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

                                    FORM 10-K
(Mark One)

_X_  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [NO FEE REQUIRED]

For the fiscal year ended February 28, 1997

                                       OR

___  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                         Commission File Number 0-12634

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
           ----------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Massachusetts                                 13-3161322
--------------------------------            ------------------------------------
  (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)           

 625 Madison Avenue, New York, New York                                 10022
----------------------------------------                              ----------
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number, including area code (212) 421-5333

Securities registered pursuant to Section 12(b) of the Act:

     None

Securities registered pursuant to Section 12(g) of the Act:

     Initial Limited Partnership Interests
     -------------------------------------
     Title of Class

     Additional Limited Partnership Interests
     ----------------------------------------
     Title of Class

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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. Yes _X_  No___

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Park III of this
Form 10-K or any amendment to this Form 10-K. [X]

                       DOCUMENTS INCORPORATED BY REFERENCE

     None

Page 1 of 169

<PAGE>


                                     PART I

Item 1.       Business.

General
-------

              Cambridge + Related Housing Properties Limited Partnership (the
"Partnership") is a limited partnership which was formed under the laws of the
Commonwealth of Massachusetts on April 28, 1983. The general partners of the
Partnership are Government Assisted Properties, Inc. (the "Assisted General
Partner"), a Delaware corporation and a wholly owned subsidiary of Lehman
Brothers Inc. ("Lehman"), a Delaware corporation, Related Housing Programs
Corporation (the "Related General Partner"), a Delaware corporation and an
affiliate of The Related Companies, L.P. ("Related"), a New York limited
partnership, and Cambridge/Related Housing Associates Limited Partnership
("Cambridge Related Associates"), a Massachusetts limited partnership, together
(the "General Partners"). The general partners of Cambridge Related Associates
are the Assisted General Partner and the Related General Partner. The General
Partners manage and control the affairs of the Partnership. See Item 10,
Directors and Executive Officers of the Registrant, below.

              On August 4, 1983, the Partnership commenced a public offering
(the "Offering"), pursuant to a prospectus dated August 4, 1983, as supplemented
by the supplements thereto dated February 1, 1984, October 13, 1983 and
September 26, 1983 (the "Prospectus"). Pursuant to the Offering, the Partnership
issued 5,019 Initial Limited Partnership Interests in 1984 and 5,019 Additional
Limited Partnership Interests in 1985, resulting in $50,190,000 in Gross
Proceeds and $36,638,700 of net proceeds available for investment and reserves.
The Offering was completed on May 4, 1984 and no further issuance of Initial
Limited Partnership Interests and Additional Limited Partnership Interests is
anticipated.

              The Partnership was formed to invest, as a limited partner, in
other limited partnerships (referred to herein as "Local Partnerships" or
"subsidiary partnerships"), each of which owns and operates an existing
residential housing development (an "Apartment Complex") Apartment Complex which
is receiving some form of local, state or federal assistance, such as mortgage
insurance, rental assistance payments, permanent mortgage financing and/or
interest reduction payments ("Government Assistance"). The Partnership's
investment objectives are to:

              (1) provide current tax benefits in the form of passive losses
which holders of Limited Partnership Interests may use to offset passive income
from other sources;

              (2) provide long-term capital appreciation through an increase in
the value of the Partnership's investments in Local Partnerships;

              (3) provide cash distributions from sale or refinancing
transactions; and

              (4) preserve and protect the Partnership's capital.

              Federal, state and local government agencies have provided
significant incentives in order to stimulate private investment in government
assisted housing. The intent of these incentives is to reduce certain market
risks and permit investors to receive (i) tax benefits, (ii) limited cash
distributions and (iii) long-term capital appreciation. Notwithstanding these
factors, there remain significant risks. These risks include, and are not
limited to, the financial strength and expertise of the local general partners.
The long-term nature of the investments in government-subsidized housing and the
continuance of government incentives limits the ability of the Partnership to
vary its investment portfolio in response to changing economic, financial and
investment conditions; such investments are also subject to changes in local
economic circumstances and housing patterns which have an impact on real estate
values. These Apartment Complexes also require greater management expertise and
may have higher operating expenses than conventional apartment buildings. See
Item 7, Management's Discussion and Analysis of Financial Condition and Results
of Operations, below.

                                      -2-
<PAGE>


              The interests in the Local Partnerships in which the Partnership
invested ("Local Partnership Interests") were acquired from unaffiliated
sellers. The Partnership became the principal limited partner in these Local
Partnerships pursuant to local limited partnership agreements. The Partnership
has acquired a 98.99% interest in each of the Local Partnerships. As a limited
partner, the Partnership's liability for obligations of the Local Partnerships
is limited to its investment. The general partners of the Local Partnerships
("Local General Partners") retain responsibility for maintaining, operating and
managing the Apartment Complexes. Under certain circumstances, the Partnership
has the right to replace the Local General Partner of the Local Partnership.

              The Partnership purchased the Local Partnership Interests for a
purchase price consisting in each case of a cash down payment, a deferred cash
payment due in April of the following year and a Purchase Money Note, secured in
each case by the Local Partnership Interest for which it was given in payment.
The cash payments were made in part as the purchase price of the Local
Partnership Interests and in part as capital contributions to the Local
Partnerships. Such contributions were generally used by the Local Partnership to
pay partnership management fees to the Local General Partners and fees to the
Local General Partners for guaranteeing the funding of operating deficits
(generally for a period of three to five years and subject to a maximum amount).

              Nonrecourse Purchase Money Notes in the original amount of
$61,029,115 were issued to the selling partners of the subsidiary partnerships
as part of the purchase price and are secured only by the Partnership's interest
in the subsidiary partnership to which the note relates. On June 3, 1996 and
September 17, 1996 the properties and the related assets and liabilities owned
by two Local Partnerships were sold to third parties and on August 15, 1996 and
on April 25, 1997 the Partnership's Local Partnership Interest in two other
Local Partnerships were sold to a third party and the Local Partnership' s
general partners, respectively (see Item 7).

              The Purchase Money Notes, which provide for simple interest at the
rate of 9% per annum through maturity, which will occur during the period July
1998 to December 1999, will not be in default during the basic term (generally
fifteen years) if not less than 60% of the cash flow actually distributed to the
Partnership by the corresponding subsidiary partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. Any interest not paid currently accrues, without further
interest thereon, through the due date of the note. All accrued and unpaid
interest must be paid on the due date of the note, unless the Partnership
exercises an extension right. Continued accrual of such interest without payment
would impact the effective rate of the notes, specifically by reducing the
current effective interest rate of 9%. The exact effect is not determinable
inasmuch as it is dependent on the actual future interest payments and ultimate
repayment dates of the notes. Unpaid interest of $64,899,777 and $62,437,367 at
February 28, 1997 and February 29, 1996, respectively, has been accrued and is
included in the caption due to selling partners. In general, the interest on and
the principal of each Purchase Money Note is also payable to the extent of the
Partnership's actual receipt of proceeds from the sale or refinancing of the
Apartment Complex, or in some cases the Local Partnership Interest to which the
Purchase Money Note relates.

              The Partnership may elect, upon the payment of an extension fee of
1 1/2% per annum of the outstanding principal amount, to extend the term of the
Purchase Money Note for up to five additional years. The Partnership may also
defer payment of any accrued and unpaid interest until the due date of the note.
The Partnership expects that upon maturity it will be required to refinance or
sell its investments in the Local Partnerships in order to pay the Purchase
Money Notes and accrued interest thereon. Based on historical operating results
of the Local Partnerships and the current economic conditions including changes
in tax laws, it is uncertain as to whether the proceeds from such sales will be
sufficient to meet the outstanding balances. Management is working with the
selling partners to restructure and/or refinance the notes. The Purchase Money
Notes are without personal recourse to either the Partnership or any of its
partners and the sellers' recourse, in the event of non-payment, would be to
foreclose on the Partnership's interests in the respective Local Partnerships.

              The General Partners will carefully analyze the opportunities
available upon the expiration of the properties' U.S. Department of Housing and
Urban Development ("HUD") contracts, as well as the tax consequences of each
option to investors. Prior to expiration of the properties' HUD contracts, and
based on the historical operating results and current economic conditions
including changes in tax laws, it is uncertain as to

                                      -3-
<PAGE>


whether there would be a return to the investors upon the sale of the applicable
properties in the Partnership's portfolio.

              The Local Partnerships which receive government assistance are
subject to low-income use restrictions which limited the owners ability to sell
or refinance the properties. In order to maintain the existing inventory of
affordable housing, Congress passed a series of related acts including the
Emergency Low Income Preservation Act of 1987, the Low-Income Housing
Preservation and Resident Homeownership Act of 1990 (together the "Preservation
Acts") and the Housing Opportunity Program Extension Act of 1996 (the "1996
Act"). In exchange for maintaining the aforementioned use restrictions, the
Preservation Acts provide financial incentives for owners of government assisted
properties. The 1996 Act provides financial assistance by funding the sale of
such properties to not-for-profit owners and also restores the owners ability to
prepay their HUD mortgage and convert the property to condominiums or
market-rate rental housing. Local general partners have filed for incentives
under the Preservation Acts or the 1996 Act for the following local
partnerships: San Diego - Logan Square Gardens Company, Albuquerque - Lafayette
Square Apts. Ltd., Westgate Associates Limited, Riverside Gardens, a Limited
Partnership, Pacific Palms, a Limited Partnership, Canton Commons Associates,
Rosewood Manor Associates, Bethany Glen Associates and South Munjoy Associates,
Ltd. The South Munjoy Associates, Ltd. property is under contract for sale to a
private owner. The local general partners of the other properties are either
negotiating purchase and sale contracts or exploring their alternatives under
the 1996 Act.

              Funding for the 1996 Act is subject to appropriations by Congress.
Congress funded $624 million in fiscal year 1996 for the preservation of
housing. Congress has funded approximately $325 million for preservation for
1997 fiscal year. Moreover only $175 million of the 1997 allocation is available
to fund preservation, while the balance is set aside for rental assistance
payments and for special projects. There is a backlog of properties having a
preservation value in excess of $900 million. Accordingly, no assurance can be
given that any of the local partnerships will obtain such incentives.

              HUD previously released the American Community Partnerships Act
(the "ACPA"). The ACPA is HUD's blueprint for providing for the nation's housing
needs in an era of static or decreasing budget authority. Two key proposals in
the ACPA that could affect the Local Partnerships are: a discontinuation of
project-based Section 8 subsidy payments, and an attendant reduction in debt on
properties that were supported by the Section 8 payments. The ACPA calls for a
transition during which the project-based Section 8 payments would be converted
to a tenant-based voucher system. Any FHA insured debt would then be
"marked-to-market" that is revalued in light of the reduced income stream.

              Several industry sources have commented to HUD and Congress that
in the event the ACPA was fully enacted in its present form, the reduction in
mortgage indebtedness would be considered taxable income to owners such as the
limited partners in the Partnership. Legislative relief has been proposed to
exempt "marked-to-market" debt from cancellation of indebtedness income
treatment. At present, there are several bills pending in Congress to address
this tax relief issue. Additionally, in the interim, HUD has agreed to annual
extensions of any expiring project-based Section 8 contracts, but there is no
guarantee that such extensions will be available in the future.

              The general partners of one subsidiary partnership, Westgate
Associates, Limited ("Westgate"), have signed an option agreement to sell the
project to the Vermont Housing Finance Agency, subject to HUD approval and other
contingencies, on or before December 31, 1998. The Partnership's investment in
Westgate was approximately $808,000 at February 28, 1997. Westgate's assets
constituted approximately 2% of the consolidated total assets at February 28,
1997.

              On March 14, 1996, South Munjoy Associates, Limited entered into a
purchase and sale of real estate agreement with Mainland Development Company of
Portland, Maine to sell the project for a selling price of approximately
$3,000,000, subject to HUD approval and other contingencies. The net proceeds
will be used to satisfy the existing mortgage debt of approximately $800,000.
The balance of the proceeds will be used to settle the purchase money notes and
accrued interest, with the balance, if any, available for general partnership
purposes.

                                      -4-
<PAGE>


              On June 3, 1996, the property and the related assets and
liabilities of Roper Mountain Apartments Ltd. ("Roper Mountain") were sold to a
third party for $4,735,000, resulting in a gain in the amount of $1,871,046. The
Partnership used $1,320,500 of the net proceeds to settle the associated
purchase money note and accrued interest which had a total outstanding balance
of $2,304,994, resulting in forgiveness of indebtedness income of $984,494.

              Rolling Meadows of Chickasha ("Chickasha"), a subsidiary
partnership, had previously filed a petition under Chapter 11 of the Bankruptcy
Code ("Chapter 11") which had been dismissed. HUD notified Chickasha that it
intended to commence foreclosure proceedings. Chickasha was in default and under
HUD control as a mortgagee in possession. On August 15, 1996, the Partnership's
Local Partnership Interest in Chickasha was sold to a third party for $75,000,
resulting in a gain in the amount of $472,720 and forgiveness of indebtedness
income of $1,768,800 as a result of forgiveness of the mortgage note payable to
HUD and accrued interest thereon. No proceeds were used to settle the associated
purchase money note and accrued interest which had a total outstanding balance
of $1,723,095, resulting in additional forgiveness of indebtedness income of
$1,723,095. Therefore the entire forgiveness of indebtedness income realized by
the Partnership from this transaction is $3,491,895.

              On September 17, 1996, the property and the related assets and
liabilities of Oakland-Keller Plaza ("Keller Plaza") were sold to a third party
for $8,800,000, resulting in a gain in the amount of $4,937,099. The Partnership
used $3,472,792 of the net proceeds to settle the associated purchase money note
and accrued interest which had a total outstanding balance of $4,065,887,
resulting in forgiveness of indebtedness income of $593,095.

          During 1995, Los Caballeros Apartments ("Los Caballeros") received an
unsatisfactory physical inspection report issued by the U.S. Department of
Housing and Urban Development ("HUD"). Los Caballeros had submitted to HUD a
Management Improvement Plan (MIO Plan) with an accompanying estimate of
restorations and improvements pursuant to the inspection report. A request for
funding from HUD accompanied the MIO Plan. The request was not granted, and thus
Los Caballeros was not able to cure the deficiencies cited in the inspection
report. On December 5, 1996, HUD rendered formal notification to Los Caballeros
that it has been declared in default of its contractual obligations with HUD as
a result of the physical deficiencies cited. On February 13, 1997, Republic
National Bank formally notified Los Caballeros that it has been declared in
default under their mortgage as a consequence of the property's default under
the regulatory agreement. Additionally, Los Caballeros is in default under the
three Housing Assistance Payments contracts. On April 25, 1997, the
Partnership's Local Partnership Interest in Los Caballeros was sold to the
general partners of Los Caballeros for $100,000, resulting in a gain in the
amount of approximately $500,000. No proceeds were used to settle the associated
Purchase Money Note and accrued interest which had a total outstanding balance
of $3,187,950, resulting in forgiveness of indebtedness income. For tax
purposes, the entire gain to be realized by the Partnership is anticipated to be
approximately $5,000,000.

              The expenditures required for operating the business of the
Partnership are met out of the cash flow distributions from Local Partnerships.
Accordingly, the Partnership believes that it will not be necessary to raise
additional funds to meet the expenditures of operating its business. However,
during the course of operations of the various Local Partnerships it may become
necessary, from time to time, to use either their own or the Partnership's
assets as security for loans to provide additional working capital.

Tax Matters
-----------

              The Tax Reform Act of 1986 (the "TRA") provides as of 1991 that
the passive losses generated by the Partnership can only be used to shelter
passive income or, in the alternative, may be carried forward to offset a gain
upon the sale of properties.

                                      -5-
<PAGE>


Competition
-----------

              The real estate business is highly competitive and each of the
Local Partnerships in which the Partnership has invested owns an Apartment
Complex which must compete for tenants in the marketplace. However, the rental
assistance and preferred interest rates on mortgage financing generally make it
possible to offer the apartments to eligible tenants at a cost to the tenant
significantly below the market rate for comparable conventionally financed
apartments in the area.

Employees
---------

              The Partnership does not have any direct employees. All services
are performed for the Partnership by its General Partner and their affiliates.
The General Partners receive compensation in connection with such activities as
set forth in Items 11 and 13. In addition, the Partnership reimburses the
General Partners and certain of their affiliates for expenses incurred in
connection with the performance by their employees of services for the
Partnership in accordance with the Partnership's Amended and Restated Agreement
and Certificate of Limited Partnership (the "Partnership Agreement").

Item 2.       Properties.

              The Partnership holds a 98.99% limited partnership interest in
each of forty-one Local Partnerships, which own forty-two residential Apartment
Complexes receiving Government Assistance. On June 3, 1996 and September 17,
1996 the properties and the related assets and liabilities owned by two Local
Partnerships were sold to third parties and on August 15, 1996 and on April 25,
1997 the Partnership's Local Partnership Interest in two other Local
Partnerships were sold to a third party and the Local Partnership' s general
partners, respectively (see Item 7. below). Set forth below is a schedule of
these Local Partnerships, including certain information concerning the Apartment
Complexes (the "Local Partnership Schedule"). See Schedule III to the financial
statements included herein for additional information pertaining to the
Apartment Complexes.

                           Local Partnership Schedule
                           --------------------------
<TABLE>
<CAPTION>
                                                                       Government
                                                                       Assistance                    Percentage of Units   
                                                                       ----------                 Occupied at December 31,
                                                            Year          HUD            -------------------------------------------
Name and Location (Number of Units)(b)                    Completed    Programs (a)      1996     1995      1994      1993      1992
--------------------------------------                    ---------    ------------      ----     ----      ----      ----      ----
<S>                                                          <C>       <C>                <C>      <C>       <C>       <C>       <C>
Caddo Parish-Villas South, Ltd.                              1972      ss. 221(d)(4)      86%      86%       95%       94%       94%
   Shreveport, Louisiana (172)

Oklahoma City-Town and Country                               1973      ss. 207            57%      81%       82%       82%       88%
   Village Apartments, Ltd. 
   Oklahoma City, Oklahoma (201)

Rolling Meadows of Chickasha, Ltd.                           1972      ss. 236            (f)      72%       72%       72%       72%
   Chickasha, Oklahoma (112)

New Jersey, Ltd.                                             1977      ss. 221(d)(4)      93%      95%       97%       97%       98%
   Mobile, Alabama (112)

Zeigler Boulevard, Ltd.                                      1981      ss. 221(d)(4)      88%      92%       90%       97%       98%
   Mobile, Alabama (112)

Eastwyck III, Ltd.                                           1979      ss. 221(d)(4)      98%      94%       99%      100%      100%
   Mobile, Alabama (48)

                                      -6-
<PAGE>
<CAPTION>


                           Local Partnership Schedule (Continued)
                           --------------------------                  
                                                                       Government
                                                                       Assistance                    Percentage of Units   
                                                                       ----------                 Occupied at December 31,
                                                            Year          HUD            -------------------------------------------
Name and Location (Number of Units)(b)                    Completed    Programs (a)      1996     1995      1994      1993      1992
--------------------------------------                    ---------    ------------      ----     ----      ----      ----      ----
<S>                                                          <C>       <C>                <C>      <C>       <C>       <C>      <C> 
Breckenridge-Chaparral Apartments II, Ltd.                   1973      ss. 236            98%      99%       99%       98%      100%
  Breckenridge, Texas (88)

Country, Ltd.                                                1978      ss. 221(d)(4)      92%      90%       92%       95%       95%
  Ridgeland, Mississippi (112) (c)    

Westwood Apartments Company, Ltd.                            1978      ss. 221(d)(4)      86%      83%       90%       91%       88%
  Montgomery, Alabama (176)

Parktowne, Ltd.                                              1978      ss. 221(d)(4)      89%      98%       95%       94%       91%
  Montgomery, Alabama (144)

Corpus Christi-Oso Bay Apartments, Ltd.                      1973      ss. 236            98%      99%      100%      100%      100%
  Corpus Christi, Texas (104)

Northbrook III, Ltd.                                         1981      ss. 221(d)(4)      94%      92%       92%       97%       94%
  Jackson, Mississippi (68) (c)                                        ss. 8

Bethany Glen Associates                                      1971      ss. 221(d)(3)      99%      95%       98%       95%       97%
  Glendale, Arizona (150)                                              ss. 8

Albuquerque-Lafayette Square Apts., Ltd.                     1973      ss. 236            99%      100%     100%       99%      100%
  Albuquerque, New Mexico (188)

Roper Mountain Apartments                                    1979      ss. 221(d)(4)      (e)      97%       97%       95%       90%
  Greenville, South Carolina (152)

Warren Manor Apartments
  Limited Partnership
  Warren, Michigan
    Warren Manor I (344)                                     1968      ss. 221(d)(4)      94%      95%       97%       96%       91%
    Warren Manor II (136)                                    1970      ss. 221(d)(4)      93%      95%       95%       96%       91%

Golf Manor Apartments                                        1970      ss. 221(d)(4)      95%      97%       95%       94%       94%
  Limited Partnership
  Roseville, Michigan (128)

Warren Woods Apartments                                      1971      ss. 221(d)(4)      98%      98%       99%       97%       93%
  Limited Partnership
  Warren, Michigan (192)

Canton Commons Apartments                                    1973      ss. 221(d)(4)      98%      99%       99%       99%       99%
  Canton, Michigan (452)                                               ss. 236
                                                                       ss. 8

Los Caballeros Apartments                                    1976      ss. 236            88%      93%       97%       97%       97%
  Thornton, Colorado (144) (d)(h)

                                      -7-
<PAGE>


                           Local Partnership Schedule (Continued)
                           --------------------------
                                                                       Government
                                                                       Assistance                    Percentage of Units   
                                                                       ----------                 Occupied at December 31,
                                                            Year          HUD            -------------------------------------------
Name and Location (Number of Units)(b)                    Completed    Programs (a)      1996     1995      1994      1993      1992
--------------------------------------                    ---------    ------------      ----     ----      ----      ----      ----

Rosewood Manor Apartments                                    1972      ss. 236            99%      99%      100%       99%       99%
   Rosewood, Michigan (207)                                            ss. 8

Grosvenor South Apartments                                   1969      ss. 221(d)(3)      98%      96%       94%       95%       95%
   Limited Partnership
   Taylor, Michigan (182)

Grosvenor South Apartments                                   1969      ss. 221(d)(4)      98%      90%       83%       84%       86%
   #2 Limited Partnership
   Taylor, Michigan (54)

Clinton Plaza Apartments                                     1969      ss. 221(d)(3)      99%      96%       92%       99%       95%
   Limited Partnership
   Clinton, Michigan (168)

Clinton Plaza Apartments                                     1970      ss. 221(d)(3)      99%      95%       93%       97%       91%
   #2 Limited Partnership
   Clinton, Michigan (192)

Oakland-Keller Plaza                                         1972      ss. 236            (e)      100%     100%      100%      100%
   Oakland, California (200)                                           ss. 8

San Diego-Logan Square Gardens Company                       1970      ss. 236            100%     100%     100%      100%      100%
   San Diego, California (170)                                         ss. 8

Grandview-Blue Ridge Manor, Ltd.                             1972      ss. 236            91%      94%       98%       95%       99%
   Grandview, Missouri (80)

Ardmore-Rolling Meadows of Ardmore, Ltd.                     1974      ss. 236            98%      97%       98%      100%      100%
   Ardmore, Oklahoma (101)

El Paso-Gateway East, Ltd.                                   1972      ss. 236            100%     99%      100%      100%      100%
   El Paso, Texas (104)                                                ss. 8

Fort Worth-Northwood Apartments, Ltd.                        1972      ss. 236            98%      98%       97%       98%       99%
   Fort Worth, Texas (100)

Stephenville-Tarleton Arms Apartments, Ltd.                  1972      ss. 236            97%      99%       99%      100%       99%
   Stephenville, Texas (128)                                           ss. 8

Cudahy Gardens, a Limited Partnership                        1971      ss. 236            100%     98%       99%      100%      100%
   Cudahy, California (100)                                            ss. 8

Pacific Palms, a Limited Partnership                         1972      ss. 236            92%      94%       95%       97%       98%
   Palm Springs, California (139)

Riverside Gardens, a Limited Partnership                     1971      ss. 236            94%      96%       95%       99%       97%
   Riverside, California (192)

                                      -8-
<PAGE>


                           Local Partnership Schedule (Continued)
                           --------------------------
                                                                       Government
                                                                       Assistance                    Percentage of Units   
                                                                       ----------                 Occupied at December 31,
                                                            Year          HUD            -------------------------------------------
Name and Location (Number of Units)(b)                    Completed    Programs (a)      1996     1995      1994      1993      1992
--------------------------------------                    ---------    ------------      ----     ----      ----      ----      ----

Bay Village Company                                          1971      ss. 236            98%      98%       98%       99%       99%
   Fall River, Massachusetts (206)                                     ss. 8

Buena Vista Manor Apartments, Ltd.                           1969      ss. 221(d)(3)      98%      93%       94%       97%       98%
   Nashville, Tennessee (200)                                          ss. 8

Rolling Meadows Apartments, Ltd.                             1971      ss. 236            99%      95%       95%       96%       94%
   Midwest City, Oklahoma (200)                                        ss. 8

Westgate Associates, Limited                                 1971      ss. 236            98%      97%       94%       95%       89%
   Brattleboro, Vermont (100)                                          ss. 8

Wingate Associates, Limited                                  1972      ss. 236            98%      99%       97%       99%       95%
   Laconia, New Hampshire (100)                                        ss. 8

South Munjoy Associates, Limited                             1966      ss. 221(d)(3)      91%      98%       98%       99%       99%
   Portland, Maine (140) (g)

Cedar Hill Apartments, Ltd.                                  1973      ss. 236            97%      100%     100%      100%       96%
   Monticello, Arkansas (60)

Char-Mur Apartments, Ltd.                                    1973      ss. 236            88%      89%       88%       97%       95%
   Trumann, Arkansas (48)

Crossett Apartments, Ltd.                                    1973      ss. 236            100%     100%     100%       99%       98%
   Crossett, Arkansas (50)
</TABLE>

          (a)  The Partnership invested in Local Partnerships owning existing
Apartment Complexes which receive either federal or state subsidies. HUD,
through FHA, administers a variety of subsidies for low and moderate-income
housing. FHA administers similar housing programs for non-urban areas. The
federal programs generally provide one or a combination of the following forms
of assistance: (i) mortgage loan insurance, (ii) rental subsidies, (iii)
reduction of mortgage interest payments.

               i)   HUD provides mortgage insurance for rental housing projects
pursuant to a number of sections of Title II of the National Housing Act
("NHA"), including Section 236, Section 221(d)(4), Section 221(d)(3) and Section
220. Under all of these programs, HUD will generally provide insurance equal to
100% of the total replacement cost of the project to non-profit owners and 90%
of the total replacement cost to limited-distribution owners. Mortgages are
provided by institutions approved by HUD, including banks, savings and loan
companies and local housing authorities. Section 221(d)(4) of NHA provides for
federal insurance of private construction and permanent mortgage loans to
finance new construction of rental apartment complexes containing five or more
units. The most significant difference between the 221(d)(4) program and the
221(d)(3) program is the maximum amount of the loan which may be obtained. Under
the 221(d)(3) program, non-profit sponsors may obtain a permanent mortgage equal
to 100% of the total replacement cost; no equity contribution is required of a
non-profit sponsor. In all other respects the 221(d)(3) program is substantially
similar to the 221(d)(4) program.

               ii)  Many of the tenants in HUD insured projects receive some
form of rental assistance payments, primarily through the Section 8 Housing
Assistance Payments Program (the "Section 8 Program").

                                      -9-
<PAGE>


Apartment Complexes not receiving assistance through the Section 8 Program
("Section 8 Payments") will generally have limitations on the amounts of rent
which may be charged. One requirement imposed by HUD regulations effective for
apartment complexes initially approved for Section 8 payments on or after
November 5, 1979, is to limit the amount of the owner's annual cash
distributions from operations to 10% of the owner's equity investment in an
Apartment Complex if the apartment complex is intended for occupancy by
families, and to 6% of the owner's equity investment in an Apartment Complex
intended for occupancy by elderly persons. The owner's equity investment in the
apartment complex is 10% of the project's replacement cost as determined by HUD.
HUD released the American Community Partnerships Act (the "ACPA"). The ACPA is
HUD's blueprint for providing for the nation's housing needs in an era of static
or decreasing budget authority. Two key proposals in the ACPA that could affect
the Local Partnerships are: a discontinuation of project-based Section 8 subsidy
payments and an attendant reduction in debt on properties that were supported by
the Section 8 payments. The ACPA calls for a transition during which the
project-based Section 8 would be converted to a tenant-based voucher system. Any
FHA insured debt would then be "marked-to-market", that is revalued in light of
the reduced income stream, if any.

               iii) Section 236 Program. As well as providing mortgage
insurance, the Section 236 program also provides an interest credit subsidy
which reduces the cost of debt service on a project mortgage, thereby enabling
the owner to charge the tenants lower rents for their apartments. Interest
credit subsidy payments are made monthly by HUD directly to the mortgagee of the
Project. Each payment is in an amount equal to the difference between (i) the
monthly interest payment required by the terms of the mortgage to pay principal,
interest and the annual mortgage insurance premium and (ii) the monthly payment
which would have been required for principal and interest if the mortgage loan
bore interest at the rate of 1%. These payments are credited against the amounts
otherwise due from the owner of the Project, who makes monthly payments of the
balance.

          (b)  State of jurisdiction is the same state as the location unless
               otherwise indicated.

          (c)  State of jurisdiction is Alabama.

          (d)  State of jurisdiction is Michigan.

          (e)  The property and the related assets and liabilities were sold
during the fiscal year ended February 28, 1997 (see Note 10 in Item 8. Financial
Statements and Supplemental Data).

          (f)  The Partnership's Local Partnership Interest in this Local
Partnership was sold during the fiscal year ended February 28, 1997 (see Note 10
in Item 8. Financial Statements and Supplemental Data).

          (g)  Subject to contract of sale (see Item 7. below).

          (h)  On April 25, 1997, the Partnership's Local Partnership Interest
in Los Caballeros was sold to the general partners of Los Caballeros for
$100,000 (see Item 7. below).

          All leases are generally for periods not greater than one to two years
and no tenant occupies more than 10% of the rentable square footage.

          Commercial tenants (to which average rental per square foot applies)
comprise less than 5% of the rental revenues of the Partnership. Rents for the
residential units are determined annually by HUD and reflect increases in
consumer price indices in various geographic areas.

          Management of the Local Partnership continuously reviews the physical
state of the properties and budgets improvements when required which are
generally funded from cash flow from operations or release of replacement
reserve escrows. No improvements are expected to require additional financing.

          See Item 1, Business, above for the general competitive conditions to
which the properties described above are subject.

                                      -10-
<PAGE>


          Real estate taxes are calculated using rates and assessed valuations
determined by the township or city in which the property is located. Such taxes
have approximated 1% of the aggregate cost of the properties as shown in
Schedule III to the financial statements included herein.


Item 3.   Legal Proceedings.

          The Partnership is a Plaintiff in the Oklahoma County District Court
in Oklahoma against Jerry L. Womack and Womack Property Management, Inc., an
Oklahoma corporation. In this action entitled Shearson + Related Housing
Properties Limited Partnership and Shearson/Related Housing Associates Limited
Partnership v. Jerry L. Womack and Womack Property Management, Inc., the
Partnership seeks judgment for damages caused by the individual defendant's
resignation as general partner of Rolling Meadows of Chickasha, Ltd. (Rolling
Meadows), of which the Partnership is a limited partner, and by the corporate
defendant's mismanagement of the apartment project owned by Rolling Meadows. The
individual defendant has counterclaimed against the Plaintiffs, alleging that
they breached an agreement to advance funds to Rolling Meadows sufficient to pay
operating losses on the property, thereby damaging such defendant in an amount
exceeding $10,000. The corporate defendant has counterclaimed against the
Plaintiffs for unpaid management fees and expenses approximating $6,000. Both
counterclaims seek costs and attorneys' fees.

          Discovery is continuing in the action. The Plaintiffs are responding
vigorously to the counterclaims and intend to continue doing so. While it is
impossible to predict with certainty, counsel believes the counterclaims have no
substantial merit and that an outcome unfavorable to the Partnership is
unlikely.

          The U.S. Department of Housing and Urban Development ("HUD"), the
holder of the mortgage on the Project, notified Rolling Meadows that such
mortgage was in default and that HUD intended to commence foreclosure
proceedings. On August 15, 1996, the Partnership's limited partnership interest
in Chickasha was sold to a third party for $75,000, resulting in no net proceeds
to the Partnership after expenses of the sale (see Item 7. below).

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

          No matters were submitted to a vote of security holders during the
fiscal year covered by this report through the solicitation of proxies or
otherwise.


          PART II

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

          At February 29, 1997, the Partnership had issued and outstanding
10,038 Limited Partnership Interests, of which 5,019 are Initial Limited
Partnership Interests and 5,019 are Additional Limited Partnership Interests,
each representing a $5,000 capital contribution per unit to the Partnership, for
aggregate Gross Proceeds of $50,190,000. Additional Limited Partnership
Interests are the Limited Partnership Interests acquired upon the exercise of
Warrants or sold by the Partnership upon the non-exercise of the Warrants. The
Warrants are rights granted pursuant to the Partnership Agreement as part of the
purchase of an Initial Limited Partner Interest. No further issuance of Initial
Limited Partnership Interests or Additional Limited Partnership Interests is
anticipated and all Warrants have expired. As of February 29, 1997, the
Partnership had 4,297 registered holders of Limited Partnership Interests.

          Limited Partnership Interests are not traded in any organized market.
It is not anticipated that any public market will develop for the purchase and
sale of any Limited Partnership Interests. Limited Partnership Interests may be
transferred only if certain requirements are satisfied, including that in the
opinion of counsel to the Partnership such transfer would not cause a
termination of the Partnership under Section 708 of the Internal Revenue Code
and would not violate any federal or state securities laws.

                                      -11-
<PAGE>


          In March 1997, a distribution of approximately $1,100,000 and $11,000
was paid to the limited partners and General Partners, respectively, from net
proceeds from the sale of properties (see Item 7, below). With the exception of
this distirubtion, the Partnership has made no distributions to its Limited
Partners from its inception on April 28, 1983 to February 28, 1997. There are no
material restrictions upon the Partnership's present or future ability to make
distributions in accordance with the provisions of the Partnership's Amended and
Restated Agreement and Certificate of Limited Partnership (the "Partnership
Agreement"). However, the Partnership has invested in Local Partnerships owning
Apartment Complexes which receive Government Assistance under programs which in
many instances restrict the cash return available to owners. See Item 8, Note
12(g). The Partnership does not anticipate providing cash distributions to its
Limited Partners in circumstances other than refinancing or sale.

          There has recently been an increasing number of requests for the list
of holders of Limited Partnership Interests in limited partnerships such as the
Partnership. Often these requests are made by a person who, only a short time
before making the request, acquired merely a small number of Limited Partnership
Interests in the partnership and seeks the list for an improper purpose, a
purpose that is not in the best interest of the partnership or is harmful to the
partnership. In order to best serve and protect the interests of the Partnership
and all of its investors, the general partners of the Partnership have adopted a
policy with respect to requests for the Partnership's list of holders of Limited
Partnership Interests. This policy is intended to protect investors from
unsolicited and coercive offers to acquire the interests of holders of Limited
Partnership Interests and does not limit any other rights the general partners
may have under the Partnership Agreement or applicable law.

                                      -12-
<PAGE>


Item 6.   Selected Financial Data.

          The information set forth below presents selected financial data of
the Partnership. Additional financial information is set forth in the audited
financial statements in Item 8 hereof.

OPERATIONS
----------
<TABLE>
<CAPTION>
                                                                               Year Ended
                                       --------------------------------------------------------------------------------------------
                                       February 28,        February 29,        February 28,        February 28,        February 28,
                                           1997                1996                1995                1994                1993   
                                       ------------        ------------        ------------        ------------        ------------
<S>                                    <C>                 <C>                 <C>                 <C>                 <C>         
Revenues                               $ 37,586,529        $ 30,593,556        $ 29,701,842        $ 29,030,972        $ 28,148,386
Operating expenses                       44,453,062          38,678,297          38,217,539          37,934,050          37,329,485
                                       ------------        ------------        ------------        ------------        ------------
Loss before minority
   interest and extra-
   ordinary item                         (6,866,533)         (8,084,744)         (8,515,697)         (8,903,078)         (9,181,099)
Minority interest in
   (income) loss of
   subsidiaries                             (18,466)              1,752                 481               2,771                 711
                                       ------------        ------------        ------------        ------------        ------------
Loss before extra-
   ordinary item                         (6,884,999)         (8,082,989)         (8,515,216)         (8,900,307)         (9,180,388)
Extraordinary item-
  forgiveness of
   indebtedness                           5,069,484                   0                   0                   0                   0
                                       ------------        ------------        ------------        ------------        ------------

Net loss                               $ (1,815,515)       $ (8,082,989)       $ (8,515,216)       $ (8,900,307)       $ (9,180,388)
                                       ============        ============        ============        ============        ============


Loss before extra-
   ordinary item per
   limited partnership
   unit                                $       (679)       $       (797)       $       (840)       $       (878)       $       (905)
Extraordinary item per
   limited partnership
   unit                                         500                   0                   0                   0                   0
                                       ------------        ------------        ------------        ------------        ------------

Net loss per limited
   partnership unit                    $       (179)       $       (797)       $       (840)       $       (878)       $       (905)
                                       ============        ============        ============        ============        ============


FINANCIAL POSITION
------------------
                                                                               Year Ended
                                       --------------------------------------------------------------------------------------------
                                       February 28,        February 29,        February 28,        February 28,        February 28,
                                           1997                1996                1995                1994                1993   
                                       ------------        ------------        ------------        ------------        ------------

Total assets                           $110,362,021        $126,569,652        $131,246,707        $136,066,706        $141,241,533
                                       ============        ============        ============        ============        ============

Long-term obligations                  $184,080,536        $195,424,384        $192,369,107        $188,963,924        $185,745,618
                                       ============        ============        ============        ============        ============

Total liabilities                      $193,616,657        $206,901,246        $203,484,636        $199,784,883        $196,046,862
                                       ============        ============        ============        ============        ============

Minority interest                      $     80,374        $     76,347        $     87,023        $     91,559        $    104,100
                                       ============        ============        ============        ============        ============
</TABLE>

                                      -13-
<PAGE>


          During the years ended February 28, 1993 through 1996, total assets
decreased primarily due to depreciation, partially offset by net additions to
property and equipment. During the same periods, long-term obligations and total
liabilities increased primarily due to accruals of interest on Purchase Money
Notes, partially offset by payments equal to 60% of the cash flow distributions
from the underlying properties. During the year ended February 28, 1997, total
assets decreased primarily due to the sale of properties (see Note 10),
depreciation and a provision for the impairment of assets, partially offset by
an increase in cash and cash equivalents resulting from net proceeds from the
sales and net additions to property and equipment. Long-term obligations and
total liabilities decreased for the year ended February 28, 1997 primarily due
to the repayment of and forgiveness of indebtedness on Purchase Money Notes,
mortgage notes payable and amounts due to selling partners as a result of the
sale of underlying properties, partially offset by accruals of interest on
Purchase Money Notes.

                                      -14-
<PAGE>


Item 7.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations.

Liquidity and Capital Resources
-------------------------------

          The Partnership's source of funds are (i) cash distributions from
operations of the Local Partnerships in which the Partnership has invested, (ii)
interest earned on funds, and (iii) cash in working capital reserves. All these
sources of funds are available to meet the obligations of the Partnership.

          The Partnership's capital has been invested primarily in forty-four
Local Partnerships. As of December 1984, the Partnership had completed its cash
investment of approximately $36,638,000 (including expenses) in the Local
Partnerships. On June 3, 1996 and September 17, 1996 the properties and the
related assets and liabilities owned by two Local Partnerships were sold to
third parties and on August 15, 1996 and on April 25, 1997 the Partnership's
Local Partnership Interest in two other Local Partnerships were sold to a third
party and the Local Partnership' s general partners, respectively (see below).

          The Partnership had a working capital reserve of approximately
$1,211,000 (which does not include approximately $1,112,000 of net proceeds
from sale of properties which was distirbuted to limited partners and General
Partners in March 1997) and $308,000 at February 28, 1997 and February 29, 1996,
respectively, of which $202,000 and $255,000 is restricted to secure an
overdraft in Town and Country's bank account and to secure operating credit
lines at seven other Local Partnerships. The working capital reserve is
temporarily invested in bank certificates of deposits or money market accounts
which can be easily liquidated to meet obligations as they arise. The General
Partners believe that the Partnership's reserves, net proceeds from future sales
and future cash flow distributions will be adequate for its operating needs, and
plans to continue investing available reserves in short-term investments. In
March 1997, a distribution of approximately $1,100,000 and $11,000 was paid to
the limited partners and General Partners, respectively, from net proceeds from
the sale of properties.

          During the fiscal year ended February 28, 1997, cash and cash
equivalents of the Partnership and its 44 consolidated Local Partnerships
(including the activity through the dates of sale for the three Local
Partnerships above) increased approximately $1,704,260. This increase was
primarily due to cash flow from operations ($2,054,000) and proceeds from sale
of properties ($13,535,000), which exceeded principal payments of mortgage notes
and purchase money notes payable ($10,450,000), increase in mortgage escrow
deposits ($301,000), payments of interest on purchase money notes ($1,796,000),
costs paid relating to sale of properties (249,000) and aquisitions of property
and equipment ($1,128,000).

          Nonrecourse Purchase Money Notes in the original amount of $61,029,115
were issued to the selling partners of the subsidiary partnerships as part of
the purchase price, and are secured only by the Partnership's interest in the
subsidiary partnership to which the note relates. On June 3, 1996 and September
17, 1996, the properties and the related assets and liabilities owned by two
subsidiary partnerships were sold to third parties on August 15, 1996 and on
April 25, 1997 the Partnership's Local Partnership Interest in two other Local
Partnerships were sold to a third party and the Local Partnership' s general
partners, respectively. A portion of the net proceeds were used to settle the
associated purchase money notes and accrued interest thereon (see below).

          The Purchase Money Notes, which provide for simple interest at the
rate of 9% per annum through maturity, which will occur during the period July
1998 to December 1999, will not be in default during the basic term (generally
fifteen years) if not less than 60% of the cash flow actually distributed to the
Partnership by the corresponding subsidiary partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. Any interest not paid currently accrues, without further
interest thereon, through the due date of the note. All accrued and unpaid
interest must be paid on the due date of the note, unless the Partnership
exercises an extension right. Continued accrual of such interest without payment
would impact the effective rate of the notes, specifically by reducing the
current effective interest rate of 9%. The exact effect is not determinable
inasmuch as it is dependent on the actual future interest payments and ultimate
repayment dates of the notes. Unpaid interest of $64,899,777 and $62,437,367 at
February 28, 1997 and February 29, 1996, respectively, has been accrued and is
included in the caption due to selling partners. In general, the interest on and
the principal of each Purchase Money Note is also payable to the extent of the
Partnership's actual receipt of proceeds from the sale or

                                      -15-
<PAGE>


refinancing of the Apartment Complex, or in some cases the Local Partnership
Interest to which the Purchase Money Note relates.

          The Partnership may elect, upon the payment of an extension fee of 
1 1/2% per annum of the outstanding principal amount, to extend the term of the
Purchase Money Note for up to five additional years. The Partnership may also
defer payment of any accrued and unpaid interest until the due date of the note.
The Partnership expects that upon maturity it will be required to refinance or
sell its investments in the Local Partnerships in order to pay the Purchase
Money Notes and accrued interest thereon. Based on the historical operating
results of the Local Partnerships and the current economic conditions including
changes in tax laws, it is uncertain as to whether the proceeds from such sales
will be sufficient to meet the outstanding balances. Management is working with
the selling partners to restructure and/or refinance the notes. The Purchase
Money Notes are without personal recourse to either the Partnership or any of
its partners and the sellers' recourse, in the event of non-payment, would be to
foreclose on the Partnership's interests in the respective local partnerships.

          Cash flow distributions aggregating $504,167, $874,592 and $387,614
were made to the Partnership in the 1996, 1995 and 1994 Fiscal Years which does
not include $43,287 and $9,899 escrow monies held for the Preservation Acts
program in the 1996 and 1994 Fiscal Years. Of such distributions, $302,500,
$487,931 and $252,670, respectively, was used to pay interest on the purchase
money notes (which includes $20,101 released to the Partnership from Low-Income
Housing Preservation and Resident Homeownership Act of 1990 (LIHPRHA) monies in
the 1994 Fiscal Year). Distribution of proceeds from sales aggregating
$9,202,571 were made to the Partnership in the 1996 Fiscal Year of which
$3,300,000 and $1,493,293, respectively, was used to pay principal and interest
on the Purchase Money Notes.

          The local partnerships which receive government assistance are subject
to low-income use restrictions which limit the owners ability to sell or
refinance the properties. In order to maintain the existing inventory of
affordable housing, Congress passed a series of related acts including the
Emergency Low Income Preservation Act of 1987, the Low-Income Housing
Preservation and Resident Homeownership Act of 1990 (together the "Preservation
Acts") and the Housing Opportunity Program Extension Act of 1996 (the "1996
Act"). In exchange for maintaining the aforementioned use restrictions, the
Preservation Acts provide financial incentives for owners of government assisted
properties. The 1996 Act provides financial assistance by funding the sale of
such properties to not-for-profit owners and also restores the owners ability to
prepay their HUD mortgage and convert the property to condominiums or
market-rate rental housing. Local general partners have filed for incentives
under the Preservation Acts or the 1996 Act for the following local
partnerships: San Diego - Logan Square Gardens Company, Albuquerque - Lafayette
Square Apts. Ltd., Westgate Associates Limited, Riverside Gardens, a Limited
Partnership, Pacific Palms, a Limited Partnership, Canton Commons Associates,
Rosewood Manor Associates, Bethany Glen Associates and South Munjoy Associates,
Ltd. The South Munjoy Associates, Ltd. property is under contract for sale to a
private owner. The local general partners of the other properties are either
negotiating purchase and sale contracts or exploring their alternatives under
the 1996 Act.

          Funding for the 1996 Act is subject to appropriations by Congress.
Congress funded $624 million in fiscal year 1996 for the preservation of
housing. Congress has funded approximately $325 million for preservation for
1997 fiscal year. Moreover only $175 million of the 1997 allocation is available
to fund preservation, while the balance is set aside for rental assistance
payments and for special projects. There is a backlog of properties having a
preservation value in excess of $900 million. Accordingly, no assurance can be
given that any of the local partnerships will obtain such incentives.

          HUD previously released the American Community Partnerships Act (the
"ACPA"). The ACPA is HUD's blueprint for providing for the nation's housing
needs in an era of static or decreasing budget authority. Two key proposals in
the ACPA that could affect the Local Partnerships are: a discontinuation of
project-based Section 8 subsidy payments, and an attendant reduction in debt on
properties that were supported by the Section 8 payments. The ACPA calls for a
transition during which the project-based Section 8 payments would be converted
to a tenant-based voucher system. Any FHA insured debt would then be
"marked-to-market" that is revalued in light of the reduced income stream.

                                      -16-
<PAGE>


          Several industry sources have commented to HUD and Congress that in
the event the ACPA were fully enacted in its present form, the reduction in
mortgage indebtedness would be considered taxable income to owners such as the
limited partners in the Partnership. Legislative relief has been proposed to
exempt "marked-to-market" debt from cancellation of indebtedness income
treatment. At present, there are several bills pending in Congeress to address
this tax relief issue. Additionally, in the interim, HUD has agreed to annual
extensions of any expiring project-based Section 8 contracts, but there is no
guarantee that such extensions will be available in the future.

          The general partners of one subsidiary partnership, Westgate
Associates, Limited ("Westgate"), have signed an option agreement to sell the
project to the Vermont Housing Finance Agency, subject to HUD approval and other
contingencies, on or before December 31, 1998. The Partnership's investment in
Westgate was approximately $808,000 at February 28, 1997. Westgate's assets
constituted approximately 2% of the consolidated total assets at February 28,
1997.

          On March 14, 1996, South Munjoy Associates, Limited entered into a
purchase and sale of real estate agreement with Mainland Development Company of
Portland, Maine to sell the project for a sales price of approximately
$3,000,000, subject to HUD approval and other contingencies. The net proceeds
will be used to satisfy the existing mortgage debt of approximately $800,000.
The balance of the proceeds will be used to settle the purchase money notes and
accrued interest, with the balance, if any, available for general partnership
purposes.

          On June 3, 1996, the property and the related assets and liabilities
of Roper Mountain Apartments Ltd. ("Roper Mountain") were sold to a third party
for $4,735,000, resulting in a gain in the amount of $1,871,046. The Partnership
used $1,320,500 of the net proceeds to settle the associated Purchase Money Note
and accrued interest which had a total outstanding balance of $2,304,994,
resulting in forgiveness of indebtedness income of $984,494.

          Rolling Meadows of Chickasha ("Chickasha"), a subsidiary partnership,
had previously filed a petition under Chapter 11 of the Bankruptcy Code
("Chapter 11") which had been dismissed. HUD notified Chickasha that it intended
to commence foreclosure proceedings. Chickasha was in default and under HUD
control as a mortgagee in possession. On August 15, 1996, the Partnership's
Local Partnership Interest in Chickasha was sold to a third party for $75,000,
resulting in a gain in the amount of $472,720 and forgiveness of indebtedness
income of $1,768,800 as a result of forgiveness of the mortgage note payable to
HUD and accrued interest thereon. No proceeds were used to settle the associated
purchase money note and accrued interest which had a total outstanding balance
of $1,723,095, resulting in additional forgiveness of indebtedness income of
$1,723,095. Therefore the entire forgiveness of indebtedness income realized by
the Partnership from this transaction is $3,491,895.

          On September 17, 1996, the property and the related assets and
liabilities of Oakland-Keller Plaza ("Keller Plaza") were sold to a third party
for $8,800,000, resulting in a gain in the amount of $4,937,099. The Partnership
used $3,472,792 of the net proceeds to settle the associated purchase money note
and accrued interest which had a total outstanding balance of $4,065,887,
resulting in forgiveness of indebtedness income of $593,095.

          During 1995, Los Caballeros Apartments ("Los Caballeros") received an
unsatisfactory physical inspection report issued by the U.S. Department of
Housing and Urban Development ("HUD"). On December 5, 1996, HUD rendered formal
notification to Los Caballeros that it has been declared in default of its
contractual obligations with HUD as a result of the physical deficiencies cited.
On February 13, 1997, Republic National Bank formally notified Los Caballeros
that it has been declared in default under their mortgage as a consequence of
the property's default under the regulatory agreement. Additionally, Los
Caballeros is in default under the three Housing Assistance Payments contracts.
On April 25, 1997, the Partnership's Local Partnership Interest in Los
Caballeros was sold to the general partners of Los Cabelleros for $100,000 (see
Results of Operations of Certain Local Partnerships below).

                                      -17-
<PAGE>


          For a discussion of contingencies affecting certain Local
Partnerships, see Results of Operations of Certain Local Partnerships below.
Since the maximum loss the Partnership would be liable for is its net investment
in the respective Local Partnerships, the resolution of the existing
contingencies is not anticipated to impact future results of operations,
liquidity or financial condition in a material way.

          Except as described above, management is not aware of any trends or
events, commitments or uncertainties which have not otherwise been disclosed
that will or are likely to impact liquidity in a material way. Management
believes the only impact would be from laws that have not yet been adopted. The
portfolio is diversified by the location of the properties around the United
States so that if one area of the country is experiencing downturns in the
economy, the remaining properties in the portfolio may be experiencing upswings.
However, the geographic diversifications of the portfolio may not protect
against a general downturn in the national economy.

Results of Operations
---------------------

          In March 1995, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Asset and for Long-Lived Assets to Be Disposed
Of". Under SFAS No. 121, the Partnership is required to review long-lived assets
and certain identifiable intangibles for impairment whenever events or changes
in circumstances indicate that the book value of an asset may not be
recoverable. An impairment loss should be recognized whenever the review
demonstrates that the book value of a long-lived asset is not recoverable.
Effective March 1, 1996, the Partnership adopted SFAS No. 121, consistent with
the required adoption period.

          Property and equipment are carried at the lower of depreciated cost or
estimated amounts recoverable through future operations and ultimate disposition
of the property. Cost includes the purchase price, acquisition fees and
expenses, and any other costs incurred in acquiring the properties. A provision
for loss on impairment of assets is recorded when estimated amounts recoverable
through future operations and sale of the property on an undiscounted basis are
below depreciated cost. Property investments themselves are reduced to estimated
fair value (generally using discounted cash flows) when the property is
considered to be impaired and the depreciated cost exceeds estimated fair value.
Through February 28, 1997, the Partnership has recorded approximately $5,166,000
as a provision for loss on impairment of assets.

          The following is a summary of the results of operations of the
Partnership for the years ended February 28, 1997, February 29, 1996 and
February 28, 1995 (the 1996, 1995, and 1994 Fiscal Years, respectively).

          The results of operations of the Partnership, as well as the Local
Partnerships, excluding gain on sale of property and forgiveness of indebtedness
income, remained fairly constant during the 1996, 1995, and 1994 Fiscal Years.
Contributing to the relatively stable operations at the Local Partnerships is
the fact that a large portion of the Local Partnerships are operating under
Government Assistance Programs which provide for rental subsidies and/or
reductions of mortgage interest payments under HUD Section 8 and Section 236
Programs. Currently, thirteen of the forty-one Local Partnerships are receiving
rental subsidies and twenty-two have mortgages with interest subsidies, which
reduce the effective interest rates to a range of 1% to 2% per annum.

          The Partnership's primary source of income continues to be its portion
of the Local Partnership's operating results. The majority of Local Partnership
income continues to be in the form of rental income with the corresponding
expenses being divided among operations, depreciation, and mortgage interest. In
addition, the Partnership incurred interest expense relating to the Purchase
Money Notes issued when the Local Partnerships Interests were acquired.

          The net loss for the 1996, 1995 and 1994 Fiscal Years aggregated
$1,815,515, $8,082,989 and $8,515,216, respectively. These represent losses per
Limited Partnership unit of $179, $797 and $840, respectively.

                                      -18-
<PAGE>


          Excluding 1996, in which the Partnership generated passive income, the
Partnership has met the investment objective of generating tax benefits in the
form of passive losses (which Limited Partners may use to offset passive income
from other sources ). This passive income may be offset by the carry forward of
any unused passive losses from prior years; however, to date the Partnership has
been unable to provide cash distributions to the Limited Partners other than
from the proceeds of sale of underlying properties.

1996 vs. 1995
-------------

          Rental income decreased approximately 1% during the 1996 Fiscal Year
as compared to 1995. Excluding Roper Mountain and Keller Plaza, which sold their
properties on June 3, 1996 and September 17, 1996, and Chickasha, in which the
Partnership's interest was sold on August 15, 1996, rental income increased
approximately 2% during the 1996 Fiscal Year as compared to 1995 primarily due
to rental rate increases.

          Other income increased approximately $67,000 during the 1996 Fiscal
Year as compared to 1995. Excluding Roper Mountain, Keller Plaza and Chickasha,
such income increased approximately $93,000 primarily due to the receipt of
proceeds from a fire insurance recovery claim by one Local Partnership, and an
increase in interest income due to higher cash and cash equivalent balances
resulting from net proceeds from the sale of the properties owned by Roper
Mountain and Keller Plaza.

          A gain on sale of properties and forgiveness of indebtedness income
was recorded in the 1996 Fiscal Year (see Note 10 and 11, respectively, in Item
8. Financial Statements and Supplemental Data).

          Total expenses excluding Roper Mountain, Keller Plaza and Chickasha,
selling and renting expenses and administrative and management-related parties
remained fairly consistent with an increase of approximately 2% for the 1996
Fiscal Year as compared to 1995.

          Administrative and management-related parties increased approximately
$875,000 for the 1996 Fiscal Year as compared to 1995 primarily due to an
increase in partnership management fees.

          Selling and renting expenses increased approximately $35,000 for the
1996 Fiscal Year as compared to 1995. Excluding Roper Mountain, Keller Plaza and
Chickasha, such expenses increased approximately $46,000 primarily due to
increases in advertising at three Local Partnerships and small increases in such
expenses at three other Local Partnerships.

          A provision for impairment of assets was recorded in the 1996 Fiscal
Year (see Note 4 in Item 8. Financial Statements and Supplemental Data).

1995 vs 1994
------------

          Rental income increased approximately 3% during the 1995 Fiscal Year
as compared to 1994 primarily due to rental rate increases.

          Other income increased approximately $97,000 for the 1995 Fiscal Year
as compared to 1994 primarily due to increases in interest income at five Local
Partnerships as well as a real estate tax abatement at another Local
Partnership.

          Total expenses remained fairly consistent with an increase of
approximately 1% for the 1995 Fiscal Year as compared to 1994.

                                      -19-
<PAGE>


Results of Operations of Certain Local Partnerships
---------------------------------------------------

Caddo Parish-Villas South, Ltd.
-------------------------------

          Caddo Parish-Villas South, Ltd. ("Villas South") continues to be in
default of its original mortgage agreement. Until November 1995, the project
operated under a provisional workout agreement with HUD. During November 1995,
the mortgage note was sold to a conventional mortgagee. These items raise
substantial doubt about Villas South's ability to continue as a going concern.
The auditors for Villas South modified their reports for the 1995 and 1994
Fiscal Years due to the uncertainty of the ability of Villas South to continue
in existence. Villas South is in the process of trying to renegotiate the terms
of the notes with the new mortgage holders, but there can be no assurance that
the renegotiation will be successful. Villas South filed for protection under
Chapter 11 of the United States Bankruptcy Code on November 12, 1996 and the
equivalent of a receiver has been appointed. In the interim, Villas South is
continuing to make payments to the new mortgage holder under the provisions of
the previous workout agreement with HUD. The Partnership's investment in Villas
South was approximately $373,000 and $524,000 at February 28, 1997 and February
29, 1996, respectively, and the minority interest balance was zero at each date.
Villas South's net loss after minority interest amounted to approximately
$151,000, $151,000, and $182,000 for the 1996, 1995 and 1994 Fiscal Years,
respectively.

Oklahoma City-Town and Country Village Apartments, Ltd.
-------------------------------------------------------

          Oklahoma City-Town and Country Village Apartments, Ltd. ("Town and
Country") continues to be in default of its original mortgage agreement. Until
November 1995, the project operated under a provisional workout agreement with
HUD. On November 1, 1995, the mortgage note was sold to a conventional
mortgagee. No payments are currently being made on this loan. At December 31,
1996, total liabilities exceeded total assets by approximately $4,500,000. These
items raise substantial doubt about Town and Country's ability to continue as a
going concern. The auditors for Town and Country modified their reports for the
1996, 1995, and 1994 Fiscal Years due to the uncertainty of the ability of Town
and Country to continue in existence. Town and Country is in the process of
trying to renegotiate the terms of the notes with the new mortgage holders, but
there can be no assurance that the renegotiation will be successful. The
Partnership's investment in Town & Country was reduced to zero by current and
prior years' losses and $215,000 at February 28, 1997 and February 29,1996,
respectively, and the minority interest balance was zero at each date. Town &
Country's net loss after minority interest amounted to approximately $4,741,000,
$350,000 and $396,000 for the 1996, 1995 and 1994 Fiscal Years, respectively.

Los Caballeros Apartments
-------------------------

          During 1995, Los Caballeros Apartments ("Los Caballeros") received an
unsatisfactory physical inspection report issued by HUD. Los Caballeros had
submitted to HUD a Management Improvement Plan (MIO Plan) with an accompanying
estimate of restorations and improvements pursuant to the inspection report. A
request for funding from HUD accompanied the MIO Plan. The request was not
granted, and thus Los Caballeros was not able to cure the deficiencies cited in
the inspection report.

          On December 5, 1996, HUD rendered formal notification to Los
Caballeros that it has been declared in default of its contractual obligations
with HUD as a result of the physical deficiencies cited. On February 13, 1997,
Republic National Bank formally notified Los Caballeros that it has been
declared in default under their mortgage as a consequence of the property's
default under the regulatory agreement. Additionally, Los Caballeros is in
default under the three Housing Assistance Payments contracts.

          The auditors for Los Caballeros modified their report for the 1996 and
1995 Fiscal Years due to the uncertainty of the ability of Los Caballeros to
continue in existence. Management of Los Caballeros is currently seeking to
refinance the original mortgage with a non-subsidy mortgage. An allowance
provision for impairment of fixed assets has been recognized in Los Caballeros'
1996 financial statements in the amount of $789,102. This amount represents
revaluation of the fixed assets to the mortgage debt amount.

                                      -20-
<PAGE>


          The formal default notification received on February 13, 1997 from
Republic National Bank, as well as the loss of the Housing Assistance Payment
contracts, raises a substantial doubt about the entity's ability to continue as
a going concern.

          An allowance provision for impairment of fixed assets has been
recognized in Los Caballeros' 1996 financial statement . Beyond this provision,
the financial statements of Los Cabelleros do not include any additional
adjustments that could be necessary in the event Los Caballeros is unable to
continue as a going concern.

          The Partnership's investment in Los Caballeros was reduced to zero by
current and prior years' losses and $539,000 at February 28, 1997 and February
29, 1996, respectively, and the minority interest balance was zero at each date.
Los Caballeros net loss after minority interest amounted to approximately
$916,000, $157,000 and $99,000 for the 1996, 1995 and 1994 Fiscal Years,
respectively.

          On April 25, 1997, the Partnership's Local Partnership Interest in Los
Caballeros was sold to the general partners of Los Caballeros for $100,000,
resulting in a gain in the amount of approximately $500,000. No proceeds were
used to settle the associated Purchase Money Note and accrued interest which had
a total outstanding balance of $3,187,850, resulting in forgiveness of
indebtedness income. For tax purposes, the entire gain to be realized by the
Partnership is anticipated to be approximately $5,000,000.

Other
-----

          The Local General Partner of Grandview-Blue Ridge Manor, Ltd.,
Oakland-Keller Plaza, Country, Ltd., Stephenville-Tarleton Arms Apartments,
Ltd., El Paso-Gateway East, Ltd., Breckenridge-Chaparral Apartments II, Ltd.,
Corpus Christi-Oso Bay Apartments, Ltd., Oklahoma City-Town and Country Village
Apartments, Ltd., Ardmore-Rolling Meadows of Ardmore, Ltd., Caddo Parish-Villas
South, Ltd., Albuquerque-Lafayette Square Apartments, Ltd. and San Diego-Loan
Square Gardens Company passed away. The coexecutors of his estate are currently
acting on his behalf until a successor can be named.

          The Partnership's investment, as a limited partner in the Local
Partnerships, is subject to the risks incident to the potential losses arising
from management and ownership of improved real estate. The Partnership's
investments could also be adversely affected by poor economic conditions
generally, which could increase vacancy levels, rental payment defaults, and
increased operating expenses, any or all of which could threaten the financial
viability of one or more of the Local Partnerships.

          There are also substantial risks associated with the operation of
Apartment Complexes receiving Government Assistance. These include governmental
regulations concerning tenant eligibility, which may make it more difficult to
rent apartments in the complexes; difficulties in obtaining government approval
for rent increases; limitations on the percentage of income which low and
moderate-income tenants may pay as rent; the possibility that Congress may not
appropriate funds to enable HUD to make the rental assistance payments it has
contracted to make; and that when the rental assistance contracts expire there
may not be market demand for apartments at full market rents in a Local
Partnership's Apartment Complex.

          The Local Partnerships are impacted by inflation in several ways.
Inflation allows for increases in rental rates generally to reflect the impact
of higher operating and replacement costs. Inflation generally does not impact
the fixed long-term financing under which real property investments were
purchased. Inflation also affects the Local Partnerships adversely by increasing
operating costs, particularly items such as fuel, utilities and labor. However,
continued inflation should allow for appreciated values of the Local
Partnerships' Apartment Complexes over a period of time as rental revenues and
replacement costs continue to increase, the benefit of which may be recognized
at the point in time when the Partnership is required to refinance or sell its
investments in Local Partnerships in order to meet its obligations under the
Purchase Money Notes.

                                      -21-
<PAGE>


          There has recently been an increasing number of requests for the list
of holders of Limited Partnership Interests in limited partnerships such as the
Partnership. Often these requests are made by a person who, only a short time
before making the request, acquired merely a small number of Limited Partnership
Interests in the partnership and seeks the list for an improper purpose, a
purpose that is not in the best interest of the partnership or is harmful to the
partnership. In order to best serve and protect the interests of the Partnership
and all of its investors, the general partners of the Partnership have adopted a
policy with respect to requests for the Partnership's list of holders of Limited
Partnership Interests. This policy is intended to protect investors from
unsolicited and coercive offers to acquire the interests of holders of Limited
Partnership Interests and does not limit any other rights the general partners
may have under the Partnership Agreement or applicable law.

                                      -22-
<PAGE>


Item 8.       Financial Statements and Supplementary Data.

                                                                      Sequential
                                                                         Page
                                                                      ----------
(a) 1.        Financial Statements
              --------------------

              Independent Auditors' Report                                24

              Consolidated Balance Sheets at February 28, 1997           138
                and February 29, 1996

              Consolidated Statements of Operations for the              139
                years ended February 28, 1997, February 29, 1996 
                and February 28, 1995                                    

              Consolidated Statements of Partners' Deficit for the       140
                years ended February 28, 1997, February 29, 1996 
                and February 28, 1995                                    

              Consolidated Statements of Cash Flows for the              141
                years ended February 28, 1997, February 29, 1996 
                and February 28, 1995                                    

              Notes to Consolidated Financial Statements                 143

                                      -23-

<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To the Partners of
Cambridge + Related Housing Properties Limited Partnership and Subsidiaries

We have audited the consolidated balance sheets of Cambridge + Related Housing
Properties Limited Partnership and Subsidiaries as of February 28, 1997 and
February 29, 1996, and the related consolidated statements of operations,
partners' deficit, and cash flows for the years ended February 28, 1997 and
February 29, 1996 and February 28, 1995 (the 1996, 1995 and 1994 Fiscal Years,
respectively). 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 did not audit the financial
statements for 41 (1996 Fiscal Year ) and 38 (1995 and 1994 Fiscal Years)
subsidiary partnerships whose (income) losses constituted ($1,698,893),
$1,883,068 and $2,265,124 of the Partnership's net loss during the 1996, 1995
and 1994 Fiscal Years, respectively, and whose assets constituted 89% (1996
Fiscal Year) and 90% (1995 Fiscal Year) of the Partnership's assets at February
28, 1997 and February 29, 1996, presented in the accompanying consolidated
financial statements. The financial statements for 39 (1996 Fiscal Year) and 37
(1995 and 1994 Fiscal Years), of these subsidiary partnerships were audited by
other auditors whose reports thereon have been furnished to us, and our opinion
expressed herein, insofar as it relates to the amounts included for these
subsidiary partnerships, is based solely upon the reports of the other auditors.
The financial statements of two (1996 Fiscal Year) and one (1995 and 1994 Fiscal
Years) of these subsidiary partnerships were unaudited.

We conducted our audits in accordance with generally accepted auditing
standards. 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, based upon our audits, and the reports of the other auditors,
the accompanying consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Cambridge + Related
Housing Properties Limited Partnership and Subsidiaries at February 28, 1997 and
February 29, 1996, and the results of their operations, and cash flows for the
years ended February 28, 1997, February 29, 1996 and February 28, 1995, in
conformity with generally accepted accounting principles.

As discussed in Note 11(a), four of the subsidiary partnerships are in default
of their mortgage agreements. This raises substantial doubt about these
subsidiary partnerships' abilities to continue as going concerns. The auditors
of two (1996 Fiscal Year), three (1995 Fiscal Year), and two (1994 Fiscal Year)
of these subsidiary partnerships have modified their reports, due to the
uncertainty of the ability of the subsidiary partnerships to continue in
existence. Management's plans regarding these matters are also discussed in Note
11(a). The financial statements for two (1996 Fiscal Year) and one (1995 and
1994 Fiscal Years) of these subsidiary partnerships were not audited. Such
subsidiary partnerships' losses constituted 2%, 13% and 10% of the Partnership's
net loss during the 1996, 1995 and 1994 Fiscal Years and assets constituted 5%
and 8% of the Partnership's total assets at February 28, 1997 and February 29,
1996, respectively. The consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties.

As discussed in Note 7, the principal of and all accrued interest on the
purchase money notes are due at maturity, which will occur, during 1998 to 1999.
The Partnership expects that upon maturity it will be required to refinance or
sell its investments in the subsidiary partnerships in order to pay the purchase
money notes and related interest obligations. It is uncertain as to whether the
proceeds from such sales will be sufficient to meet the outstanding balances of
the purchase money notes and accrued interest thereon. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

TRIEN, ROSENBERG, ROSENBERG, WEINBERG, CIULLO & FAZZARI, L.L.P.


New York, New York
May 30, 1997

                                      -24-
<PAGE>


                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                          Independent Auditor's Report

To the Partners of
CADDO PARISH-VILLAS SOUTH, LTD.
Shreveport, Louisiana
                       

We have audited the accompanying balance sheet of CADDO PARISH-VILLAS SOUTH,
LTD. as of DECEMBER 31, 1995, and the related statements of income, changes in
partners' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the project's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

The project's financial statements do not disclose information about matters
that raise substantial doubt about its ability to continue as a going concern.
The project is not in compliance with the terms of its original mortgage loan
agreement with its lender, but is making payments on the loan as described in
Note C to the financial statements. Management has plans to significantly
improve the physical condition of the property, with the goal of increasing
rental revenues and occupancy. There are, however, significant uncertainties
surrounding its ability to continue its operations and to satisfy its
creditors on a timely basis. In our opinion, disclosure of that information is
required to conform with generally accepted accounting principles.

In our opinion, except for the omission of the information discussed in the
preceding paragraph, the financial statements referred to above present
fairly, in all material respects, the financial position of CADDO
PARISH-VILLAS SOUTH, LTD. as of DECEMBER 31, 1995, and the results of its
operations, changes in partners' equity and cash flows for the year then ended
in conformity with generally accepted accounting principles.

<PAGE>

The accompanying financial statements have been prepared assuming that CADDO
PARISH-VILLAS SOUTH, LTD. will continue as a going concern. The conditions
described in the third paragraph of this report raise substantial doubt about
the project's ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying information included in the
report is presented for the purpose of additional analysis and are not a
required part of the basic financial statements of CADDO PARISH-VILLAS SOUTH,
LTD. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken
as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

BROWDER & ASSOCIATES, P.C.   

January 22, 1996

<PAGE>
                   [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
CADDO PARISH-VILLAS SOUTH, LTD.
Shreveport, Louisiana


                                                     HUD Field Office Director
                                                         SHREVEPORT, LOUISIANA



We have audited the accompanying balance sheet of CADDO PARISH-VILLAS SOUTH,
LTD., Project No. 059-35085-PM-SHM, as of DECEMBER 31, 1994, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CADDO PARISH-VILLAS SOUTH,
LTD. as of DECEMBER 31, 1994, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that CADDO
PARISH-VILLAS SOUTH, LTD. will continue as a going concern. As discussed in
Note C to the financial statements the project is delinquent on its mortgage as
of DECEMBER 31, 1994. As of February 7, 1995, the project is not in compliance
with the terms of its original loan agreement with its lender, but is in
compliance with the terms of a provisional workout agreement, as more fully
described in Note C to the financial statements. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of CADDO PARISH-VILLAS SOUTH, LTD. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.



/S/ BROWDER & ASSOCIATES, P.C.

BROWDER & ASSOCIATES, P.C.

February 7, 1995
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
OKLAHOMA CITY-TOWN & COUNTRY VILLAGE APARTMENTS, LTD.
Oklahoma City, Oklahoma


We have audited the accompanying balance sheet of OKLAHOMA CITY-TOWN & COUNTRY
VILLAGE APARTMENTS, LTD., Project No. , as of DECEMBER 31, 1996, and the related
statements of income, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of OKLAHOMA CITY-TOWN & COUNTRY
VILLAGE APARTMENTS, LTD. as of DECEMBER 31, 1996, and the results of its
operations, changes in partners' equity and cash flows for the year then ended
in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that OKLAHOMA
CITY-TOWN & COUNTRY VILLAGE APARTMENTS, LTD. will continue as a going concern.
As discussed in Note J to the financial statements the project is not in
compliance with the terms of its original mortgage loan agreement, and has
discontinued making payments on the loan. These conditions raise substantial
doubt about the project's ability to continue as a going concern.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying information included in the report
are presented for the purpose of additional analysis and are not a required part
of the basic financial statements of OKLAHOMA CITY-TOWN & COUNTRY VILLAGE
APARTMENTS, LTD. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                    Federal Employer       
February 13, 1997                                      Identification Number: 
                                                            63-0986156        
                                                       


Audit Principal: E.O. Browder, Jr.

<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
OKLAHOMA CITY-TOWN & COUNTRY VILLAGE APARTMENTS, LTD.
Oklahoma City, Oklahoma


We have audited the accompanying balance sheet of OKLAHOMA CITY-TOWN & COUNTRY
VILLAGE APARTMENTS, LTD., as of December 31, 1995, and the related statements
of income, changes in partners' equity, and cash flows for the year then
ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

The project's financial statements do not disclose information about matters
that raise substantial doubt about its ability to continue as a going concern.
The project is not in compliance with the terms of its original mortgage loan
agreement, but continues to make payments on the loan as described in Note C
to the financial statements. Management has conducted market research and
believes planned changes in marketing strategy can significantly improve
occupancy. Management is also giving serious consideration to restructuring
debt in 1996 by filing for bankruptcy. There are, however, significant
uncertainties surrounding the project's ability to continue its operations and
to satisfy its creditors on a timely basis. In our opinion, disclosure of that
information is required to conform with generally accepted accounting
principles.

<PAGE>

In our opinion, except for the omission of the information discussed in the
preceding paragraph, the financial statements referred to above present
fairly, in all material respects, the financial position of OKLAHOMA CITY-TOWN 
& COUNTRY VILLAGE APARTMENTS, LTD. as of December 31, 1995, and the results of
its operations, changes in partners' equity and cash flows for the year then
ended in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that
OKLAHOMA CITY-TOWN & COUNTRY VILLAGE APARTMENTS, LTD. will continue as a going
concern. The conditions described in the third paragraph of this report raise
substantial doubt about the project's ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of OKLAHOMA CITY-TOWN & COUNTRY VILLAGE
APARTMENTS, LTD. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama
January 22, 1996
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report

To the Partners of
OKLAHOMA CITY-TOWN & COUNTRY VILLAGE APARTMENTS, LTD.
Oklahoma City, Oklahoma

                                                     HUD Field Office Director
                                                       OKLAHOMA CITY, OKLAHOMA

We have audited the accompanying balance sheet of OKLAHOMA CITY-TOWN & COUNTRY
VILLAGE APARTMENTS, LTD., Project No. 117-00193-SHM, as of DECEMBER 31, 1994,
and the related statements of profit and loss, changes in partners' equity, and
cash flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of OKLAHOMA CITY-TOWN & COUNTRY
VILLAGE APARTMENTS, LTD. as of DECEMBER 31, 1994, and the results of its
operations, changes in partners' equity and cash flows for the year then ended
in conformity with generally accepted accounting principles.
<PAGE>

The accompanying financial statements have been prepared assuming that
OKLAHOMA CITY-TOWN & COUNTRY VILLAGE APARTMENTS, LTD. will continue as a going
concern. As discussed in NOTE C to the financial statements the project is
delinquent on its mortgage as of DECEMBER 31, 1994. As of January 31, 1995,
the project is not in compliance with the terms of its original loan agreement
with its lender and is operating under the terms of a provisional workout
agreement, which expires April 30, 1995, as more fully described in NOTE C to
the financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of OKLAHOMA CITY-TOWN & COUNTRY VILLAGE
APARTMENTS, LTD. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.



/S/ BROWDER & ASSOCIATES, P.C.

BROWDER & ASSOCIATES, P.C.


January 31, 1995

<PAGE>
                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]

                          INDEPENDENT AUDITORS' REPORT

To the Partners
New Jersey, Ltd.

     We have audited the accompanying balance sheet of New Jersey, Ltd. as of
December 31, 1996 and the related statements of profit and loss (on HUD Form No.
92410), partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of New Jersey, Ltd., as of
December 31, 1996 and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 19
through 24 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE>


     In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," (the "Guide"), we have also issued
reports dated January 29, 1997, on our consideration of New Jersey, Ltd's
internal control structure and on its compliance with specific requirements
applicable to major and nonmajor HUD programs, affirmative fair housing, and
laws and regulations applicable to the financial statements.

                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Atlanta, Georgia                             Federal Employer
January 29, 1997                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (770) 844-0644
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners
New Jersey, Ltd.


     We have audited the accompanying balance sheet of New Jersey, Ltd. as of
December 31, 1995 and the related statements of profit and loss (on HUD Form
No. 92410), partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.

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

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of New Jersey, Ltd.,
as of December 31, 1995 and the results of its operations, the changes in
partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.

<PAGE>

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
20 through 26 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

     In accordance with Government Auditing Standards, we have also issued
reports dated February 2, 1996 on our consideration of New Jersey, Ltd's
internal control structure and on its compliance with specific requirements
applicable to major and nonmajor HUD programs, affirmative fair housing, and
laws and regulations applicable to the financial statements.


                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Charlotte, North Carolina                    Federal Employer
February 2, 1996                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (704) 332-9100

<PAGE>


                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT

To the Partners
New Jersey, Ltd.


     We have audited the accompanying balance sheet of New Jersey, Ltd. as of
December 31, 1994 and the related statements of profit and loss (on HUD Form
No. 92410), partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.

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

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of New Jersey, Ltd.,
as of December 31, 1994 and the results of its operations, the changes in
partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
17 through 22 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.



                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Charlotte, North Carolina                    Federal Employer
January 20, 1995                               Identification Number:
                                               52-1088612
Audit Principal:  Michael C. Beck
                  (704) 332-9100

<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT


To the Partners
Zeigler Boulevard, Ltd.


     We have audited the accompanying balance sheet of Zeigler Boulevard, Ltd.
as of December 31, 1996, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Zeigler Boulevard,
Ltd., as of December 31, 1996, and the results of its operations, the changes
in partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
19 through 25 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE>

     In accordance with Government Auditing Standards, and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
January 29, 1997 on our consideration of Zeigler Boulevard, Ltd's internal
control structure and on its compliance with specific requirements applicable to
major and nonmajor HUD programs, affirmative fair housing, and laws and
regulations applicable to the financial statements.


                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Atlanta, Georgia                             Federal Employer
January 29, 1997                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (770) 844-0644

<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT


To the Partners
Zeigler Boulevard, Ltd.


     We have audited the accompanying balance sheet of Zeigler Boulevard, Ltd.
as of December 31, 1995, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Zeigler Boulevard,
Ltd., as of December 31, 1995, and the results of its operations, the changes
in partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.
<PAGE>

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
21 through 27 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
 
     In accordance with Government Auditing Standards, we have also issued
reports dated January 31, 1996 on our consideration of Zeigler Boulevard, 
Ltd's internal control structure and on its compliance with specific
requirements applicable to major and nonmajor HUD programs, affirmative fair
housing, and laws and regulations applicable to the financial statements.


                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Charlotte, North Carolina                    Federal Employer
January 31, 1996                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (704) 332-9100


<PAGE>

                   [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT


To the Partners
Zeigler Blvd., Ltd.


     We have audited the accompanying balance sheet of Zeigler Blvd., Ltd., as
of December 31, 1994, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Zeigler Blvd.,
Ltd., as of December 31, 1994, and the results of its operations, the changes
in partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
17 through 22 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.



                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Charlotte, North Carolina                    Federal Employer
January 18, 1995                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (704) 332-9100
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                          INDEPENDENT AUDITORS' REPORT

To the Partners
Eastwyck III, Ltd.


     We have audited the accompanying balance sheet of Eastwyck III, Ltd., as
of December 31, 1996, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Eastwyck III, Ltd., as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
19 through 24 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE>

     In accordance with Government Auditing Standards, and the "Consolidated
Audit Guide for Audits of HUD Programs," we we have also issued reports dated
February 2, 1997 on our consideration of Eastwyck III, Ltd.'s internal control
structure and on its compliance with specific requirements applicable to major
HUD programs, affirmative fair housing, and laws and regulations applicable to
the financial statements.


                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Atlanta, Georgia                             Federal Employer
February 2, 1997                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (770) 844-0644
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                          INDEPENDENT AUDITORS' REPORT

To the Partners
Eastwyck III, Ltd.


     We have audited the accompanying balance sheet of Eastwyck III, Ltd. as
of December 31, 1995, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Eastwyck III,
Ltd., as of December 31, 1995, and the results of its operations, the changes
in partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.

<PAGE>


     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
20 through 25 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

     In accordance with Government Auditing Standards, we have also issued
reports dated January 29, 1996 on our consideration of Eastwyck III, Ltd.'s
internal control structure and on its compliance with specific requirements
applicable to major HUD programs, affirmative fair housing, and laws and
regulations applicable to the financial statements.


                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Charlotte, North Carolina                    Federal Employer
January 29, 1996                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (704) 332-9100
<PAGE>

                   [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT

To the Partners
Eastwyck III, Ltd.


     We have audited the accompanying balance sheet of Eastwyck III, Ltd. as
of December 31, 1994, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Eastwyck III,
Ltd., as of December 31, 1994, and the results of its operations, the changes
in partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
16 through 21 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.



                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Charlotte, North Carolina                    Federal Employer
January 23, 1995                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (704) 332-9100
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
BRECKENRIDGE-CHAPARRAL II, LTD.
Breckenridge, Texas


                                                     HUD Field Office Director
                                                             FORT WORTH, TEXAS


We have audited the accompanying balance sheet of BRECKENRIDGE-CHAPARRAL II,
LTD., Project No. 113-44016-LD, as of DECEMBER 31, 1996, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BRECKENRIDGE-CHAPARRAL II,
LTD. as of DECEMBER 31, 1996, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of
BRECKENRIDGE-CHAPARRAL II, LTD.'s internal control structure and reports dated
January 20, 1997 on its compliance with specific requirements applicable to the
major HUD program, specific requirements applicable to the non-major HUD
program, specific requirements applicable to Affirmative Fair Housing, and laws
and regulations applicable to the basic financial statements.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of BRECKENRIDGE-CHAPPARAL II, LTD. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.


/s/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 20, 1997                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
BRECKENRIDGE-CHAPARRAL II, LTD.
Breckenridge, Texas


                                                     HUD Field Office Director
                                                             FORT WORTH. TEXAS


We have audited the accompanying balance sheet of BRECKENRIDGE-CHAPARRAL II,
LTD., Project No. 113-44016-LD, as of DECEMBER 31, 1995, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BRECKENRIDGE-CHAPARRAL II,
LTD. as of DECEMBER 31, 1995, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 22, 1996 on our consideration of
BRECKENRIDGE-CHAPARRAL II, LTD.'s internal control structure and reports dated
January 22, 1996 on its compliance with laws and regulations applicable to the
basic financial statements, the major HUD program, and the nonmajor HUD
program.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of BRECKENRIDGE-CHAPPARAL II, LTD. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.


/s/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 22, 1996                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report

To the Partners of
BRECKENRIDGE-CHAPARRAL II, LTD.
Breckenridge, Texas


                                                     HUD Field Office Director
                                                             FORT WORTH, TEXAS

We have audited the accompanying balance sheet of BRECKENRIDGE-CHAPARRAL II,
LTD., Project No. 113-44016-LD, as of DECEMBER 31, 1994, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BRECKENRIDGE-CHAPARRAL II,
LTD. as of DECEMBER 31, 1994, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of BRECKENRIDGE-CHAPARRAL II, LTD. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.



/S/ BROWDER & ASSOCIATES, P.C.

BROWDER & ASSOCIATES, P.C.

January 31, 1995
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners
Country, Ltd.


     We have audited the accompanying balance sheet of Country, Ltd., as of
December 31, 1996, and the related statements of profit and loss (on HUD Form
No. 92410), partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Country, Ltd., as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
19 through 24 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE>

     In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," (the "Guide"), we have also issued
reports dated on January 29, 1997, our consideration of Country, Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major HUD programs, affirmative fair housing, and laws and regulations
applicable to the financial statements.


                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Atlanta, Georgia                             Federal Employer
January 29, 1997                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (770) 844-0644
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners
Country, Ltd.


     We have audited the accompanying balance sheet of Country, Ltd. as of
December 31, 1995, and the related statements of profit and loss (on HUD Form
No. 92410), partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.

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

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Country, Ltd., as
of December 31, 1995, and the results of its operations, the changes in
partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accountinq principles.

<PAGE>

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
20 through 26 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

     In accordance with Government Auditing Standards, we have also issued
reports dated February 2, 1996 on our consideration of Country, Ltd.'s
internal control structure and on its compliance with specific requirements
applicable to major HUD programs, affirmative fair housing, and laws and
regulations applicable to the financial statements.


                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Charlotte, North Carolina                    Federal Employer
February 2, 1996                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (704) 332-9100
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT

To the Partners
Country, Ltd.

     We have audited the accompanying balance sheet of Country, Ltd. as of
December 31, 1994, and the related statements of profit and loss (on HUD Form
No. 92410), partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.

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

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Country, Ltd., as
of December 31, 1994, and the results of its operations, the changes in
partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
16 through 21 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.



                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Charlotte, North Carolina                    Federal Employer
January 21, 1995                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (704) 332-9100
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners
Westwood Apartments Company, Ltd.


     We have audited the accompanying balance sheets of Westwood Apartments
Company, Ltd. as of December 31, 1996 and 1995, and the related statements of
revenue and expenses, partners' capital 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 Westwood
Apartments Company, Ltd. as of December 31, 1996 and 1995, and the results of
its operations, the changes in partners' capital and cash flows for the years
then ended, in conformity with generally accepted accounting principles.

     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
12 through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.



                                                  /S/ REZNICK FEDDER & SILVERMAN

Bethesda, Maryland
February 7, 1997
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners
Westwood Apartments Company, Ltd.


     We have audited the accompanying balance sheets of Westwood Apartments
Company, Ltd. as of December 31, 1995 and 1994, and the related statements of
revenue and expenses, partners' capital 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 Westwood
Apartments Company, Ltd. as of December 31, 1995 and 1994, and the results of
its operations, the changes in partners' capital and cash flows for the years
then ended, in conformity with generally accepted accounting principles.

     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
11 through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.



/S/ REZNICK FEDDER & SILVERMAN

Bethesda, Maryland
February 6, 1996

<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITOR'S REPORT


To the Partners
Parktowne, Ltd.


     We have audited the accompanying balance sheets of Parktowne, Ltd. as of
December 31, 1996 and 1995, and the related statements of revenue and
expenses, partners' capital 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 Parktowne, Ltd. as
of December 31, 1996 and 1995, and the results of its operations, the changes
in partners' capital and cash flows for the years then ended, in conformity
with generally accepted accounting principles.

     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
11 through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.


                                                  /S/ REZNICK FEDDER & SILVERMAN

Bethesda, Maryland
February 7, 1997
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITOR'S REPORT


To the Partners
Parktowne, Ltd.


     We have audited the accompanying balance sheets of Parktowne, Ltd. as of
December 31, 1995 and 1994, and the related statements of revenue and
expenses, partners' capital 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 Parktowne, Ltd. as
of December 31, 1995 and 1994, and the results of its operations, the changes
in partners' capital and cash flows for the years then ended, in conformity
with generally accepted accounting principles.

     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
11 through 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.


/S/ REZNICK FEDDER & SILVERMAN

Bethesda, Maryland
February 6, 1996

<PAGE>


                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
CORPUS CHRISTI-OSO BAY APARTMENTS, LTD.
Corpus Christi, Texas

                                                      HUD Field Office Director
                                                            SAN ANTONIO, TEXAS


We have audited the accompanying balance sheet of CORPUS CHRISTI-OSO BAY
APARTMENTS, LTD., Project No. 115-44129-LDP, as of DECEMBER 31, 1996, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CORPUS CHRISTI-OSO BAY
APARTMENTS, LTD. as of DECEMBER 31, 1996, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in conformity
with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of CORPUS
CHRISTI-OSO BAY APARTMENTS, LTD.'s internal control structure and reports dated
January 22, 1997 on its compliance with laws and regulations applicable to the
basic financial statements, specific requirements applicable to the major HUD
programs and specific requirements applicable to Affirmative Fair Housing.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of CORPUS CHRISTI-OSO BAY APARTMENTS, LTD. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 20, 1997                                        Identification Number:
                                                                    63-0986156
Audit Principal: E.O. Browder, Jr.


<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
CORPUS CHRISTI-OSO BAY APARTMENTS, LTD.
Corpus Christi, Texas

                                                      HUD Field Office Director
                                                            SAN ANTONIO, TEXAS


We have audited the accompanying balance sheet of CORPUS CHRISTI-OSO BAY
APARTMENTS, LTD., Project No. 115-44129-LDP, as of DECEMBER 31, 1995, and the
related statements of income, changes in partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CORPUS CHRISTI-OSO BAY
APARTMENTS, LTD. as of DECEMBER 31, 1995, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 22, 1996 on our consideration of CORPUS
CHRISTI-OSO BAY APARTMENTS, LTD.'s internal control structure and reports
dated January 22, 1996 on its compliance with laws and regulations applicable
to the basic financial statements and the major HUD programs.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying information included in the
report is presented for the purpose of additional analysis and are not a
required part of the basic financial statements of CORPUS CHRISTI-OSO BAY
APARTMENTS, LTD. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 22, 1996                                        Identification Number:
                                                                    63-0986156
Audit Principal: E.O. Browder, Jr.

<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
CORPUS CHRISTI-OSO BAY APARTMENTS, LTD.
Corpus Christi. Texas

                                                     HUD Field Office Director
                                                            SAN ANTONIO, TEXAS

We have audited the accompanying balance sheet of CORPUS CHRISTI-OSO BAY
APARTMENTS, LTD., Project No. 115-44129-LDP, as of DECEMBER 31, 1994, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CORPUS CHRISTI-OSO BAY
APARTMENTS, LTD. as of DECEMBER 31, 1994, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of CORPUS CHRISTI-OSO BAY APARTMENTS, LTD.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.



/S/ BROWDER & ASSOCIATES, P.C.

BROWDER & ASSOCIATES, P.C.

January 17, 1995
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT


To the Partners
Northbrook III, Ltd.



     We have audited the accompanying balance sheet of Northbrook III, Ltd. as
of December 31, 1996, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Northbrook III, Ltd., as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
19 through 24 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE>

     In accordance with Government Auditing Standards, and the "Consolidated
Audit Guide for Audits of Hud Programs," we have also issued reports dated
February 2, 1997 on our consideration of Northbrook III, Ltd.'s internal control
structure and on its compliance with specific requirements applicable to major
and nonmajor HUD programs, affirmative fair housing, and laws and regulations
applicable to the financial statements.


                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Atlanta, Georgia                             Federal Employer
February 2, 1997                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (770) 844-0644
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT


To the Partners
Northbrook III, Ltd.



     We have audited the accompanying balance sheet of Northbrook III, Ltd. as
of December 31, 1995, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Northbrook III,
Ltd., as of December 31, 1995, and the results of its operations, the changes
in partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.

<PAGE>

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
20 through 26 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

     In accordance with Government Auditing Standards, we have also issued
reports dated February 2, 1996 on our consideration of Northbrook III, Ltd.'s
internal control structure and on its compliance with specific requirements
applicable to major and nonmajor HUD programs, affirmative fair housing, and
laws and regulations applicable to the financial statements.


                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Charlotte, North Carolina                    Federal Employer
February 2, 1996                               Identification Number:
                                               52-1088612

Audit Principal: Michael C. Beck
                 (704) 332-9100
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT


To the Partners
Northbrook III, Ltd.


     We have audited the accompanying balance sheet of Northbrook III, Ltd. as
of December 31, 1994, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Northbrook III,
Ltd., as of December 31, 1994, and the results of its operations, the changes
in partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principals.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages
17 through 22 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.



                                             /S/ REZNICK FEDDER & SILVERMAN
                                             /S/ REZNICK FEDDER & SILVERMAN

Charlotte, North Carolina                    Federal Employer         
January 19, 1995                               Identification Number: 
                                               52-1088612             
Audit Principal: Michael C. Beck
                 (704) 332-9100

<PAGE>

                          [GRASS & COFFEY-LETTERHEAD]


                         Independent Auditor's Report

To The Partners
Bethany Glen Associates
(A Limited Partnership)

We have audited the accompanying balance sheets of Bethany Glen Associates, as
of December 31, 1996 and 1995, and the related statements of operations,
partners' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 Bethany Glen Associates as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.


/S/ GRASS & COFFEY, C.P.A.'s, P.C.

February 11, 1997
Phoenix, Arizona
<PAGE>

                          [GRASS & COFFEY-LETTERHEAD]


                         Independent Auditor's Report

To The Partners
Bethany Glen Associates
(A Limited Partnership)

We have audited the accompanying balance sheets of Bethany Glen Associates, as
of December 31, 1995 and 1994, and the related statements of operations,
partners' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 Bethany Glen Associates as of
December 31, 1995 and 1994, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.


/S/ GRASS & COFFEY, C.P.A.'s, P.C.

February 12, 1996
Phoenix, Arizona
<PAGE>


                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of 
ALBUQUERQUE-LAFAYETTE SQUARE APARTMENTS, LTD.
Albuquerque, New Mexico

                                                     HUD Field Office Director
                                                       ALBUQUERQUE, NEW MEXICO


We have audited the accompanying balance sheet of ALBUQUERQUE-LAFAYETTE SQUARE
APARTMENTS, LTD., Project No. 116-44022-LDP, as of DECEMBER 31, 1996, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ALBUQUERQUE-LAFAYETTE SQUARE
APARTMENTS, LTD. as of DECEMBER 31, 1996, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.

     In accordance with Government Auditing Standards and the Guide, we have
also issued a report dated January 20, 1997 on our consideration of
ALBUQUERQUE-LAFAYETTE SQUARE APARTMENTS, LTD.'s internal control structure and
reports dated January 20, 1997 on its compliance with laws and regulations
applicable to the basic financial statements, specific requirements applicable
to the major HUD program, specific requirements applicable to the non-major HUD
program and specific requirements applicable to Affirmative Fair Housing.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of ALBUQUERQUE-LAFAYETTE SQUARE APARTMENTS,
LTD. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken
as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 20, 1997                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.

<PAGE>


                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of 
ALBUQUERQUE-LAFAYETTE SQUARE APARTMENTS, LTD.
Albuquerque, New Mexico

                                                     HUD Field Office Director
                                                       ALBUQUERQUE, NEW MEXICO


We have audited the accompanying balance sheet of ALBUQUERQUE-LAFAYETTE SQUARE
APARTMENTS, LTD., Project No. 116-44022-LDP, as of DECEMBER 31, 1995, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ALBUQUERQUE-LAFAYETTE SQUARE
APARTMENTS, LTD. as of DECEMBER 31, 1995, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 22, 1996 on our consideration of
ALBUQUERQUE-LAFAYETTE SQUARE APARTMENTS, LTD.'s internal control structure and
reports dated January 22, 1996 on its compliance with laws and regulations
applicable to the basic financial statements, the major HUD Program, and the
nonmajor HUD program.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of ALBUQUERQUE-LAFAYETTE SQUARE APARTMENTS,
LTD. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken
as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 22, 1996                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
ALBUQUERQUE-LAFAYETTE SQUARE APARTMENTS, LTD.
Albuquerque, New Mexico

                                                     HUD Field Office Director
                                                       ALBUQUERQUE, NEW MEXICO

We have audited the accompanying balance sheet of ALBUQUERQUE-LAFAYETTE SQUARE
APARTMENTS, LTD., Project No. 116-44022-LDP, as of DECEMBER 31, 1994, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ALBUQUERQUE-LAFAYETTE SQUARE
APARTMENTS, LTD. as of DECEMBER 31, 1994, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of ALBUQUERQUE-LAFAYETTE SQUARE APARTMENTS,
LTD. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken
as a whole.



/S/ BROWDER & ASSOCIATES, P.C.

BROWDER & ASSOCIATES, P.C.

January 31, 1995
<PAGE>

                    [REZNICK FEDDER & SILVERMAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners 
Roper Mountain Apartments, Ltd.


     We have audited the accompanying balance sheets of Roper Mountain
Apartments, Ltd. as of December 31, 1996 and 1995, and the related statements of
operations, 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 Roper Mountain Apartments,
Ltd. as of December 31, 1996 and 1995, and the results of its operations, the
changes in partners' equity (deficit) and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information is
presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.


/S/ REZNICK FEDDER & SILVERMAN

Boston, Massachusetts
January 15, 1997
<PAGE>

                    [REZNICK FEDDER & SILVERNAN-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners 
Roper Mountain Apartments, Ltd.


     We have audited the accompanying balance sheets of Roper Mountain
Apartments, Ltd. as of December 31, 1995 and 1994, and the related statements
of operations, partners' equity 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 Roper Mountain
Apartments, Ltd. as of December 31, 1995 and 1994, and the results of its
operations, the changes in partners' equity and its cash flows for the years
then ended in conformity with generally accepted accounting principles.

     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information is
presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.


/S/ REZNICK FEDDER & SILVERNAN

Boston, Massachusetts
February 9, 1996

<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



WARREN MANOR APARTMENTS LIMITED PARTNERSHIP
28777 Northwestern Highway, Suite 100 
Southfield, MI 48034


     We have audited the accompanying comparative balance sheet of Warren
Manor Apartments Limited Partnership (a limited partnership) as of December
31, 1996 and 1995 and the related comparative statements of revenue and
expense, partners' equity, cash flows and, supplemental schedules on pages 9-11
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

     In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Warren Manor Apartments
Limited Partnership as of December 31, 1996 and 1995 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the basic financial
statements taken as a whole.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants



February 6, 1997

<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



WARREN MANOR APARTMENTS LIMITED PARTNERSHIP
28777 Northwestern Highway, Suite 100 
Southfield, MI 48034


     We have audited the accompanying comparative balance sheet of Warren
Manor Apartments Limited Partnership (a limited partnership) as of December
31, 1995 and 1994 and the related comparative statements of revenue and
expense, partners' equity, cash flows and supplemental schedules on pages 9-11
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

     In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Warren Manor Apartments
Limited Partnership as of December 31, 1995 and 1994 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the basic financial
statements taken as a whole.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants



February 4, 1996

<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners 
Golf Manor Apartments Limited Partnership 
28777 Northwestern Highway, Suite 100
Southfield, MI 48034


     We have audited the accompanying Comparative Balance Sheet of Golf Manor
Apartments Limited Partnership (a limited partnership) as of December 31, 1996
and 1995 and the related Comparative Statements of Revenue and Expense,
Partners' Equity, Cash Flows and Supplemental Schedules on Pages 9-11 for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

     In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Golf Manor Apartments
Limited Partnership as of December 31, 1996 and 1995 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the basic financial
statements taken as a whole.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants


January 24, 1997

<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners 
Golf Manor Apartments Limited Partnership 
28777 Northwestern Highway, Suite 100
Southfield, MI 48034


     We have audited the accompanying Comparative Balance Sheet of Golf Manor
Apartments Limited Partnership (a limited partnership) as of December 31, 1995
and 1994 and the related Comparative Statements of Revenue and Expense,
Partners' Equity, Cash Flows and Supplemental Schedules on Pages 8-10 for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

     In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Golf Manor Apartments
Limited Partnership as of December 31, 1995 and 1994 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the basic financial
statements taken as a whole.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH
Certified Public Accountants


February 2, 1996

<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT


To the Partners 
Warren Woods Apartments Limited Partnership 
28777 Northwestern Highway, Suite 100 
Southfield, MI 48034


     We have audited the accompanying Comparative Balance Sheet of Warren
Woods Apartments Limited Partnership (a limited partnership) as of December
31, 1996 and 1995 and the related Comparative Statements of Revenue and
Expense, Partners' Equity, Cash Flows and Supplemental Schedules on Pages 9-11
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

     In our opinion, the financial statements referred to above present fairly,
in all material respects the financial position of Warren Woods Apartments
Limited Partnership as of December 31, 1996 and 1995 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the basic financial
statements taken as a whole.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants

January 29, 1997

<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT


To the Partners 
Warren Woods Apartments Limited Partnership 
28777 Northwestern Highway, Suite 100 
Southfield, MI 48034


     We have audited the accompanying Comparative Balance Sheet of Warren
Woods Apartments Limited Partnership (a limited partnership) as of December
31, 1995 and 1994 and the related Comparative Statements of Revenue and
Expense, Partners' Equity, Cash Flows and Supplemental Schedules on Pages 9-11
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

     In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Warren Woods Apartments
Limited Partnership as of December 31, 1995 and 1994 and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the basic financial
statements taken as a whole.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants

February 3, 1996

<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners 
Canton Commons Apartments Limited Partnership 
28777 Northwestern Highway, Suite 100 
Southfield, MI 48034


     We have audited the accompanying Comparative Balance Sheet of Canton
Commons Apartment Limited Partnership (a limited partnership) as of December
31, 1996 and 1995 and the related Comparative Statements of Revenue and
Expense, Partners' Equity, Cash Flows and Supplemental Schedules on Pages
9-11 for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

     In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Canton Commons Apartments
Limited Partnership as of December 31, l996 and 1995 and the result of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the basic financial
statements taken as a whole.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants


January 23, 1997

<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners 
Canton Commons Apartments Limited Partnership 
28777 Northwestern Highway, Suite 100 
Southfield, MI 48034


     We have audited the accompanying Comparative Balance Sheet of Canton
Commons Apartment Limited Partnership (a limited partnership) as of December
31, 1995 and 1994 and the related Comparative Statements of Revenue and
Expense, Partners' Equity, Cash Flows and Supplemental Schedules on Pages
10-11 for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

     In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Canton Commons Apartments
Limited Partnership as of December 31, l995 and 1994 and the result of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles. The supporting data included in this
report have been subjected to the same auditing procedures applied in the
examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the basic financial
statements taken as a whole.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants


February 9, 1996

<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT


Los Caballeros Apartments
28777 Northwestern Highway, Suite 100
Southfield, Michigan 48034



We have audited the accompanying Comparative Balance Sheet of Los Caballeros
Apartments (a limited partnership) as of December 31, 1996 and 1995 and the
related Comparative Statements of Revenue and Expense, Partners' Equity, Cash
Flows and Supplemental Information on Pages 11-12 for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.

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

In our opinion, the financial statements referred to above present fairly in
all material respects the financial position of Los Caballeros Apartments as
of December 31, 1996 and 1995 and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted
accounting principles. The supporting data included in this report have been
subjected to the same auditing procedures applied in the examination of the
basic financial statements and, in our opinion, are presented fairly in all
material respects in relation to the basic financial statements taken as a
whole.

The accompanying financial statements have been prepared assuming the limited
partnership will continue as a going concern. As discussed in the notes to the
financial statements, Los Caballeros Apartments has been rendered in default of
their regulatory agreement, in default with the three Housing Assistance Payment
contracts, and is therefore, as a result, in default under the mortgage. These
problems raise substantial doubt about the entity's ability to continue as a
going concern.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants


February 6, 1997,

except for Going Concern Note,
as to which the date is
February 13, 1997
<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT


To the Partners
Los Caballeros Apartments
28777 Northwestern Highway, Suite 100
Southfield, Michigan 48034



We have audited the accompanying Comparative Balance Sheet of Los Caballeros
Apartments (a limited partnership) as of December 31, 1995 and 1994 and the
related Comparative Statements of Revenue and Expense, Partners' Equity, Cash
Flows and Supplemental Information on Pages 9-11 for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.

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

In our opinion, the financial statements referred to above present fairly in
all material respects the financial position of Los Caballeros Apartments as
of December 31, 1995 and 1994 and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted
accounting principles. The supporting data included in this report have been
subjected to the same auditing procedures applied in the examination of the
basic financial statements and, in our opinion, are presented fairly in all
material respects in relation to the basic financial statements taken as a
whole.

The accompanying financial statements have been prepared assuming the limited
partnership will continue as a going concern. As discussed in the notes to the
financial statements, Los Caballeros Apartments Limited Partnership does not
have the working capital necessary to cover the costs to cure deficiencies
cited in a Department of Housing and Urban Development inspection report.
Additionally, one of the three Housing Assistance Payment Contracts was not
renewed. These problems raise substantial doubt about the entity's ability to
continue as a going concern.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants


February 1, 1996
<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners
ROSEWOOD MANOR APARTMENTS
28777 Northwestern Highway, Suite 100
Southfield, MI 48034


We have audited the accompanying Comparative Balance Sheet of Rosewood Manor
Apartments (a limited partnership) as of December 31, 1996 and 1995 and the
related Statements of Revenue and Expense, Partners' Equity, and Cash Flows and
Supplemental schedules on Page 9-11 for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

     In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Rosewood Manor Apartments
as of December 31, 1996 and 1995 and the results of its operations and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles. The supporting data included in this report have been
subjected to the same auditing procedures applied in the examination of the
basic financial statements and, in our opinion, are presented fairly in all
material respects in relation to the basic financial statements taken as a
whole.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants

January 28, 1997
<PAGE>

                 [WEINTRAUB, NESSEL & SMITH, PLLC-LETTERHEAD]


                         INDEPENDENT AUDITORS' REPORT



To the Partners
ROSEWOOD MANOR APARTMENTS
28777 Northwestern Highway, Suite 100
Southfield, MI 48034


     We have audited the accompanying Comparative Balance Sheet of Rosewood
Manor Apartments (a limited partnership) as of December 31, 1995 and 1994 and
the related Statements of Revenue and Expense, Partners' Equity, and Cash
Flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

     In our opinion, the financial statements referred to above present fairly
in all material respects the financial position of Rosewood Manor Apartments
as of December 31, 1995 and 1994 and the results of its operations and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles. The supporting data included in this report have been
subjected to the same auditing procedures applied in the examination of the
basic financial statements and, in our opinion, are presented fairly in all
material respects in relation to the basic financial statements taken as a
whole.


/S/ WEINTRAUB, NESSEL & SMITH, PLLC

WEINTRAUB, NESSEL & SMITH, PLLC
Certified Public Accountants

February 6, 1996
<PAGE>

                     [BOCKNEK, BERGER & GHERSI-LETTERHEAD]


                         Independent Auditors' Report


GROSVENOR SOUTH APARTMENTS LIMITED PARTNERSHIP
One Towne Square, Suite 1913
Southfield, Michigan 48076

Gentlemen:

We have audited the accompanying Balance Sheet of

                GROSVENOR SOUTH APARTMENTS LIMITED PARTNERSHIP
                            (a Limited partnership)

as of December 31, 1996 and 1995, and the related Statements of Revenue and
Expense, Partners' Equity and Cash Flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 GROSVENOR SOUTH APARTMENTS
LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying information is
presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.


/S/ BOCKNEK, BERGER & GHERSI

BOCKNEK, BERGER & GHERSI
Certified Public Accountants
Professional Corporation

February 1, 1997
<PAGE>

                     [BOCKNEK, BERGER & GHERSI-LETTERHEAD]


                         Independent Auditors' Report


GROSVENOR SOUTH APARTMENTS LIMITED PARTNERSHIP
One Towne Square, Suite 1913
Southfield, Michigan 48076

Gentlemen:

We have audited the accompanying Balance Sheet of

                GROSVENOR SOUTH APARTMENTS LIMITED PARTNERSHIP
                            (a Limited partnership)

as of December 31, 1995 and 1994, and the related Statements of Revenue and
Expense, Partners' Equity and Cash Flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 GROSVENOR SOUTH APARTMENTS
LIMITED PARTNERSHIP as of December 31, 1995 and 1994, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying information is
presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.


/S/ BOCKNEK, BERGER & GHERSI

BOCKNEK, BERGER & GHERSI
Certified Public Accountants
Professional Corporation

January 27, 1996

<PAGE>

                     [BOCKNEK, BERGER & GHERSI-LETTERHEAD]


                         Independent Auditors' Report

GROSVENOR SOUTH APARTMENTS #2 LIMITED PARTNERSHIP
One Towne Square, Suite 1913
Southfield, Michigan 48076


Gentlemen:

We have audited the accompanying Balance Sheet of

                GROSVENOR SOUTH APARTMENTS #2 LIMITED PARTNERSHIP
                            (a Limited partnership)

as of December 31, 1996 and 1995, and the related Statements of Revenue and
Expense, Partners' Equity and Cash Flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 GROSVENOR SOUTH APARTMENTS #2
LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying information is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.



/S/ BOCKNEK, BERGER & GHERSI

BOCKNEK, BERGER & GHERSI
Certified Public Accountants
Professional Corporation

February 1, 1997
<PAGE>

                     [BOCKNEK, BERGER & GHERSI-LETTERHEAD]


                         Independent Auditors' Report

GROSVENOR SOUTH APARTMENTS #2 LIMITED PARTNERSHIP
One Towne Square, Suite 1913
Southfield, Michigan 48076


Gentlemen:

We have audited the accompanying Balance Sheet of

                GROSVENOR SOUTH APARTMENTS #2 LIMITED PARTNERSHIP
                            (a Limited partnership)

as of December 31, 1995 and 1994, and the related Statements of Revenue and
Expense, Partners' Equity and Cash Flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 GROSVENOR SOUTH APARTMENTS #2
LIMITED PARTNERSHIP as of December 31, 1995 and 1994, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying information is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.



/S/ BOCKNEK, BERGER & GHERSI

BOCKNEK, BERGER & GHERSI
Certified Public Accountants
Professional Corporation

January 27, 1995
<PAGE>

                    [BOCKNEK, BERGER & GHERSI-LETTERHEAD]


                         Independent Auditors' Report



CLINTON PLAZA APARTMENTS LIMITED PARTNERSHIP
One Towne Square, Suite 1913 
Southfield, Michigan 48076

Gentlemen:

We have audited the accompanying Balance Sheet of

                 CLINTON PLAZA APARTMENTS LIMITED PARTNERSHIP
                            (a Limited partnership)

as of December 31, 1996 and 1995, and the related Statements of Revenue and
Expense, Partners' Equity and Cash Flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 CLINTON PLAZA APARTMENTS
LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying information is
presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.


/S/ BOCKNEK, BERGER & GHERSI

BOCKNEK, BERGER & GHERSI
Certified Public Accountants
Professional Corporation

February 1, 1997
<PAGE>

                    [BOCKNEK, BERGER & GHERSI-LETTERHEAD]


                         Independent Auditors' Report



Clinton Plaza Apartments Limited Partnership
One Towne Square, Suite 1913 
Southfield, Michigan 48076

Gentlemen:

We have audited the accompanying Balance Sheet of

                 CLINTON PLAZA APARTMENTS LIMITED PARTNERSHIP
                            (a Limited partnership)

as of December 31, 1995 and 1994, and the related Statements of Revenue and
Expense, Partners' Equity and Cash Flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 Clinton Plaza Apartments
Limited Partnership as of December 31, 1995 and 1994, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying information is
presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.


/S/ BOCKNEK, BERGER & GHERSI

BOCKNEK, BERGER & GHERSI
Certified Public Accountants
Professional Corporation

January 27, 1996
<PAGE>

                    [BOCKNEK, BERGER & GHERSI-LETTERHEAD]


                         Independent Auditors' Report



CLINTON PLAZA APARTMENTS #2 LIMITED PARTNERSHIP
One Towne Square, Suite 1913 
Southfield, Michigan 48076

Gentlemen:

We have audited the accompanying Balance Sheet of

                CLINTON PLAZA APARTMENTS #2 LIMITED PARTNERSHIP
                            (a Limited partnership)

as of December 31, 1996 and 1995, and the related Statements of Revenue and
Expense, Partners' Equity and Cash Flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 CLINTON PLAZA APARTMENTS #2
LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with qenerally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying information is
presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.


/S/ BOCKNEK, BERGER & GHERSI

BOCKNEK, BERGER & GHERSI
Certified Public Accountants
Professional Corporation

February 1, 1997
<PAGE>

                    [BOCKNEK, BERGER & GHERSI-LETTERHEAD]


                         Independent Auditors' Report



CLINTON PLAZA APARTMENTS #2 LIMITED PARTNERSHIP
One Towne Square, Suite 1913 
Southfield, Michigan 48076

Gentlemen:

We have audited the accompanying Balance Sheet of

                CLINTON PLAZA APARTMENTS #2 LIMITED PARTNERSHIP
                            (a Limited partnership)

as of December 31, 1995 and 1994, and the related Statements of Revenue and
Expense, Partners' Equity and Cash Flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 CLINTON PLAZA APARTMENTS #2
LIMITED PARTNERSHIP as of December 31, 1995 and 1994, and the results of its
operations, changes in partners' equity and its cash flows for the years then
ended in conformity with qenerally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying information is
presented for the purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.


/S/ BOCKNEK, BERGER & GHERSI

BOCKNEK, BERGER & GHERSI
Certified Public Accountants
Professional Corporation

January 27, 1996
<PAGE>

                   [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Board of Directors of
OAKLAND-KELLER PLAZA



We have audited the accompanying balance sheet of OAKLAND-KELLER PLAZA as of
DECEMBER 31, 1996, and the related statements of income, changes in partners'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of OAKLAND-KELLER PLAZA as of
DECEMBER 31, 1996, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.



/S/ BROWDER & ASSOCIATES, P.C.
BROWDER & ASSOCIATES, P.C.


Birmingham, Alabama 
February 24, 1997   
                    
<PAGE>

                   [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
OAKLAND-KELLER PLAZA
Oakland, California

                                                     HUD Field Office Director
                                                     SAN FRANCISCO, CALIFORNIA

We have audited the accompanying balance sheet of OAKLAND-KELLER PLAZA,
Project No. 121-44216-LDP, as of December 31, 1995, and the related statements
of profit and loss, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of OAKLAND-KELLER PLAZA as of
DECEMBER 31, 1995, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 22, 1996 on our consideration of OAKLAND-KELLER
PLAZA's internal control structure and reports dated January 22, 1996 on its
compliance with laws and regulations applicable to the basic financial
statements, the major HUD program, and the nonmajor HUD program.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of OAKLAND-KELLER PLAZA. Such information
has been subjected to the auditing procedures applied in the audit of the
basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 22, 1996                                        Identification Number:
                                                                    63-0986156
Audit Principal: E.O. Browder, Jr.
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
OAKLAND-KELLER PLAZA
Oakland, California


                                                     HUD Field Office Director
                                                     SAN FRANCISCO, CALIFORNLA

We have audited the accompanying balance sheet of OAKLAND-KELLER PLAZA,
Project No. 121-44216-LDP, as of DECEMBER 31, 1994, and the related statements
of profit and loss, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of OAKLAND-KELLER PLAZA as of
DECEMBER 31, 1994, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of OAKLAND-KELLER PLAZA. Such information
has been subjected to the auditing procedures applied in the audit of the
basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.



/S/ BROWDER & ASSOCIATES, P.C.

BROWDER & ASSOCIATES, P.C.

January 25, 1995
<PAGE>

                   [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of 
SAN DIEGO-LOGAN SQUARE GARDENS COMPANY 
San Diego, California

                                                       HUD Field Office Director
                                                           SAN DIEGO, CALIFORNIA

We have audited the accompanying balance sheet of SAN DIEGO-LOGAN SQUARE
GARDENS COMPANY, Project No. 129-44051-LD, as of DECEMBER 31, 1996, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD
Programs (the "Guide") issued by the U.S. Department of Housing and Urban
Development, Office of Inspector General in July 1993. Those standards and the
Guide require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SAN DIEGO-LOGAN SQUARE GARDENS
COMPANY as of DECEMBER 31, 1996, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of SAN DIEGO-LOGAN
SQUARE GARDENS COMPANY's internal control structure and reports dated January
20, 1997 on its compliance with specific requirements applicable to the major
HUD programs, specific requirements applicable to Affirmative Fair Housing, and
laws and regulations applicable to the basic financial statements.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of SAN DIEGO-LOGAN SQUARE GARDENS COMPANY.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements, and in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 20, 1997                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.
<PAGE>

                   [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of 
SAN DIEGO-LOGAN SQUARE GARDENS COMPANY 
San Diego, California

                                                      HUD Field Office Director
                                                         SAN DIEGO, CALIFORNIA

We have audited the accompanying balance sheet of SAN DIEGO-LOGAN SQUARE
GARDENS COMPANY, Project No. 129-44051-LD, as of DECEMBER 31, 1995, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD
Programs (the "Guide") issued by the U.S. Department of Housing and Urban
Development, Office of Inspector General in July 1993. Those standards and the
Guide require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SAN DIEGO-LOGAN SQUARE GARDENS
COMPANY as of DECEMBER 31, 1995, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 22, 1996 on our consideration of SAN DIEGO-LOGAN
SQUARE GARDENS COMPANY's internal control structure and reports dated January
22, 1996 on its compliance with laws and regulations applicable to the basic
financial statements and the major HUD programs.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of SAN DIEGO-LOGAN SQUARE GARDENS COMPANY.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 22, 1996                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
SAN DIEGO-LOGAN SQUARE GARDENS COMPANY
San Diego, California

                                                     HUD Field Office Director
                                                         SAN DIEGO, CALIFORNIA

We have audited the accompanying balance sheet of SAN DIEGO-LOGAN SQUARE
GARDENS COMPANY, Project No. 129-44051-LD, as of DECEMBER 31, 1994, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SAN DIEGO-LOGAN SQUARE
GARDENS COMPANY as of DECEMBER 31, 1994, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of SAN DIEGO-LOGAN SQUARE GARDENS COMPANY.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.



/S/ BROWDER & ASSOCIATES, P.C.

BROWDER & ASSOCIATES, P.C.

January 27, 1995
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
GRANDVIEW-BLUE RIDGE MANOR
Grandview, Missouri

                                                     HUD Field Office Director
                                                         KANSAS CITY, MISSOURI

We have audited the accompanying balance sheet of GRANDVIEW-BLUE RIDGE MANOR,
Project No. 084-44127-LDP, as of DECEMBER 31, 1996, and the related statements
of profit and loss, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GRANDVIEW-BLUE RIDGE MANOR as
of DECEMBER 31, 1996, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of GRANDVIEW-BLUE
RIDGE MANOR's internal control structure and reports dated January 20, 1997 on
its compliance with specific requirements applicable to the major HUD program,
and specific requirements applicable to Affirmative Fair Housing and, laws and
regulations applicable to the basic financial statements.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of GRANDVIEW-BLUE RIDGE MANOR. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 20, 1997                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
GRANDVIEW-BLUE RIDGE MANOR
Grandview, Missouri

                                                     HUD Field Office Director
                                                         KANSAS CITY, MISSOURI

We have audited the accompanying balance sheet of GRANDVIEW-BLUE RIDGE MANOR,
Project No. 084-44127-LDP, as of DECEMBER 31, 1995, and the related statements
of profit and loss, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GRANDVIEW-BLUE RIDGE MANOR as
of DECEMBER 31, 1995, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 22, 1996 on our consideration of GRANDVIEW-BLUE
RIDGE MANOR's internal control structure and reports dated January 22, 1996 on
its compliance with laws and regulations applicable to the basic financial
statements and the major HUD programs.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of GRANDVIEW-BLUE RIDGE MANOR. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 22, 1996                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
GRANDVIEW-BLUE RIDGE MANOR
Grandview, Missouri

                                                     HUD Field Office Director
                                                         KANSAS CITY, MISSOURI

We have audited the accompanying balance sheet of GRANDVIEW-BLUE RIDGE MANOR,
Project No. 084-44127-LDP, as of December 31, 1994, and the related statements
of profit and loss, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GRANDVIEW-BLUE RIDGE MANOR as
of DECEMBER 31, 1994, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of GRANDVIEW-BLUE RIDGE MANOR. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.



/S/ BROWDER & ASSOCIATES, P.C.

BROWDER & ASSOCIATES, P.C.

January 18, 1995
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of 
ROLLING MEADOWS OF ARDMORE, LTD.-PECAN CREEK 
Ardmore, Oklahoma

                                                     HUD Field Office Director
                                                       OKLAHOMA CITY, OKLAHOMA

We have audited the accompanying balance sheet of ROLLING MEADOWS OF
ARDMORE, LTD.-PECAN CREEK, Project No. 117-44044-LD, as of DECEMBER 31, 1996,
and the related statements of profit and loss, changes in partners' equity, and
cash flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ROLLING MEADOWS OF ARDMORE,
LTD.-PECAN CREEK as of DECEMBER 31, 1996, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in conformity
with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated February 10, 1997 on our consideration of ROLLING MEADOWS
OF ARDMORE, LTD.-PECAN CREEK's internal control structure and reports dated
February 10, 1997 on its compliance with specific requirements applicable to the
major HUD program, specific requirements applicable to the non-major HUD
program, specific requirements applicable to Affirmative Fair Housing, and laws
and regulations applicable to the basic financial statements.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of ROLLING MEADOWS OF ARDMORE, LTD.-PECAN CREEK.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
February 10, 1997                                       Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of 
ARDMORE-ROLLING MEADOWS OF ARDMORE, LTD. 
Ardmore, Oklahoma

                                                     HUD Field Office Director
                                                       OKLAHOMA CITY, OKLAHOMA

We have audited the accompanying balance sheet of ARDMORE-ROLLING MEADOWS OF
ARDMORE, LTD., PROJECT No. 117-44044-LD, as of DECEMBER 31, 1995, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ARDMORE-ROLLING MEADOWS OF
ARDMORE, LTD. as of DECEMBER 31, 1995, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 22, 1996 on our consideration of ARDMORE-ROLLING
MEADOWS OF ARDMORE, LTD.'s internal control structure and reports dated
January 22, 1996 on its compliance with laws and regulations applicable to the
basic financial statements. the major HUD program, and the nonmajor HUD
program.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of ARDMORE-ROLLING MEADOWS OF ARDMORE, LTD.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 22, 1996                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.
<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
ARDMORE-ROLLING MEADOWS OF ARDMORE, LTD.
Ardmore, Oklahoma

                                                     HUD Field Office Director
                                                       OKLAHOMA CITY, OKLAHOMA

We have audited the accompanying balance sheet of ARDMORE-ROLLING MEADOWS OF
ARDMORE, LTD., Project No. 117-44044-LD, as of DECEMBER 31, 1994, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ARDMORE-ROLLING MEADOWS OF
ARDMORE, LTD. as of DECEMBER 31, 1994, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of ARDMORE-ROLLING MEADOWS OF ARDMORE, LTD.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.



/S/ BROWDER & ASSOCIATES, P.C.

BROWDER & ASSOCIATES, P.C.

January 21, 1995


<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
EL PASO-GATEWAY EAST, LTD.
El Paso, Texas
                                                     HUD Field Office Director
                                                             FORT WORTH, TEXAS

We have audited the accompanying balance sheet of EL PASO-GATEWAY EAST, LTD.,
Project No. 133-44016-LD, as of DECEMBER 31, 1996, and the related statements
of profit and loss, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of EL PASO-GATEWAY EAST, LTD.
as of DECEMBER 31, 1996, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 20, 1997 on our consideration of EL PASO-GATEWAY
EAST, LTD.'s internal control structure and reports dated January 20, 1997 on
its compliance with laws and regulations applicable to the basic financial
statements, specific requirements applicable to the major HUD program, specific
requirements applicable to the nonmajor HUD program and specific requirements
applicable to Affirmative Fair Housing.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of EL PASO-GATEWAY EAST, LTD. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 20, 1997                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.



<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
EL PASO-GATEWAY EAST, LTD.
El Paso, Texas
                                                     HUD Field Office Director
                                                             FORT WORTH, TEXAS

We have audited the accompanying balance sheet of EL PASO-GATEWAY EAST, LTD.,
Project No. 133-44016-LD, as of DECEMBER 31, 1995, and the related statements
of profit and loss, changes in partners' equity, and cash flows for the year
then ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of EL PASO-GATEWAY EAST, LTD.
as of DECEMBER 31, 1995, and the results of its operations, changes in
partners' equity and cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 22, 1996 on our consideration of EL
PASO-GATEWAY EAST, LTD.'s internal control structure and reports dated January
22, 1996 on its compliance with laws and regulations applicable to the basic
financial statements, the major HUD program, and the nonmajor HUD program.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of EL PASO-GATEWAY EAST, LTD. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 22, 1996                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.



<PAGE>

                    [BROWDER & ASSOCIATES, P.C. - LETTERHEAD]


                         Independent Auditor's Report


To the Partners of
EL PASO-GATEWAY EAST, LTD.
El Paso, Texas

                                                       HUD Field Office Director
                                                               FORT WORTH, TEXAS

We have audited the accompanying balance sheet of EL PASO-GATEWAY EAST, LTD.,
Project No. 133-44016-LD, as of DECEMBER 31, 1994, and the related statements of
profit and loss, changes in partners' equity, and cash flows for the year then
ended. These financial statements are the responsibility of the project's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of EL PASO-GATEWAY EAST, LTD. as
of DECEMBER 31, 1994, and the results of its operations, changes in partners'
equity and cash flows for the year then ended in conformity with generally
accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of EL PASO-GATEWAY EAST, LTD. Such information
has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.

/s/ BROWDER & ASSOCIATES, P.C.
BROWDER & ASSOCIATES, P.C.

January 27, 1995

<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                          Independent Auditor's Report


To the Partners of 
FORT WORTH-NORTHWOOD APARTMENTS, LTD. 
Fort Worth, Texas

                                                     HUD Field Office Director
                                                             FORT WORTH, TEXAS

We have audited the accompanying balance sheet of FORT WORTH-NORTHWOOD
APARTMENTS, LTD., Project No. 113-44025, as of DECEMBER 31, 1996, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FORT WORTH-NORTHWOOD
APARTMENTS, LTD. as of DECEMBER 31, 1996, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 29, 1997 on our consideration of FORT
WORTH-NORTHWOOD APARTMENTS, LTD.'s internal control structure and reports dated
January 29, 1997 on its compliance with laws and regulations applicable to the
basic financial statements, specific requirements applicable to the major HUD
program, specific requirements applicable to the non-major HUD program and
specific requirements applicable to Affirmative Fair Housing.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of FORT WORTH-NORTHWOOD APARTMENTS, LTD.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 29, 1997                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.

<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                          Independent Auditor's Report


To the Partners of 
FORT WORTH-NORTHWOOD APARTMENTS, LTD. 
Fort Worth Texas

                                                     HUD Field Office Director
                                                             FORT WORTH, TEXAS

We have audited the accompanying balance sheet of FORT WORTH-NORTHWOOD
APARTMENTS, LTD., Project No. 113-44025, as of DECEMBER 31, 1995, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FORT WORTH-NORTHWOOD
APARTMENTS, LTD. as of DECEMBER 31, 1995, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting Principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 22, 1996 on our consideration of FORT
WORTH-NORTHWOOD APARTMENTS, LTD.'s internal control structure and reports
dated January 22, 1996 on its compliance with laws and regulations applicable
to the basic financial statements, the major HUD program, and the nonmajor HUD
program.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of FORT WORTH-NORTHWOOD APARTMENTS, LTD.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the financial statements taken as a
whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 22, 1996                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.

<PAGE>

                    [BROWDER & ASSOCIATES, P.C. - LETTERHEAD]


                          Independent Auditor's Report


To the Partners of
FORT WORTH-NORTHWOOD APARTMENTS, LTD.
Fort Worth, Texas


                                                       HUD Field Office Director
                                                               FORT WORTH, TEXAS

We have audited the accompanying balance sheet of FORT WORTH-NORTHWOOD
APARTMENTS, LTD., Project No. 113-44025, as of DECEMBER 31, 1994, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FORT WORTH-NORTHWOOD
APARTMENTS, LTD. as of DECEMBER 31, 1994, and the results of its operations, 
changes in partners' equity and cash flows for the year then ended in 
conformity with generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of FORT WORTH-NORTHWOOD APARTMENTS, LTD. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.


/s/ BROWDER & ASSOCIATES, P.C.
BROWDER & ASSOCIATES, P.C.

January 28, 1995

<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of 
STEPHENVILLE-TARLETON ARMS APARTMENTS, LTD. 
Stephenville, Texas

                                                     HUD Field Office Director
                                                             FORT WORTH, TEXAS

We have audited the accompanying balance sheet of STEPHENVILLE-TARLETON ARMS
APARTMENTS, LTD., Project No. 113-44034-LD, as of DECEMBER 31, 1996, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of STEPHENVILLE-TARLETON ARMS
APARTMENTS, LTD. as of DECEMBER 31, 1996, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 29, 1997 on our consideration of
STEPHENVILLE-TARLETON ARMS APARTMENTS, LTD.'s internal control structure and
reports dated January 29, 1997 on its compliance with laws and regulations
applicable to the basic financial statements, specific requirements applicable
to the major HUD program, specific requirements applicable to the non-major HUD
program, and specific requirements applicable to Affirmative Fair Housing.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of STEPHENVILLE-TARLETON ARMS APARTMENTS,
LTD. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken
as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 29, 1997                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.


<PAGE>

                    [BROWDER & ASSOCIATES, P.C.-LETTERHEAD]


                         Independent Auditor's Report


To the Partners of 
STEPHENVILLE-TARLETON ARMS APARTMENTS, LTD. 
Stephenville, Texas

                                                     HUD Field Office Director
                                                             FORT WORTH, TEXAS

We have audited the accompanying balance sheet of STEPHENVILLE-TARLETON ARMS
APARTMENTS, LTD., Project No. 113-44034-LD, as of December 31, 1995, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U.S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of STEPHENVILLE-TARLETON ARMS
APARTMENTS, LTD. as of DECEMBER 31, 1995, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Guide, we have also
issued a report dated January 22, 1996 on our consideration OF
STEPHENVILLE-TARLETON ARMS APARTMENTS, LTD.'s internal control structure and
reports dated January 22, 1996 on its compliance with laws and regulations
applicable to the basic financial statements, the major HUD program, and the
nonmajor HUD program.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements of STEPHENVILLE-TARLETON ARMS APARTMENTS,
LTD. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken
as a whole.


/S/ BROWDER & ASSOCIATES, P.C.

Birmingham, Alabama                                           Federal Employer
January 22, 1996                                        Identification Number:
                                                                    63-0986156

Audit Principal: E.O. Browder, Jr.


<PAGE>

                    [BROWDER & ASSOCIATES, P.C. - LETTERHEAD]


                          Independent Auditor's Report


To the Partners of
STEPHENVILLE-TARLETON ARMS APARTMENTS, LTD.
Stephenville, Texas


                                                       HUD Field Office Director
                                                               FORT WORTH, TEXAS

We have audited the accompanying balance sheet of STEPHENVILLE-TARLETON ARMS
APARTMENTS, LTD., Project No. 113-44034-LD, as of DECEMBER 31, 1994, and the
related statements of profit and loss, changes in partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the project's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards,
Government Auditing Standards issued by the Comptroller General of the United
States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide") issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General in July 1993. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of STEPHENVILLE-TARLETON ARMS
APARTMENTS, LTD. as of DECEMBER 31, 1994, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in conformity
with generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements of STEPHENVILLE-TARLETON ARMS APARTMENTS, LTD.
Such information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.


/s/ BROWDER & ASSOCIATES, P.C.
BROWDER & ASSOCIATES, P.C.

January 19, 1995

<PAGE>


                   [ROBERT ERCOLINI & COMPANY LLP-LETTERHEAD]


                         INDEPENDENT AUDITOR'S REPORT



The General Partners of
Bay Village Company
(a Massachusetts Limited Partnership)
Boston, Massachusetts


We have audited the accompanying balance sheets of Bay Village Company (a
Massachusetts Limited Partnership) as of December 31, l996 and 1995 and the
related statements of operations, partners' equity, and cash flows for each of
the three years in the period ended December 31, 1996. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 Bay Village Company (a
Massachusetts Limited Partnership) as of December 31, 1996 and 1995, and the
results of its operations, changes in partners' equity, and its cash flows for
each of the three years in the period ended December 31, 1996, in conformity
with generally accepted accounting principles.


/S/ ROBERT ERCOLINI & COMPANY LLP

January 30, 1997

<PAGE>

                    [ROBERT ERCOLINI & COMPANY-LETTERHEAD]


                         INDEPENDENT AUDITOR'S REPORT



The General Partners of
Bay Village Company
(a Massachusetts Limited Partnership)
Boston, Massachusetts


We have audited the accompanying balance sheets of Bay Village Company (a
Massachusetts Limited Partnership) as of December 31, l995 and 1994 and the
related statements of operations, partners' equity, and cash flows for each of
the three years in the period ended December 31, 1995. 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 generalP
ly accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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 Bay Village Company (a
Massachusetts Limited Partnership) as of December 31, 1995 and 1994, and the
results of its operations, changes in partners' equity, and its cash flows for
each of the three years in the period ended December 31, 1995, in conformity
with generally accepted accounting principles.


/S/ ROBERT ERCOLINI & COMPANY

January 26, 1996

<PAGE>

            [WILLIAMS, CROSSLIN, SPARKS & VADEN, P.C.-LETTERHEAD]

         REPORT ON AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA


                        Independent Auditors' Report


To The Partners of
Buena Vista Manor Apartments, Ltd.
(A Tennessee Limited Partnership)
Nashville, Tennessee


We have audited the accompanying balance sheet of Buena Vista Manor
Apartments, Ltd., (a Tennessee limited partnership), HUD Project No.
086-35009-SUP-LD as of December 31, 1996, and the related statements of profit
and loss, changes in partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly in
all material respects, the financial position of Buena Vista Manor Apartments,
Ltd., at December 31, 1996, and the results of its operations, changes in
partners' equity and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued reports
dated January 31, 1997 on our consideration of Buena Vista Manor Apartments,
Ltd.'s, internal control structure, its compliance with laws and regulations,
its compliance with specific requirements applicable to major HUD-assisted
programs and its compliance with specific requirements applicable to
affirmative fair housing.

<PAGE>


To the Partners of
Buena Vista Manor Apartments, Ltd.
Page 2



Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting information contained in the report
shown on pages 16 to 24 is presented for the purpose of additional analysis
and is not a required part of the basic financial statements of Buena Vista
Manor Apartments, Ltd. Such information has been subjected to the procedures
applied in the audit of the financial statements and, in our opinion, is
fairly presented in all material respects in relation to the financial
statements taken as a whole.


/S/ WILLIAMS, CROSSLIN, SPARKS & VADEN, P.C.

/S/ WILLIAMS, CROSSLIN, SPARKS & VADEN, P.C.


January 31, 1997

<PAGE>

            [WILLIAMS, CROSSLIN, SPARKS & VADEN, P.C.-LETTERHEAD]

         REPORT ON AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA


                        Independent Auditors' Report


To The Partners of
Buena Vista Manor Apartments, Ltd.
(A Tennessee Limited Partnership)
Nashville, Tennessee


We have audited the accompanying balance sheet of Buena Vista Manor
Apartments, Ltd., (a Tennessee limited partnership), HUD Project No.
086-35009-SUP-LD as of December 31, 1995, and the related statements of profit
and loss, changes in partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly in
all material respects, the financial position of Buena Vista Manor Apartments,
Ltd., at December 31, 1995, and the results of its operations, changes in
partners' equity and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued reports
dated January 26, 1996 on our consideration of Buena Vista Manor Apartments,
Ltd.'s, internal control structure, its compliance with laws and regulations,
its compliance with specific requirements applicable to major HUD-assisted
programs and its compliance with specific requirements applicable to
affirmative fair housing.

<PAGE>


To the Partners of
Buena Vista Manor Apartments, Ltd.
Page 2



Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting information contained in the report
shown on pages 15 to 24 is presented for the purpose of additional analysis
and is not a required part of the basic financial statements of Buena Vista
Manor Apartments, Ltd. Such information has been subjected to the procedures
applied in the audit of the financial statements and, in our opinion, is
fairly presented in all material respects in relation to the financial
statements taken as a whole.


/S/ WILLIAMS, CROSSLIN, SPARKS & VADEN, P.C.

January 26, 1996

<PAGE>

             [WILLIAMS, CROSSLIN, SPARKS & VADEN, P.C. - LETTERHEAD]


          REPORT ON AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

                          Independent Auditors' Report


To The Partners of
Buena Vista Manor Apartments, Ltd.
(A Tennessee Limited Partnership)
Nashville, Tennessee

We have audited the accompanying balance sheet of Buena Vista Manor Apartments,
Ltd., (a Tennessee limited partnership), HUD Project No. 086-35009-SUP-LD as of
December 31, 1994, and the related statements of profit and loss, changes in
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Buena Vista Manor Apartments, Ltd.,
at December 31, 1994, and the results of its operations, changes in partners'
equity and its cash flows for the year then ended in conformity with generally
accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting information contained in the report
shown on pages 14 to 23 is presented for the purpose of additional analysis and
is not a required part of the basic financial statements of Buena Vista Manor
Apartments, Ltd. Such information has been subjected to the procedures applied
in the audit of the financial statements and, in our opinion, is fairly
presented in all material respects in relation to the financial statements taken
as a whole.

/s/ WILLIAMS, CROSSLIN, SPARKS & VADEN, P.C.

February 6, 1995

<PAGE>

              [ONSTOTT, CRADDICK & HYDE, CPA'S, INC.-LETTERHEAD]


                         Independent Auditors' Report

To the Partners
Rolling Meadows Apartments, Ltd.


We have audited the balance sheet of HUD Project No. 117-44009-LD, Rolling
Meadows Apartments, LTD., (a limited partnership) as of December 31, 1996, and
the related statements of profit and loss, changes in partners' capital and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HUD Project No. 117-44009-LD,
Rolling Meadows Apartments, Ltd. at December 31, 1996 and the results of its
operations and changes in partners' capital and cash flows for the year then
ended, in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 25, 1997, on our
consideration of Rolling Meadows Apartments, LTD.'s internal control structure
and reports dated February 25, 1997, on its compliance with specific
requirements applicable to major HUD programs, specific requirements applicable
to Affirmative Fair Housing, and specific requirements applicable to nonmajor
HUD program transactions.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplementary information (shown
on Schedules 1 to 14) are presented for the purposes of additional analysis and
are not a required part of the financial statements of Rolling Meadows
Apartments, Ltd. Such information has been subjected to the auditing procedures
applied in the audit of the financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.


/S/ ONSTOTT, CRADDICK & HYDE CPA's, INC.

Onstott, Craddick & Hyde CPA's, Inc.
February 25, 1997

<PAGE>

              [ONSTOTT, CRADDICK & HYDE, CPA'S, INC.-LETTERHEAD]


                         Independent Auditors' Report

To the Partners
Rolling Meadows Apartments, Ltd.


We have audited the balance sheet of HUD Project No. 117-44009-LD, Rolling
Meadows Apartments, LTD., (a limited partnership) as of December 31, 1995, and
the related statements of profit and loss, changes in partners' capital and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HUD Project No. 117-44009-LD,
Rolling Meadows Apartments, Ltd. at December 31, 1995 and the results of its
operations and changes in partners' capital and cash flows for the year then
ended, in conformity with generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report (shown
on Schedules 1 to 14) are presented for the purposes of additional analysis
and are not a required part of the financial statements of Rolling Meadows
Apartments, Ltd. Such information has been subjected to the auditing
procedures applied in the audit of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.


/S/ ONSTOTT, CRADDICK & HYDE CPA's, INC.

Onstott, Craddick & Hyde CPA's, Inc.
February 20, 1996

<PAGE>

              [ONSTOTT, CRADDICK & HYDE, CPA'S, INC. - LETTERHEAD]


                          Independent Auditor's Report

To the Partners
Rolling Meadows Apartments, Ltd.


We have audited the balance sheet of HUD Project No. 117-44009-LD, Rolling
Meadows Apartments, LTD., (a limited partnership) as of December 31, 1994, and
the related statement of profit and loss, changes in partners' capital and cash
flow for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HUD Project No. 117-44009-LD,
Rolling Meadows Apartments, Ltd. at December 31, 1994 and the results of its
operations and changes in partners' capital and cash flows for the year then
ended, in conformity with generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report (shown
on Schedules 1 to 14) are presented for the purposes of additional analysis and
are not a required part of the financial statements of Rolling Meadows
Apartments, Ltd. Such information has been subjected to the auditing procedures
applied in the audit of the financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.


/s/ ONSTOTT, CRADDICK & HYDE CPA's, INC.

ONSTOTT, CRADDICK & HYDE CPA's, INC.

February 28, 1995
<PAGE>

                          [EDWARD LEMKIN-LETTERHEAD]


                         INDEPENDENT AUDITOR'S REPORT


To the Partners
Westgate Associates Limited

     I have audited the accompanying balance sheet of Westgate Associates
Limited, HUD Project No.: 026-44008-SHM (a Vermont limited partnership) as of
December 31, 1996, and the related statements of profit & loss (HUD Form
#92410), partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management.
My responsibility is to express an opinion on these financial statements
based on my audit.

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

     In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Westgate
Associates Limited, HUD Project No.: 026-44008-SHM, as of December 31, 1996,
and the results of its operations, its changes in partners' capital and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.

     In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, I have also issued a report dated February 3, 1997 on my
consideration of Westgate Associates Limited's internal control structure and
reports dated February 3, 1997, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
program transactions.

     My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 17-25 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of
Westgate Associates Limited. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.


                                                    /S/ EDWARD LEMKIN

                                                      EDWARD LEMKIN
                                               Certified Public Accountant

Orange, Connecticut
February 3, 1997

<PAGE>

                          [EDWARD LEMKIN-LETTERHEAD]


                         INDEPENDENT AUDITOR'S REPORT


To the Partners
Westgate Associates Limited

     I have audited the accompanying balance sheet of Westgate Associates
Limited, HUD Project No.: 026-44008-SHM (a Vermont limited partnership) as of
December 31, 1995, and the related statements of profit & loss (HUD Form
#92410), partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management.
My responsibility is to express an opinion on these financial statements
based on my audit.

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

     In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Westgate
Associates Limited, HUD Project No.: 026-44008-SHM, as of December 31, 1995,
and the results of its operations, its changes in partners' capital and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.

     In accordance with Government Auditing Standards, I have also issued a
report dated February 2, 1996 on consideration of Westgate Associates
Limited's internal control structure and a report dated February 2, 1996 on
its compliance with laws and regulations.

     The accompanying supplemental information (shown on pages 17 to 25) is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in my opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.


                                                    /S/ EDWARD LEMKIN

                                                      EDWARD LEMKIN
                                               Certified Public Accountant

Orange, Connecticut
February 2, 1996

<PAGE>
                          [EDWARD LEMKIN - LETTERHEAD]

                          INDEPENDENT AUDITOR'S REPORT


To the Partners
Westgate Associates Limited

        I have audited the accompanying balance sheet of Westgate Associates
Limited, HUD Project No.: 026-44008-SHM (a Vermont limited partnership) as of
December 31, 1994, and the related statements of profit & loss (HUD Form
#92410), partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.

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

        In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Westgate Associates
Limited, HUD Project No.: 026-44008-SHM, as of December 31, 1994, and the
results of its operations, its changes in partners' capital and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.

        My audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included in
the report (shown on pages 17 to 25) are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of
Westgate Associates Limited. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.

                                /s/ EDWARD LEMKIN

                                  EDWARD LEMKIN
                           Certified Public Accountant

Orange, Connecticut
February 1, 1995
<PAGE>

                          [EDWARD LEMKIN-LETTERHEAD]


                         INDEPENDENT AUDITOR'S REPORT


To the Partners
Wingate Associates Limited


     I have audited the accompanying balance sheet of Wingate Associates
Limited, HUD Project No.: 024-44018-LDP (a New Hampshire limited partnership)
as of December 31, 1996, and the related statements of profit & loss (HUD Form
#92410), partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management.
My responsibility is to express an opinion on these financial statements based
on my audit.

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

     In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Wingate Associates
Limited, HUD Project No.: 024-44018-LDP, as of December 31, 1996, and the
results of its operations, its changes in partners' capital and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.

     In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, I have also issued a report dated February 1, 1997, on my
consideration of Wingate Associates Limited's internal control structure and
reports dated February 1, 1997, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
program transactions.

     My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 17-25 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of Wingate
Associates Limited. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.


                                                    /S/ EDWARD LEMKIN

                                                      EDWARD LEMKIN
                                               Certified Public Accountant

Orange, Connecticut
February 1, 1997

<PAGE>

                          [EDWARD LEMKIN-LETTERHEAD]


                         INDEPENDENT AUDITOR'S REPORT


To the Partners
Wingate Associates Limited


     I have audited the accompanying balance sheet of Wingate Associates
Limited, HUD Project No.: 024-44018-LDP (a New Hampshire limited partnership)
as of December 31, 1995, and the related statements of profit & loss (HUD Form
#92410), partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management.
My responsibility is to express an opinion on these financial statements based
on my audit.

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

     In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Wingate Associates
Limited, HUD Project No.: 024-44018-LDP, as of December 31, 1995, and the
results of its operations, its changes in partners' capital and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.

     In accordance with Government Auditing Standards, I have also issued a
report dated February 3, 1996 on my consideration of Wingate Associates
Limited's internal control structure and a report dated February 3, 1996 on
its compliance with laws and regulations.

     The accompanying supplemental information (shown on pages 17 to 25) is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in my opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.


                                                    /S/ EDWARD LEMKIN

                                                      EDWARD LEMKIN
                                               Certified Public Accountant

Orange, Connecticut
February 3, 1996

<PAGE>

                          [EDWARD LEMKIN - LETTERHEAD]

                          INDEPENDENT AUDITOR'S REPORT


To the Partners
Wingate Associates Limited

        I have audited the accompanying balance sheet of Wingate Associates
Limited, HUD Project No.: 024-44018-LDP (a New Hampshire limited partnership) as
of December 31, 1994, and the related statements of profit & loss (HUD Form
#92410), partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.

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

        In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Wingate Associates
Limited, HUD Project No.: 024-44018-LDP, as of December 31, 1994, and the
results of its operations, its changes in partners' capital and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.

        My audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included in
the report (shown on pages 16 to 24) are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of
Wingate Associates Limited. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.

                                /s/ EDWARD LEMKIN

                                  EDWARD LEMKIN
                           Certified Public Accountant

Orange, Connecticut
February 4, 1995

<PAGE>

                          [EDWARD LEMKIN-LETTERHEAD]


                         INDEPENDENT AUDITOR'S REPORT

To the Partners
South Munjoy Associates Limited


     I have audited the accompanying balance sheet of South Munjoy Associates
Limited, HUD Project No.: 022-55002-LDP-R (a Maine limited partnership) as of
December 31, 1996, and the related statements of profit & loss (HUD Form
#92410), partners' capital, and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management.
My responsibility is to express an opinion on these financial statements based
on my audit.

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

     In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of South Munjoy Associates
Limited, HUD Project No.: 022-55002-LDP-R, as of December 31, 1996, and the
results of its operations, its changes in partners' capital, and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

     In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, I have also issued a report dated February 3, 1997, on my
consideration of South Munjoy Associates Limited's internal control structure
and reports dated February 3, 1997, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
program transactions.

     My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 18 to 26 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of South
Munjoy Associates Limited. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.


                                                    /S/ EDWARD LEMKIN

                                                      EDWARD LEMKIN
                                               Certified Public Accountant

Orange, Connecticut
February 3, 1997

<PAGE>

                          [EDWARD LEMKIN-LETTERHEAD]


                         INDEPENDENT AUDITOR'S REPORT

To the Partners
South Munjoy Associates Limited


     I have audited the accompanying balance sheet of South Munjoy Associates
Limited, HUD Project No.: 022-55002-LDP-R (a Maine limited partnership) as of
December 31, 1995, and the related statements of profit & loss (HUD Form
#92410), partners' capital, and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management.
My responsibility is to express an opinion on these financial statements based
on my audit.

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

     In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of South Munjoy Associates
Limited, HUD Project No.: 022-55002-LDP-R, as of December 31, 1995, and the
results of its operations, its changes in partners' capital, and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

     In accordance with Government Auditing Standards, I have also issued a
report dated February 6, 1996 on my consideration of South Munjoy Associates
Limited's internal control structure and a report dated February 6, 1996 on
its compliance with laws & regulations.

     The accompanying supplemental information (shown on pages 18 to 26) are
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in my opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.


                                                    /S/ EDWARD LEMKIN

                                                      EDWARD LEMKIN
                                               Certified Public Accountant

Orange, Connecticut
February 6, 1996

<PAGE>

                          [EDWARD LEMKIN - LETTERHEAD]


                          INDEPENDENT AUDITOR'S REPORT


To the Partners
South Munjoy Associates Limited

        I have audited the accompanying balance sheet of South Munjoy Associates
Limited, HUD Project No.: 022-55002-LDP-R (a Maine limited partnership) as of
December 31, 1994, and the related statements of profit & loss (HUD Form
#92410), partners' capital, and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.

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

        In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of South Munjoy
Associates Limited, HUD Project No.: 022-55002-LDP-R, as of December 31, 1994,
and the results of its operations, its changes in partners' capital, and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.

        My audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included in
the report (shown on pages 16 to 24) are presented for the purpose of additional
analysis and are not a required part of the basic financial statement of South
Munjoy Associates Limited. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in my
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.


                                /s/ EDWARD LEMKIN

                                  EDWARD LEMKIN
                           Certified Public Accountant

Orange, Connecticut
February 8, 1995

<PAGE>

              [JEFFREY PHILLIPS MOSLEY & SCOTT, P.A. - LETTERHEAD]


INDEPENDENT AUDITORS' REPORT


To The Partners
Cedar Hill Apartments:

We have audited the accompanying financial statements of Cedar Hill Apartments
(Project Number 082-44064 LD/SUP) (a limited partnership hereinafter referred to
as the "Partnership") as of December 31, 1996, and for the year then ended,
listed in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year then ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 16, 1977, on our consideration of Cedar Hill Apartments's internal
control structure and a report dated January 16, 1997, on its compliance with
laws and regulations.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.

                  /s/ JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.


January 16, 1997

<PAGE>

              [JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.-LETTERHEAD]


INDEPENDENT AUDITORS' REPORT


To the Partners 
Char-Mur Apartments:

We have audited the accompanying financial statements of Char-Mur Apartments
(Project Number 082-44035 LD/SUP) (a limited partnership hereinafter referred to
as the "Partnership") as of December 31, 1996, and for the year then ended,
listed in the foregoing table of contents. These financial statements are the
responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity, and cash flows for
the year ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 20, 1997, on our consideration of Char-Mur Apartments internal
control structure and a report dated January 20, 1997, on its compliance with
laws and regulations.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.


/S/ JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.

January 20, 1997


<PAGE>

              [JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.-LETTERHEAD]


INDEPENDENT AUDITORS' REPORT


To the Partners 
Crossett Apartments, Ltd.:

We have audited the accompanying financial statements of Crossett Apartments,
Ltd. (Project Number 082-44063 LD/SUP) (a limited partnership hereinafter
referred to as the "Partnership") as of December 31, 1996, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Partnership as of December 31, 1996, and
the results of its operations, changes in partners' equity and cash flows for
the year then ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued a report
dated January 14, 1997, on our consideration of Crossett Apartments, Ltd.'s
internal control structure and a report dated January 14, 1997, on its
compliance with laws and regulations.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Partnership on pages 11 - 15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership, but are required by the Consolidated Audit Guide for Audits of HUD
Programs, issued July 1993 by the U.S. Department of Housing and Urban
Development, Office of Inspector General. Such schedules, which are the
responsibility of the General Partner, have been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.


/S/ JEFFREY, PHILLIPS, MOSLEY & SCOTT, P.A.

January 14, 1997

<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS



                                     ASSETS
<TABLE>
<CAPTION>

                                                                                          February 28,     February 29,
                                                                                             1997              1996   
                                                                                         -------------    -------------
<S>                                                                                      <C>              <C>          
Property and equipment - at cost, less accumulated depreciation
   (Notes 2, 4, 6 and 7)                                                                 $  93,530,519    $ 111,663,787
Cash and cash equivalents (Notes 2 and 11)                                                   5,981,506        4,277,246
Certificates of deposit (Note 11)                                                              201,986          255,000
Cash - restricted for tenants' security deposits                                             1,082,255        1,155,455
Mortgage escrow deposits (Notes 5, 6 and 11)                                                 8,098,227        7,969,001
Rents receivable                                                                               303,172          288,143
Prepaid expenses and other assets                                                            1,164,356          961,020
                                                                                         -------------    -------------

   Total assets                                                                          $ 110,362,021    $ 126,569,652
                                                                                         =============    =============

                        LIABILITIES AND PARTNERS' DEFICIT

Mortgage notes payable (Notes 6 and 11)                                                  $  63,599,388    $  71,832,854
Purchase money notes payable (Note 7)                                                       56,929,115       61,029,115
Due to selling partners (Note 7)                                                            63,552,033       62,562,415
Accounts payable, accrued expenses and other liabilities                                     4,448,032        6,333,269
Tenants' security deposits payable                                                           1,082,255        1,155,455
Due to general partners of subsidiaries and their affiliates (Note 8)                        1,152,253          998,268
Due to general partners and affiliates (Note 8)                                              1,742,027        2,989,870
Distributions payable (Note 12)                                                              1,111,554                0
                                                                                         -------------    -------------

                                                                                           193,616,657      206,901,246
                                                                                         -------------    -------------

Minority interest (Note 2)                                                                      80,374           76,347
                                                                                         -------------    -------------

Commitments and contingencies (Note 11)


Partners' deficit                                                                          (83,335,010)     (80,407,941)
                                                                                         -------------    -------------

   Total liabilities and partners' deficit                                               $ 110,362,021    $ 126,569,652
                                                                                         =============    =============
</TABLE>








See accompanying notes to consolidated financial statements

                                      -25-
<PAGE>


                    CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                         AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                             Year Ended               
                                                            --------------------------------------------
                                                            February 28,    February 29,    February 28,
                                                                1997            1996            1995  
                                                            ------------    ------------    ------------
<S>                                                         <C>             <C>             <C>         
Revenues
   Rentals, net                                             $ 29,409,734    $ 29,764,899    $ 28,970,357
   Other                                                         895,930         828,657         731,485
   Gain on sale of properties (Note 10)                        7,280,865               0               0
                                                            ------------    ------------    ------------

     Total revenues                                           37,586,529      30,593,556      29,701,842
                                                            ------------    ------------    ------------

Expenses
   Selling and renting                                           501,897         466,937         447,549
   Administrative and management                               4,499,446       4,259,188       4,108,892
   Administrative and management-related parties (Note 8)      2,773,362       1,898,169       1,875,898
   Operating                                                   5,101,730       4,991,453       5,078,721
   Repairs and maintenance                                     8,003,384       7,891,374       7,529,949
   Taxes and insurance                                         4,107,619       4,223,636       4,189,053
   Financial, principally interest                             7,824,329       8,329,170       8,496,497
   Depreciation                                                6,475,294       6,618,370       6,490,980
   Provision for impairment of assets (Note 4)                 5,166,001               0               0
                                                            ------------    ------------    ------------

     Total expenses                                           44,453,062      38,678,297      38,217,539
                                                            ------------    ------------    ------------

Loss before minority interest and extraordinary item          (6,866,533)     (8,084,741)     (8,515,697)

Minority interest in (income) loss of subsidiaries               (18,466)          1,752             481
                                                            ------------    ------------    ------------

Loss before extraordinary item                                (6,884,999)     (8,082,989)     (8,515,216)

Extraordinary item - forgiveness of
   indebtedness income (Note 10)                               5,069,484               0               0
                                                            ------------    ------------    ------------

Net loss                                                    $ (1,815,515)   $ (8,082,989)   $ (8,515,216)
                                                            ============    ============    ============

Loss before extraordinary item - limited partners             (6,816,149)     (8,002,159)     (8,430,064)

Extraordinary item - limited partners                          5,018,789               0               0
                                                            ------------    ------------    ------------

Net loss - limited partners                                 $ (1,797,360)   $ (8,002,159)   $ (8,430,064)
                                                            ============    ============    ============

Number of limited partnership units outstanding                   10,038          10,038          10,038
                                                            ============    ============    ============

Loss before extraordinary item per limited partnership      $       (679)   $       (797)   $       (840)

Extraordinary per limited partnership unit                           500               0               0
                                                            ------------    ------------    ------------

Net loss per limited partnership unit                       $       (179)   $       (797)   $       (840)
                                                            ============    ============    ============
</TABLE>


See accompanying notes to consolidated financial statements

                                      -26
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIT


<TABLE>
<CAPTION>



                                                               Total      Limited Partners  General Partners
                                                            ------------  ----------------  ----------------
<S>                                                         <C>             <C>               <C>          
Balance - March 1, 1994                                     $(63,809,736)   $(62,723,108)     $ (1,086,628)
                                                                                             
Net loss - year ended February 28, 1995                       (8,515,216)     (8,430,064)          (85,152)
                                                            ------------    ------------      ------------
                                                                                             
Balance - February 28, 1995                                  (72,324,952)    (71,153,172)       (1,171,780)
                                                                                             
Net loss - year ended February 29, 1996                       (8,082,989)     (8,002,159)          (80,830)
                                                            ------------    ------------      ------------

Balance - February 29, 1996                                  (80,407,941)    (79,155,331)       (1,252,610)
                                                                                             
Net loss - year ended February 28, 1997                       (1,815,515)     (1,797,360)          (18,155)
                                                                                             
Distributions                                                 (1,111,554)     (1,100,438)          (11,116)
                                                            ------------    ------------      ------------
                                                                                             
Balance - February 28, 1997                                 $(83,335,010)   $(82,053,129)     $ (1,281,881)
                                                            ============    ============      ============
                                                                                           
</TABLE>


























See accompanying notes to consolidated financial statements

                                      -27-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      Increase in Cash and Cash Equivalents
<TABLE>
<CAPTION>

                                                                             Year Ended               
                                                            --------------------------------------------
                                                            February 28,    February 29,    February 28,
                                                                1997            1996            1995  
                                                            ------------    ------------    ------------
<S>                                                         <C>             <C>             <C>          
Cash flows from operating activities:
  Net loss                                                  $ (1,815,515)   $ (8,082,989)   $ (8,515,216)
                                                            ------------    ------------    ------------
  Adjustments to reconcile net loss to net cash
    provided by operating activities:
  Gain on sale of properties (Note 10)                        (7,280,865)              0               0
  Extraordinary item - forgiveness of
    indebtedness income (Note 10)                             (5,069,484)              0               0
  Depreciation                                                 6,475,294       6,618,370       6,490,980
  Provision for impairment of assets (Note 4)                  5,166,001               0               0
  (Increase) decrease in assets
    Cash restricted for tenants' security deposits                71,378         (28,634)        (21,182)
    Mortgage escrow deposits                                     119,009        (103,030)       (264,716)
    Rents receivable                                             (21,323)        (73,199)        101,327
    Prepaid expenses and other assets                           (153,863)        (46,385)         81,068
  Increase (decrease) in liabilities
    Due to selling partners                                    5,286,095       5,492,620       5,492,620
    Accounts payable, accrued expenses and other liabilities     374,003         315,471         291,364
    Tenants' security deposits payable                           (21,016)         28,634          21,182
    Increase in due to general partners of subsidiaries
      and their affiliates                                       206,629         122,780          76,213
    Decrease in due to general partners of subsidiaries
      and their affiliates                                       (52,644)       (182,063)        (81,348)
    Due to general partners and affiliates                    (1,247,843)         76,511         (12,841)
    Minority interest in income (loss) of subsidiaries            18,466          (1,752)           (481)
                                                            ------------    ------------    ------------
      Total adjustments                                        3,869,837      12,219,323      12,174,186
                                                            ------------    ------------    ------------
  Net cash provided by operating activities                    2,054,322       4,136,334       3,658,970
                                                            ------------    ------------    ------------

Cash flows from investing activities:
  Decrease in certificates of deposit                             53,014               0               0
  Proceeds from sale of properties                            13,535,000               0               0
  Costs paid relating to sale of properties                     (248,628)              0               0
  Acquisitions of property and equipment                      (1,127,796)     (1,308,380)     (1,269,577)
  Increase in mortage escrow deposits                           (301,306)       (281,261)       (170,583)
                                                            ------------    ------------    ------------
  Net cash provided by (used in) investing activities         11,910,284      (1,589,641)     (1,440,160)
                                                            ------------    ------------    ------------

Cash flows from financing activities:
  Principal payments of mortgage notes                        (7,150,114)     (1,949,412)     (1,834,767)
  Payments to selling partners                                (1,795,793)       (487,931)       (252,670)
  Principal payments of purchase money notes payable          (3,300,000)              0               0
  Decrease in minority interest                                  (14,439)         (8,924)         (4,055)
                                                            ------------    ------------    ------------
  Net cash used in financing activities                      (12,260,346)     (2,446,267)     (2,091,492)
                                                            ------------    ------------    ------------
</TABLE>

                                      -28-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                      Increase in Cash and Cash Equivalents
                                   (Continued)
<TABLE>
<CAPTION>

                                                                             Year Ended               
                                                            --------------------------------------------
                                                            February 28,    February 29,    February 28,
                                                                1997            1996            1995  
                                                            ------------    ------------    ------------
<S>                                                         <C>             <C>             <C>          
Net increase in cash and cash equivalents                      1,704,260         100,426         127,318

Cash and cash equivalents, beginning of year                   4,277,246       4,176,820       4,049,502
                                                            ------------    ------------    ------------

Cash and cash equivalents, end of year                      $  5,981,506    $  4,277,246    $  4,176,820
                                                            ============    ============    ============

Supplemental disclosure of cash flows information:
   Cash paid during the year for interest                   $  3,862,613    $  2,725,430    $  2,910,812
                                                            ============    ============    ============


Supplemental disclosures of noncash investing and 
  financing activities:
  
       Distribution payable                                    1,111,554               0               0
 
  Forgiveness of indebtedness (Note 10):

       Decrease in purchase money notes payable                 (800,000)              0               0
       Decrease in due to selling partners                    (2,500,684)              0               0
       Decrease in mortgage notes payable                     (1,083,352)              0               0
       Decrease in accounts payable, accrued expenses
         and other liabilities                                  (685,448)              0               0

Summarized below are the components of the gain
  on sale of properties:
       Decrease in property and equipment, net of
         accumulated depreciation                              7,619,769               0               0
       Decrease in cash-restricted for tenants' security           1,822               0               0
         deposits
       Decrease in rents receivable                                6,294               0               0
       Decrease in mortgage escrow deposits                       53,071               0               0
       Decrease in prepaid expenses and other assets              25,527               0               0
       Increase in prepaid expenses - notes receivable           (75,000)              0               0
       Decrease in accounts payable, accrued expenses
         and other liabilities                                (1,573,792)              0               0
       Decrease in tenants' security deposits payable            (52,184)              0               0
</TABLE>














See accompanying notes to consolidated financial statements.

                                      -29-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997


NOTE 1  -     Organization

              Cambridge + Related Housing Properties Limited Partnership, (the
"Partnership") was formed pursuant to the laws of the State of Massachusetts on
April 28, 1983. The Partnership invests, as a limited partner, in other limited
partnerships (referred to herein as "Local Partnerships" "subsidiary" or
"subsidiary partnerships"), each of which owns and operates an existing
Apartment Complex which is receiving some form of local, state or federal
assistance, including mortgage insurance, rental assistance payments, permanent
mortgage financing and/or interest reduction payments ("Government Assistance").

              The Partnership holds an interest in forty-one Local Partnerships,
each of which owns one Apartment Complex which receives Government Assistance.
On June 3, 1996 and September 17, 1996, the properties and the related assets
and liabilities owned by two subsidiary partnerships were sold to third parties,
and on August 15, 1996 the Partnership's Local Partnership Interest in another
subsidiary partnership was also sold to a third party. A portion of the net
proceeds were used to settle the associated purchase money notes and accrued
interest thereon. (See Note 10.)

              The general partners of the Partnership are Government Assisted
Properties, Inc. (the "Assisted General Partner"), a Delaware corporation and a
wholly owned subsidiary of Lehman Brothers Inc. ("Lehman"), a Delaware
corporation, Related Housing Programs Corporation (the "Related General
Partner"), a Delaware corporation and an affiliate of The Related Companies,
L.P. ("Related"), a New York limited partnership, and Cambridge/Related Housing
Associates Limited Partnership ("Cambridge Related Associates"), a Massachusetts
limited partnership, together (the "General Partners"). The general partners of
Cambridge Related Associates are the Assisted General Partner and the Related
General Partner.

              Pursuant to the public offering, which occurred during 1983
through 1985, the Partnership received $50,190,000 of Gross Proceeds from 4,297
investors. No further issuance of Initial Limited Partnership Interests or
Additional Limited Partnership Interests is anticipated.

              The terms of the Amended and Restated Agreement and Certificate of
Limited Partnership of the Partnership (the "Partnership Agreement") provide,
among other things, that profits or losses, in general, be shared 99% by the
limited partners and 1% by the general partners.


NOTE 2  -     Summary of Significant Accounting Policies

              a)  Basis of Consolidation

                  The consolidated financial statements include the accounts of
the Partnership and 44 subsidiary partnerships, two of which only have activity
through the date of sale of their properties and the related assets and
liabilities on June 3, 1996 and September 17, 1996, and one of which only has
activity through the date of sale of the Partnership's interest on August 15,
1996 (see Note 10). The Partnership is the principal limited partner, with an
ownership interest of 98.99% in each of the subsidiary partnerships. Through the
rights of the Partnership and/or the General Partner, which General Partner has
a contractural obligation to act on behalf of the Partnership, to remove the
general partner of the subsidiary local partnerships and to approve certain
major operating and financial decisions, the Partnerhsip has a controlling
financial interest in the subsidiary local partnerhsips.

                  For financial reporting purposes, the Partnership's fiscal
year ends on the last day of February. All subsidiaries have fiscal years ending
December 31. Accounts of subsidiaries have been adjusted for intercompany
transactions from January 1 through the last day of February.

                  All intercompany accounts and transactions have been
eliminated in consolidation.

                                      -30-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997

NOTE 2  -     Summary of Significant Accounting Policies (Continued)


                  Increases (decreases) in the capitalization of consolidated
subsidiaries attributable to minority interest arises from contributions and
distributions to the minority interest partners.

                  Losses attributable to minority interests which exceed the
minority interests' investment in a subsidiary have been charged to the
Partnership. Such losses aggregated $0, $19,987 and $24,883 for the years ended
February 28, 1997, February 29, 1996 and February 28, 1995, (the 1996, 1995 and
1994 Fiscal Years), respectively. The Partnership's investment in each
subsidiary is equal to the respective subsidiary's partners' equity less
minority interest capital, if any.

              b)  Property and Equipment

                  In March 1995, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of". Under SFAS No. 121, the Partnership is required to review
long-lived assets and certain identifiable intangibles for impairment whenever
events or changes in circumstances indicate that the book value of an asset may
not be recoverable. An impairment loss should be recognized whenever the review
demonstrates that the book value of a long-lived asset is not recoverable.
Effective March 1, 1996, the Partnership adopted SFAS No. 121, consistent with
the adoption period.

                  Property and equipment are carried at the lower of depreciated
cost or estimated amounts recoverable through future operations and ultimate
disposition of the property. Cost includes the purchase price, acquisition fees
and expenses, and any other costs incurred in acquiring the properties. The cost
of property and equipment is depreciated over their estimated useful lives using
accelerated and straight-line methods. Expenditures for repairs and maintenance
are charged to expense as incurred; major renewals and betterments are
capitalized. At the time property and equipment are retired or otherwise
disposed of, the cost and accumulated depreciation are eliminated from the
assets and accumulated depreciation accounts and the profit or loss on such
disposition is reflected in earnings. A provision for loss on impairment of
assets is recorded when estimated amounts recoverable through future operations
and sale of the property on an undiscounted basis are below depreciated cost.
Property investments themselves are reduced to estimated fair value (generally
using discounted cash flows) when the property is considered to be impaired and
the depreciated cost exceeds estimated fair value. Through February 28, 1997,
the Partnership has recorded $5,166,001 as a provision for loss on impairment of
assets.

              c)  Interest Subsidies

                  Interest expense has been reduced by interest subsidies (Note
6).

              d)  Cash and Cash Equivalents

                  Cash and cash equivalents include cash on hand, cash in banks,
and investments in short-term investments with an original maturity of three
months or less.

              e)  Income Taxes

                  No provision has been made for income taxes in the
accompanying consolidated financial statements since such taxes, if any, are the
responsibility of the individual partners. For income tax purposes, the
Partnership has a fiscal year ending December 31 (Note 9).

                                      -31-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997

NOTE 2  -     Summary of Significant Accounting Policies (Continued)


              f)  Loss Contingencies

                  The Partnership records loss contingencies as a charge to
income when information becomes available which indicates that it is probable
that an asset has been impaired or a liability has been incurred as of the date
of the financial statements and the amount of loss can be reasonably estimated.

              g)  Use of Estimates

                  The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly actual results could differ from those estimates.

NOTE 3  -     Fair Value of Financial Instruments

              The following methods and assumptions were used to estimate the
fair value of each class of financial instruments for which it is practicable to
estimate that value:

              Cash and Cash Equivalents, Certificates of Deposit,
              ---------------------------------------------------
Cash-Restricted for Tenants' Security Deposits and Mortgage Escrow Deposits
---------------------------------------------------------------------------

              The carrying amount approximates fair value because of the short
maturity of those instruments.

              Mortgage Notes Payable
              ----------------------

              The fair value of mortgage notes payable is estimated, where
practicable, based on the borrowing rate currently available for similar loans.

              The estimated fair values of the Partnership's mortgage note
payable are as follows:

                               February 28, 1997           February 28, 1996    
                           -------------------------   -------------------------
                            Carrying        Fair        Carrying        Fair
                             Amount        Value         Amount         Value  
                           -----------   -----------   -----------   -----------
Mortgage Notes Payable
  for which it is:

Practicable to estimate
  fair value               $33,009,830   $32,233,224   $40,850,499   $39,863,803
Not Practicable (a)        $30,589,558   $         0   $30,982,355   $         0

Purchase Money Notes
  Payable for which it is
  Not Practicable (b)      $56,929,115   $         0   $61,029,115   $         0

              (a) The mortgage notes payable are insured by HUD primarily in
accordance with Section 236 of the National Housing Act. New loans are no longer
being insured in accordance with Section 236 and presently existing loans are
subject to restrictions regarding prepayment. Management believes the estimation
of fair value to be impracticable.

              (b) For the reasons discussed in Note 11(b) it is not practicable
to estimate the fair value of these notes.

                                      -32-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997


NOTE 4  -     Property and Equipment

              The components of property and equipment and their estimated
useful lives are as follows:

                                  February 28,   February 29,    Estimated
                                       1997          1996       Useful Lives  
                                  ------------   ------------   ------------

Land                              $  9,606,871   $ 10,668,083
Building and improvements          155,805,524    172,931,495   15-40 years
Furniture and fixtures               8,301,801      8,504,69 1   5-10 years
                                  ------------   ------------               

                                   173,714,196    192,104,269
Less: Accumulated depreciation      80,183,677     80,440,482
                                  ------------   ------------

                                  $ 93,530,519   $111,663,787
                                  ============   ============


              Property acquisition fees of $6,630,577 were earned by the General
Partners of the Partnership and have been capitalized as a cost of property and
equipment.

              Depreciation expense for the 1996, 1995 and 1994 Fiscal Years
amounted to $6,475,294, $6,618,370 and $6,490,980, respectively.

              During the year ended December 31, 1996, the physical condition of
the property owned by Oklahoma City-Town and Country Village Apartments Ltd.
deteriorated significantly. Repairs were restricted to making units ready for
new tenants. Three apartments damaged by fire in 1995 and 1996 were not
repaired. Vacancies increased significantly. The project is in default on its
mortgage and is in a cash overdraft position. The conditions described are not
expected to reverse in the near future. Future cash flows are estimated to be
significantly less than the carrying value of the property. As a result,
impairment of property and equipment is recognized in the financial statements
in accordance with SFAS No. 121. The cost of property and equipment has been
written down to $100,000. This amount was determined by projecting future cash
flows on the assumption that the current level of vacancies will not decrease in
the remaining estimated useful life of the property. Impairment of $4,376,899
has been recognized as the difference between the carrying value before
impairment at December 31, 1996 and the present value of estimated cash flows.

              On December 5, 1996, HUD rendered formal notification to Los
Caballeros Apartments ("Los Caballeros") that it has been declared in default of
its contractual obligations with HUD as a result of the physical deficiencies
cited. On February 13, 1997, Republic National Bank formally notified Los
Caballeros that it has been declared in default under their mortgage as a
consequence of the property's default under the regulatory agreement.
Additionally, Los Caballeros is in default under the three Housing Assistance
Payments contracts. An allowance provision for impairment of fixed assets has
been recognized in Los Caballeros' 1996 financial statements in the amount of
$789,102. On April 25, 1997, the Partnership's Local Partnership Interest in Los
Caballeros was sold to the general partners of Los Caballeros for $100,000 (see
Note 12).

                                      -33-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997


NOTE 5  -     Mortgage Escrow Deposits

              Mortgage escrow deposits consist of the following:

                                                       February 28, February 29,
                                                          1997         1996   
                                                       ----------   ----------

              Reserve for replacements                 $5,357,492   $5,099,473
              Real estate taxes, insurance and other    2,655,681    2,827,761
              Preservation Acts                            85,054       41,767
                                                       ----------   ----------

                                                       $8,098,227   $7,969,001
                                                       ==========   ==========

NOTE 6  -     Mortgage Notes Payable

              The mortgage notes are payable in aggregate monthly installments
of approximately $503,000, including principal and interest at rates ranging
from 3% to 9% per annum, through May 2022. Each subsidiary partnership's
mortgage note payable is collateralized by the land and buildings of the
respective subsidiary partnership, the assignment of certain subsidiary
partnership's rents and leases and is without further recourse.

              Certain mortgage notes with balances aggregating $32,591,409 and
$38,708,128 at December 31, 1996 and 1995, respectively, which bear interest at
rates ranging from 7% to 8.5% per annum, were eligible for interest rate
subsidies under the terms of regulatory agreements with the Secretary of the
Department of Housing and Urban Development ("HUD"). Accordingly, the subsidiary
partnerships paid only that portion of the monthly payments that would be
required if the interest rate was in the range of 1% to 1.75% per annum; the
balance was subsidized under Section 236 of the National Housing Act.

              Annual principal payment requirements for each of the next five
fiscal years are as follows:

              Year Ending December 31                             Amount  
              -----------------------                          ------------

                      1997                                     $  7,743,958
                      1998                                        2,216,399
                      1999                                        2,362,120
                      2000                                        2,518,510
                      2001                                        2,696,927
                      Thereafter                                 46,061,474
                                                                 ----------
                                                                $63,599,388
                                                                ===========

              The above principal payment requirements have been adjusted for
principal acceleration which may result from the event of default of two
subsidiary partnerships with mortgage note balances aggregating $5,663,355 at
December 31, 1996. (Note 11(a))

              The mortgage agreements require monthly deposits to reserves for
replacements aggregating approximately $171,000 and monthly deposits to escrow
accounts for real estate taxes, insurance and other (Note 5).

                                      -34-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997


NOTE 7  -     Purchase Money Notes Payable

              Nonrecourse Purchase Money Notes in the original amount of
$61,029,115 were issued to the selling partners of the subsidiary partnerships
as part of the purchase price, and are secured only by the Partnership's
interest in the subsidiary partnership to which the note relates. On June 3,
1996 and September 17, 1996, the properties and the related assets and
liabilities owned by two subsidiary partnerships were sold to third parties, and
on August 15, 1996 the Partnership's Local Partnership Interest in another
subsidiary partnership was also sold to a third party. A portion of the net
proceeds were used to settle the associated purchase money notes and accrued
interest thereon (see Note 10).

              The Purchase Money Notes, which provide for simple interest at the
rate of 9% per annum through maturity, which will occur during the period July
1998 to December 1999, will not be in default during the basic term (generally
fifteen years) if not less than 60% of the cash flow actually distributed to the
Partnership by the corresponding subsidiary partnership (generated by the
operations, as defined) is applied first to accrued interest and then to current
interest thereon. Any interest not paid currently accrues, without further
interest thereon, through the due date of the note. All accrued and unpaid
interest must be paid on the due date of the note, unless the Partnership
exercises an extension right. Continued accrual of such interest without payment
would impact the effective rate of the notes, specifically by reducing the
current effective interest rate of 9%. The exact effect is not determinable
inasmuch as it is dependent on the actual future interest payments and ultimate
repayment dates of the notes. Unpaid interest of $64,899,777 and $62,437,367 at
February 28, 1997 and February 29, 1996, respectively, has been accrued and is
included in the caption due to selling partners. In general, the interest on and
the principal of each Purchase Money Note is also payable to the extent of the
Partnership's actual receipt of proceeds from the sale or refinancing of the
Apartment Complex, or in some cases the Local Partnership Interest to which the
Purchase Money Note relates.

              The Partnership may elect, upon the payment of an extension fee of
1 1/2% per annum of the outstanding principal amount, to extend the term of the
Purchase Money Note for up to five additional years. The Partnership may also
defer payment of any accrued and unpaid interest until the due date of the note.
The Partnership expects that upon maturity it will be required to refinance or
sell its investments in the Local Partnerships in order to pay the Purchase
Money Notes and accrued interest thereon. Based on the historical operating
results of the Local Partnerships and the current economic conditions including
changes in tax laws, it is uncertain as to whether the proceeds from such sales
will be sufficient to meet the outstanding balances. Management is working with
the selling partners to restructure and/or refinance the notes. The Purchase
Money Notes are without personal recourse to either the Partnership or any of
its partners and the sellers' recourse, in the event of non-payment, would be to
foreclose on the Partnership's interests in the respective Local Partnerships.

              Cash flow distributions aggregating $504,167, $874,592 and
$387,614 were made to the Partnership in the 1996, 1995 and 1994 Fiscal Years
which does not include $43,287 and $9,899 escrow monies held for the
Preservation Acts program in the 1996 and 1994 Fiscal Years. Of such
distributions, $302,500, $487,931 and $252,670, respectively, was used to pay
interest on the purchase money notes (which includes $20,101 released to the
Partnership from Low-Income Housing Preservation and Resident Homeownership Act
of 1990 (LIHPRHA) monies in the 1994 Fiscal Year). Distribution of proceeds from
sales aggregating $9,202,571 were made to the Partnership in the 1996 Fiscal
Year of which $3,300,000 and $1,493,293, respectively, was used to pay principal
and interest on the Purchase Money Notes.

                                      -35-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997


NOTE 8  -     Related Party Transactions

              The costs incurred to related parties for the years ended February
28, 1997, February 29, 1996 and February 28, 1995 were as follows:


                                                        Year Ended              
                                          --------------------------------------
                                          February 28, February 29, February 28,
                                              1997         1996         1995   
                                          ------------ ------------ ------------
         Partnership management fees (a)   $  966,000   $  121,650   $  127,800
         Expense reimbursement (b)            208,772      152,409      158,494
         Property management fees (c)       1,572,340    1,597,860    1,563,354
         Local administrative fee (d)          26,250       26,250       26,250
                                           ----------   ----------   ----------

                                           $2,773,362   $1,898,169   $1,875,898
                                           ==========   ==========   ==========


              (a) After all other expenses of the Partnership are paid, an
annual partnership management fee of up to .5% of invested assets is payable to
the Partnership's general partners and affiliates. Partnership management fees
have been charged to operations and are included in administrative and
management-related parties expenses. Partnership management fees owed to the
General Partners amounting to approximately $936,000 and $30,000 were accrued
and unpaid as of February 28, 1997 and February 29, 1996.

              (b) The Partnership reimburses the General Partners and their
affiliates for actual Partnership operating expenses incurred by the General
Partners and their affiliates on the Partnership's behalf. The amount of
reimbursement from the Partnership is limited by the provisions of the
Partnership Agreement. Another affiliate of the General Partners performs asset
monitoring for the Partnership. These services include site visits and
evaluations of the subsidiary partnerships' performance.

              (c) Property management fees paid by Local Partnerships to
affiliates of the Local Partnerships amounted to approximately $1,572,340,
$1,597,860 and $1,563,354 for the 1996, 1995 and 1994 Fiscal Years,
respectively. Of such fees $330,024, $330,475 and $314,915 was paid to a company
which is also an affiliate of the Related General Partner for the 1996, 1995 and
1994 Fiscal Years, respectively.

              (d) Cambridge Related Associates, a limited partner of the
subsidiary partnerships is entitled to receive a local administrative fee of up
to $2,500 from each subsidiary partnership.

              Cambridge Related Associates has a .01% interest, as a limited
partner, in each of the subsidiary partnerships.

              As of January 1, 1992, Related Credit Properties III, Inc., an
affiliate of the Related General Partner, became the local general partner of
three subsidiary partnerships, Pacific Palms, a Limited Partnership, Cudahy
Gardens, a Limited Partnership, and Riverside Gardens, a Limited Partnership.

                                      -36-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997


NOTE 8  -     Related Party Transactions (Continued)



              Due to local general partners and affiliates at December 31, 1996
and 1995 consists of the following:

                                                              December 31   
                                                        ---------------------
                                                           1996        1995   
                                                        ----------   --------
              Operating advances (*)                    $  259,361   $192,985
              General partner distributions                 61,290     50,678
              Management and other operating advances      831,602    754,605
                                                        ----------   --------

                                                        $1,152,253   $998,268
                                                        ==========   ========


              (*) Operating advances include four loans payable to local general
partners and affiliates which are unsecured, non-interest bearing and are
payable out of available surplus cash, of the respective subsidiary partnership,
or at the time of sale or refinancing.

NOTE 9  -     Income Taxes

              A reconciliation of the financial statement net loss to the income
tax loss for the Partnership and its consolidated subsidiaries is as follows:

<TABLE>
<CAPTION>

                                                                       Year Ended December 31          
                                                              ------------------------------------------
                                                                  1996          1995            1994   
                                                              -----------    -----------    ------------
<S>                                                           <C>            <C>            <C>          
Financial statement net loss                                  $(1,815,515)   $(8,082,989)   $ (8,515,216)

Difference between depreciation expense recorded for
   financial reporting purposes and the accelerated cost
   recovery system utilized for income tax purposes            (1,435,732)    (1,574,305)     (2,092,587)

Difference resulting from accruals for financial reporting
   purposes not deductible for tax purposes until paid             38,371        (24,384)        167,982

Difference resulting from parent company having a
   different fiscal year for income tax and financial
   reporting purposes                                             708,043          7,263         (20,283)

Difference between gain on sale of properties recorded for
   financial reporting purposes and for income tax purposes     4,285,757              0               0

Provision for loss on impairment of assets                      5,166,001              0               0

Difference between extraordinary item-forgiveness of
   indebtedness income recorded for financial reporting
   purposes and for income tax purposes                        (1,769,101)             0               0

Other                                                             429,491              0          43,391
                                                              -----------    -----------    ------------

Net income (loss) as shown on the income tax return for
   the calendar year ended                                    $ 5,607,315    $(9,674,415)   $(10,416,713)
                                                              ===========    ===========    ============
</TABLE>

                                      -37-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997

NOTE 10  -    Sale of Properties

              On June 3, 1996, the property and the related assets and
liabilities of Roper Mountain Apartments Ltd. ("Roper Mountain") were sold to a
third party for $4,735,000, resulting in a gain in the amount of $1,871,046. The
Partnership used $1,320,500 of the net proceeds to settle the associated
Purchase Money Note and accrued interest which had a total outstanding balance
of $2,304,994, resulting in forgiveness of indebtedness income of $984,494.

              Rolling Meadows of Chickasha ("Chickasha"), a subsidiary
partnership, had previously filed a petition under Chapter 11 of the Bankruptcy
Code ("Chapter 11") which had been dismissed. HUD notified Chickasha that it
intended to commence foreclosure proceedings. Chickasha was in default and under
HUD control as a mortgagee in possession. On August 15, 1996, the Partnership's
Local Partnership Interest in Chickasha was sold to a third party for $75,000,
resulting in a gain in the amount of $472,720 and forgiveness of indebtedness
income of $1,768,800 as a result of forgiveness of the mortgage note payable to
HUD and accrued interest thereon. No proceeds were used to settle the associated
Purchase Money Note and accrued interest which had a total outstanding balance
of $1,723,095, resulting in additional forgiveness of indebtedness income.
Therefore the entire forgiveness of indebtedness income realized by the
Partnership from this transaction is $3,491,895.

              On September 17, 1996, the property and the related assets and
liabilities of Oakland-Keller Plaza ("Keller Plaza") were sold to a third party
for $8,800,000, resulting in a gain in the amount of $4,937,099. The Partnership
used $3,472,792 of the net proceeds to settle the associated Purchase Money Note
and accrued interest which had a total outstanding balance of $4,065,887,
resulting in forgiveness of indebtedness income of $593,095.

NOTE 11  -    Commitments and Contingencies

              a)  Events of Default

                  Caddo Parish-Villas South, Ltd.
                  -------------------------------

                  Caddo Parish-Villas South, Ltd. ("Villas South") continues to
be in default of its original mortgage agreement. Until November 1995, the
project operated under a provisional workout agreement with HUD. During November
1995, the mortgage note was sold to a conventional mortgagee. These items raise
substantial doubt about Villas South's ability to continue as a going concern.
The auditors for Villas South modified their reports for the 1995 and 1994
Fiscal Years due to the uncertainty of the ability of Villas South to continue
in existence. Villas South is in the process of trying to renegotiate the terms
of the notes with the new mortgage holders, but there can be no assurance that
the renegotiation will be successful. Villas South filed for protection under
Chapter 11 of the United States Bankruptcy Code on November 12, 1996 and the
equivalent of a receiver has been appointed. In the interim, Villas South is
continuing to make payments to the new mortgage holder under the provisions of
the previous workout agreement with HUD. The Partnership's investment in Villas
South was approximately $373,000 and $524,000 at February 28, 1997 and February
29, 1996, respectively, and the minority interest balance was zero at each date.
Villas South's net loss after minority interest amounted to approximately
$151,000, $151,000, and $182,000 for the 1996, 1995 and 1994 Fiscal Years,
respectively.

                  Oklahoma City-Town and Country Village Apartments, Ltd.
                  -------------------------------------------------------

                  Oklahoma City-Town and Country Village Apartments, Ltd. ("Town
and Country") continues to be in default of its original mortgage agreement.
Until November 1995, the project operated under a provisional

                                      -38-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997

NOTE 11 -     Commitments and Contingencies


workout agreement with HUD. On November 1, 1995, the mortgage note was sold to a
conventional mortgagee. No payments are currently being made on this loan. At
December 31, 1996, total liabilities exceeded total assets by approximately
$4,500,000. These items raise substantial doubt about Town and Country's ability
to continue as a going concern. The auditors for Town and Country modified their
reports for the 1996, 1995, and 1994 Fiscal Years due to the uncertainty of the
ability of Town and Country to continue in existence. Town and Country is in the
process of trying to renegotiate the terms of the notes with the new mortgage
holders, but there can be no assurance that the renegotiation will be
successful. The Partnership's investment in Town & Country was reduced to zero
by current and prior years' losses and $215,000 at February 28, 1997 and
February 29,1996, respectively, and the minority interest balance was zero at
each date. Town & Country's net loss after minority interest amounted to
approximately $4,741,000, $350,000 and $396,000 for the 1996, 1995 and 1994
Fiscal Years, respectively.

                  Los Caballeros Apartments
                  -------------------------

                  During 1995, Los Caballeros Apartments ("Los Caballeros")
received an unsatisfactory physical inspection report issued by the U.S.
Department of Housing and Urban Development ("HUD"). Los Caballeros had
submitted to HUD a Management Improvement Plan (MIO Plan) with an accompanying
estimate of restorations and improvements pursuant to the inspection report. A
request for funding from HUD accompanied the MIO Plan. The request was not
granted, and thus Los Caballeros was not able to cure the deficiencies cited in
the inspection report.

                  On December 5, 1996, HUD rendered formal notification to Los
Caballeros that it has been declared in default of its contractual obligations
with HUD as a result of the physical deficiencies cited. On February 13, 1997,
Republic National Bank formally notified Los Caballeros that it has been
declared in default under their mortgage as a consequence of the property's
default under the regulatory agreement. Additionally, Los Caballeros is in
default under the three Housing Assistance Payments contracts.

                  These problems raise substantial doubt about Los Cabelleros'
ability to continue as a going concern. The auditors for Los Caballeros modified
their report for the 1996 and 1995 Fiscal Years due to the uncertainty of the
ability of Los Caballeros to continue in existence. Management of Los Caballeros
is currently seeking to refinance the original mortgage with a non-subsidy
mortgage. An allowance provision for impairment of fixed assets has been
recognized in Los Caballeros' 1996 financial statements in the amount of
$789,102. This amount represents revaluation of the fixed assets to the mortgage
debt amount.

                  The formal default notification received on February 13, 1997
from Republic National Bank, as well as the loss of the Housing Assistance
Payment contracts, raises a substantial doubt about the entity's ability to
continue as a going concern.

                  An allowance provision for impairment of fixed assets has been
recognized in Los Caballeros' 1996 financial statement. Beyond this provision,
the financial statements of Los Caballeros do not include any additional
adjustments that could be necessary in the event Los Caballeros is unable to
continue as a going concern. The Partnership's investment in Los Caballeros was
reduced to zero by current and prior years' losses and $539,000 at February 28,
1997 and February 29, 1996, respectively, and the minority interest balance was
zero at each date. Los Caballeros net loss after minority interest amounted to
approximately $916,000, $157,000 and $99,000 for the 1996, 1995 and 1994 Fiscal
Years, respectively.

                                      -39-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997

NOTE 11 -     Commitments and Contingencies (Continued)


                  Chickasha
                  ---------

                  Rolling Meadows of Chickasha ("Chickasha"), a subsidiary
partnership, had previously filed a petition under Chapter 11 of the Bankruptcy
Code ("Chapter 11") which had been dismissed. HUD notified Chickasha that it
intended to commence foreclosure proceedings. Chickasha was in default and under
HUD control as a mortgagee in possession. On August 15, 1996, the Partnership's
Local Partnership Interest in Chickasha was sold to a third party for $75,000.

              b)  Purchase Money Notes

                  As part of the purchase price of its investment in the Local
Partnerships, the Partnership issued approximately $61,029,000 of Purchase Money
Notes. As of the end of the 1996 Fiscal Year, unpaid accrued interest on the
Purchase Money Notes amounted to approximately $64,900,000. The principal of and
all accrued interest on the Purchase Money Notes is due at maturity, which will
occur during the period July 1998 to December 1999. On June 3, 1996 and
September 17, 1996, the properties and the related assets and liabilities owned
by two subsidiary partnerships were sold to third parties, and on August 15,
1996 the Partnership's Local Partnership Interest in another subsidiary
partnership was also sold to a third party. A portion of the net proceeds were
used to settle the associated purchase money notes and accrued interest thereon
(see Note 10). The Partnership may elect, upon the payment of an extension fee
of 1 1/2% per annum of the outstanding principal amount, to extend the term of
the Purchase Money Notes for up to five additional years (see Note 7).
Management is working with the selling partners to restructure and/or refinance
the notes. The sellers recourse, in the event of non-payment, would be to
foreclose on the Partnership's interests in the respective Local Partnerships.

              c)  Certificate of Deposit

                  The Partnership has a certificate of deposit in the amount of
$71,986 at February 28, 1997 to secure an overdraft in Town and Country's bank
account. The amount of the overdraft was approximately $36,000 at December 31,
1996.

              d)  Other Restricted Cash

                  In addition, the Partnership and/or its subsidiary
partnerships may from time to time use a portion of their cash or property to
secure operating credit lines. As of February 28, 1997, $130,000 of the
Partnership's funds have been so pledged to secure operating credit lines at
seven subsidiary partnerships.

              e)  Guarantees

                  The Partnership has guaranteed approximately $77,000 of
advances to certain subsidiary partnerships from their general partners and
affiliates.

              f)  Legal Proceedings

                  The Partnership is a Plaintiff in the Oklahoma County District
Court in Oklahoma against Jerry L. Womack and Womack Property Management, Inc.,
an Oklahoma corporation. In this action entitled Shearson + Related Housing
Properties Limited Partnership and Shearson/Related Housing Associates Limited
Partnership v. Jerry L. Womack and Womack Property Management, Inc., the
Partnership seeks judgment for damages caused by

                                      -40-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997

NOTE 11 -     Commitments and Contingencies (Continued)


the individual defendant's resignation as general partner of Chickasha, of which
the Partnership is a limited partner, and by the corporate defendant's
mismanagement of the apartment project owned by Chickasha. The individual
defendant has counterclaimed against the Plaintiffs, alleging that they breached
an agreement to advance funds to Chickasha sufficient to pay operating losses on
the property, thereby damaging such defendant in an amount exceeding $10,000.
The corporate defendant has counterclaimed against the Plaintiffs for unpaid
management fees and expenses approximating $6,000. Both counterclaims seek costs
and attorneys' fees.

              Discovery is continuing in the action. The Plaintiffs are
responding vigorously to the counterclaims and intend to continue doing so.
While it is impossible to predict with certainty, counsel believes the
counterclaims have no substantial merit and that an outcome unfavorable to the
Partnership is unlikely.

              The U.S. Department of Housing and Urban Development ("HUD"), the
holder of the mortgage on the Project, notified Chickasha that such mortgage was
in default and that HUD intended to commence foreclosure proceedings. On August
15, 1996, the Partnership's limited partnership interest in Chickasha was sold
to a third party for $75,000 (see Note 10 to the financial statements).

              g)  Uninsured Cash and Cash Equivalents

                  The Partnership maintains its cash and cash equivalents in
various banks. Accounts at each bank are guaranteed by the Federal Deposit
Insurance Corporation (FDIC) up to $100,000. As of February 28, 1997, uninsured
cash and cash equivalents and mortgage escrow deposits approximated $3,162,000.

              h)  Sale of Subsidiary Partnership

                  The general partners of one subsidiary partnership, Westgate
Associates, Limited ("Westgate"), have signed an option agreement to sell the
project to the Vermont Housing Finance Agency, subject to HUD approval and other
contingencies, on or before December 31, 1998. The Partnership's investment in
Westgate was approximately $808,000 at February 28, 1997. Westgate's assets
constituted approximately 2% of the consolidated total assets at February 28,
1997.

                  On March 14, 1996, South Munjoy Associates, Limited entered
into a purchase and sale of real estate agreement with Mainland Development
Company of Portland, Maine to sell the project for a sales price of
approximately $3,000,000, subject to HUD approval and other contingencies. The
net proceeds will be used to satisfy the existing mortgage debt of approximately
$800,000. The balance of the proceeds will be used to settle the Purchase Money
Notes and accrued interest with the balance, if any, available for general
partnership purposes. The Partnership's investment in South Munjoy was
approximately $2,405,000 at February 28, 1997. South Munjoy's assets constituted
approximately 3% of the consolidated total assets at February 28, 1997.

              i)  Other

                  The Partnership is subject to the risks incident to potential
losses arising from the management and ownership of improved real estate. The
Partnership can also be affected by poor economic conditions generally, however
no more than 20% of the properties are located in any single state. There are
also substantial risks associated with owning properties receiving Government
Assistance, for example the possibility that Congress may not appropriate funds
to enable HUD to make rental assistance payments. HUD also restricts annual cash
distributions to partners based on operating results and a percentage of the
owners equity contribution. The

                                      -41-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 28, 1997


NOTE 11 -     Commitments and Contingencies (Continued)



Partnership cannot sell or substantially liquidate its investments in subsidiary
partnerships during the period that the subsidy agreements are in existence
without HUD's approval. Furthermore, there may not be market demand for
apartments at full market rents when the rental assistance contracts expire.

NOTE 12 -     Subsequent Events

               In March 1997, a distribution of approximately $1,100,000 and
$11,000 which was accrued at February 28, 1997 was paid to the limited partners
and General Partners, respectively, from net proceeds from the sale of
underlying properties.

On April 25, 1997, the Partnership's Local Partnership Interest in Los
Caballeros was sold to the general partners of Los Caballeros for $100,000,
resulting in a gain in the amount of approximately $500,000. No proceeds were
used to settle the associated Purchase Money Note and accrued interest which had
a total outstanding balance of $3,187,950, resulting in forgiveness of
indebtedness income. For tax purposes, the entire gain to be realized by the
Partnership is anticipated to be approximately $5,000,000.

                                      -42-
<PAGE>


Item 9.       Changes in and Disagreements with Accountants on Accounting and 
              Financial Disclosure.

              None


                                    PART III

Item 10.      Directors and Executive Officers of the Registrant.

              The Partnership has no directors or officers. The Partnership's
affairs are managed and controlled by the General Partners.

              Government Assisted Properties, Inc. is a wholly-owned subsidiary
of Lehman Brothers, Inc. ("Lehman"). Related Housing Programs Corporation is
affiliated with The Related Companies, L.P. ("Related"). The general partner of
Related is The Related Realty Group, Inc., of which Stephen M. Ross is
president, director and a stockholder. The General Partners manage and control
the affairs of the Partnership by engaging other affiliates of Related and
Lehman.

              Certain information concerning the directors and officers of the
General Partners who may be deemed directors or executive officers of the
Partnership are set forth below.

Government Assisted Properties, Inc.
------------------------------------

              Government Assisted Properties, Inc. (the "Assisted General
Partner") was incorporated in Delaware on April 15, 1983. As described below,
several of the officers and directors of the Assisted General Partner have had
significant experience in the real estate business. Two of the officers of the
Assisted General Partner served on the Investment Committee of the Partnership,
which was responsible for the acquisition of Local Partnership Interests. In
addition, the Assisted General Partner reviews the operations, budgets and
financial results of the Partnership and Local Partnerships on an ongoing basis.
The Assisted General Partner and/or its affiliates, through participation in the
Investment Committee or otherwise, will provide consultation and advice with
respect to proposed sales or refinancings of the Partnership's investments in
appropriate circumstances. The Assisted General Partner also assists in the
preparation of, and reviews and comments upon, all filings required to be made
by the Partnership with the Securities and Exchange Commission, HUD, the
Internal Revenue Service and any other federal or state government body, and
reports to investors.

              The director and officers of the Assisted General Partner are as
follows:

              PAUL L. ABBOTT, 51, is a Managing Director of Lehman Brothers and
President of the Assisted General Partner. Mr. Abbott joined Lehman Brothers in
August 1988, and is responsible for the investment management of residential,
commercial and retail real estate. Prior to joining Lehman, Mr. Abbott was a
real estate consultant and senior officer of a privately held company
specializing in the syndication of private real estate limited partnerships.
From 1974 through 1983, Mr. Abbott was an officer of two life insurance
companies and a director of an insurance agency subsidiary. Mr. Abbott received
his formal education in the undergraduate and graduate schools of Washington
University of St. Louis.

              DONALD E. PETROW, 40, is a First Vice President of Lehman Brothers
and Vice President of the Assisted General Partner. From March 1989, he has been
responsible for the investment management of various investment portfolios,
including but not limited to, federal insured mortgages, residential real
estate, broadcasting and energy. From November 1981 to February 1989, Mr.
Petrow, as a Vice President of Lehman, was involved in investment banking
activities relating to partnership finance and acquisition. Prior to joining
Lehman, Mr. Petrow was employed in accounting and equipment leasing firms. Mr.
Petrows holds a B.S. Degree in accounting from Saint Peters College and an
M.B.A. in Finance from Pace University.

                                      -43-
<PAGE>


Related Housing Programs Corporation
------------------------------------

              The Related Housing Programs Corporation (the "Related General
Partner") was incorporated in Delaware on July 2, 1982. The directors and
executive officers of the Related General Partner are as follows:

              STEPHEN M. ROSS, 57, is a Director of the Related General Partner.
Mr. Ross is also President, Director and shareholder of The Related Realty
Group, Inc., the general partner of The Related Companies, L.P. He graduated
from the University of Michigan School of Business Administration with a
Bachelor of Science degree and from Wayne State University School of Law with a
Juris Doctor degree. Mr. Ross then received a Master of Laws degree in taxation
from New York University School of Law. He joined the accounting firm of Coopers
& Lybrand in Detroit as a tax specialist and later moved to New York, where he
worked for two large Wall Street investment banking firms in their real estate
and corporate finance departments. Mr. Ross formed the predecessor of The
Related Companies, L.P. in 1972 to develop, manage, finance and acquire
subsidized and conventional apartment developments.

              J. MICHAEL FRIED, 53, is President and a Director of the Related
General Partner. Mr. Fried is the sole shareholder of one of the general
partners of Related Capital Company ("Capital"), a real estate finance and
acquisition affiliate of Related. In that capacity, he is responsible for all of
Capital's syndication, finance, acquisition and investor reporting activities.
Mr. Fried practiced corporate law in New York City with the law firm of
Proskauer Rose Goetz & Mendelsohn from 1974 until he joined Capital in 1979. Mr.
Fried graduated from Brooklyn Law School with a Juris Doctor degree, magna cum
laude; from Long Island University Graduate School with a Master of Science
degree in Psychology; and from Michigan State University with a Bachelor of Arts
degree in History.

              ALAN P. HIRMES, 42, is a Vice President of the Related General
Partner. Mr. Hirmes has been a Certified Public Accountant in New York since
1978. Prior to joining Related in October 1983, Mr. Hirmes was employed by
Weiner & Co., Certified Public Accountants. Mr. Hirmes is also a Vice President
of Capital. Mr. Hirmes graduated from Hofstra University with a Bachelor of Arts
degree.

              STUART J. BOESKY, 40, is a Vice President of the Related General
Partner. Mr. Boesky practiced real estate and tax law in New York City with the
law firm of Shipley & Rothstein from 1984 until February 1986 when he joined
Capital. From 1983 to 1984, Mr. Boesky practiced law with the Boston law firm of
Kaye Fialkow Richard & Rothstein, and from 1978 to 1980 was a consultant
specializing in real estate at the accounting firm of Laventhol & Horwath. Mr.
Boesky graduated from Michigan State University with a Bachelor of Arts degree
and from Wayne State School of Law with a Juris Doctor degree. He then received
a Master of Laws degree in Taxation from Boston University School of Law.

              RICHARD A. PALERMO, 36, is Treasurer of the Related General
Partner. Mr. Palermo has been a Certified Public Accountant in New York since
1985. Prior to joining Related in September 1993, Mr. Palermo was employed by
Sterling Grace Capital Management from October 1990 to September 1993,
Integrated Resources, Inc. from October 1988 to October 1990 and E.F. Hutton &
Company, Inc. from June 1986 to October 1988. From October 1982 to June 1986,
Mr. Palermo was employed by Marks Shron & Company and Mann Judd Landau,
certified public accountants. Mr. Palermo graduated from Adelphi University with
a Bachelor of Business Administration Degree.

              LYNN A. McMAHON, 41, is Secretary of the Related General Partner.
Since 1983, she has served as Assistant to the President of Capital. From 1978
to 1983 she was employed at Sony Corporation of America in the Government
Relations Department.

              SUSAN J. McGUIRE, 50, is Assistant Secretary of the Related
General Partner. Ms. McGuire graduated from William Cullen Bryant High School in
Woodside, New York, and attended Queensboro Community College. Since January
1977, she has served as Assistant to the President and Office Manager at
Capital. From May 1973 to January 1977, she was employed as an administrative
assistant with Condren, Walker & Co., Inc., an investment banking firm in New
York City.

                                      -44-
<PAGE>


Item 11.      Executive Compensation.

              The Partnership has no officers or directors. The Partnership does
not pay or accrue any fees, salaries or other forms of compensation to directors
or officers of the General Partners for their services. However, under the terms
of the Partnership Agreement , the General Partners and their affiliates are
entitled to receive compensation from the Partnership in consideration of
certain services rendered to the Partnership by such parties. In addition, the
General Partners collectively hold a 1% interest in all profits, losses and
distributions attributable to operations and a subordinated 15% interest in such
items attributable to sales and refinancings. See Note 8 to the Financial
Statements in Item 8 above, which information is incorporated herein by
reference thereto. Certain directors and officers of the General Partners
receive compensation from the General Partner and their affiliates for services
performed for various affiliated entities which may include services performed
for the Partnership.

              Tabular information concerning salaries, bonuses and other types
of compensation payable to executive officers has not been included in this
annual report. As noted above, the Partnership has no executive officers. The
levels of compensation payable to the General Partners and/or their affiliates
is limited by the terms of the Partnership Agreement and may not be increased
therefrom on a discretionary basis.



                                      -45-
<PAGE>


Item 12.      Security Ownership of Certain Beneficial Owners and Management.

              The General Partners own all of the outstanding general
partnership interests in the Partnership. The General Partners collectively have
a 1% interest in all profits, losses and distributions of the Partnership from
operations and a subordinated 15% interest in such items from sale or
refinancing proceeds. Except as aforesaid, no person is known to own
beneficially in excess of 5% of the outstanding partnership interests.

              At February 28, 1997, security ownership by the General Partners
and their affiliates is as follows:

<TABLE>
<CAPTION>

                              Name and Address of                  Amount of               Percentage
Title of Class                Beneficial Ownership             Beneficial Ownership         of Class
--------------                --------------------             --------------------        ----------
<S>                           <C>                                    <C>                      <C>
General Partnership           Government Assisted
Interest in the Partnership   Properties, Inc.                       $   1                    25%
                              c/o Lehman Brothers                                           
                              3 World Financial Center                                      
                              New York, NY  10285                                           
                                                                                            
                              Related Housing Programs                                      
                              Corporation                                1                    25%
                              625 Madison Avenue                                            
                              New York, NY  10022                                           
                                                                                            
                              Cambridge/Related Housing                                     
                              Associates Limited Partnership           998                    50%
                              625 Madison Avenue                                            
                              New York, NY  10022                            
</TABLE>

              The Assisted General Partner and the Related General Partner each
hold a .5% general partnership interest in Cambridge Related Associates. Ronald
W. Weiss and J. Michael Fried each own a 49.5% limited partner interest in
Cambridge Related Associates. Ronald W. Weiss is not affiliated with the
Assisted or Related General Partner.


Item 13.      Certain Relationships and Related Transactions.

              The Partnership has and will continue to have certain
relationships with the General Partner and its affiliates, as discussed in Item
11 and also Note 8 to the Financial Statements in Item 8 above, which is
incorporated herein by reference thereto. However, there have been no direct
financial transactions between the Partnership and the directors and officers of
the General Partners.

              Affiliates of the Related General Partner earned approximately
$330,000 in management fees during the 1996 Fiscal Year for providing property
management services to nine of the Local Partnerships.

              In accordance with the partnership agreements, Cambridge Related
Associates was named as the general partner of the following six Local
Partnerships: New Jersey, Ziegler Boulevard, Eastwyck III, Country, Northbrook
III and Roper Mountain.

                                      -46-
<PAGE>


                                     PART IV
<TABLE>
<CAPTION>

<S>           <C>                                                                                    <C> 
Item 14.      Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

                                                                                                     Sequential
                                                                                                        Page 
                                                                                                     ----------
(a) 1.        Financial Statements
              --------------------

              Independent Auditors' Report                                                               24

              Consolidated Balance Sheets at February 28, 1997 and February 29, 1996                    138

              Consolidated Statements of Operations for the years ended February                        139
              28, 1997, February 29, 1996 and February 28, 1995

              Consolidated Statements of Partners' Deficit for the years ended                          140
              February 28, 1997, February 29, 1996 and February 28, 1995

              Consolidated Statements of Cash Flows for the years ended February                        141
              28, 1997, February 29, 1996 and February 28, 1995

              Notes to Consolidated Financial Statements                                                143


(a) 2.        Financial Statement Schedules
              -----------------------------

              Independent Auditors' Report                                                              163

              Schedule I - Condensed Financial Information of Registrant                                164

              Schedule III - Real Estate and Accumulated Depreciation                                   167

              All other schedules have been omitted because the required                                
              information is included in the financial statements and notes
              thereto or they are not applicable or not required.


(a) 3.        Exhibits
              --------

(3)           The Partnership's Amended and Restated Agreement and Certificate of
              Limited Partnership, as filed with the Secretary of State of the
              Commonwealth of Massachusetts, incorporated by reference to Exhibit (3)
              to the Partnership's Annual Report on Form 10-K for the fiscal year ended
              February 29, 1984 (Commission File #0-12634).

(21)          The Local Partnerships set forth in Item 2 may be considered subsidiaries
              of the Registrant

(27)          Financial Data Schedule (filed herewith)                                                  169


(b)           Reports on Form 8-K
              -------------------

              None
</TABLE>

                                      -47-
<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.


                     CAMBRIDGE + RELATED HOUSING PROPERTIES
                     --------------------------------------
                               LIMITED PARTNERSHIP
                               -------------------



                                       By: GOVERNMENT ASSISTED PROPERTIES, INC.,
                                           a general partner

Date:  June 12, 1997

                                           By:  /s/ Paul L. Abbott
                                                ------------------
                                                Paul L. Abbott
                                                President


                                       and


                                       By:    RELATED HOUSING PROGRAMS 
                                              CORPORATION,
                                              a general partner

Date:  June 12, 1997

                                              By: /s/ J. Michael Fried
                                                  --------------------
                                                  J. Michael Fried
                                                  President and Director

                                      -50-
<PAGE>


              Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf by
the registrant and in the capacities and on the dates indicated:


    Signature                             Title                         Date
----------------------  ------------------------------------------  ------------

/s/ J. Michael Fried    President  and Chief Executive Officer     
----------------------  (principal executive officer) and Director  
J. Michael Fried        of Related  Housing Programs Corporation   June 12, 1997


/s/ Alan P. Hirmes      Vice President (principal financial  
----------------------  officer) of Related Housing Programs  
Alan P. Hirmes          Corporation                                June 12, 1997


/s/ Richard A. Palermo  Treasurer (principal accounting       
----------------------  officer) of Related Housing Programs   
Richard A. Palermo      Corporation                                June 12, 1997


/s/ Stephen M. Ross     
----------------------  Director of Related Housing 
Stephen M. Ross         Programs Corporation                       June 12, 1997


/s/ Paul L. Abbott      President and Chief Executive Officer and  
----------------------  Chief Financial Officer of Government       
Paul L. Abbott          Assisted Properties, Inc.                  June 12, 1997


                                      -51-
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------


To the Partners of
Cambridge + Related Housing Properties Limited Partnership and Subsidiaries


          In connection with our audits of the consolidated financial statements
of Cambridge + Related Housing Properties Limited Partnership and Subsidiaries
included in this Form 10-K as presented in our opinion dated May 30, 1997 on
page 24, and based on the reports of other auditors, we have also audited
supporting Schedules I and III for the 1996, 1995 and 1994 Fiscal Years. In our
opinion, and based on the reports of other auditors (certain of which were
modified due to the uncertainty of these subsidiary partnerships' abilities to
continue in existence), these consolidated schedules present fairly, when read
in conjunction with the related consolidated financial statements, the financial
data required to be set forth therein.

          As discussed in Note 11(a), four of the subsidiary partnerships are in
default of their mortgage agreements. This raises substantial doubt about these
subsidiary partnerships' abilities to continue as going concerns. The auditors
of two (1996 Fiscal Year), three (1995 Fiscal Year), and two (1994 Fiscal Year)
of these subsidiary partnerships have modified their reports, due to the
uncertainty of the ability of the subsidiary partnerships to continue in
existence. Management's plans regarding these matters are also discussed in Note
11(a). The financial statements for two (1996 Fiscal Year) and one (1995 and
1994 Fiscal Years) of these subsidiary partnerships were not audited. Such
subsidiary partnerships' losses constituted 2%, 13% and 10% of the Partnership's
net loss during the 1996, 1995 and 1994 Fiscal Years and assets constituted 5%
and 8% of the Partnership's total assets at February 28, 1997 and February 29,
1996, respectively. The consolidated financial statements do not include any
adjustments that might result from the outcome of these uncertainties.

          As discussed in Note 7, the principal of and all accrued interest on
the purchase money notes are due at maturity, which will occur, during 1998 to
1999. The Partnership expects that upon maturity it will be required to
refinance or sell its investments in the subsidiary partnerships in order to pay
the purchase money notes and related interest obligations. It is uncertain as to
whether the proceeds from such sales will be sufficient to meet the outstanding
balances of the purchase money notes and accrued interest thereon. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

TRIEN, ROSENBERG, ROSENBERG, WEINBERG, CIULLO & FAZZARI, L.L.P.

New York, New York
May 30, 1997

<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT


              Summarized condensed financial information of registrant (not
including consolidated subsidiary partnerships)



                            CONDENSED BALANCE SHEETS


                                     ASSETS

                                                    February 28,    February 29,
                                                        1997            1996*  
                                                    -----------     -----------

Cash and cash equivalents                           $ 2,120,859     $    53,218
Certificates of deposit                                 201,986         255,000
Investment in subsidiary partnerships                41,362,927      46,741,239
Other assets                                            175,538          93,217
                                                    -----------     -----------

   Total assets                                     $43,861,310     $47,142,674
                                                    ===========     ===========


                        LIABILITIES AND PARTNERS' DEFICIT

Purchase money notes payable                        $56,929,115     $61,029,115
Due to general partner and affiliates                   791,514       1,953,071
Due to selling partners                              63,442,985      62,453,367
Other liabilities                                        17,601          17,666
Distribution payable                                  1,111,554               0
                                                    -----------     -----------
   Total liabilities                                122,292,769     125,453,219


Partners' deficit                                   (78,431,459)    (78,310,545)
                                                    -----------     -----------

Total liabilities and partners' deficit             $43,861,370     $47,142,674
                                                    ===========     ===========


              Investments in subsidiary partnerships are recorded in accordance
with the equity method of accounting, wherein the investments are not reduced
below zero. Accordingly, partners' deficit on the consolidated balance sheet
will differ from partners' deficit shown above.


*Restated for comparative purposes to reflect investments in certain subsidiary
 partnerships at zero.

                                      -52-
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT


                       CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                            Year Ended               
                                                            -----------------------------------------
                                                            February 28,   February 29,   February 28,
                                                               1997           1996*           1995*  
                                                            -----------    -----------    -----------
<S>                                                         <C>            <C>            <C>        
Revenues

   Other                                                    $    66,982    $    15,254    $    16,994
                                                            -----------    -----------    -----------

                                                                 66,982         15,254         16,994
                                                            -----------    -----------    -----------

Expenses

   Administrative and management                                195,043        180,897        242,532
   Administrative and management-related parties              1,174,772        274,059        286,294
   Financial, principally interest                            5,286,095      5,492,620      5,492,620
                                                            -----------    -----------    -----------

                                                              6,655,910      5,947,576      6,021,446
                                                            -----------    -----------    -----------

                                                             (6,588,928)    (5,932,322)    (6,004,452)

   Forgiveness of indebtness income                           3,207,855              0              0
   Equity in income (loss) of subsidiary partnerships (a)     4,371,713     (1,763,546)    (2,249,359)
                                                            -----------    -----------    -----------

Net income (loss)                                           $   990,640    $(7,695,868)   $(8,253,811)
                                                            ===========    ===========    ===========
</TABLE>


(a) Includes suspended prior year losses in excess of investment in accordance
with equity method of accounting amounting to ($2,097,399).


*Restated for comparative purposes to reflect investments in certain subsidiary
 partnerships at zero.
<PAGE>



           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT


                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                        Year Ended               
                                                        -----------------------------------------
                                                        February 28,   February 29,   February 28,
                                                           1997           1996*          1995*  
                                                        -----------    -----------    -----------
<S>                                                     <C>            <C>            <C>         
Cash flows from operating activities:

Net income (loss)                                       $   990,640    $(7,695,868)   $(8,253,811)
                                                        -----------    -----------    -----------

Adjustments to reconcile net loss to net cash
   (used in) operating activities:

   Forgiveness of indebtedness income                    (3,207,855)             0              0

   (Increase) decrease in assets

   Decrease in certificates of deposit                       53,014              0              0
   Equity in (income) loss of subsidiary partnerships    (4,371,713)     1,763,546      2,249,359
   (Increase) decrease in other assets                      (82,321)       (39,226)        23,906

   Increase (decrease) in liabilities

   Due to general partners and affiliates                (1,254,385)        59,593        (28,867)
   Due to selling partners                                5,286,095      5,492,620      5,492,620
   Other liabilities                                            (65)          (677)             2
                                                        -----------    -----------    -----------

   Total adjustments                                     (3,577,230)     7,275,856      7,737,020
                                                        -----------    -----------    -----------

   Net cash (used in) operating activities               (2,586,590)      (420,012)      (516,791)
                                                        -----------    -----------    -----------

Net cash provided by investing activities:

   Distributions from subsidiaries                        9,750,025        874,592        397,512
                                                        -----------    -----------    -----------

Net cash (used in) financing activities:

   Principal payments of purchase money notes            (3,300,000)             0              0
   Payments to selling partners                          (1,795,794)      (487,932)      (252,670)
                                                        -----------    -----------    -----------
                                                         (5,095,794)      (487,932)      (252,670)
                                                        -----------    -----------    -----------

Net increase (decrease) in cash and cash equivalents      2,067,641        (33,352)      (371,949)

Cash and cash equivalents, beginning of year                 53,218         86,570        458,519
                                                        -----------    -----------    -----------

Cash and cash equivalents, end of year                  $ 2,120,859    $    53,218    $    86,570
                                                        ===========    ===========    ===========

</TABLE>

*Restated for comparative purposes to reflect investments in certain subsidiary
 partnerships at zero.
<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                FEBRUARY 28, 1997

<TABLE>
<CAPTION>
                                                                                                              
                                                                                                                 
                                                                 Initial Cost to Partnership   Cost Capitalized    
                                                                 ---------------------------     Subsequent to     
                                                                                Buildings and    Acquisition:   
Subsidiary Partnership's Residential Property     Encumbrances       Land       Improvements     Improvements   
---------------------------------------------     ------------   ------------   ------------     ------------   
                                                                                                                
<S>    <C>                                        <C>            <C>            <C>              <C>            
 (9)   Bay Village Company                        $  4,449,246   $    333,604   $  6,053,390     $    600,195   
(12)   Bethany Glen Associates                       2,429,399        341,004      3,025,540          403,793   
(11)   Grandview-Blue Ridge Manor, Limited           1,463,289        128,604      2,011,867           25,279   
 (4)   Buena Vista Manor Apts. Ltd.                  3,215,509        258,604      4,355,907          578,551   
 (7)   Canton Commons Apartments                     9,460,525        683,605     11,875,258          210,342   
(18)   Cedar Hill Apartments, Ltd.                   1,001,471         67,419      1,337,361           51,892   
(10)   Breckenridge-Chaparral Apartments II, Ltd.    1,473,143        123,604      2,010,522          117,442   
(18)   Char-mur Apartments                             826,994         55,048      1,080,372           41,634   
 (7)   Clinton Plaza Apartments L. P.                3,022,730        238,604      4,443,787          131,687   
 (7)   Clinton Plaza Apartments #2 L. P.             3,696,548        288,604      5,293,492          177,190   
(18)   Crossett Apartments, Ltd.                       931,031         61,840      1,176,962           77,821   
 (8)   Cudahy Gardens, Ltd.                          2,319,863        168,604      3,092,733          109,710   
(10)   El Paso-Gateway East, Ltd.                    1,815,159        158,604      2,422,623          328,567   
 (7)   Golf Manor Apartments, Ltd.                   2,018,524        183,605      3,060,084          113,674   
 (7)   Grosvenor South Apartments L. P.              2,794,618        233,604      4,341,549           45,670   
 (7)   Grosvenor South Apartments #2 L. P.             868,349         81,104      1,460,463           65,123   
 (3)   Oakland-Keller Plaza                                  0        358,605      5,742,056       (6,100,661)  
(16)   Lafayette Square Apartment's Ltd.             3,280,821        348,604      4,116,308          300,165   
 (8)   San Diego-Logan Square Gardens Co.            4,008,613        308,604      5,005,103          538,226   
 (6)   Los Caballeros Apartments                     3,120,591        223,604      4,124,963         (778,254)  
 (3)   South Munjoy Associates Ltd.                  2,275,505        208,604      3,456,920          577,013   
(13)   Country, Ltd.                                 2,902,400        210,827      3,807,680           16,147   
(13)   Northbrook III, Ltd.                          1,369,365        131,383      2,305,900           17,754   
(10)   Forth Worth-Northwood Apartments, Ltd.        1,611,461        118,604      2,226,552          264,151   
(10)   Corpus Christi-Oso Bay Apartments, Ltd.       1,900,921        158,604      2,501,173          204,305   
 (8)   Pacific Palms, Ltd.                           3,768,653        233,604      4,819,956          535,800   
(14)   Zeigler Blvd., Ltd.                           2,878,586        218,605      3,945,003          121,652   
(14)   Parktowne, Ltd.                               2,529,161        176,605      3,273,501           97,226   
 (8)   Riverside Gardens, Ltd.                       4,298,211        308,604      5,357,903          589,217   
 (5)   Rolling Meadows Apts., Ltd.                   3,420,658        258,604      4,418,421          533,683   
 (5)   Ardmore-Rolling Meadows of Ardmore, Ltd.      1,711,707        138,604      2,320,412          206,089   
 (5)   Rolling Meadows of Chickasha, Limited                 0        128,604      2,298,164       (2,426,768)  
(15)   Roper Mountain Apartments                             0        258,605      4,925,617       (5,184,222)  
 (7)   Rosewood Manor Apartments                     4,179,870        508,604      5,328,672           56,606   
(14)   New Jersey, Ltd.                              2,417,117        178,605      3,214,241          112,737   
(10)   Stephenville-Tarleton Arms                    2,200,049        238,604      2,832,970          167,489   
 (5)   Oklahoma City-Town & Country Village          6,369,797        408,604      7,307,195       (4,253,696)  
(17)   Caddo Parish-Villas South, Ltd.               5,168,558        298,604      6,019,236          183,248   
(14)   Eastwyck III, Ltd.                            1,225,777        108,605      1,790,877            8,226   
 (7)   Warren Manor Apts., Ltd.-Property A and B     7,254,232        758,604     10,506,325          337,217   
 (7)   Warren Woods Apartments, Ltd.                 3,228,256        308,605      4,697,009           98,940   
 (1)   Westgate Associates Ltd.                      2,041,997        183,604      2,824,512          147,054   
(14)   Westwood Apartments Company, Limited          3,341,559        233,605      4,168,757           37,126   
 (2)   Wingate Associates Ltd.                       2,238,240        198,604      2,968,529          263,308   
                                                     ---------        -------      ---------          -------   
                                                                                                                
                                                  $120,528,503   $ 10,619,983   $173,345,865     $(10,251,652)  
                                                  ============   ============   ============     ============   
                                                                                             

[RESTUBBED TABLE]
                                                                                                                         
                                                       Gross Amount at which Carried At Close of Period                  
                                                       ------------------------------------------------                  
                                                                         Buildings and                      Accumulated    
Subsidiary Partnership's Residential Property             Land           Improvements          Total        Depreciation   
---------------------------------------------          ------------      ------------      ------------     ------------   
                                                                                                                           
<S>    <C>                                             <C>               <C>               <C>              <C>            
 (9)   Bay Village Company                             $    334,015      $  6,653,174      $  6,987,189     $  3,064,323   
(12)   Bethany Glen Associates                              341,415         3,428,922         3,770,337        2,107,396   
(11)   Grandview-Blue Ridge Manor, Limited                  129,015         2,036,735         2,165,750          967,119   
 (4)   Buena Vista Manor Apts. Ltd.                         294,581         4,898,481         5,193,062        3,080,320   
 (7)   Canton Commons Apartments                            684,016        12,085,189        12,769,205        6,537,194   
(18)   Cedar Hill Apartments, Ltd.                           69,380         1,387,292         1,456,672(e)       492,321   
(10)   Breckenridge-Chaparral Apartments II, Ltd.           124,015         2,127,553         2,251,568          946,089   
(18)   Char-mur Apartments                                   57,009         1,120,045         1,177,054          399,376   
 (7)   Clinton Plaza Apartments L. P.                       239,016         4,575,062         4,814,078        2,069,139   
 (7)   Clinton Plaza Apartments #2 L. P.                    289,016         5,470,270         5,759,286        2,463,629   
(18)   Crossett Apartments, Ltd.                             63,801         1,252,822         1,316,623          518,584   
 (8)   Cudahy Gardens, Ltd.                                 169,016         3,202,031         3,371,047        1,482,010   
(10)   El Paso-Gateway East, Ltd.                           164,656         2,745,138         2,909,794        1,188,452   
 (7)   Golf Manor Apartments, Ltd.                          184,016         3,173,347         3,357,363        1,728,746   
 (7)   Grosvenor South Apartments L. P.                     234,016         4,386,807         4,620,823        2,005,706   
 (7)   Grosvenor South Apartments #2 L. P.                   81,516         1,525,174         1,606,690          672,519   
 (3)   Oakland-Keller Plaza                                       0                 0                 0                0   
(16)   Lafayette Square Apartment's Ltd.                    349,015         4,416,062         4,765,077        1,976,209   
 (8)   San Diego-Logan Square Gardens Co.                   309,015         5,542,918         5,851,933        2,466,952   
 (6)   Los Caballeros Apartments                            224,016         3,346,297         3,570,313        1,878,882   
 (3)   South Munjoy Associates Ltd.                         209,015         4,033,522         4,242,537        1,231,174   
(13)   Country, Ltd.                                        211,238         3,823,416         4,034,654        1,717,169   
(13)   Northbrook III, Ltd.                                 131,794         2,323,243         2,455,037        1,041,361   
(10)   Forth Worth-Northwood Apartments, Ltd.               119,015         2,490,292         2,609,307        1,083,913   
(10)   Corpus Christi-Oso Bay Apartments, Ltd.              159,015         2,705,067         2,864,082        1,193,412   
 (8)   Pacific Palms, Ltd.                                  234,015         5,355,345         5,589,360        3,456,518   
(14)   Zeigler Blvd., Ltd.                                  219,016         4,066,244         4,285,260        1,779,932   
(14)   Parktowne, Ltd.                                      177,016         3,370,316         3,547,332        1,493,268   
 (8)   Riverside Gardens, Ltd.                              309,016         5,946,708         6,255,724        2,753,871   
 (5)   Rolling Meadows Apts., Ltd.                          259,015         4,951,693         5,210,708        2,604,181   
 (5)   Ardmore-Rolling Meadows of Ardmore, Ltd.             118,015         2,547,090         2,665,105        1,194,310   
 (5)   Rolling Meadows of Chickasha, Limited                      0                 0                 0                0   
(15)   Roper Mountain Apartments                                  0                 0                 0                0   
 (7)   Rosewood Manor Apartments                            509,016         5,384,866         5,893,882        2,454,054   
(14)   New Jersey, Ltd.                                     179,016         3,326,567         3,505,583        1,450,416   
(10)   Stephenville-Tarleton Arms                           239,015         3,000,048         3,239,063        1,347,410   
 (5)   Oklahoma City-Town & Country Village                 100,000         3,362,103         3,462,103        3,362,103   
(17)   Caddo Parish-Villas South, Ltd.                      299,015         6,202,073         6,501,088        2,806,054   
(14)   Eastwyck III, Ltd.                                   109,016         1,798,692         1,907,708          808,341   
 (7)   Warren Manor Apts., Ltd.-Property A and B            759,015        10,843,131        11,602,146        5,826,568   
 (7)   Warren Woods Apartments, Ltd.                        309,016         4,795,538         5,104,554        2,610,622   
 (1)   Westgate Associates Ltd.                             184,015         2,971,155         3,155,170          991,151   
(14)   Westwood Apartments Company, Limited                 234,016         4,205,472         4,439,488        1,883,419   
 (2)   Wingate Associates Ltd.                              199,016         3,231,425         3,430,441        1,049,464   
                                                       ------------      ------------      ------------     ------------   
                                                       $  9,606,871      $164,107,325      $173,714,196     $ 80,183,677   
                                                       ============      ============      ============     ============   

[RESTUBBED TABLE]
                                                                            Life on which                  
                                                                            Depreciation in   
                                                                            Latest Income     
                                                       Year of      Date    Statement is      
Subsidiary Partnership's Residential Property       Construction  Acquired  Computed(c)(d)    
---------------------------------------------       ------------  --------  --------------    
                                                                                              
<S>    <C>                                               <C>       <C>           <C>          
 (9)   Bay Village Company                               (c)       10/83         15-30        
(12)   Bethany Glen Associates                           (c)       10/83         10-30        
(11)   Grandview-Blue Ridge Manor, Limited               (c)       9/83             30        
 (4)   Buena Vista Manor Apts. Ltd.                      (c)       11/8          20-30        
 (7)   Canton Commons Apartments                         (c)       8/83             25        
(18)   Cedar Hill Apartments, Ltd.                       (c)       12/84         20-35        
(10)   Breckenridge-Chaparral Apartments II, Ltd.        (c)       9/83             30        
(18)   Char-mur Apartments                               (c)       12/84         10-35        
 (7)   Clinton Plaza Apartments L. P.                    (c)       8/83             30        
 (7)   Clinton Plaza Apartments #2 L. P.                 (c)       8/83             30        
(18)   Crossett Apartments, Ltd.                         (c)       12/84            30        
 (8)   Cudahy Gardens, Ltd.                              (c)       9/83           5-30         
(10)   El Paso-Gateway East, Ltd.                        (c)       9/83             30        
 (7)   Golf Manor Apartments, Ltd.                       (c)       8/83             25        
 (7)   Grosvenor South Apartments L. P.                  (c)       8/83             30        
 (7)   Grosvenor South Apartments #2 L. P.               (c)       8/83             30        
 (3)   Oakland-Keller Plaza                              (c)       9/83          15-30        
(16)   Lafayette Square Apartment's Ltd.                 (c)       9/83             30        
 (8)   San Diego-Logan Square Gardens Co.                (c)       9/83          15-30        
 (6)   Los Caballeros Apartments                         (c)       9/83             30        
 (3)   South Munjoy Associates Ltd.                      (c)       11/83         30-40        
(13)   Country, Ltd.                                     (c)       8/83             21        
(13)   Northbrook III, Ltd.                              (c)       8/83             25        
(10)   Forth Worth-Northwood Apartments, Ltd.            (c)       9/83          10-30        
(10)   Corpus Christi-Oso Bay Apartments, Ltd.           (c)       9/83          15-30        
 (8)   Pacific Palms, Ltd.                               (c)       9/83           9-30         
(14)   Zeigler Blvd., Ltd.                               (c)       8/83             40        
(14)   Parktowne, Ltd.                                   (c)       8/83          15-30        
 (8)   Riverside Gardens, Ltd.                           (c)       9/83          15-30        
 (5)   Rolling Meadows Apts., Ltd.                       (c)       11/83            27        
 (5)   Ardmore-Rolling Meadows of Ardmore, Ltd.          (c)       9/83          10-30        
 (5)   Rolling Meadows of Chickasha, Limited             (c)       11/83            27        
(15)   Roper Mountain Apartments                         (c)       8/83             25        
 (7)   Rosewood Manor Apartments                         (c)       9/83             30        
(14)   New Jersey, Ltd.                                  (c)       8/83             40        
(10)   Stephenville-Tarleton Arms                        (c)       9/83          15-40        
 (5)   Oklahoma City-Town & Country Village              (c)       9/83          10-30        
(17)   Caddo Parish-Villas South, Ltd.                   (c)       9/83          15-30        
(14)   Eastwyck III, Ltd.                                (c)       8/83             40        
 (7)   Warren Manor Apts., Ltd.-Property A and B         (c)       8/83             25        
 (7)   Warren Woods Apartments, Ltd.                     (c)       8/83             25        
 (1)   Westgate Associates Ltd.                          (c)       11/83            40        
(14)   Westwood Apartments Company, Limited              (c)       8/83             30        
 (2)   Wingate Associates Ltd.                           (c)       11/83         30-40        
                                                                                              
[END RESTUBBED TABLE]                                                                         
</TABLE>

<PAGE>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
             Partnership Property Pledged as Collateral (Continued)
                                FEBRUARY 28, 1997


(a)  Properties are subject to mortgage notes and purchase money notes, as shown
     below.
(b)  No carrying costs have been capitalized since all properties were acquired
     after completion of construction.
(c)  Since all properties were acquired as operating properties, depreciation is
     computed using primarily the straight line method over the estimated useful
     lives determined by the Partnership date of acquisition.
(d)  Furniture and fixtures, included in building and improvements, are
     depreciated primarily by the straight line method over the estimated useful
     lives ranging from 5 to 15 years.
(e)  These amounts differ from the amounts presented in the audited financial
     statements of these subsidiary partnerships due to a difference in
     accounting between these partnerships and the other forty-one subsidiary
     partnerships. This difference, which is significant to the individual
     subsidiary partnerships, relates to discounts on the respective mortgages
     payable and the related acquisition cost and current carrying value of
     property and equipment.

Geographic Locations: (1) Vermont, (2) New Hampshire, (3) Maine, (4) Tennessee,
(5) Oklahoma, (6) Colorado, (7) Michigan, (8) California, (9) Massachusetts,
(10) Texas, (11) Missouri, (12) Arizona, (13) Mississippi, (14) Alabama, (15)
South Carolina, (16) New Mexico, (17) Louisiana, (18) Arkansas

<TABLE>
<CAPTION>
                                                  Cost of Property and Equipment                   Accumulated Depreciation   
                                          --------------------------------------------    ------------------------------------------

                                                                                  Year Ended
                                          ------------------------------------------------------------------------------------------
                                          February 28,    February 29,    February 28,    February 28,   February 29,   February 28,
                                              1997            1996            1995           1997           1996           1995    
                                          ------------    ------------    ------------    -----------    -----------    -----------
<S>                                       <C>             <C>             <C>             <C>            <C>            <C>        
Balance at beginning of period            $192,104,269    $190,857,683    $189,670,409    $80,440,482    $73,883,906    $67,475,229
Additions during period:
  Improvements                               1,100,741       1,393,790       1,270,157
  Depreciation expense                       6,475,294       6,618,370       6,490,980
Reductions during period:
  Dispositions                              19,490,814         147,204          82,883      6,732,099         61,794         82,303
                                          ------------    ------------    ------------    -----------    -----------    -----------

Balance at end of period                  $173,714,196    $192,104,269    $190,857,683    $80,183,677    $80,440,482    $73,883,906
                                          ============    ============    ============    ===========    ===========    ===========
</TABLE>

At the time the local partnerships were acquired by Cambridge & Related Housing
Properties Limited Partnership, the entire purchase price paid by Cambridge &
Related Housing Properties Limited Partnership was pushed down to the local
partnerships as property and equipment with an offsetting credit to capital.
Since the projects were in the construction phase at the time of acquisition,
the capital accounts were insignificant at the time of purchase. Therefore,
there are no material differences between the original cost basis for tax and
GAAP.