<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

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

                   For the Fiscal Year Ended DECEMBER 31, 1999

                             Commission File Number
                                     0-09262


                         REAL ESTATE ASSOCIATES LIMITED

                        A CALIFORNIA LIMITED PARTNERSHIP

                  I.R.S. Employer Identification No. 95-3187912

       9090 WILSHIRE BOULEVARD, SUITE 201, BEVERLY HILLS, CALIFORNIA 90211

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

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


                                             NONE


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

                             Yes      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-K or any amendment to this
Form 10-K. [X]


<PAGE>   2

PART I.

ITEM 1. 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 offered 16,500 Limited Partnership
Interests through a public offering managed by E.F. Hutton Inc.

The general partners of Real Estate Associates Limited are Charles H. Boxenbaum,
an individual residing in California, and 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. The current members of NAPICO's Board of Directors are
Charles H. Boxenbaum, Bruce E. Nelson and Alan I. Casden.

REAL holds limited partnership interests in 9 local limited partnerships as of
December 31, 1999, after selling its interests in 9 local limited partnerships,
in December 1998 to the Operating Partnership and after having its interest in
one local limited partnership redeemed on September 30, 1998. Each of these
limited partnerships owns a single 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.

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 remains,
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 are not
expected to 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"),
which was adopted in October 1997, 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


                                       1
<PAGE>   3

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.

On September 11, 1998, HUD issued interim regulations implementing MAHRAA and
final regulations are expected to be issued in 2000.

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.

The 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 limited partnerships pursuant to arm's-length
negotiations with these developers, or others, who acted as general partners. As
a limited partner, REAL's liability for obligations of the local limited
partnership is limited to its investment. The local general partner of the local
limited partnership retains responsibility for developing, constructing,
maintaining, operating and managing the project. Under certain circumstances of
default, REAL has the right to replace the general partner of the local limited
partnerships, but otherwise does not have control of sale or refinancing, etc.

Although each of the partnerships in which REAL has invested 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.



                                       2
<PAGE>   4

During 1999, all of the projects in which REAL had invested were substantially
rented. The following is a schedule of the status as of December 31, 1999, of
the projects owned by local limited partnerships in which REAL is a limited
partner.


            SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                         IN WHICH REAL HAS AN INVESTMENT
                                DECEMBER 31, 1999




<TABLE>
<CAPTION>
                                                Units Authorized
                                                  For Rental
                                                Assistance Under
                                                  Section 8 or
                                                   Other Rent                                Percentage of
                                No. of             Supplement               Units             Total Units
Name and Location               Units               Program               Occupied              Occupied
-----------------               ------          ----------------          --------           -------------
<S>                            <C>                 <C>                     <C>                  <C>
Belleville Manor                 32                   32/0                    31                   97%
Marion, KY

Bethel Towers                   146                   53/0                   139                   95%
Detroit, MI

Cherry Hill Place               186                   186/0                  186                  100%
Inkster, MI

Clinton Apts                     32                   32/0                    24                   75%
Clinton, KY

Northwood Village                72                   72/0                    69                   96%
Emporia, VA

Ridgeview Estates                32                   0/32                    28                   88%
Lewisburg, W. VA

Wedgewood Village                32                   0/32                    32                  100%
Ripley, W. VA

W. Lafayette Apts                49                   49/0                    41                   84%
W. Lafayette, OH

Williamson Towers                76                   76/0                    74                   97%
Williamson, W. VA
                                ---                   ------                 ---
                                657                   500/64                 624                   95%
                                ===                   ======                 ===
</TABLE>



                                       3
<PAGE>   5

ITEM 2. PROPERTIES:

The local limited partnerships in which REAL holds interests own various
multi-family rental properties. See Item 1 for information pertaining to these
properties.

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 managing general partner) and two investors
holding an aggregate of five units of limited partnership interest in Real
Estate Associates Limited VI (another affiliated partnership in which NAPICO is
the managing general partner) commenced an action in the United States District
Court for the Central District of California against the Partnership, NAPICO and
certain other affiliated entities. The complaint alleges that the defendants
breached their fiduciary duty to the limited partners of certain NAPICO managed
partnerships and made 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 the Operating Partnership
organized by an affiliate of NAPICO. The plaintiffs seek 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 managing
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 affiliated entities. The managing general partner of
such NAPICO managed partnerships and the other defendants believe that the
plaintiffs' claims are without merit and intend to contest the actions
vigorously.

The corporate general partner of the Partnership is a plaintiff in various
lawsuits and has also been named a defendant in other lawsuits arising from
transactions in the ordinary course of business. None of these suits were
related to REAL.

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

In August 1998, a consent solicitation statement was sent to the limited
partners setting forth the terms and conditions of the purchase of the limited
partners' interests, held for investment by the Partnership, by the Operating
Partnership, together with certain amendments to the Partnership Agreement and
other disclosures of various conflicts of interest in connection with the
proposed transaction. Prior to the sale of the partnership interests in 1998,
the consents of the limited partners to the sale and amendments to the
Partnership Agreement were obtained.

PART II.

ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED SECURITY
        HOLDER 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. Limited Partnership Interests may be transferred only if certain
requirements are satisfied. At December 31, 1999, there were 1,111 registered
holders of units in REAL. Distributions have not been made from the inception of
the Partnership to December 31, 1998. 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 investments in limited partnerships. In March 1999, the
Partnership made distributions of $3,861,000 to the limited partners and $39,000
to the general partners, primarily using proceeds from the sale of the
partnership interests.




                                       4
<PAGE>   6
ITEM 6.   SELECTED FINANCIAL DATA:



<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                    ---------------------------------------------------------------------------------------
                                      1999                 1998               1997              1996                1995
                                    -----------        -----------        -----------        -----------        -----------
<S>                                 <C>                <C>                <C>                <C>                <C>
Loss from Operations                $  (269,214)       $  (788,370)       $  (622,278)       $  (490,373)       $  (490,021)

Gain on sale of limited
    partnership interests                    --          3,798,734                 --                 --                 --

Distributions from Limited
   Partnerships Recognized
   as Income                              9,481            997,836            587,078            465,403          1,373,243

Equity in Income (Loss) of
   Limited Partnerships
   and Amortization of
   Acquisition Costs                     41,704           (747,873)          (204,940)           177,874            384,476
                                    -----------        -----------        -----------        -----------        -----------

Net Income (Loss)                   $  (218,029)       $ 3,260,327        $  (240,140)       $   152,904        $ 1,267,698
                                    ===========        ===========        ===========        ===========        ===========

Net Income (Loss) per limited
   Partnership Interest             $       (13)       $       196        $       (14)       $         9        $        77
                                    ===========        ===========        ===========        ===========        ===========



Total assets                        $   782,893        $ 4,970,809        $ 1,864,839        $ 2,863,973        $ 2,715,836
                                    ===========        ===========        ===========        ===========        ===========

Investments in Limited
   Partnerships                     $   579,027        $   530,241        $ 1,319,976        $ 2,486,997        $ 2,191,335
                                    ===========        ===========        ===========        ===========        ===========

Accrued Fees and Expenses
   Due General Partner              $        --        $        --        $   181,333        $ 1,021,677        $ 1,014,337
                                    ===========        ===========        ===========        ===========        ===========
</TABLE>




                                       5
<PAGE>   7

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

LIQUIDITY

The Partnership's primary sources of funds include interest income on money
market accounts and certificates of deposit and distributions from local
partnerships in which the Partnership has invested. It is not expected that any
of the local limited partnerships in which the Partnership has invested will
generate cash flow sufficient to provide for distributions to the Partnership's
limited partners in any material amount. The Partnership made a cash
distribution to investors in March 1999, primarily using proceeds from the
disposition of its investments in certain limited partnerships.

CAPITAL RESOURCES

REAL received $16,500,000 in subscriptions for units of Limited Partnership
Interests (at $1,000 per unit) during the period October 27, 1978 through August
31, 1979 pursuant to a registration statement on Form S-11.

RESULTS OF OPERATIONS

The Partnership was formed to provide various benefits to its partners as
discussed in Item 1. It is anticipated that the local limited partnerships in
which REAL has invested could produce tax losses for as long as 20 years after
formation. Tax benefits will decline over time as the advantages of accelerated
depreciation are greatest in the earlier years, as deductions for interest
expense decrease as mortgage principal is amortized and as the Tax Reform Act of
1986 limits the deductions available.

At December 31, 1999, the Partnership had investments in 9 limited partnerships,
all of which own housing projects that were substantially all rented. The
Partnership sold its interests in 8 local partnerships in December 1998 and had
its interest in one local partnership redeemed in September 30, 1998. The
Partnership, as a limited partner, is entitled to 50% to 99% of the profits and
losses of the local limited partnerships. The Partnership accounts for its
investments in the local limited partnerships on the equity method, thereby
adjusting its investment balance by its proportionate share of the income or
loss of the local limited partnerships. Equity in losses of limited partnerships
are recognized in the financial statements until the limited partnership
investment account is reduced to a zero balance. Losses incurred after the
limited partnership investment account is reduced to zero are not recognized.
Limited partners are not liable for losses beyond their contributed capital. At
December 31, 1999 and 1998, the Partnership has a positive investment balance in
only one local limited partnership.

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

The total income from the local limited partnerships that was allocated to the
Partnership was $239,000, $540,000 and $226,000 for the years ended December 31,
1999, 1998 and 1997, respectively. However, because losses incurred after the
investment account is reduced to a zero balance are not recognized and
subsequent income is not recognized until the investment account becomes
positive again, the Partnership recognized equity in income (loss) of limited
partnerships, substantially all from the partnerships with a positive investment
balance, of $41,704, $149,808 and $(204,940) for the years ended December 31,
1999, 1998 and 1997, respectively. The loss in 1997 is the result of one local
partnership incurring debt retirement and financing costs of $477,000 in
connection with the refinancing of its mortgage payable. This local partnership,
using funds released from restricted escrow accounts, made a cash distribution
of $965,000 to the Partnership in 1997, which reduced the investment balance in
that partnership. It allowed the Partnership to pay the accrued fees and
expenses due general partner, which were $1,021,677 at December 31, 1996. In
addition, the loss recorded by the Partnership for the year ended December 31,
1998 includes impairment losses



                                       6

<PAGE>   8

of $897,681 recognized on certain of the investments in local limited
partnerships. The cumulative amount of the unrecognized equity in losses of
certain limited partnerships was approximately $3,492,053 and $3,907,365 as of
December 31, 1999 and 1998, respectively.

Distributions from the local limited partnerships in which the Partnership did
not have a positive investment balance were $9,481, $997,836 and $587,078 for
the years ended December 31, 1999, 1998 and 1997, respectively. Distributions
were higher in 1998 than in 1997 because the Partnership's interest in one local
limited partnership was redeemed on September 30, 1998 for a payment of
$589,915. These amounts were recognized as income on the accompanying statements
of operations, in accordance with the equity method of accounting. Distributions
decreased in 1999 as a result of the sale of certain partnership interests in
1998.

As of December 31, 1999, 1998 and 1997, the Partnership has cash and cash
equivalents of $203,866, $540,568 and $544,863, respectively. Substantially all
of these amounts are on deposit with two high credit quality financial
institutions, earning interest. This resulted in the Partnership earning
$16,080, $13,917 and $22,277 in interest income for the years ended December 31,
1999, 1998 and 1997, respectively. The amount of interest income varies with
market rates available on deposits and with the amount of funds available for
investment. Cash equivalents can be converted to cash to meet obligations of the
Partnership as they arise. The Partnership intends to continue investing
available funds in this manner.

A recurring partnership expense is the annual management fee. The fee is payable
to the Corporate General Partner of the Partnership and is calculated at .5
percent of the Partnership's original remaining invested assets. The management
fee is paid to the Corporate General Partner for its continuing management of
partnership affairs. The fee is payable beginning with the month following the
Partnership's initial investment in a local limited partnership. Because of the
decrease in invested assets at the end of 1998 as a result of the sale of
partnership interests, management fees decreased from $407,340 for 1998 and 1997
to $106,232 for 1999.

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 are not
expected to 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"),
which was adopted in October 1997, 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.

On September 11, 1998, HUD issued interim regulations implementing MAHRAA and
final regulations are expected to be issued in 2000.

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.



                                       7
<PAGE>   9

As a result of the foregoing, the Partnership, in 1997, undertook an extensive
review of disposition, refinancing or re-engineering alternatives for the
properties in which the limited partnerships have invested and are subject to
HUD mortgage and rental subsidy programs. The Partnership has incurred expenses
in connection with this review by various third party professionals, including
accounting, legal, valuation, structural and engineering costs, which amounted
to $70,788, $253,214 and $119,589 for the years ended December 31, 1999, 1998
and 1997, respectively, and are included in administrative expenses.

On December 30, 1998, the Partnership sold its limited partnership interests in
8 local limited partnerships to the Operating Partnership. The sale resulted in
cash proceeds to the Partnership of $3,900,000 and a net gain of $3,798,734,
after deducting selling costs. The cash proceeds were held in escrow at December
31, 1998 and were collected subsequent to year-end. In March 1999, the
Partnership made cash distributions of $3,861,000 to the limited partners and
$39,000 to the general partners, primarily using proceeds from the sale of the
partnership interests.

The Operating Partnership purchased such limited partner interests for cash,
which it raised in connection with a private placement of its equity securities.
The purchase was subject to, among other things, (i) the purchase of the general
partner interests in the local limited partnerships by the REIT; (ii) the
approval of HUD and certain state housing finance agencies; and (iii) the
consent of the limited partners to the sale of the local limited partnership
interests held for investment by the Partnership.

In August 1998, a consent solicitation statement was sent to the limited
partners setting forth the terms and conditions of the purchase of the limited
partners' interests held for investment by the Partnership, together with
certain amendments to the Partnership Agreement and other disclosures of various
conflicts of interest in connection with the proposed transaction. Prior to the
sale of the partnership interests, the consents of the limited partners to the
sale and amendments to the Partnership Agreement were obtained.

Operating expenses, other than management fees, consist of legal and accounting
fees for services rendered to the Partnership and administrative expenses, legal
and accounting fees were generally consistent and were $66,438, $74,602 and
$54,950 for the years ended December 31, 1999, 1998 and 1997, respectively.
Administrative expenses were $112,624, $320,345 and $182,265 for the years ended
December 31, 1999, 1998 and 1997, respectively. Included in administrative
expenses are reimbursements to NAPICO for certain expenses, which totaled
$3,300, $24,276 and $24,279 for the years ended December 31, 1999, 1998 and
1997, respectively. In addition, included in administrative expenses in 1999,
1998 and 1997 is $70,788, $253,214 and $119,589, respectively, in expenses,
related to the aforementioned third-party review of the properties owned by the
local partnerships. Accounts payable at December 31, 1998 includes $55,543 of
such costs.

Revenues and expenses of the local limited partnerships decreased during the
year ended December 31, 1999 as compared to prior years, as a result of the sale
of 8 partnership interests on December 30, 1998.

Total revenue for the local partnerships has decreased from $16,857,000 and
$16,935,000 for the years ended December 31, 1998 and 1997, respectively, to
$4,174,000 for the year ended December 31, 1999.

Total expenses for the local partnerships decreased from $16,190,000 and
$16,637,000 for the years ended December 31, 1998 and 1997, respectively, to
$3,951,000 for the year ended December 31, 1999.

The total net income for the local partnerships for 1999, 1998 and 1997
aggregated $213,000, $667,000 and $298,000, respectively. The income allocated
to the Partnership was $227,000, $540,000 and $226,000 for 1999, 1998 and 1997,
respectively.

The Partnership, as a Limited Partner in the local limited partnerships in which
it has invested, is subject to the risks incident to the construction,
management, and ownership of improved real estate. The Partnership investments
are also subject to adverse general economic conditions, and accordingly, the
status of the national economy including substantial unemployment, concurrent
inflation and changing legislation could increase



                                       8

<PAGE>   10

vacancy levels, rental payment defaults, and operating expenses, which in turn,
could substantially increase the risk of operating losses for the projects.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:

The Financial Statements and Supplementary Data are listed under Item 14.


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

Not applicable.




                                       9

<PAGE>   11

                         REAL ESTATE ASSOCIATES LIMITED
                       (A California limited partnership)

                              FINANCIAL STATEMENTS,
                          FINANCIAL STATEMENT SCHEDULES
                   AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
                                DECEMBER 31, 1999



                                       10
<PAGE>   12

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


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


We have audited the accompanying balance sheets of Real Estate Associates
Limited (a California limited partnership) as of December 31, 1999 and 1998, and
the related statements of operations, partners' equity (deficiency) and cash
flows for each of the three years in the period ended December 31, 1999. Our
audits also included the financial statement schedules listed in the index in
item 14. These financial statements and financial statement schedules are the
responsibility of the management of the Partnership. Our responsibility is to
express an opinion on these financial statements and financial statement
schedules based on our audits. 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
equity in loss of these limited partnerships represents 2 percent and 5 percent
of the total net income (loss) of the Partnership for the years ended December
31, 1998 and 1997, respectively, and these limited partnerships represent a
substantial portion of the investee information in Note 2 and the financial
statement schedules. 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 audits in accordance with generally accepted auditing
standards. 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 audits and the reports of other auditors provide a reasonable
basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Real Estate Associates Limited as of December 31, 1999
and 1998, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1999 in conformity with generally
accepted accounting principles. Also, in our opinion, based on our audits and
the reports of other auditors, such financial statement schedules, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.



DELOITTE & TOUCHE LLP

Los Angeles, California
March 31, 2000


                                       11
<PAGE>   13


                         REAL ESTATE ASSOCIATES LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                 BALANCE SHEETS
                           DECEMBER 31, 1999 AND 1998

                                     ASSETS



<TABLE>
<CAPTION>
                                                          1999                1998
                                                        -----------        -----------
<S>                                                     <C>                <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2)            $   579,027        $   530,241

CASH AND CASH EQUIVALENTS (Note 1)                          203,866            540,568

CASH DUE FROM ESCROW (Note 2)                                    --          3,900,000
                                                        -----------        -----------

          TOTAL ASSETS                                  $   782,893        $ 4,970,809
                                                        ===========        ===========


                 LIABILITIES AND PARTNERS' EQUITY (DEFICIENCY)


LIABILITIES:
     Accounts payable                                   $    46,368        $   116,255
                                                        -----------        -----------


COMMITMENTS AND CONTINGENCIES (Notes 3 and 4)

PARTNERS' EQUITY (DEFICIENCY):
    General partners                                       (119,704)           (78,524)
    Limited partners                                        856,229          4,933,078
                                                        -----------        -----------

                                                            736,525          4,854,554
                                                        -----------        -----------

           TOTAL LIABILITIES AND PARTNERS' EQUITY       $   782,893        $ 4,970,809
                                                        ===========        ===========
</TABLE>




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



                                       12
<PAGE>   14

                         REAL ESTATE ASSOCIATES LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                            STATEMENTS OF OPERATIONS

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997



<TABLE>
<CAPTION>
                                                         1999                 1998              1997
                                                       -----------        -----------        -----------
<S>                                                    <C>                <C>                <C>
INTEREST AND OTHER INCOME                              $    16,080        $    13,917        $    22,277
                                                       -----------        -----------        -----------

OPERATING EXPENSES:
      Legal and accounting                                  66,438             74,602             54,950
      Management fees - general partner (Note 3)           106,232            407,340            407,340
      Administrative  (Note 3)                             112,624            320,345            182,265
                                                       -----------        -----------        -----------

TOTAL OPERATING EXPENSES                                   285,294            802,287            644,555
                                                       -----------        -----------        -----------

LOSS FROM OPERATIONS                                      (269,214)          (788,370)          (622,278)

GAIN ON SALE OF LIMITED PARTNERSHIP
       INTERESTS (Note 2)                                       --          3,798,734                 --

DISTRIBUTIONS FROM LIMITED
      PARTNERSHIPS RECOGNIZED AS
      INCOME (Note 2)                                        9,481            997,836            587,078

EQUITY IN INCOME (LOSS) OF LIMITED
      PARTNERSHIPS AND AMORTIZATION
      OF ACQUISITION COSTS (Note 2)                         41,704           (747,873)          (204,940)
                                                       -----------        -----------        -----------

NET (LOSS) INCOME                                      $  (218,029)       $ 3,260,327        $  (240,140)
                                                       ===========        ===========        ===========

NET (LOSS) INCOME PER LIMITED
      PARTNERSHIP INTEREST (Note 1)                    $       (13)       $       196        $       (14)
                                                       ===========        ===========        ===========
</TABLE>



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



                                       13
<PAGE>   15

                         REAL ESTATE ASSOCIATES LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                   STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997




<TABLE>
<CAPTION>
                               General            Limited
                               Partners           Partners             Total
                              -----------        -----------        -----------
<S>                           <C>                <C>                <C>
EQUITY (DEFICIENCY),
    January 1, 1997           $  (108,726)       $ 1,943,093        $ 1,834,367

    Net loss for 1997              (2,401)          (237,739)          (240,140)
                              -----------        -----------        -----------

EQUITY (DEFICIENCY),
    December 31, 1997            (111,127)         1,705,354          1,594,227

    Net income for 1998            32,603          3,227,724          3,260,327
                              -----------        -----------        -----------

EQUITY (DEFICIENCY),
    December 31, 1998             (78,524)         4,933,078          4,854,554

    Distributions                 (39,000)        (3,861,000)        (3,900,000)

    Net loss for 1999              (2,180)          (215,849)          (218,029)
                              -----------        -----------        -----------

EQUITY (DEFICIENCY),
    December 31, 1999         $  (119,704)       $   856,229        $   736,525
                              ===========        ===========        ===========
</TABLE>



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


                                       14
<PAGE>   16

                         REAL ESTATE ASSOCIATES LIMITED
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                            STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997




<TABLE>
<CAPTION>
                                                                                   1999               1998                1997
                                                                                -----------        -----------        -----------
<S>                                                                             <C>                <C>                <C>
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
            Net (loss) income                                                   $  (218,029)       $ 3,260,327        $  (240,140)
            Adjustments to reconcile net (loss) income to net
              cash (used in) provided by  operating activities:
                Equity in loss (income) of limited partnerships
                     and amortization of acquisition costs                          (41,704)           747,873            204,940
                 Gain on sale of partnership interests                                   --         (3,798,734)
                 Decrease in accrued fees
                    and expenses due general partner                                     --           (181,333)          (840,344)
                 (Decrease) increase in accounts payable                            (69,887)            26,976             81,350
                                                                                -----------        -----------        -----------
                     Net cash (used in) provided by
                        operating activities                                       (329,620)            55,109           (794,194)
                                                                                -----------        -----------        -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
            Costs related to sale of partnership interests                               --           (101,266)
            Distributions from limited partnership
                recognized as return of capital                                      37,918             47,594            974,165
            Capital contribution to limited partnerships                            (45,000)            (5,732)           (12,084)
            Proceed from the sale of limited partnership interests                3,900,000                 --                 --
                                                                                -----------        -----------        -----------

                      Net cash provided by (used in) investing activities         3,892,918            (59,404)           962,081
                                                                                -----------        -----------        -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
            Distributions to partners                                            (3,900,000)
                                                                                -----------        -----------        -----------
NET (DECREASE) INCREASE IN CASH EQUIVALENTS                                        (336,702)            (4,295)           167,887

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                        540,568            544,863            376,976
                                                                                -----------        -----------        -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                                          $   203,866        $   540,568        $   544,863
                                                                                ===========        ===========        ===========
</TABLE>



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

                                       15
<PAGE>   17

                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999



1.         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 in other limited partnerships which
           own and operate primarily federal, state and local
           government-assisted housing projects. The general partners are
           National Partnership Investments Corp. (NAPICO), the Corporate
           General Partner, and Charles H. Boxenbaum, Chief Executive Officer of
           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 Partnership issued 16,505 units of limited partnership interests
           through a public offering. The general partners have a 1 percent
           interest in the profits and losses of the Partnership. The limited
           partners have the remaining 99 percent interest which is allocated in
           proportion to their respective individual investments.

           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 various other
           events as specified in the terms of the Partnership agreement.

           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 have received an amount from the sale of
           the project(s) or project interest(s) 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.

           On December 30, 1998, the Partnership sold its interests in 8 local
           limited partnerships for $3,900,000 to the Operating Partnership. In
           addition, on September 30, 1998, the Partnership's interest in one
           local limited partnership was redeemed for $589,915.



                                       16
<PAGE>   18

                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1999



1.         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

           Use of Estimates

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

           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 to the investment account
           and are being amortized on a straight line basis over the estimated
           lives of the underlying assets, which is generally 30 years.

           Net Income (Loss) Per Limited Partnership Interest

           Net (loss) income per limited partnership interest was computed by
           dividing the limited partners' share of net (loss) income by the
           number of limited partnership interests outstanding during the year.
           The number of limited partnership interests was 16,505 for all years
           presented.

           Cash and Cash Equivalents

           Cash and cash equivalents consist of cash and bank certificates of
           deposit with an original maturity of three months or less. The
           Partnership has its cash and cash equivalents on deposit primarily
           with two high credit quality financial institutions. Such cash and
           cash equivalents are in excess of the FDIC insurance limit.

           Impairment of Long-Lived Assets

           The Partnership reviews long-lived assets to determine if there has
           been any permanent impairment whenever events or changes in
           circumstances indicate that the carrying amount of the asset may not
           be recoverable. If the sum of the expected future cash flows is less
           than the carrying amount of the assets, the Partnership recognizes an
           impairment loss. During 1998, the partnership recognized an
           impairment loss of approximately $898,000, related to certain
           investments in local limited partnerships, which has been included in
           equity in loss of limited partnerships.



                                       17
<PAGE>   19

                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1999



2.         INVESTMENTS IN LIMITED PARTNERSHIPS

           The Partnership holds limited partnership interests in 9 limited
           partnerships as of December 31, 1999 and 1998, after selling its
           interests in 8 limited partnerships in 1998 and having its interest
           in one limited partnership redeemed. The limited partnerships own
           residential low income rental projects consisting of 657 apartment
           units. The mortgage loans of these projects are payable to or insured
           by various governmental agencies.

           The Partnership, as a limited partner, is entitled to between 50
           percent and 99 percent of the profits and losses in the limited
           partnerships.

           Equity in losses of limited partnerships are recognized in the
           financial statements until the limited partnership investment account
           is reduced to a zero balance. Losses incurred after the limited
           partnership investment account is reduced to zero are not recognized.
           The cumulative amount of the unrecognized equity in losses of certain
           limited partnerships was in the aggregate approximately $3,492,053
           and $3,907,365 as of December 31, 1999 and 1998, respectively.

           Distributions from the limited partnerships are accounted for as a
           return of capital until the investment balance is reduced to zero.
           Subsequent distributions received are recognized as income.

           The following is a summary of the investments in limited partnerships
           and reconciliation to the limited partnership accounts:


<TABLE>
<CAPTION>
                                                                           1999                1998
                                                                        -----------        -----------
<S>                                                                     <C>                <C>
           Investment balance, beginning of year                        $   530,241        $ 1,319,976
           Capital contribution                                              45,000              5,732
           Equity in loss of limited partnerships                            44,490           (745,087)
           Amortization of capitalized acquisition costs and fees            (2,786)            (2,786)
           Cash distributions recognized as return of capital               (37,918)           (47,594)
                                                                        -----------        -----------

           Investment balance, end of year                              $   579,027        $   530,241
                                                                        ===========        ===========
</TABLE>

           The difference between the investment per the accompanying balance
           sheets at December 31, 1999 and 1998, and the deficiency per the
           limited partnerships' combined financial statements is due primarily
           to cumulative unrecognized equity in losses of certain limited
           partnerships, costs capitalized to the investment account, cumulative
           distributions recognized as income and recognition of impairment
           losses.



                                       18
<PAGE>   20

                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1999



2.         INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)


           Selected financial information from the combined financial statements
           of the limited partnerships, at December 31, 1999 and 1998 and for
           each of the three years in the period ended December 31, 1999 is as
           follows:



                                 Balance Sheets


<TABLE>
<CAPTION>
                                                                1999            1998
                                                              --------        --------
                                                                   (in thousands)
<S>                                                           <C>             <C>
           Land and buildings, net                            $  7,470        $  7,901
                                                              ========        ========

           Total assets                                       $ 11,642        $ 11,835
                                                              ========        ========

           Mortgages payable                                  $ 15,105        $ 15,525
                                                              ========        ========

           Total liabilities                                  $ 16,095        $ 16,408
                                                              ========        ========

           Deficiency of Real Estate Associates Limited       $ (3,388)       $ (3,567)
                                                              ========        ========

           Deficiency of other partners                       $ (1,065)       $ (1,006)
                                                              ========        ========
</TABLE>



                            Statements of Operations



<TABLE>
<CAPTION>
                                                          1999           1998          1997
                                                         -------       -------       -------
                                                                   (in thousands)
<S>                                                      <C>           <C>           <C>
           Total revenues                                $ 4,174       $16,857       $16,935
                                                         =======       =======       =======

           Interest expense                              $   887       $ 4,550       $ 4,533
                                                         =======       =======       =======

           Depreciation and amortization                 $   758       $ 2,691       $ 2,653
                                                         =======       =======       =======

           Total expenses                                $ 3,951       $16,190       $16,637
                                                         =======       =======       =======

           Net income                                    $   223       $   667       $   298
                                                         =======       =======       =======

           Net income allocable to the Partnership       $   227       $   540       $   226
                                                         =======       =======       =======
</TABLE>



                                       19
<PAGE>   21

                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1999



2.         INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

           Prior to the sale of certain partnership interests on December 30,
           1998, an affiliate of NAPICO was the general partner in five of the
           limited partnerships included above, and another affiliate receives
           property management fees of approximately 5 to 6 percent of the
           revenue from three of these partnerships. Subsequent to the sale of
           certain partnership interests, an affiliate of NAPICO is the general
           partner in one of the limited partnerships, and its property is
           managed by another affiliate. The affiliate received property
           management fees of $6,975, $184,843 and $210,908 in 1999, 1998 and
           1997, respectively. The following sets forth significant data for
           this partnership, in which an affiliate of NAPICO is currently the
           general partner, reflected in the accompanying financial statements
           using the equity method of accounting:



<TABLE>
<CAPTION>
                                                                1999           1998           1997
                                                              -------        -------        -------
                                                                          (in thousands)
<S>                                                           <C>            <C>           <C>
           Total assets                                       $   879        $   404
                                                              =======        =======

           Total liabilities                                  $ 2,722        $ 1,064
                                                              =======        =======

           Deficiency of Real Estate Associates Limited       $(1,776)       $  (757)
                                                              =======        =======

           Equity (deficiency) of other partners              $   (67)       $    97
                                                              =======        =======

           Total revenue                                      $   415        $ 4,215        $ 4,215
                                                              =======        =======        =======

           Net loss                                           $   (81)       $  (548)       $  (346)
                                                              =======        =======        =======
</TABLE>

           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 maybe the case
           under existing HAP Contracts. The payments under the renewed HAP
           Contracts are not expected to 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



                                       20
<PAGE>   22

                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1999



2.         INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

           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"), which was adopted in October 1997, 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.

           On September 11, 1998, HUD issued interim regulations implementing
           MAHRAA and final regulations are expected to be issued in 2000.

           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.

           As a result of the foregoing, the Partnership, in 1997, undertook an
           extensive review of disposition, refinancing or re-engineering
           alternatives for the properties in which the limited partnerships
           have invested and are subject to HUD mortgage and rental subsidy
           programs. The Partnership has incurred expenses in connection with
           this review by various third party professionals, including
           accounting, legal, valuation, structural and engineering costs, which
           amounted to $70,788, $253,214 and $119,589 for the years ended
           December 31, 1999, 1998 and 1997, respectively, and are included in
           administrative expenses. Accounts payable at December 31, 1998
           includes $55,543 of such costs.



                                       21
<PAGE>   23

                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1999



2.         INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

           On December 30, 1998, the Partnership sold its limited partnership
           interests in 8 local limited partnerships to the Operating
           Partnership. The sale resulted in cash proceeds to the Partnership of
           $3,900,000 and a net gain of $3,798,734, after deducting selling
           costs. The cash proceeds were held in escrow at December 31, 1998 and
           were collected in 1999. In March 1999, the Partnership made cash
           distributions of $3,861,000 to the limited partners and $39,000 to
           the general partners, primarily using proceeds from the sale of the
           partnership interests.

           The Operating Partnership purchased such limited partner interests
           for cash, which it raised in connection with a private placement of
           its equity securities. The purchase was subject to, among other
           things, (i) the purchase of the general partner interests in the
           local limited partnerships by the Operating Partnership; (ii) the
           approval of HUD and certain state housing finance agencies; and (iii)
           the consent of the limited partners to the sale of the local limited
           partnership interests held for investment by the Partnership.

           In August 1998, a consent solicitation statement was sent to the
           limited partners setting forth the terms and conditions of the
           purchase of the limited partners' interests held for investment by
           the Partnership, together with certain amendments to the Partnership
           Agreement and other disclosures of various conflicts of interest in
           connection with the proposed transaction. Prior to the sale of the
           partnership interests, the consents of the limited partners to the
           sale and amendments to the Partnership Agreement were obtained.

3.         FEES AND EXPENSES DUE GENERAL PARTNER

           Under the terms of the Restated Certificate and Agreement of Limited
           Partnership, the Partnership is obligated to NAPICO for an annual
           management fee equal to .5 percent of the original invested assets of
           the remaining limited partnerships. Invested assets is defined as the
           costs of acquiring project interests, including the proportionate
           amount of the mortgage loans related to the Partnership's interest in
           the capital accounts of the respective partnerships.

           The Partnership reimburses NAPICO for certain expenses. The
           reimbursement to NAPICO was $3,300, $24,276 and $24,279 in 1999, 1998
           and 1997, respectively, and is included in administrative expenses.




                                       22
<PAGE>   24

                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1999



4.         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 managing
           general partner) and two investors holding an aggregate of five units
           of limited partnership interest in Real Estate Associates Limited VI
           (another affiliated partnership in which NAPICO is the managing
           general partner) commenced an action in the United States District
           Court for the Central District of California against the Partnership,
           NAPICO and certain other affiliated entities. The complaint alleges
           that the defendants breached their fiduciary duty to the limited
           partners of certain NAPICO managed partnerships and made 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 the Operating
           Partnership organized by an affiliate of NAPICO. The plaintiffs seek
           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 managing 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 affiliated entities. The
           managing general partner of such NAPICO managed partnerships and the
           other defendants believe that the plaintiffs' claims are without
           merit and intend to contest the actions vigorously.

           The corporate general partner of the Partnership is a plaintiff in
           various lawsuits and has also been named a defendant in 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.

5.         INCOME TAXES

           No provision has been made for income taxes in the accompanying
           financial statements since such taxes, if any, are the liability of
           the individual partners. The major differences in tax and financial
           reporting result from the use of different bases and depreciation
           methods for the properties held by the limited partnerships.
           Differences in tax and financial reporting also arise as losses are
           not recognized for financial reporting purposes when the investment
           balance has been reduced to zero.



                                       23
<PAGE>   25
                         REAL ESTATE ASSOCIATES LIMITED
                       (a California limited partnership)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                DECEMBER 31, 1999



6.         FAIR VALUE OF FINANCIAL INSTRUMENTS

           Statement of Financial Accounting Standards No. 107, "Disclosure
           about Fair Value of Financial Instruments," requires disclosure of
           fair value information about financial instruments. The carrying
           amount of assets and liabilities reported on the balance sheets that
           require such disclosure approximates fair value due to their
           short-term maturity.

7.         FOURTH QUARTER ADJUSTMENT

           The Partnership's policy is to record its equity in the income (loss)
           of limited partnerships on a quarterly basis, using estimated
           financial information furnished by the various local operating
           general partners. The equity in income (loss) of limited partnerships
           reflected in the accompanying annual financial statements is based
           primarily upon audited financial statements of the investee limited
           partnerships. The decrease of approximately $15,000, between the
           estimated nine-month equity in income and the actual 1999 year end
           equity in income has been recorded in the fourth quarter.




                                       24
<PAGE>   26
                                                                        SCHEDULE



                         REAL ESTATE ASSOCIATES LIMITED
                      INVESTMENTS IN LIMITED PARTNERSHIPS
                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997



<TABLE>
<CAPTION>
                                                    Year Ended December 31, 1999
                                -------------------------------------------------------------------------
                                                                 Cash           Equity
                                Balance         Capital         Distri-          In           Balance
                                January 1,      Contri-         butions         Income       December 31,
Limited Partnerships              1999          butions        Received         (Loss)           1999
--------------------            ----------     --------        --------        --------      ------------
<S>                            <C>            <C>             <C>             <C>           <C>
Belleville Manor Apts.          $              $               $               $              $

Benroe, Ltd. (Wedgewood)

Bethel Towers, Ltd.

Cherry Hill, Ltd.                530,241                        (37,918)         86,704         579,027
Dividend Housing Assn.

Clinton Apts., Ltd.

Emporia, Ltd. (Northwood)

Roebern, Ltd. (Ridgeview)

West Lafayette, Ltd.                             45,000                         (45,000)

Williamson Towers, Ltd.
                                --------       --------        --------        --------       --------
                                $530,241       $ 45,000        $(37,918)       $ 41,704       $579,027
                                ========       ========        ========        ========       ========
</TABLE>



                                       25
<PAGE>   27
                                                                        SCHEDULE
                                                                     (Continued)



                         REAL ESTATE ASSOCIATES LIMITED
                       INVESTMENTS IN LIMITED PARTNERSHIPS
                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997



<TABLE>
<CAPTION>
                                                                 Year Ended December 31, 1998
                                         ----------------------------------------------------------------------------------
                                                                                Cash             Equity
                                          Balance           Capital            Distri-            In             Balance
                                         January 1,         Contri-            butions          Income         December 31,
Limited Partnerships                        1998            butions           Received          (Loss)            1998
--------------------                     ----------       ----------        ----------        ----------       ------------
<S>                                     <C>               <C>               <C>               <C>            <C>
Bedford House *                          $                $                 $                 $                 $

Belleville Manor Apts.

Benroe, Ltd. (Wedgewood)                                       2,752                              (2,752)               --

Bethel Towers, Ltd.

Cherry Hill, Ltd.                           985,631                            (38,113)         (417,277)          530,241
Dividend Housing Assn.

Chidester Place, Ltd. *
Dividend Housing Assn.

Clinton Apts., Ltd.

East Central Towers Associates *

Emporia, Ltd. (Northwood)                   334,345                             (9,481)         (324,864)               --

Gadsden Towers, Ltd. *

LaLoma Assoc., Ltd.*

Parkview Associates *

Pennsylvania Assoc. (Norristown) *

Riverside Towers Associates **

Roebern, Ltd. (Ridgeview)                                      2,980                              (2,980)               --

Van Nuys Associates *

West Lafayette, Ltd.

Williamson Towers, Ltd.
                                         ----------       ----------        ----------        ----------        ----------

                                         $1,319,976       $    5,732        $  (47,594)       $ (747,873)       $  530,241
                                         ==========       ==========        ==========        ==========        ==========
</TABLE>



* Sold to the Operating Partnership in 1998

** The interest was redeemed by the local limited partnership in 1998.


                                       26
<PAGE>   28

                                                                        SCHEDULE
                                                                     (CONTINUED)



                         REAL ESTATE ASSOCIATES LIMITED
                       INVESTMENTS IN LIMITED PARTNERSHIPS
                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997



<TABLE>
<CAPTION>
                                                                 Year Ended December 31, 1997
                                       ----------------------------------------------------------------------------------
                                                                            Cash              Equity
                                        Balance           Capital          Distri-              In             Balance
                                       January 1,         Contri-          butions            Income         December 31,
Limited Partnerships                      1997            butions          Received           (Loss)             1997
--------------------                   ----------       ----------        ----------        ----------       ------------
<S>                                   <C>              <C>               <C>               <C>            <C>
Bedford House                          $                $                 $                 $                 $

Belleville Manor Apts.

Benroe, Ltd. (Wedgewood)

Bethel Towers, Ltd.

Cherry Hill, Ltd.                       2,222,749                           (964,684)         (272,434)          985,631
Dividend Housing Assn.

Chidester Place, Ltd.
Dividend Housing Assn.

Clinton Apts., Ltd.

East Central Towers Associates

Emporia, Ltd. (Northwood)                 264,248                             (9,481)           79,578           334,345

Gadsden Towers, Ltd.

LaLoma Assoc., Ltd.

Parkview Assoc.

Pennsylvania Assoc. (Norristown)

Riverside Towers Assoc.

Roebern, Ltd. (Ridgeview)                                 12,084                               (12,084)               --

Van Nuys Assoc.

West Lafayette, Ltd.

Williamson Towers, Ltd.
                                       ----------       ----------        ----------        ----------        ----------

                                       $2,486,997       $   12,084        $ (974,165)       $ (204,940)       $1,319,976
                                       ==========       ==========        ==========        ==========        ==========
</TABLE>



                                       27
<PAGE>   29

                                                                        SCHEDULE
                                                                     (CONTINUED)



                         REAL ESTATE ASSOCIATES LIMITED
          INVESTMENT IN, EQUITY IN EARNINGS OF, AND DIVIDENDS RECEIVED
                       FROM AFFILIATES AND OTHER PERSONS
                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997




NOTES:     1.         Equity in income (losses) of the limited partnerships
                      represents the Partnership's allocable share of the net
                      results of operations from the limited partnerships for
                      the year. Equity in losses of the limited partnerships
                      will be recognized until the investment balance is reduced
                      to zero or a negative balance equal to further commitments
                      by the Partnership.

           2.         Cash distributions from the limited partnerships are
                      treated as a return of the investment and reduce the
                      investment balance until such time as the investment is
                      reduced to zero or a negative balance equal to further
                      commitments by the Partnership. Distributions subsequently
                      received are recognized as income.



                                       28
<PAGE>   30

                                                                    SCHEDULE III

                         REAL ESTATE ASSOCIATES LIMITED
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                 OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
                         IN WHICH REAL HAS INVESTMENTS
                               DECEMBER 31, 1999


<TABLE>
<CAPTION>
                                                                         BUILDINGS
                                                                       FURNISHINGS &
                                                                        EQUIPMENT-
                                                                      INITIAL COST TO
                                                                      PARTNERSHIP AND
                                                                      AMOUNT CARRIED
                                 NUMBER     OUTSTANDING                 AT CLOSE OF                   ACCUMULATED    CONSTRUCTION
     PARTNERSHIP/LOCATION       OF UNITS   MORTGAGE LOAN     LAND          YEAR            TOTAL      DEPRECIATION      PERIOD
------------------------------  --------   -------------   --------   ---------------   -----------   ------------   ------------
<S>                             <C>        <C>             <C>        <C>               <C>           <C>            <C>
Belleville Manor, Ltd.             32       $   546,069          --     $   777,440     $   777,440   $   487,069      1978-1979
 Benton, KY

Bethel Towers, Ltd.               146         3,191,245      67,400       3,955,212       4,022,612     2,971,806        (A)
 Detroit, MI

Cherry Hill, Ltd.                 186         5,199,164     448,460       7,965,085       8,413,545     4,955,505      1978-1980
 Dividend Housing Assn.
   Southfield, MI

Clinton Apts. Ltd.                 32           320,803      49,868         521,887         571,755       458,992      1977-1980
 Calvert City, KY

Emporia, Ltd. (Northwood)          72         1,235,515      39,500       2,450,579       2,490,079     1,895,438      1978-1980
 Greensville, Co., VA

Roebern, Ltd. (Ridgeview)          32           627,272      26,000       1,009,213       1,035,213       869,262      1978-1979
 Columbus, OH

Benroe, Ltd., (Wedgewood)          32           616,061      45,000       1,093,731       1,138,731       896,276      1978-1979
 Columbus, OH

West Lafayette, Ltd.               49           951,362      35,000       1,255,470       1,290,470     1,004,061      1979-1981
 West Lafayette, OH

Williamson Towers, Ltd.            76         2,417,397          --       3,290,827       3,290,827     2,021,971      1979-1981
 Minroe Co., WV
                                  ---       -----------    --------     -----------     -----------   -----------

   Total                          657       $15,104,888    $711,228     $22,319,444     $23,030,672   $15,560,380
                                  ===       ===========    ========     ===========     ===========   ===========
</TABLE>


                                       29

<PAGE>   31

                                                                    SCHEDULE III
                                                                     (Continued)



                         REAL ESTATE ASSOCIATES LIMITED
              REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
                       HELD BY LOCAL LIMITED PARTNERSHIPS
                          IN WHICH REAL HAS INVESTMENTS
                                DECEMBER 31, 1999



NOTES:     1.         Each local limited partnership has developed, owns and
                      operates the housing project. Substantially all project
                      costs, including construction period interest expense,
                      were capitalized by the limited partnerships.

           2.         Depreciation is provided for by various methods over the
                      estimated useful lives of the Projects. The estimated
                      composite useful lives of the buildings are from 25 to 40
                      years.

           3.         Investments in property and equipment:



<TABLE>
<CAPTION>
                                                           Buildings,
                                                          Furnishings
                                                              And
                                         Land               Equipment             Total
                                      ------------        ------------        ------------
<S>                                   <C>                 <C>                 <C>
Balance at January 1, 1997            $  2,583,434        $ 83,527,570        $ 86,111,004

Net additions during 1997                       --             905,364             905,364
                                      ------------        ------------        ------------

Balance at December 31, 1997             2,583,434          84,432,934          87,016,368

Sales of properties during 1998         (2,300,367)        (62,317,616)        (64,617,983)

Net additions during 1998                  428,161              65,283             493,444
                                      ------------        ------------        ------------

Balance at December 31, 1998               711,228          22,180,601          22,891,829

Net additions during 1999                       --             138,843             138,843
                                      ------------        ------------        ------------

Balance at December 31, 1999          $    711,228        $ 22,319,444        $ 23,030,672
                                      ============        ============        ============
</TABLE>



                                       30
<PAGE>   32


                                                                    SCHEDULE III
                                                                     (CONTINUED)


                         REAL ESTATE ASSOCIATES LIMITED
              REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
                       HELD BY LOCAL LIMITED PARTNERSHIPS
                          IN WHICH REAL HAS INVESTMENTS
                                DECEMBER 31, 1999




<TABLE>
<CAPTION>
                                                                     Buildings,
                                                                    Furnishings
                                                                        And
                                                                     Equipment
                                                                   ------------
<S>                                                                <C>
Accumulated Depreciation:

Balance at January 1, 1997                                         $ 51,114,600

Net additions during 1997                                             2,563,992
                                                                   ------------

Balance at December 31, 1997                                         53,678,592

Sales of properties during 1998                                     (41,029,759)

Net additions during 1998                                             2,342,189
                                                                   ------------

Balance at December 31, 1998                                         14,991,022

Net additions during 1999                                               569,358
                                                                   ------------

Balance at December 31, 1999                                       $ 15,560,380
                                                                   ============
</TABLE>




                                       31

<PAGE>   33

PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:

REAL ESTATE ASSOCIATES LIMITED (the "Partnership") has no directors or executive
officers of its own.

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 following biographical information is presented
for the directors and executive officers of NAPICO with principal responsibility
for the Partnership's affairs.

CHARLES H. BOXENBAUM, 70, Chairman of the Board of Directors and Chief Executive
Officer of NAPICO.

Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was a
real estate broker with the Beverly Hills firm of Carl Rhodes Company.

Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate Association,
National Institute of Real Estate Brokers, Appraisal Institute, various mortgage
banking seminars, and the North American Property Forum held in London, England.
In 1963, he was the winner of the Snyder Award, the highest annual award offered
by the National Association of Real Estate Boards for Best Exchange. He is one
of the founders and a past director of the First Los Angeles Bank, organized in
November 1974. Mr. Boxenbaum was a member of the Board of Directors of the
National Housing Council. Mr. Boxenbaum received his Bachelor of Arts degree
from the University of Chicago.

BRUCE E. NELSON, 48, President and a director of NAPICO.

Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved in
the identification, analysis, and negotiation of real estate investments.

From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time, Mr. Nelson was engaged
in the private practice of law in Los Angeles. Mr. Nelson received his Bachelor
of Arts degree from the University of Wisconsin and is a graduate of the
University of Colorado School of Law. He is a member of the State Bar of
California and is a licensed real estate broker in California and Texas.

ALAN I. CASDEN, 54, Chairman of Casden Properties Inc., a director and member of
the audit committee of NAPICO, and chairman of the Executive Committee of
NAPICO.

Mr. Casden has been involved in approximately $3 billion of real estate
financings and sales and has been responsible for the development and
construction of more than 12,000 apartment units and 5,000 single-family homes
and condominiums.

Mr. Casden is a member of the American Institute of Certified Public Accountants
and of the California Society of Certified Public Accountants. Mr. Casden is a
member of the advisory board of the National Multi-Family Housing Conference,
the Multi-Family Housing Council, and the President's Council of the California
Building Industry Association. He also serves on the advisory board to the
School of Accounting of the


                                       32
<PAGE>   34

University of Southern California. He holds a Bachelor of Science degree and a
Masters in Business Administration degree from the University of Southern
California.

PAUL PATIERNO, 43, Chief Financial Officer.

Mr. Patierno joined NAPICO in 1998 and is responsible for its financial affairs,
as well as the limited partnerships sponsored by it. From 1995 until joining
NAPICO in September 1998, Mr. Patierno was a senior manager in the affordable
housing group of Altschuler, Melvoin and Glasser LLP, a national public
accounting firm. From 1990 to 1995, he practiced public accounting with a firm
specializing in real estate syndication. Mr. Patierno received his bachelor of
science degree in accounting from California State University at Northridge, and
is a member of the American Institute of Certified Public Accountants and the
California Society of Certified Public Accountants.

PATRICIA W. TOY, 70, Senior Vice President - Communications and Assistant
Secretary.

Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.

MARK L. WALTHER, 39, Executive Vice President, General Counsel and Assistant
Secretary.

Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr. Walther
worked in the San Francisco law firm of Browne and Kahn which specialized in
construction litigation. Mr. Walther received his Bachelor of Arts Degree in
Political Science from the University of California, Santa Barbara and is a
graduate of the University of California, Davis, School of Law. He is a member
of the State Bar of Hawaii.

NAPICO and several of its officers, directors and affiliates, including Charles
H. Boxenbaum, Bruce E. Nelson and Alan I. Casden, consented to the entry, on
June 25, 1997, of an administrative cease and desist order by the U.S.
Securities and Exchange Commission (the "Commission"), without admitting or
denying any of the findings made by the Commission. The Commission found that
NAPICO and others had violated certain federal securities laws in connection
with transactions unrelated to the Partnership. The Commission's order did not
impose any cost, burden or penalty on any partnership managed by NAPICO and does
not impact NAPICO's ability to serve as the Partnership's Managing General
Partner.



                                       33
<PAGE>   35


ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS:

Real Estate Associates Limited has no officers, employees, or directors.
However, under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to pay the Corporate General Partner
an annual management fee. The annual management fee is approximately equal to .5
percent of the invested assets, including the Partnership's allocable share of
the mortgages related to real estate properties held by local limited
partnerships. The fee is earned beginning in the month the Partnership makes its
initial contribution to the limited partnership. In addition, the Partnership
reimburses the Corporate General Partner for certain expenses.

An affiliate of the Corporate General Partner is responsible for the on-site
property management for one property owned by a limited partnership in which the
Partnership has invested.

ITEM 12. 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; no person is known to own beneficially in excess
           of 5 percent of the outstanding limited partnership interests.

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

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:

The Partnership has no officers, directors or employees of its own. All of its
affairs are managed by the Corporate General Partner, National Partnership
Investments Corp. The Partnership is obligated to NAPICO for an annual
management fee equal to .5 percent of the original remaining invested assets of
the limited partnerships. Invested assets is defined as the costs of acquiring
project interests, including the proportionate amount of the mortgage loans
related to the Partnership's interest in the capital accounts of the respective
partnerships. The management fee was $106,232 for the year ended December 31,
1999 and $407,340 for each of the two years in the period ended December 31,
1998.

The Partnership reimburses NAPICO for certain expenses. The reimbursement to
NAPICO was $3,300, $24,276 and $24,279 in 1999, 1998 and 1997, respectively, and
is included in operating expenses.

Prior to the sale of certain partnership interests on December 30, 1998, an
affiliate of NAPICO was the general partner in five of the limited partnerships
in which the Partnership had an investment, and another affiliate received
property management fees of approximately 5 to 6 percent of the revenue from
three of these partnerships. Subsequent to the sale of certain partnership
interests, an affiliate of NAPICO is the general partner in one of the limited
partnerships, and its property is managed by another affiliate. The affiliate
received property management fees of $6,975, $184,844 and $210,908 in 1999, 1998
and 1997, respectively.

On December 30, 1998, the Partnership sold its limited partnership interests in
8 local limited partnerships to the Operating Partnership. The sale resulted in
cash proceeds to the Partnership of $3,900,000 and a net gain of $3,798,734,
after deducting the selling costs. The cash proceeds were held in escrow at
December 31, 1998 and were collected subsequent to year-end. In March 1999, the
Partnership made a cash distribution of $3,861,000 to the limited partners and
$39,000 to the general partners, primarily using proceeds from the sale of the
partnership interests.





                                       34
<PAGE>   36

The Operating Partnership purchased such limited partner interests for cash,
which it raised in connection with a private placement of its equity securities.
The purchase was subject to, among other things, (i) the purchase of the general
partner interests in the local limited partnerships by the REIT; (ii) the
approval of HUD and certain state housing finance agencies; and (iii) the
consent of the limited partners to the sale of the local limited partnership
interests held for investment by the Partnership.

In August 1998, a consent solicitation statement was sent to the limited
partners setting forth the terms and conditions of the purchase of the limited
partners' interests held for investment by the Partnership, together with
certain amendments to the Partnership Agreement and other disclosures of various
conflicts of interest in connection with the proposed transaction. Prior to the
sale of the partnership interests, the consents of the limited partners to the
sale and amendments to the Partnership Agreement were obtained.

PART IV.

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

FINANCIAL STATEMENTS

Report of Independent Public Accountants.

Balance Sheets as of December 31, 1999 and 1998.

Statements of Operations for the years ended December 31, 1999, 1998 and 1997.

Statements of Partners' Equity (Deficiency) for the years ended December 31,
1999, 1998 and 1997.

Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997.

Notes to Financial Statements.

FINANCIAL STATEMENT SCHEDULES
APPLICABLE TO REAL ESTATE ASSOCIATES LIMITED AND THE LIMITED PARTNERSHIPS IN
WHICH REAL ESTATE ASSOCIATES LIMITED HAS INVESTMENTS:

Schedule - Investments in Limited Partnerships, December 31, 1999, 1998 and
1997.

Schedule III - Real estate and accumulated depreciation, December 31, 1999, 1998
and 1997.

The remaining schedules are omitted because the required information is included
in the financial statements and notes thereto as they are not applicable or not
required.

EXHIBITS

(3)        Articles of incorporation and bylaws: The registrant is not
           incorporated. The Partnership Agreement was filed with Form S-11
           Registration # 260561 incorporated herein by reference.

(10)       Material contracts: The registrant is not party to any material
           contracts, other than the Restated Certificate and Agreement of
           Limited Partnership dated September 15, 1979 previously filed and
           which is hereby incorporated by reference.

REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the year ended December 31, 1999.



                                       35
<PAGE>   37

                                   SIGNATURES



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



REAL ESTATE ASSOCIATES LIMITED

By:  NATIONAL PARTNERSHIP INVESTMENTS CORP.
     General Partner



/s/ CHARLES H. BOXENBAUM
---------------------------------------------
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer


/s/ BRUCE E. NELSON
---------------------------------------------
Bruce E. Nelson
Director and President


/s/ ALAN I. CASDEN
---------------------------------------------
Alan I. Casden
Director


/s/ PAUL PATIERNO
---------------------------------------------
Paul Patierno
Chief Financial Officer


                                       36