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

                                    FORM 10-Q


(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934


For the period ended     March 31, 2001


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


For the transition period from                     to
                               -------------------    --------------------

Commission file number  0-13520


                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)


              Massachusetts                            04-2828131
      (State or other jurisdiction of               (I.R.S. Employer
     incorporation or organization)                 Identification No.)


                      100 Second Avenue, Needham, MA      02494
               (Address of principal executive offices) (Zip Code)


        Registrant's telephone number, including area code (781) 444-5251


      --------------------------------------------------------------------
                   Former address, if changed from last report

  Indicate  by check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Sections 13 or 15(d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                                  [X] Yes     [ ] No


                            Exhibits Index on Page 25

                                  Page 1 of 26
<PAGE>
<TABLE>
<CAPTION>

                      LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                         (A Massachusetts Limited Partnership)

                                         INDEX


                                                                                  Page
<S>    <C>                                                                         <C>

Part I: Financial Information

Item 1. Financial Statements:

        Statement of Net Assets in Liquidation, March 31, 2001 and
         December 31, 2000                                                          3

        Statement of Changes of Net Assets in Liquidation for the
         Three months Ended March 31, 2001                                          4

        Statement of Operations for the Three Months Ended March 31, 2000           5

        Statement of Cash Flows for the Three Months Ended March 31, 2000         6-7

        Notes to Financial Statements                                            8-17

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                               18-24

Item 3.  Quantitative and Qualitative Disclosure about Market Risk -
         not applicable

Part II:   Other Information

Item 3.  Defaults Upon Senior Securities                                           25

Item 6.  Exhibits and Reports on Form 8-K                                          25


</TABLE>


                                       2
<PAGE>





<TABLE>
<CAPTION>

                          LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                             (A Massachusetts Limited Partnership)

                             STATEMENT OF NET ASSETS IN LIQUIDATION



                                                               (Unaudited)         (Audited)
                                                                March 31,         December 31,
                                                                   2001              2000
                                                              ------------       -------------
<S>                                                            <C>                 <C>
Assets (Liquidation Basis):

    Cash and cash equivalents                                   $521,414            $376,286
    Restricted cash                                               76,042             147,103
    Distributions receivable                                      39,333                --
    Investments in Local Limited Partnerships                    109,396             296,910
                                                                --------            --------
       Total Assets                                             $746,185            $820,299
                                                                ========            ========

Liabilities (Liquidation Basis):

    Purchase Money Notes and accrued interest liabilities       $ 52,302            $ 51,983
    Accounts payable to affiliates                               386,271             386,271
    Accounts payable                                              23,697               3,596
    Accrued expenses                                             277,964             375,250
    Interest payable                                                 841                 841
                                                                --------            --------
       Total liabilities                                         741,075             817,941
                                                                --------            --------

Net Assets in Liquidation                                       $  5,110            $  2,358
                                                                ========            ========




<FN>
           The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
                                       3
<PAGE>
<TABLE>
<CAPTION>



                                LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                                    (A Massachusetts Limited Partnership)

                              STATEMENT OF CHANGES OF NET ASSETS IN LIQUIDATION
                           For the period from January 1, 2001 to March 31, 2001
                                                 (Unaudited)

<S>                                                                 <C>            <C>           <C>

Net Assets in liquidation at December 31, 2000                                                    $  2,358

Operating Activities
    Interest income                                                              $  4,882
                                                                                 --------
Operating Expenses
    Purchase Money Note interest - increase in accrual              $  (319)
    Other operating expenses                                         (2,115)       (2,434)
                                                                    -------      --------
          Sub-total operating activities                                                             2,448

Liquidating Activities
   Increase in investment in Local Limited Partnerships                               319
   Change in estimated liquidation value
      Estimated sales price                                         148,500
      Actual sales price                                            148,485           (15)
                                                                    -------      --------
            Sub-total liquidating activities                                                           304
                                                                                                  --------

Net Assets in liquidation at March 31, 2001                                                       $  5,110
                                                                                                  ========






<FN>
                 The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

                                       4
<PAGE>



                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                             STATEMENT OF OPERATIONS
                                   (Unaudited)

                                                                  For the Three
                                                                   Months Ended
                                                                 March 31, 2000
                                                                ----------------

Interest income                                                     $     5,758

Expenses:

  Interest expense                                                      182,808

  General and administrative expenses:
     Affiliates                                                          24,500
     Other                                                                6,007
                                                                    -----------
  Total expenses                                                        213,315
                                                                    -----------

Loss before other income and equity in income (loss) of
  Local Limited Partnership investments                                (207,557)

Other income:
  Gain on sale of investment in Osuna Apartments                      2,434,099
                                                                    -----------

Income before equity in income of Local Limited
  Partnership investments                                             2,226,542

Equity in income of Local Limited partnership
  investments
                                                                          3,140
                                                                    -----------

Net income                                                          $ 2,229,682
                                                                    ===========

Limited partners' interest in net income                            $ 2,207,385
                                                                    ===========

Weighted average number of units outstanding
  used in computing basic net income per limited
  partnership unit                                                       21,566
                                                                    ===========

Basic net income per
  limited partnership unit                                          $    102.35
                                                                    ===========






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

                                       5
<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                             STATEMENT OF CASH FLOWS
                                   (Unaudited)

                                                                For the Three
                                                             Months Ended March
                                                                  31, 2000
                                                             ------------------


Cash flows from operating activities:
   Cash distributions from Local Limited Partnerships            $   124,988
   Interest payments on Purchase Money Notes                          (9,101)
   Cash paid for general and administration expenses                 (12,572)
   Interest received                                                   2,048
                                                                 -----------
         Net cash provided by operating activities                   105,363
                                                                 -----------

Cash flows from financing activity:
   Capital distributions                                              (3,087)
                                                                 -----------
         Net cash used in financing activities                        (3,087)
                                                                 -----------

Cash flows from investing items:
   Cash proceeds from sale of investment in Osuna
    Apartments                                                       100,000
   Consulting fees                                                   (23,426)
   Deferred closing costs and reimbursable expenses                   (8,073)
                                                                 -----------
         Net cash provided by investing items                         68,501
                                                                 -----------

Net increase in cash and cash equivalents                            170,777

Cash and cash equivalents at:

   Beginning of period                                               526,940
                                                                 -----------

   End of period                                                 $   697,717
                                                                 ===========


                                   (continued)


                                       6
<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                       STATEMENT OF CASH FLOWS (continued)
                                   (Unaudited)

Reconciliation of net income to net cash provided by operating activities:

                                                               For the Three
                                                             Months Ended March
                                                                  31, 2000
                                                             ------------------

Net income                                                       $ 2,229,682

Adjustments to reconcile net income to net cash
   provided by operating activities:

    Share of income of Local Limited
      Partnership investments                                         (3,140)

    Cash distributions from Local Limited
      Partnerships                                                   124,988

    Interest expense added to Purchase Money
      Notes, net of discount amortization                            182,845

    Gain on sale of investment in Local Limited
      Partnerships                                                (2,434,099)

    (Decrease) increase in:
      Interest receivable                                             (3,709)
      Accrued interest payable                                        (9,137)
      Accounts payable to affiliates                                  24,498
      Accounts payable                                                11,435
      Accrued expenses                                               (18,000)
                                                                 -----------
Net cash provided by operating activities                        $   105,363
                                                                 ===========






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

                                       7
<PAGE>


                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1.       Organization and Liquidation of the Partnership

Organization

      Liberty Housing  Partners  Limited  Partnership  (the  "Partnership")  was
formed under the Massachusetts Uniform Limited Partnership Act on March 20, 1984
for the primary purpose of investing in other limited partnerships which own and
operate government  assisted  multi-family  rental housing complexes (the "Local
Limited Partnerships").

Liquidation and Sale of Investments in Local Limited Partnerships

      On March  30,  2001,  the  Partnership  sold its 98%  limited  partnership
interests in  Fuquay-Varina,  Oxford Homes and Williamston  Homes to the general
partner of these  partnerships or his affiliate for $148,485 plus the assumption
of the related  Purchase  Money Note  obligations.  The carrying  value of these
properties  had been  adjusted at December  31, 2000 to reflect the actual sales
transactions.

      On February 1, 2000,  the  Partnership  sold its 98% interest as a limited
partner (the  "Partnership  Interest") in Osuna Apartments  Company ("Osuna") to
the Sovereign  Management  Corporation,  the company retained by Osuna to manage
its apartment  complex (the  "Purchaser").  In consideration for the sale of the
Partnership  Interest,  the  Partnership  received a net cash purchase  price of
$100,000.  In connection  with the sale, the holders of the Purchase Money Notes
(the "Notes")  issued by the  Partnership in connection  with its acquisition of
the  Partnership  Interest  released the  Partnership  from all  liabilities  in
connection  with  the  Notes.  After  transaction  expenses,   including  $1,800
recognized in the third quarter of 2000,  the  Partnership  recognized a gain of
$2,432,299 on the sale of the investment.

      On May 28,  1999,  the  Partnership  sold its  interest in Fiddlers  Creek
Apartments in exchange for $483,451 in cash and assumption of the Purchase Money
Note obligations.  On April 13, 2000, estimated state withholding taxes totaling
$211,271 were paid from the proceeds of the sale of the Partnership's investment
in Fiddlers Creek  Apartments.  The Partnership  subsequently  reevaluated  this
obligation  and applied for a refund of the $211, 271  previously  remitted.  On
November 7, 2000 the refund was received with interest of $4,659.

      On July 15,  1999,  the  Partnership  sold its  interest  in  Linden  Park
Associates  Limited  Partnership  in exchange for $395,960 in cash.  Linden Park
Associates  refinanced  their  existing debt and also paid in full the principal
and accrued and unpaid  interest  due the  Partnership  on their notes  totaling
$241,058.  In  accordance  with the  Partnership's  agreement  with the  General
Partner of Linden  Park  Associates  (the  "Linden  GP"),  these funds have been
segregated  for use to pay the fees and expenses due the Linden GP in connection
with the  consulting  arrangement  described  below.  Interest  earned  on these
segregated funds will be available to pay these fees and expenses.

                                       8
<PAGE>


                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1.       Organization and Liquidation of the Partnership, continued

Liquidation and Sale of Investments in Local Limited Partnerships, continued

      The Linden GP was engaged in September, 1998 to assist the general partner
to review the  Partnership's  portfolio,  develop a strategy for  maximizing the
value of the portfolio and implementing the strategy. The agreement provides for
fees  based  on the  successful  implementation  of all or part of the  strategy
developed  which will be paid from the segregated  funds  discussed  above.  The
remaining  balance of the segregated  funds was $76,042 as of March 31, 2001. In
the first quarter of 2001, the consulting  fees paid to the Linden GP in respect
of the successful  sales of the  Partnership's  investments  in  Fuquary-Varina,
Oxford Homes and Williamston Homes totaled $71,723. In 2000, the consulting fees
paid to the  Linden GP in respect of the  successful  sale of the  Partnership's
investment in Osuna Apartments was $23,426 and reimbursed expenses totaled $407.

      Management  has  entered  into  negotiations  and  agreements  to sell the
Partnership's  94%  interests  in  Brierwood,  Brierwood  II,  Pine  Forest  and
Meadowwood Apartments. The Partnership would receive only a nominal cash payment
in  connection  with  each  sale.  The sale of the  Partnership's  interests  in
Brierwood,  Pine Forest and Meadowwood Apartments also requires consent from all
the related  Purchase  Money Note holders.  Such consents  were  requested.  The
Partnership  received  unanimous  consent from the  Purchase  Money Note holders
relating to Pine Forest  Apartments but did not receive  unanimous  consent from
the Purchase Money Note holders relating to Brierwood and Meadowwood Apartments.
Accordingly,  the transactions  could not all be consummated as proposed.  Under
the partnership  agreements  relating to these investments,  Liberty LGP has the
right to cause the sale of the partnership's project.  Liberty LGP has agreed to
pursue the sale of these four properties. The proposed purchasers are affiliates
of the local general partner in these  partnerships.  The  transactions  are not
expected to result in any distribution in respect of the Partnership's  interest
in these  partnerships.  Management  presently  anticipates the closing of these
transactions in the third quarter of 2001.

      The  Partnership  entered into an agreement with the local general partner
of  Austintown  Associates  to sell the  Partnership's  98% limited  partnership
interest,  subject,  among other things,  to the consent of the related Purchase
Money Note holders.  The  Partnership did not receive  unanimous  consent of the
Purchase  Money Note  holders  and the  agreement  expired on April 1, 2000.  On
September  15, 2000  certain of the  Purchase  Money Note  holders  commenced an
action in the Court of Common Pleas Mahoning County,  Ohio seeking,  among other
things,  to  foreclose  upon  the  Partnership's   pledge  of  its  98%  limited
partnership interest in Austintown  Associates.  The Partnership did not contest
the proceeding  and, on February 26, 2001, the Court entered a default  judgment
and order appointing a receiver to sell the Partnership's interest in Austintown
Associates to satisfy the judgment. The sale proceeds,  after the costs of sale,
will be paid to the Purchase Money Note holders.

                                       9
<PAGE>


                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1.       Organization and Liquidation of the Partnership, continued

Liquidation and Sale of Investments in Local Limited Partnerships, continued

      Management  commenced  discussions with the local manager for Surry Manor,
Ltd. and Glendale Manor  Apartments to purchase the  Partnership's  interests in
those  partnerships.  No agreement on the transfer of these  interests  has been
reached.  The sale of these interests requires unanimous consent of the Purchase
Money Note holders. Management will continue to pursue more detailed discussions
in 2001.

      The carrying values of the  investments in the Local Limited  Partnerships
and the Purchase Money Notes and related accrued interest were adjusted to their
estimated fair values and settlement  amounts,  respectively,  upon adopting the
liquidation basis of accounting (See Note 2).

      As discussed  above,  the  Partnership  is currently in various  stages of
negotiations  to  sell  its  interests  in the  remaining  seven  Local  Limited
Partnerships.  If the  Partnership  is  successful in disposing of its remaining
investments,   management   presently  intends  to  wind  up  the  Partnership's
operations in the fourth quarter of 2001 or the first quarter of 2002.

      No  assurance  can  be  given  that  the  Partnership   will  be  able  to
successfully  conclude  any  of  the  above  transactions.   Consequently,   the
completion of the liquidation of the Partnership may be different than currently
anticipated.

      The net amount,  if any,  ultimately  available for distribution  from the
liquidation of the Partnership  depends on many unpredictable  factors,  such as
the amounts  realized on the sale of the remaining  investments in Local Limited
Partnerships,  carrying costs of the assets prior to sale,  settlement of claims
and  commitments,  the amount of revenue and expenses of the  Partnership  until
completely liquidated and other uncertainties.

2.       Significant Accounting Policies

Basis of Presentation

      In  the  opinion  of  the  General  Partner,  the  accompanying  unaudited
financial  statements  contain all normal  recurring  adjustments  necessary  to
present  fairly the  financial  statements  of the  Partnership  for the periods
presented.  Changes of net assets in  liquidation  and operating  results of any
interim  period  are not  necessarily  indicative  of the  results  that  may be
expected for a full year.  The  financial  statements  do not include all of the
information and footnote disclosures required by accounting principles generally
accepted in the United States of America.  These financial  statements should be
read in conjunction  with the  Partnership's  audited  financial  statements and
notes thereto included in the  Partnership's  annual report on Form 10-K for the
year ended December 31, 2000.

                                       10

<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

2.       Significant Accounting Policies, continued

Basis of Accounting

      Effective December 31, 2000, the Partnership adopted the liquidation basis
of  accounting.  Prior  to  that  date,  the  Partnership  recorded  results  of
operations using the going concern basis of accounting.

      The accompanying  statements of net assets in liquidation and statement of
changes  of  net  assets  in  liquidation,   reflect  the  transactions  of  the
Partnership utilizing liquidation  accounting concepts as required by accounting
principles  generally  accepted  in the  United  States  of  America.  Under the
liquidation  basis of  accounting,  assets  are  stated at their  estimated  net
realizable  values  and  liabilities  are  stated at their  anticipated  payable
amounts.

      The valuation of assets and liabilities necessarily requires estimates and
assumptions,  and there are uncertainties in carrying out the dissolution of the
Partnership.  The actual values upon dissolution and costs associated  therewith
could be higher or lower than the amounts recorded.

      The accompanying  statement of operations for the three months ended March
31, 2000  reflects the  operations of the  Partnership  prior to the adoption of
liquidation  basis of accounting and prior to the adjustments  required to adopt
the liquidation basis of accounting.

Investment in Local Limited Partnerships

      Investments  in Local  Limited  Partnerships  at March 31, 2001 consist of
investments  in seven Local Limited  Partnerships  which are stated at estimated
liquidation  value.  Prior  to  the  adoption  of  liquidation  accounting,  the
investments  in Local  Limited  Partnerships  were  accounted  for by the equity
method  whereby costs to acquire the  investments,  including  cash paid,  notes
issued  and  other  costs  of  acquisition,  were  capitalized  as  part  of the
investment account.  The Partnership's  equity in the earnings or losses of each
of the Local Limited  Partnerships  was reflected as an addition to or reduction
of the respective  investment account. The Partnership did not recognize losses,
which reduced its investment  account below zero.  Cash  distributions  received
which reduce the investment below zero were recognized as investment income.

Use of Estimates

      The  preparation  of financial  statements in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  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 revenue and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

                                       11
<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

3.       Contingencies

      The Purchase  Money Notes  relating to Austintown  Associates,  Meadowwood
Ltd,  Brierwood  Ltd and Pine Forest  matured on October 30, 1999.  The Purchase
Money  Notes  relating  to  Glendale  Manor  matured on August 29,  2000.  These
remaining  five series  Purchase  Money Notes are now in default.  The  Purchase
Money Notes for Surry Manor mature on July 9, 2001.

      The sale or other  disposition by the  Partnership of its interests in the
Local Limited  Partnerships,  including in connection  with a foreclosure of the
pledged  security for Purchase  Money Note  obligations,  is likely to result in
recapture of previously claimed tax losses to the Partnership and may have other
adverse tax  consequences to the Partnership and to the Limited  Partners.  Such
recapture may cause some or all of the Limited  Partners to have taxable  income
from the Partnership  without cash distributions from the Partnership with which
to satisfy the tax liability resulting therefrom.

      As  discussed  in Note 1 above,  the  Partnership  is currently in various
stages of  negotiations  to sell its  interests  in the  remaining  seven  Local
Limited  Partnerships.  If the  Partnership  is  successful  in disposing of its
remaining investments, management presently intends to wind up the Partnership's
operations in the fourth quarter of 2001 or the first quarter of 2002.

      No  assurance  can  be  given  that  the  Partnership   will  be  able  to
successfully  conclude  any  of  the  above  transactions.   Consequently,   the
completion of the liquidation of the Partnership may be different than currently
anticipated.

      As a result of its  investments  in the Local  Limited  Partnerships,  the
Partnership is affected by certain risks and  uncertainties  associated with the
operations of the Properties owned by the Local Limited Partnerships.

      The  rents  of the  Properties,  many  of  which  receive  rental  subsidy
payments,  including  payments  under  Section 8 of Title II of the  Housing and
Community  Development  Act of 1974 ("Section 8"), are subject to specific laws,
regulations  and  agreements  with  federal  and  state  agencies.  The  subsidy
agreements  expire at various times from April 2001 through October 2001.  Under
the Multifamily  Assisted Housing and Reform and  Affordability  Act (MAHRAA) of
1997,  as  amended,   Congress  set  forth  the   legislation  for  a  permanent
"mark-to-market" program and provided for permanent authority for the renewal of
Section 8 Contracts.  Owners with Section 8 contracts  expiring after  September
30, 1998 are subject to the  provisions  of MAHRA.  On September  11, 1998,  HUD
issued an  interim  rule to  provide  clarification  for  implementation  of the
mark-to-market  program.  Since then, revised guidance has been provided through
various HUD housing  notices,  most  recently HUD housing  notice  99-36,  which
addresses project-based Section 8 contracts expiring in fiscal year 2000.

                                       12
<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

3.       Contingencies, continued

      Under this  notice,  project  owners  have  several  options for Section 8
contract  renewals,  depending  on the type of project and rent  level.  Options
include  marking rents up to market,  renewing other  contracts with rents at or
below market, referring projects to the Office of Multifamily Housing Assistance
Restructuring  (OMHAR) for  mark-to-market  or "OMHAR lite"  renewals,  renewing
contracts  that are exempted  from  referral to OMHAR,  renewing  contracts  for
portfolio re-engineering demonstration and preservation projects, and opting out
of the Section 8 program.  Owners must submit  their  option to HUD at least 120
days before  expiration of their contract.  Each option contains  specific rules
and procedures that must be followed to comply with the  requirements of housing
notice 99-36.

      As such,  each Local Limited  Partnership  may choose to either opt out of
the Section 8 program, request mortgage restructuring and renewal of the Section
8  contract,  or request  renewal of the  Section 8  contract  without  mortgage
restructuring.  Each option contains a specific set of rules and procedures that
must be  followed  in order to  comply  with the  requirements  of  MAHRAA.  The
properties  are working with HUD to renew their  existing  contracts  for two to
five year periods.

      The Partnership  cannot  reasonably  predict  legislative  initiatives and
governmental  budget  negotiations,  the  outcome  of which  could  result  in a
reduction  in funds  available  for the various  federal and state  administered
housing programs  including the Section 8 program.  Such changes could adversely
affect the future net  operating  income  and debt  structure  of certain  Local
Limited Partnerships currently receiving such subsidy or similar subsidies.

4.       Investments in Local Limited Partnerships

      The Partnership  acquired Local Limited Partnership  interests in thirteen
Local  Limited   Partnerships   which  own  and  operate   government   assisted
multi-family  housing  complexes.  As discussed in Note 1 above, the Partnership
has sold six of its  investments  as of March  31,  2001.  The  Partnership,  as
Investor  Limited  Partner  pursuant to Local  Limited  Partnership  Agreements,
acquired  interests  ranging  from  94%  to 98% in the  profit  or  losses  from
operations and cash from operations of each of the Local Limited Partnerships.

      As  discussed  above,  the  Partnership  is  currently  in the  process of
liquidating the  Partnership  and disposing of its remaining  investments in the
Local  Limited  Partnerships  presently  estimated  to occur  through the fourth
quarter  of 2001 or  first  quarter  of 2002.  No  assurance  can be given  that
management will be able to complete its liquidation of Partnership's investments
within this time period.



                                       13
<PAGE>




                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

4.       Investments in Local Limited Partnerships, continued

         The following is a summary of cumulative  activity for  investments  in
Local Limited Partnerships since their dates of acquisition:
<TABLE>
<CAPTION>

                                                                  (Unaudited)             Audited
                                                                   March 31,            December 31,
                                                                      2001                 2000
                                                                -------------          -------------
<S>                                                             <C>                   <C>
Total acquisition cost to the Partnership                        $ 9,356,379           $ 9,356,379

Additional capital contributed by the Partnership                     11,425                11,425

Partnership's share of losses of Local Limited Partnerships       (3,400,251)           (3,444,200)

Cash distributions received from Local Limited Partnerships       (4,199,256)           (4,199,256)

Cash distributions received from Local  Limited
     Partnerships recognized as Investment Income                     95,195                95,195

Sales of investments in Local Limited Partnerships                (1,512,144)           (1,035,518)

Adjustment to reduce investments in Local Limited Partnerships
     to liquidation accounting basis                                (241,952)             (487,115)
                                                                 -----------           -----------

Investments in Local Limited Partnerships                        $   109,396           $   296,910
                                                                 ===========           ===========

</TABLE>

                                       14

<PAGE>



                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


4.  Investments in Local Limited Partnerships, continued

         Summarized financial information from the combined financial statements
of all Local Limited Partnerships is as follows:

                 Summarized Statement of Operations (Unaudited)


                                            For the Three Months Ended March 31,
                                            ------------------------------------
                                                 2001                     2000
                                            -----------              -----------

Rental and other income                      $ 833,773                $ 771,859
Expenses:
   Operating expenses                          523,887                  520,529
   Interest expense                            143,579                  144,858
   Depreciation and amortization               144,749                  150,107
                                             ---------                ---------
     Total expenses                            812,215                  815,494
                                             ---------                ---------

 Net income (loss)                           $  21,558                $ (43,635)
                                             =========                =========

Partnership's share of net income (loss)     $  21,856                $ (42,476)
                                             =========                =========

Other partners' share
  of net income (loss)                       $    (298)               $  (1,159)
                                             =========                =========


                                       15
<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                      (A Massachusetts Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

4.  Investments in Local Limited Partnerships, continued

      The difference between the Partnership's  share of income in Local Limited
Partnership  investments  in the  Partnership's  Statement of Operations for the
three months ended March 31, 2000 and the share of loss in the above  Summarized
Statement of Operations consists of the Partnership's unrecorded share of losses
and cash distributions recorded as investment income as follows:

                                                                  For the Three
                                                                   Months Ended
                                                                 March 31, 2000
                                                                 --------------
Share of income in Local Limited Partnership Investments
  in the Partnership's Statement of Operations                      $  3,140

Partnership's share of income (loss) in the
  Above summarized Statement of Operations                           (42,476)
                                                                    --------
     Difference                                                     $ 45,616
                                                                    ========

Unrecorded Losses:
     Brierwood, Ltd.                                                   6,847
     Brierwood II, Ltd.                                                5,735
     Pine Forest Apartments, Ltd.                                      9,860
     Surry Manor                                                       7,579
     Glendale Manor                                                    4,262
     Meadowwood                                                        9,405
                                                                    --------
     Subtotal Unrecorded Losses                                       43,688

Cash distributions recorded as investment income:
     Glendale Manor                                                    1,928
                                                                    --------
Total                                                               $ 45,616
                                                                    ========


                                       16


<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                          (A Massachusetts Partnership)

                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)


5.       Transactions with Affiliates

      In  the  first  three   months  of  2000,   the   Partnership   recognized
administrative expenses and management fees owed to the Managing General Partner
of $12,000 and $12,500, respectively.

      In connection with the adoption of the liquidation basis of accounting, an
adjustment to record estimated  liabilities  through the liquidation of $100,000
was recorded at December 31, 2000. This amount  included  $50,000 of partnership
management fees and $50,000 of reimbursable  administration  expenses.  At March
31, 2001,  accounts payable to affiliates  totaling $386,271  represents amounts
owed for  reimbursements of Partnership  administrative  expenses and management
fees of $156,000 and $154,771,  respectively and amounts  estimated  through the
liquidation  for  administrative  expenses  and  management  fees of $38,000 and
$37,500,   respectively.   In  the  first   quarter  of  2001,   there  were  no
administrative expenses and management fees to the General Partner recognized in
addition to the estimate through liquidation recorded at December 31, 2000.

6.       Statement of Distributable Cash from Operations

      Distributable  Cash From  Operations  for the three months ended March 31,
2001, as defined in Section 17 of the Partnership Agreement, is as follows:

Interest income                                                        $  4,882

Plus: 2000 cash distributions to be received from
      Local Limited Partnerships, net of non-resident
      state withholding taxes                                            39,333

Less: 2001 interest payments on Purchase Money
      Notes to be paid out of 2000 cash
      distributions from Local Limited Partnerships                     (39,333)

Less: General and administrative expenses                               (40,231)
                                                                       --------

Cash from Operations, as defined                                        (35,349)
                                                                       --------

Distributable Cash from Operations, as defined                         $      0
                                                                       ========

                                       17

<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                          (A Massachusetts Partnership)

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

General

      Because of the progress which had been made during 2000 in connection with
the  Partnership's  efforts to liquidate its portfolio of  investments  in Local
Limited  Partnerships,  effective December 31, 2000, the Partnership adopted the
liquidation  basis of accounting.  Prior to that date, the Partnership  recorded
results of operations using the going concern basis of accounting.

      Under the  liquidation  basis of  accounting,  assets  are stated at their
estimated net realizable  values and liabilities are stated at their anticipated
settlement amounts. The valuation of assets and liabilities necessarily requires
many  estimates and  assumptions,  and there are  substantial  uncertainties  in
carrying out the liquidation of the Partnership's assets. The actual values upon
liquidation  and costs  associated  therewith  could be higher or lower than the
amounts  recorded.  In connection  with the  liquidation,  the  Partnership  has
recorded an accrual for additional  expenses to reflect the  Partnership's  best
estimate of the costs associated with the liquidation.

Liquidity and Capital Resources

The Partnership

      The  Partnership  is liable for the  amount of the  Purchase  Money  Notes
delivered  to purchase  its  interests  in the Local  Limited  Partnerships  (as
hereinafter described),  and for the Partnership's day-to-day administrative and
operating expenses.

      The Partnership  acquired its interests in two Local Limited  Partnerships
for cash. The  Partnership  acquired its interests in eleven other Local Limited
Partnerships by delivery of cash, short-term promissory notes (all of which have
been paid in full) and purchase  money  promissory  notes which bear interest at
the rate of 9% per annum  (the  "Purchase  Money  Notes").  The  payment of each
Purchase Money Note is secured by a pledge of the Partnership's  interest in the
Local Limited  Partnership to which the note relates.  Recourse on each Purchase
Money Note is  limited to the  pledged  partnership  interest.  Each note had an
initial  term of 15 to 17 years.  The  Partnership's  interests  in these  Local
Limited Partnerships were pledged as security for the Partnership's  obligations
under the respective Purchase Money Notes.

      In  May  1999,  the  Partnership  sold  its  interest  in  Fiddlers  Creek
Apartments and the purchaser  assumed the  Partnership's  obligations  under the
related Purchase Money Notes. In July 1999, the Partnership sold its interest in
Linden Park  Associates.  Linden Park Associates  refinanced their existing debt
and also paid in full the  principal  and  accrued and unpaid  interest  due the
Partnership on their notes. In February 2000, the Partnership  sold its interest
in Osuna Apartments Company and the holders of the Purchase Money Notes released
the Partnership  from all liabilities in connection with the Notes. On March 30,
2001,  the  Partnership  sold its  interest in  Fuquay-Varina,  Oxford Homes and
Williamston  Homes and the purchaser  assumed the Partnership  obligations under
the related Purchase Money Notes.

                                       18
<PAGE>



                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                          (A Massachusetts Partnership)

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

Liquidity and Capital Resources, continued

The Partnership, continued

      At March 31, 2001,  five series of the Purchase  Money Notes,  relating to
Austintown  Associates,  Meadowwood Ltd., Brierwood Ltd, Pine Forest Apartments,
Ltd.  and  Glendale  Manor  Apartments,  had matured  and were in  default.  The
remaining series of Purchase Money Notes,  relating to Surry Manor, Ltd., mature
on July 9, 2001.  None of the series of Purchase Money Notes is  cross-defaulted
to the others,  nor are the series of Purchase Money Notes  cross-collateralized
in any manner.

      The terms of each  Purchase  Money Note  permit  interest to accrue to the
extent cash  distributions  to the Partnership from the applicable Local Limited
Partnership are insufficient to enable the Partnership to pay the Purchase Money
Note on a current basis.  Generally,  the amount of such cash distributions have
not been  sufficient in any year to pay the full amount of interest  accrued for
that year on the Purchase  Money Notes.  The Purchase Money Notes do not require
payment of any  portion of the  principal  amount of the note prior to  maturity
(except that the Purchase  Money Notes  require  immediate  payment  following a
default (as defined therein) by the Partnership thereunder).  Accordingly,  each
Purchase  Money Note  requires a  substantial  balloon  payment at maturity.  In
connection with the adoption of the liquidation  basis of accounting,  the value
shown for the Purchase  Money Notes was adjusted to the  anticipated  settlement
amount and no further interest accruals will be recorded.

      The sale or other  disposition by the  Partnership of its interests in the
Local Limited  Partnerships,  including in connection  with a foreclosure of the
pledged  security,  is likely to result in recapture of  previously  claimed tax
losses to the  Partnership  and may have other adverse tax  consequences  to the
Partnership and to the Unit holders. Such recapture may cause some or all of the
Unit  holders  to  have  taxable  income  from  the  Partnership   without  cash
distributions  from the  Partnership  with  which to satisfy  the tax  liability
resulting therefrom.

      On March  30,  2001,  the  Partnership  sold its 98%  limited  partnership
interests in  Fuquay-Varina,  Oxford Homes and Williamston  Homes to the general
partner of these  partnerships or his affiliate for $148,485 plus the assumption
of the related  Purchase  Money Note  obligations.  The carrying  value of these
properties  had been  adjusted at December  31, 2000 to reflect the actual sales
transactions.

      On February 1, 2000,  the  Partnership  sold its 98% interest as a limited
partner (the  "Partnership  Interest") in Osuna Apartments  Company ("Osuna") to
the Sovereign  Management  Corporation,  the company retained by Osuna to manage
its apartment  complex (the  "Purchaser").  In consideration for the sale of the
Partnership  Interest,  the  Partnership  received a net cash purchase  price of
$100,000.  In connection  with the sale, the holders of the Purchase Money Notes
(the "Notes")  issued by the  Partnership in connection  with its acquisition of
the  Partnership  Interest  released the  Partnership  from all  liabilities  in
connection  with  the  Notes.   After  transaction   expenses, including  $1,800
recognized in the third quarter of 2000,  the  Partnership  recognized a gain of
$2,432,299 on the sale of the investment.

                                       19
<PAGE>


                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                          (A Massachusetts Partnership)

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

Liquidity and Capital Resources, continued

The Partnership, continued

      On May 28,  1999,  the  Partnership  sold its  interest in Fiddlers  Creek
Apartments in exchange for $483,451 in cash and assumption of the Purchase Money
Note obligations.  On April 13, 2000, estimated state withholding taxes totaling
$211,271 were paid from the proceeds of the sale of the Partnership's investment
in Fiddlers Creek  Apartments.  The Partnership  subsequently  reevaluated  this
obligation  and applied for a refund of the $211, 271  previously  remitted.  On
November 7, 2000 the refund was received with interest of $4,659.

      On July 15,  1999,  the  Partnership  sold its  interest  in  Linden  Park
Associates  Limited  Partnership  in exchange for $395,960 in cash.  Linden Park
Associates  refinanced  their  existing debt and also paid in full the principal
and accrued and unpaid  interest  due the  Partnership  on their notes  totaling
$241,058.  In  accordance  with the  Partnership's  agreement  with the  General
Partner of Linden  Park  Associates  (the  "Linden  GP"),  these funds have been
segregated  for use to pay the fees and expenses due the Linden GP in connection
with the  consulting  arrangement  described  below.  Interest  earned  on these
segregated funds will be available to pay these fees and expenses.

      Management  has  entered  into  negotiations  and  agreements  to sell the
Partnership's  94%  interests  in  Brierwood,  Brierwood  II,  Pine  Forest  and
Meadowwood Apartments. The Partnership would receive only a nominal cash payment
in  connection  with  each  sale.  The sale of the  Partnership's  interests  in
Brierwood,  Pine Forest and Meadowwood Apartments also requires consent from all
the related  Purchase  Money Note holders.  Such consents  were  requested.  The
Partnership  received  unanimous  consent from the  Purchase  Money Note holders
relating to Pine Forest  Apartments but did not receive  unanimous  consent from
the Purchase Money Note holders relating to Brierwood and Meadowwood Apartments.
Accordingly,  the transactions  could not be consummated as proposed.  Under the
partnership agreements relating to these investments,  Liberty LGP has the right
to cause the sale of the partnership's project. Liberty LGP has agreed to pursue
the sale of these four properties. The proposed purchasers are affiliates of the
local general partner in these  partnerships.  The transactions are not expected
to result in any distribution in respect of the Partnership's  interest in these
partnerships. Management presently anticipates the closing of these transactions
in the third quarter of 2001.

      The  Partnership  entered into an agreement with the local general partner
of  Austintown  Associates  to sell the  Partnership's  98% limited  partnership
interest,  subject,  among other things,  to the consent of the related Purchase
Money Note holders.  The  Partnership did not receive  unanimous  consent of the
Purchase  Money Note  holders  and the  agreement  expired on April 1, 2000.  On
September  15, 2000  certain of the  Purchase  Money Note  holders  commenced an
action in the Court of Common Pleas Mahoning County,  Ohio seeking,  among other
things,  to  foreclose  upon  the  Partnership's   pledge  of  its  98%  limited
partnership interest in Austintown  Associates.  The Partnership did not contest
the proceeding  and, on February 26, 2001, the Court entered a default  judgment
and order appointing a receiver to sell the Partnership's interest in Austintown
Associates to satisfy the judgment. The sale proceeds,  after the costs of sale,
will be paid to the Purchase Money Note holders.

                                       20
<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                          (A Massachusetts Partnership)

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

Liquidity and Capital Resources, continued

The Partnership, continued

      Management  commenced  discussions with the local manager for Surry Manor,
Ltd. and Glendale Manor  Apartments to purchase the  Partnership's  interests in
those  partnerships.  No agreement on the transfer of these  interests  has been
reached.  The sale of these interests requires unanimous consent of the Purchase
Money Note holders. Management will continue to pursue more detailed discussions
in 2001.

      As discussed  above,  the  Partnership  is currently in various  stages of
negotiations  to  sell  its  interests  in the  remaining  seven  Local  Limited
Partnerships.  If the  Partnership  is  successful in disposing of its remaining
investments,   management   presently  intends  to  wind  up  the  Partnership's
operations in the fourth quarter of 2001 or the first quarter of 2002.

      No  assurance  can  be  given  that  the  Partnership   will  be  able  to
successfully  conclude  any  of  the  above  transactions.   Consequently,   the
completion of the liquidation of the Partnership may be different than currently
anticipated.

      The net amount,  if any,  ultimately  available for distribution  from the
liquidation of the Partnership  depends on many unpredictable  factors,  such as
the amounts  realized on the sale of the remaining  investments in Local Limited
Partnerships,  carrying costs of the assets prior to sale,  settlement of claims
and  commitments,  the amount of revenue and expenses of the  Partnership  until
completely liquidated and other uncertainties.

      In  light  of the  Partnership's  adoption  of the  liquidation  basis  of
accounting, the Partnership's net asset values as of March 31, 2001 and December
31, 2000 reflect the net realizable  values for the Investments in Local Limited
Partnerships  after giving  effect to the  estimated  closing costs upon sale or
disposal of the investments.  In addition,  an estimated  liability was recorded
for  estimates  of costs to be  incurred  in carrying  out the  dissolution  and
liquidation  of the  Partnership.  These  costs  include  estimated  legal fees,
accounting fees, tax return preparation and partnership  administration.  Actual
costs could vary  significantly  from these estimated costs due to uncertainties
related  to the  length  of  time  required  to  complete  the  liquidation  and
dissolution  of the  Partnership  and  unanticipated  events  which may arise in
disposing of the Partnership's remaining assets.

      At March 31, 2001, the Partnership had total cash and cash  equivalents of
$597,456,  including cash reserves of $521,414 and restricted cash of $76,042 as
compared to total cash at December 31, 2000 of $523,389, including cash reserves
of $376,286 and restricted cash of $147,103.  Cash reserves increased  primarily
as the result of $148,485 proceeds from the sale of the Partnership's  interests
in Fuquay-Varina,  Oxford Homes and Williamston Homes. Restricted cash decreased
as a result of costs paid relating to the sale of the Partnership's investments.


                                       21

<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                          (A Massachusetts Partnership)

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

Liquidity and Capital Resources, continued

The Partnership, continued

      Accounts payable and accrued expenses  decreased to a total of $301,661 at
March 31, 2001 from  $378,846 at December 31, 2000.  The decrease was  primarily
the  result  of  payment  of  consulting  fees  relating  to  the  sale  of  the
Partnership's investments of $71,723 and operating costs of $7,577.

The Local Limited Partnerships.

      The liquidity of the Local Limited  Partnerships  in which the Partnership
has  invested  is  dependent  on the  ability of the  respective  Local  Limited
Partnerships,  which own and operate  government  assisted  multi-family  rental
housing complexes,  to generate cash flow sufficient to fund operations and debt
service and to maintain  working  capital  reserves.  Each of the Local  Limited
Partnerships  is regulated by government  agencies which require monthly funding
of certain  operating and capital  improvements  reserves and which regulate the
amount of cash to be  distributed  to owners.  Each Local Limited  Partnership's
source of funds is rental income received from tenants and government subsidies.
Certain of the Local Limited  Partnerships  receive  rental  income  pursuant to
Section 8 rental  assistance  contracts which expire at various times from April
2001 through October 2001. Under the Multifamily Assisted Housing and Reform and
Affordability  Act  (MAHRAA)  of  1997,  as  amended,  Congress  set  forth  the
legislation for a permanent  "mark-to-market" program and provided for permanent
authority  for the  renewal  of  Section  8  Contracts.  Owners  with  Section 8
contracts  expiring  after  September 30, 1998 are subject to the  provisions of
MAHRAA.   On  September  11,  1998,  HUD  issued  an  interim  rule  to  provide
clarification of the implementation of the mark-to-market  program.  Since then,
revised  guidance has been provided  through various HUD housing  notices,  most
recently HUD housing  notice  99-36,  which  addresses  project-based  Section 8
contracts expiring in fiscal year 2000.

      Under this  notice,  project  owners  have  several  options for Section 8
contract  renewals,  depending  on the type of project and rent  level.  Options
include  marking rents up to market,  renewing other  contracts with rents at or
below market, referring projects to the Office of Multifamily Housing Assistance
Restructuring  (OMHAR) for  mark-to-market  or "OMHAR lite"  renewals,  renewing
contracts  that are exempted  from  referral to OMHAR,  renewing  contracts  for
portfolio re-engineering demonstration and preservation projects, and opting out
of the Section 8 program.  Owners must submit  their  option to HUD at least 120
days before  expiration of their contract.  Each option contains  specific rules
and procedures that must be followed to comply with the  requirements of housing
notice 99-36.

      As such,  each Local Limited  Partnership  may choose to either opt out of
the Section 8 program, request mortgage restructuring and renewal of the Section
8  contract,  or request  renewal of the  Section 8  contract  without  mortgage
restructuring.  Each option contains a specific set of rules and procedures that
must be  followed  in order to  comply  with the  requirements  of  MAHRAA.  The
properties  are working with HUD to renew their  existing  contracts  for two to
five year periods.

                                       22
<PAGE>

                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                          (A Massachusetts Partnership)

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

Liquidity and Capital Resources, continued

The Local Limited Partnerships.

      The Partnership  cannot  reasonably  predict  legislative  initiatives and
governmental  budget  negotiations,  the  outcome  of which  could  result  in a
reduction  in funds  available  for the various  federal and state  administered
housing programs  including the Section 8 program.  Such changes could adversely
affect the future net  operating  income  and debt  structure  of certain  Local
Limited Partnerships currently receiving such subsidy or similar subsidies.

      The Local Limited  Partnerships are impacted by inflation in several ways.
Inflation  allows for increases in rental rates generally  reflecting the impact
of higher  operating and  replacement  costs.  Inflation  also affects the Local
Limited  Partnerships  adversely by increasing operating costs such as utilities
and salaries.

      As discussed  above,  the  Partnership  is currently in various  stages of
negotiations  to  sell  its  interests  in the  remaining  seven  local  limited
partnerships.  If the  Partnership  is  successful in disposing of its remaining
seven  investments,  management  presently  intends to wind up the Partnership's
operations in the fourth quarter of 2001 or the first quarter of 2002.

      Each of the Local Limited Partnerships has incurred mortgage indebtedness.
The mortgage loans provide for equal monthly  payments of principal and interest
in  amounts,  which  will  reduce the  principal  amount of the loans to zero at
maturity.   Each  of  the  maturity  dates  of  the   respective   mortgages  is
substantially beyond the due date of the Purchase Money Note obligations.

      Upon a sale of a property  by a Local  Limited  Partnership  the  mortgage
indebtedness  of such property must be satisfied  prior to  distribution  of any
funds to the partners in the Local Limited Partnership.

Partnership Operations

      Because the  Partnership  adopted the  liquidation  basis of accounting on
December 31, 2000, the results of operations for the period ended March 31, 2001
are not  presented.  Instead,  the  Partnership's  operating  results  have been
reflected on the statement of changes of net assets in  liquidation  and reflect
changes  from the  estimated  net  realizable  values of assets and  anticipated
payable amounts of liabilities previously recorded.

                                       23
<PAGE>


                  LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP
                          (A Massachusetts Partnership)

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

Partnership Operations, continued

      In the first three months of 2001, interest income earned on cash reserves
decreased to $4,882 from $5,758 in the first three  months of 2000,  principally
as a result of a lower  balance in the first  quarter of 2001.  The  Partnership
incurred  additional  expenses  of $2,115 in the first  quarter  of 2001  versus
$30,507 in the first quarter of 2000. The  Partnership  has not booked  interest
expense on the remaining Purchase Money Notes in the first three months of 2001,
although the associated  legal  liability has increased.  Under the  liquidation
basis of accounting,  the carrying value of the Purchase Money Notes and accrued
interest has been written down to the anticipated  payable amounts. On March 30,
2001,  the  Partnership  sold its  interest in  Fuquay-Varina,  Oxford Homes and
Williamston  Homes.  These  sales  transactions  did not  vary  materially  from
previously  recorded amounts.  The Partnership's  equity in income for the first
three months of 2000 was $3,140.


                                       24
<PAGE>

                                     PART II
                                Other Information

Item 3.  Defaults Upon Senior Securities.

      The Purchase  Money Notes  relating to Austintown  Associates,  Meadowwood
Ltd,  Brierwood  Ltd and Pine Forest  matured on October 30, 1999.  The Purchase
Money Notes  relating to Glendale  Manor matured on August 29, 2000.  These five
series of Purchase  Money Notes are now in default.  The amounts due at maturity
under these  non-recourse  obligations  consisted  of  $3,280,000  in  aggregate
principal amount and $3,833,453 in accrued and unpaid interest.  As of March 31,
2001, the aggregate arrearages under these notes amounted to $7,493,273.

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

      The following exhibit is filed herewith:

      Exhibit Number                Description

      18                            Letter re Change in Accounting Principle

(b) Reports on Form 8-K

      On April 13, 2001, the  Partnership  filed a Current Report on form 8-K to
report the  disposition  on March 30, 2001 of its limited  partner  interests in
Oxford Homes for the Elderly,  Ltd., Williamston Homes for the Elderly, Ltd. and
Fuquay-Varina Homes for the Elderly, Ltd..


                                       25

<PAGE>



                                   SIGNATURES


        Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                   LIBERTY HOUSING PARTNERS LIMITED PARTNERSHIP

                                   By:  TNG Properties Inc.
                                        Managing General Partner



                                   By:  /s/ Michael A. Stoller
                                        Michael A. Stoller
                                        President and CEO


                                   By:  TNG Properties Inc.
                                        Managing General Partner



                                   By:  /s/ Wilma R. Brooks
                                        Wilma R. Brooks
                                        Chief Financial Officer


Date:  May 15, 2001


                                       26