, Melvoin and Glasser, LLP
March 27, 2003


<PAGE>


Exhibit 99.5

                          INDEPENDENT AUDITORS' REPORT



To the Partners
Williamson Towers Associates

We have audited the accompanying balance sheets of Williamson Towers Associates,
a limited partnership, (Project No. 045-35100) as of December 31, 2002 and 2001,
and the related statements of operations and partners' deficit and of cash flows
for the years then ended.  These financial  statements are the responsibility of
the  General  Partner.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We have  conducted our audits in accordance  with auditing  standards  generally
accepted  in the United  States of America  and  Government  Auditing  Standards
issued by the Comptroller General of the United States.  Those standards require
that we plan and perform the audit to obtain reasonable  assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles used and significant  estimates made by the General Partner,  as well
as evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our  opinion,  the  financial  statements  present  fairly,  in all  material
respects,  the financial  position of Williamson Towers Associates  (Project No.
045-35100) as of December 31, 2002 and 2001,  and the results of its  operations
and its cash  flows for the  years  then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The additional  information of Williamson
Towers  Associates  (Project No.  045-35100) on pages 8 through 17, is presented
for the purpose of  additional  analysis and is not a required part of the basic
financial statements.  This additional  information is the responsibility of the
General Partner. Such additional  information has been subjected to the auditing
procedures  applied in our audit of the basic  financial  statements and, in our
opinion,  is fairly stated in all material  respects when considered in relation
to the basic 2002 financial statements taken as a whole.

In accordance  with Government  Auditing  Standards we have also issued a report
dated January 17, 2003, on our  consideration of Williamson  Towers  Associates'
internal  control and report dated January 17, 2003, on its compliance with laws
and  regulations.  These reports are an integral  part of an audit  performed in
accordance with Government  Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.



Deloitte & Touche
January 17, 2003