CATOOSA SENIOR VILLAGE, LP

                              FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002








<PAGE>


                           CATOOSA SENIOR VILLAGE, LP


                                TABLE OF CONTENTS


                                                                           PAGE


Independent auditors' report                                                   1

Financial statements:

      Balance sheets                                                           2

      Statements of operations                                                 3

      Statements of changes in partners' equity (deficit)                      4

      Statements of cash flows                                                 5

      Notes to financial statements                                        6 - 7

Supplemental information:

      Schedule of certain expenses                                        9 - 10





<PAGE>

                                     HA&W
              Certifield Public Accountants and Business Advisors


                          INDEPENDENT_AUDITORS' REPORT
                          ----------------------------




To the Partners
Catoosa Senior Village, LP

We have audited the accompanying balance sheets of CATOOSA SENIOR VILLAGE, LP (a
limited  partnership)  as of  December  31,  2003  and  2002,  and  the  related
statements of operations,  changes in partners' equity (deficit), and cash flows
for the years then ended.  These financial  statements are the responsibility of
the  Partnership's  management.  Our  responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of CATOOSA SENIOR VILLAGE,  LP as
of December 31, 2003 and 2002, and the results of its operations, its changes in
partners'  equity  (deficit),  and its cash flows for the years then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.

/s/Habif, Arogeti & Wynne, LLP

Atlanta, Georgia

February 16, 2004







                          Habif, Arogeti & Wynne, LLP
 Glenridge Highland Two* 5565 Glenridge Connector * Suit Atlanta, Georgia 30342
                404.892.9651 * Fax 404.876.3913 * WWW.hawcpa.com


An Independent Member of Baker Tilly International* Certified Public Accountants


<PAGE>


                           CATOOSA SENIOR VILLAGE, LP
                                 BALANCE SHEETS
                                  DECEMBER 31,

                                     ASSETS
<TABLE>
<CAPTION>

                                                                                           2003                   2002
                                                                                      ---------------       ---------------

Property and equipment, at cost
----------------------
<S>                                                                                      <C>                   <C>
   Land                                                                                  $ 1,038,645           $   456,650
   Building                                                                                3,531,798                     0
   Equipment                                                                                 237,267                     0
   Construction in progress                                                                        0             3,326,051
                                                                                      ---------------             ---------
                                                                                           4,807,710             3,782,701
        Accumulated depreciation                                                             (50,277)                    0
                                                                                      ---------------       ---------------

                                                                                           4,757,433             3,782,701
                                                                                      ---------------       ---------------

Other assets
------------
   Cash, operating                                                                            22,872                22,244
   Cash, tax and insurance                                                                    23,041                     0
   Accounts receivable                                                                            19                     0
   Tenant security deposits                                                                   17,876                     0
   Prepaid expenses                                                                            6,339                     0
   Monitoring fee, net of accumulated amortization
        $627 and $0 for 2003 and 2002, respectively                                           27,573                     0
   Operating deficit reserve                                                                  86,731                     0
                                                                                      ---------------       ---------------

                                                                                             184,451                26,244
                                                                                      ---------------       ---------------

                                                                                         $ 4,941,884            $3,808,945
                                                                                      ===============       ===============

                   LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
                   ------------------------------------------


Current liabilities
-------------------
   Accounts payable and accrued expenses                                                 $     3,634           $   146,662
   Other accounts                                                                                  0               288,262
   Construction loan payable                                                               2,382,000             1,649,667
   Prepaid rents                                                                               3,371                     0
   Tenant security deposits                                                                   17,876                     0
                                                                                      ---------------       ---------------

        Total current liabilities                                                          2,406,881             2,084,591
                                                                                      ---------------       ---------------

Long-term debt
--------------
   Due to developer                                                                          574,000                91,840
                                                                                      ---------------       ---------------

Partners' equity (deficit)                                                                 1,961,003             1,632,514
-------------------------                                                             ---------------       ---------------

                                                                                         $ 4,941,884            $3,808,945
                                                                                      ===============       ===============
</TABLE>


                   See auditors' report and accompanying notes

                                       -2-

<PAGE>



                           CATOOSA SENIOR VILLAGE, LP
                            STATEMENTS OF OPERATIONS
                        FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>

                                                                                           2003                   2002
                                                                                      ---------------       ----------------

<S>                                                                                       <C>               <C>
Income from rental operations
-----------------------------
   Gross rent potential                                                                   $   91,879        $            0
   Vacancies and rental concessions                                                           (2,943)                    0
   Other rental income                                                                            22                     0
                                                                                      ---------------       ----------------


Operating expenses
------------------
   Administrative and marketing                                                                2,072                     0
   Management fees                                                                             8,494                     0
   Repairs and maintenance                                                                    16,364                     0
   Utilities                                                                                   5,983                     0
   Real estate taxes                                                                           1,765                     0
   Insurance                                                                                   9,918                     0
   Administrative                                                                             33,045                     0
                                                                                      ---------------         --------------

                                                                                              76,921                     0
                                                                                      ---------------         --------------


        Net operating income                                                                  12,037                     0
                                                                                      ---------------         --------------


Other income (expenses)
-----------------------
   Interest income                                                                                49                     0
   Amortization                                                                                 (627)                    0
   Depreciation                                                                              (50,277)                    0
                                                                                      ---------------         -------------

                                                                                             (50,855)                    0
                                                                                      ---------------         -------------

        Net loss                                                                       $     (38,818)         $          0
                                                                                      ===============         =============
</TABLE>


                   See auditors' report and accompanying notes

                                       -3-




<PAGE>


                           CATOOSA SENIOR VILLAGE, LP
               STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>


                                                            General                      Limited
                                                            Partners                     Partners               Total
                                                       --------------                   ------------          ------------


<S>                                                    <C>                              <C>                   <C>
Partner's equity (deficit),
     December 31, 2002                                 $         0                      $   515,200           $   515,200




Contributions                                                   10                        1,117,304             1,117,314




Net income (loss)                                                0                                0                     0
                                                       --------------                   ------------          ------------




Partners' equity (deficit)
     December 31, 2002                                          10                        1,632,504             1,632,514




Contributions                                                    0                          367,307               367,307




Net income (loss)                                             (388)                         (38,430)              (38,818)
                                                       --------------                   ------------          ------------




Partners' equity (deficit)
     December 31, 2003                                 $      (378)                     $ 1,961,381           $ 1,961,003
                                                       ==============                   ============          ============
</TABLE>

                   See auditors' report and accompanying notes

                                       -4-
<PAGE>

                           CATOOSA SENIOR VILLAGE, LP
                             STATEMENT OF CASH FLOWS
                        FOR THE YEARS ENDED DECEMBER 31,

                           Increase (Decrease) In Cash
<TABLE>
<CAPTION>

                                                                                           2003                   2002
                                                                                        ---------------       -------------
<S>                                                                                     <C>                   <C>
Cash flows from operating activities
   Net income (loss)                                                                    $    (38,818)         $          0
                                                                                        ---------------       -------------
        Adjustments to reconcile net income (loss) to
           net cash provided (used) by operating activities
              Amortization                                                                       627                     0
              Depreciation                                                                    50,277                     0
              Change in accounts receivable                                                      (19)                    0
              Change in prepaid expenses                                                      (6,339)                    0
              Change in accounts payable and accrued expenses                               (143,028)                    0
              Change in prepaid rent                                                           3,371                     0
              Change in other accruals                                                       288,262                     0
                                                                                        ---------------       -------------

                  Total adjustments                                                         (838,373)                    0
                                                                                        ---------------       -------------

                      Net cash provided (used) by operating activities                      (422,191)                    0
                                                                                        ---------------       -------------

Cash flow from investing activities
   Investment in rental property                                                          (1,025,009)           (2,794,884)
   Investment in monitoring fees                                                             (28,200)                    0
   Net (deposits) releases to/from tax and insurance escrow                                  (23,041)                    0
   Net (deposits) release to/from operating reserve                                          (86,731)                    0
                                                                                        ---------------       -------------

        Net cash provided (used) by investing activities                                  (1,162,981)           (2,766,981)
                                                                                        ---------------       -------------

Cash flows from financing activities
   Proceeds from issuance of construction loan                                               732,333             1,649,667
   Payment to developer                                                                      482,160                     0
   Capital contribution                                                                      367,307             1,117,314
                                                                                        ---------------       -------------

        Net cash provided (used) by financing activities                                   1,584,800             2,766,981
                                                                                        ---------------       -------------

              Net increase (decrease) in cash                                                 (3,372)              (27,903)

Cash, beginning of year                                                                       26,244                54,147
                                                                                        ---------------       -------------

              Cash, end of year                                                         $     22,872          $     26,244
                                                                                        ===============       =============

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

                                                                                           2003                   2002
                                                                                      ---------------       ---------------

Cash paid during the years for interest on mortgage                                   $            0       $             0
</TABLE>



                   See auditors' report and accompanying notes

                                       -5-

<PAGE>



                           CATOOSA SENIOR VILLAGE, LP
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002


Note A
Organization and Summary of Significant Accounting Policies
-----------------------------------------------------------

Catoosa  Senior  Village,  LP  (the  Partnership)  was  organized  as a  limited
partnership  under the laws of the state of Georgia in 2001. The Partnership was
formed  to  develop,   construct,   own,   maintain   and  operate  a  low-  and
moderate-income apartment complex known as Catoosa Senior Village (the Project),
a 60-unit rental project located in Calhoun, Georgia.

The  following  significant  accounting  policies  have  been  followed  in  the
preparation of the financial statements:

a. Basis of Accounting:
   --------------------

     The  financial  statements of the  Partnership  are prepared on the accrual
     basis of accounting and in accordance  with generally  accepted  accounting
     principles.

b.   Tenant Rent Receivables:
     ------------------------

     Management  considers  tenant  rent  receivables  to be fully  collectible;
     accordingly, no allowance for doubtful accounts is required.  Uncollectible
     rent receivables are charged to operations upon management's  determination
     that collection of the receivable is unlikely.

c.   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 the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

d.   Rental Property:
     ----------------

     Property and equipment have been recorded at cost. Depreciation is provided
     for in  amounts  sufficient  to relate  the cost of  depreciable  assets to
     operations  using the  straight-line  method over their  estimated  service
     lives of 40 years for  buildings,  10 years for  equipment and 15 years for
     land improvements.

     Maintenance and repairs are charged to expense as incurred;  major renewals
     and  betterments are  capitalized.  When items of property or equipment are
     sold or retired, the related cost and accumulated  depreciation are removed
     from the accounts, and any gain or loss is included in income.

e.   Income Taxes:
     -------------

     Income or loss of the  Partnership is allocated .01% to the general partner
     and  99.99% to the  limited  partners.  No income  tax  provision  has been
     included  in  the  financial   statements  since  income  or  loss  of  the
     Partnership is required to be reported by the partners on their  respective
     income tax returns.

                                      -6-
<PAGE>



                           CATOOSA SENIOR VILLAGE, LP
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002


f.   Rental income:
     --------------

     Rental income is recognized for  residential  units as they accrue.  Rental
     payments received in advance are deferred until earned.  All leases between
     the Partnership and tenants of the property are operating `eases.

g.   Amortization:
     -------------

     Compliance  monitoring fees are being amortized on the straight-line method
     of 15 years,  which  approximates the effective yield, over the life of the
     related loans.

Note B
Construction Loan Payable
-------------------------

Georgia Department of Community Affairs:

The  Partnership  secured a  construction  loan of  $2,382,000  from the Georgia
Department  of  Community  Affairs for the  purpose of funding the  construction
costs of the  Project.  The loan  accrues  interest at 0.00% per annum until the
conversion date, the construction  loan maturity date. If the construction  loan
is converted to a permanent  loan when the interest  rate will be 1% computed on
basis of a 360-day year. The note is  collateralized by a deed to secure debt on
rental property.

Note C
Development Fees
----------------

The  developer,  an affiliate of the general  partner of the  Partnership,  will
receive a developer's  fee of $574,000 for its services  during the  development
and  construction  of the  Project.  The fee is to be paid  in  installments  as
defined in the development agreement. As of December 31, 2003 and 2002, $574,000
and  $91,840,  respectively,  of this fee  remained  payable  at year  end.  The
developer's fee has been capitalized into the building basis.

Note D
Partnership Profits, Losses and Distributions
---------------------------------------------

Operating  profits and losses are allocated  99.99% to the limited  partners and
..01% to the  general  partner.  Tax credits  are to be  allocated  99.99% to the
limited  partners  and  .01% to the  general  partner.  Profit  or loss and cash
distributions  from sales of property  will be  allocated as  formulated  in the
partnership agreement.

Note E
Commitments and Contingencies
-----------------------------

The  Partnership's  low-income  housing  credits are  contingent on the Projects
ability to maintain  compliance with applicable  sections of Section 42. Failure
to maintain compliance with occupant  eligibility,  and/or unit gross rent or to
correct  noncompliance  within a specified time period could result in recapture
of  previously  taken tax credits plus  interest.  In addition,  such  potential
noncompliance  may  require  an  adjustment  to the  contributed  capital by the
limited partner.


                                      -7-
<PAGE>






















                            SUPPLEMENTAL INFORMATION







<PAGE>




                           CATOOSA SENIOR VILLAGE, LP
                          SCHEDULES OF CERTAIN EXPENSES
                   FOR THE YEARS ENDED DECEMBER 2003 AND 2002
<TABLE>
<CAPTION>

                                                                                           2003                    2002
                                                                                        ---------------   -----------------
<S>                                                                                     <C>               <C>
Revenue
   Gross rental revenue                                                                 $    90,879       $              0
   Less: Vacancies                                                                           (2,943)                     0
   Less: Miscellaneous                                                                            0                      0
                                                                                        ---------------   ----------------

       Subtotal                                                                              88,936                      0

Vacancy percentage                                                                             3.20%                  0.00%

Tenant late fees                                                                                  0                      0
Tenant charges for damages                                                                        0                      0
Interest income                                                                                  49                      0
Miscellaneous income                                                                             22                      0
                                                                                        ---------------   ------------------

        Total revenue                                                                        89,007                      0
                                                                                        ---------------   ------------------

EXPENSES
   Advertising                                                                                2,072                      0
   Professional fees                                                                            275                      0
   Office expenses                                                                            3,557                      0
   Office furniture and equipment                                                             8,788                      0
   Other854                                                                                       0
   Payroll taxes                                                                              2,794                      0
   Telephone                                                                                  4,023                      0
   Travel                                                                                       468                      0
                                                                                        ---------------   ------------------

        General and administrative subtotal                                                  22,831                      0
                                                                                        ---------------   ------------------

Cable                                                                                            26                      0
Decorating/improvements                                                                       1,246                      0
Garbage and trash                                                                             1,218                      0
Electric                                                                                      3,650                      0
Insurance                                                                                     9,198                      0
Grounds                                                                                       3,049                      0
Maintenance                                                                                     814                      0
Payroll                                                                                       9,872                      0
Pest control                                                                                     33                      0
Security                                                                                        132                      0
Water and sewer                                                                               2,307                      0
Real estate taxes                                                                             1,765                      0
Manager payroll                                                                              12,286                      0
Management fee                                                                                8,494                      0
                                                                                        ---------------   ------------------

   Operating expenditure subtotal                                                            54,090                      0
                                                                                        ---------------   ------------------

        Total expenses                                                                       76,921                      0
                                                                                        ---------------   ------------------

   Net operating income                                                                 $    12,086       $              0
                                                                                        ===============   ==================

   Replacement reserve                                                                  $         0       $              0
                                                                                        ---------------   ------------------

   Income to service debt                                                               $    12,086       $              0
                                                                                         --------------        -------------
</TABLE>

                   See auditors' report and accompanying notes

                                       -9-

<PAGE>



                           CATOOSA SENIOR VILLAGE, LP
                          SCHEDULES OF CERTAIN EXPENSES
                   FOR THE YEARS ENDED DECEMBER 2003 AND 2002
<TABLE>
<CAPTION>

                                                                                           2003                    2002
                                                                                      -----------------      ---------------
Summary of Operating and Administrative Expenses
------------------------------------------------
<S>                                                                                  <C>                     <C>
    General and administrative                                                       $       22,831          $            0
                                                                                      -----------------      ---------------
    Utilities                                                                                 7,201                       0
                                                                                      -----------------      ---------------
    Payroll                                                                                  22,290                       0
                                                                                      -----------------      ---------------
    Maintenance                                                                               5,142                       0
                                                                                      -----------------      ---------------
    Management fees                                                                           8,494                       0
                                                                                      -----------------      ---------------
    Tax                                                                                       1,765                       0
                                                                                      -----------------      ---------------
    Insurance                                                                                 9,198                       0
                                                                                      -----------------      ---------------
        Total expenses                                                               $       76,921          $            0
                                                                                      =================      ===============
Revenue growth rate                                                                             NA%                     NA%
Expense growth                                                                                  NA%                     NA%
    Total number of units 60                      Per-unit replacement reserve       $            0          $            0
                                                                                      -----------------      ---------------
</TABLE>





                                      -10-