<PAGE>

                                  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

For the fiscal year ended February 29, 2000

                                       OR

_______  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                         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 of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

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 is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

                       DOCUMENTS INCORPORATED BY REFERENCE
         None
Page 1 of 160


<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") and
Related Housing Programs Corporation (the "Related General Partner"), both of
which are Delaware corporations affiliated with 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.

The Partnership completed its initial public offering (the "Offering") on May 4,
1984. 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 Partnership is currently in
the process of winding up its operations and disposing of its investments. It is
anticipated that this process will take a number of years. See "Sales of
Underlying Properties/Local Partnership Interests" below. As of February 29,
2000, the Partnership has disposed of twenty of its forty-four original
investments.

INVESTMENT OBJECTIVES/GOVERNMENT INCENTIVES

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") 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.

The Partnership is in the process of winding down its operations as it continues
to sell its asset;. therefore investment objectives (1), (2) and (4) are no
longer applicable. The Partnership has to date distributed approximately
$6,167,000 from sales transactions and expects to continue to make distributions
from excess sales proceeds, although such aggregate distributions are not
currently anticipated to equal the original investment. The Partnership will no
longer be generating passive losses due to the sale of properties. However,
passive losses previously


                                      -2-
<PAGE>

allocated (to the extent unused) are available to offset the income expected to
be generated form the sales effort.

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.

INVESTMENTS

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).

PURCHASE MONEY NOTES

Nonrecourse Purchase Money Notes (the "Purchase Money Notes") 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 Purchase Money Note relates.

The Purchase Money Notes, which provide for simple interest, will not be in
default, 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. As of February 29, 2000, the maturity dates of the Purchase
Money Notes associated with the remaining properties owned by the Subsidiary
Partnerships were extended for three to five years (see below). Any interest not
paid currently accrues, without further interest thereon, through the extended
due date of the Purchase Money Note. Continued accrual of such interest without
payment would impact the effective


                                      -3-
<PAGE>

rate of the Purchase Money 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 Purchase Money Notes. Unpaid interest of $36,560,820 and $49,651,170 at
February 29, 2000 and February 28, 1999, 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 was permitted to extend the term of the Purchase Money Notes for
up to five additional years. In connection with such extensions, the Partnership
incurred an extension fee of 1/2% per annum of the outstanding principal balance
of the Purchase Money Notes. The Partnership sent an extension notice to each
Purchase Money Note holder that pursuant to the Purchase Money Note it was
extending the maturity. However in certain cases, the Partnership did not pay
the extension fee at that time, deferring such payment to the future. Extension
fees in the amount of $719,010 were incurred by the Partnership through February
29, 2000. Such Purchase Money Notes are now extended with maturity dates ranging
from July 2001 to December 2004. Extension fees of $564,682 were accrued and
added to the Purchase Money Notes balance.

The Partnership expects that upon final 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 unlikely that the proceeds from such sales
will be sufficient to meet the outstanding balances. Management is working with
the Purchase Money Note holders to restructure and/or refinance the Purchase
Money Notes. No assurance can be given that management's efforts will be
successful. 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.

GOVERNMENT PROGRAMS AND REGULATIONS

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 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 Com-


                                      -4-
<PAGE>

mons Associates, Rosewood Manor Associates, Bethany Glen Associates and South
Munjoy Associates, Limited. The South Munjoy Associates, Limited property and
the Riverside Gardens limited partnership were sold on September 9, 1997 and
April 27, 1998, respectively. The Bethany Glen Associates, property and Canton
Commons Associates and Rosewood Manor Associates limited partnership interests
were sold on November 8, 1999 and June 18, 1999. The Westgate Associates Limited
Partnership entered into a purchase and sale contract with an unaffiliated third
party purchaser as of March 6, 2000. No assurance can be given that the
transaction will be consummated. The local general partners of the other
properties are either negotiating purchase and sale contracts or exploring their
alternatives under the 1996 Act.

In September 1997, Congress enacted the Multi-Family Assisted Housing Reform and
Affordability Act of 1997 ("MAHRA") which provides for the renewal of Section 8
Housing Assistance Payments Contracts ("Section 8 Contracts") to be based upon
market rentals instead of the above-market rentals which is generally the case
under existing Section 8 Contracts. As a result, Section 8 Contracts that are
renewed in the future in projects insured by the Federal Housing Administration
("FHA") may not provide sufficient cash flow to permit owners of properties to
meet the debt service requirements of these existing FHA-insured mortgages.
MAHRA also provides for the restructuring of these mortgage loans so that the
annual debt service on the restructured loan (or loans) can be supported by
Section 8 rents established at the market rents. The restructured loans will be
held by the current lender or another lender. There can be no assurance that a
property owner will be permitted to restructure its mortgage indebtedness
pursuant to the new rules implementing MAHRA or that an owner, or the holder of
the mortgage, would choose to restructure the mortgage if it were able to
participate. MAHRA went into effect on September 11, 1998 when interim
regulations implementing the program were published. It should be noted that
there are many uncertainties as to the economic and tax impact on a property
owner because of the combination of the reduced Section 8 contract rents and the
restructuring of the existing FHA-insured mortgage loan under MAHRA.

On October 21, 1998 President Clinton signed the Fiscal Year 1999 Departments of
Veteran Affairs, Housing and Urban Development and Independent Agencies
Appropriation Legislation into law. The bill provides, among other things, that
owners of a property that was eligible for prepayment had to give notice of such
prepayment to HUD tenants and to the chief executive of the state or local
government for the jurisdiction in which the housing is located. The notice must
be provided not less than 150 days, but not more than 270 days, before such
payment. Moreover, the owner may not increase the rent charged to tenants for a
period of 60 days following such prepayment. The bill also provides for
tenant-based vouchers for eligible tenants (generally below 80% of area median
income) at the true comparable market rents for unassisted units in order to
protect current residents from substantial increases in rent.

On October 20, 1999, President Clinton signed FY 2000 VA, the HUD Independent
Agencies Appropriations Act (the "Appropriations Act"). The Appropriations Act
contains revisions to the HUD Mark-to-Market Program and other HUD programs
concerning the preservation of the HUD housing stock. On December 29, 1999 HUD
issued Notice H99-36 addressing "Project Based Section 8 Contracts Expiring in
Fiscal Year 2000" reflecting the changes in the Appropriations Act and
superceding earlier HUD Notices 98-34, 99-08, 99-15, 99-21 and 99-32. Notice
99-36 clarifies many of the earlier uncertainties with respect to the earlier
HUD Section 8 Mark-to-Market Programs and continued the Mark-up-to-Market
Program which allows owners with Section 8 contracts to increase the rents to
market levels where contract rents are currently below market.


                                      -5-
<PAGE>

SALES OF UNDERLYING PROPERTIES/LOCAL PARTNERSHIP INTERESTS

GENERAL

The Partnership is currently in the process of winding up its operations and
disposing of its investments. It is anticipated that this process will take a
number of years. As of February 29, 2000, the Partnership has disposed of twenty
of its forty-four original investments. Nine additional investments are listed
for sale and the General Partner anticipates that the fifteen remaining
investments will be listed for sale by December 31, 2001. There can be no
assurance as to when the Partnership will dispose of its last remaining
investments or the amount of proceeds which may be received. However, based on
the historical operating results of the Local Partnerships and the current
economic conditions including changes in tax laws, it is unlikely that the
proceeds from such sales will be sufficient to return the limited partners,
original investment.

In order to facilitate an orderly disposition of the Partnership's assets, the
Partnership formed two entities: Cambridge Liquidating Trust LLC ("Trust I"), a
Massachusetts limited liability company which is owned 99.99% by the Partnership
and .01% by affiliates of Related; and, Cambridge Liquidating Trust II ("Trust
II"), a Massachusetts general partnership which is owned 99% by Cambridge
Liquidating GP II, L.L.C. ("GP II") and 1% by Cambridge Liquidating GP I, L.L.C.
("GP I"). Both GP I and GP II are owned by the Partnership.

On December 30, 1998, the Partnership contributed its limited partnership
interest in Bethany Glen Associates, Westwood, Ltd., Parktowne, Ltd., Rolling
Meadows Apartments, Ltd., Buena Vista Apartments, Ltd. and Wingate Associates,
Ltd. to Trust I. On December 31, 1998, the Partnership contributed its limited
partnership interests in Grandview-Blue Ridge Manor Limited,
Breckenridge-Chaparral Apartments II, Ltd., El Paso-Gateway East, Ltd.,
Albequerque-Lafayette Square Apartments, Ltd., Corpus Christi-Oso Bay
Apartments, Ltd., Westgate Associates Limited, San Diego-Logan Square Gardens
Co., Ardmore-Rolling Meadows of Ardmore, Ltd., Fort Worth-Northwoods Apartments,
Ltd. and Stephenville-Tarleton Arms Apartments, Ltd. to Trust II. In each case,
the interests were contributed subject to each respective Purchase Money Note.
The contribution did not involve any consideration being paid to the
Partnership, therefore, there was no tax effect to the limited partners of the
Partnership.

INFORMATION REGARDING DISPOSITION

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 approximately $4,937,000. The Partnership
used approximately $3,473,000 of the net proceeds to settle the associated
Purchase Money Note and accrued interest which had a total outstanding balance
of approximately $4,066,000 resulting in forgiveness of indebtedness income of
approximately $593,000. In 1997, additional proceeds were received and paid to
the Purchase Money Note holder resulting in a decrease in the forgiveness of
indebtedness income of approximately $66,000.

On April 25, 1997, the Partnership's Local Partnership Interest in Los
Caballeros Apartments ("Los Caballeros") was sold to the general partners of Los
Caballeros for $100,000, resulting in a gain in the amount of approximately
$501,000. No proceeds were used to settle the associated Purchase Money Note and
accrued interest thereon which had a total outstanding balance of approximately
$3,188,000, resulting in forgiveness of indebtedness income.

On September 9, 1997, the property and the related assets and liabilities of
South Munjoy Associates, Limited ("South Munjoy") were sold to Montfort Housing
Limited Partnership, which


                                      -6-
<PAGE>

is an affiliate of Mainland Development Company of Portland, Maine ("Mainland
Development") for $3,000,000, resulting in a loss in the amount of approximately
$225,000. The Partnership used approximately $1,313,000 of the net proceeds to
settle the associated Purchase Money Note and accrued interest thereon which had
a total outstanding balance of approximately $3,247,000, resulting in
forgiveness of indebtedness income of approximately $1,934,000.

On December 12, 1997, the Partnership's limited partnership interests in
Grosvenor South Apartments Limited Partnership and Grosvenor South Apartments #2
Limited Partnership (together, the "Grosvenors") were sold to the general
partners of the Grosvenors for approximately $1,114,000, resulting in a loss in
the amount of approximately $1,409,000. No proceeds were used to settle the
associated Purchase Money Notes and accrued interest which had a total
outstanding balance of approximately $5,058,000, resulting in forgiveness of
indebtedness income.

On December 12, 1997, the Partnership's limited partnership interests in Clinton
Plaza Apartments Limited Partnership and Clinton Plaza Apartments #2 Limited
Partnership (together the "Clintons") were sold to the general partners of the
Clintons for approximately $1,673,000, resulting in a loss in the amount of
approximately $2,769,000. No proceeds were used to settle the associated
Purchase Money Notes and accrued interest which had a total outstanding balance
of approximately $9,690,000, resulting in forgiveness of indebtedness income.

On January 16, 1998, the property and related assets and liabilities of Country
Ltd. ("Country") and Northbrook III, Ltd. ("Northbrook") were sold to a third
party for a combined purchase price of $5,256,000, resulting in gains of
approximately $1,508,000 during the year ended February 1998. The Partnership
used approximately $861,000 and $90,000, respectively, of the net proceeds to
settle the associated Purchase Money Note and accrued interest thereon which had
total outstanding balances of $2,517,000 and $77,000, respectively, resulting in
forgiveness of indebtedness income (loss) of $1,656,119 and ($13,044) and
related Purchase Money Note and interest thereon, during the year ended February
28, 1998.

On April 21, 1998, the Partnership's limited partnership interest and related
Purchase Money Note and interest thereon in Oklahoma City - Town and Country
Village Apartments, Ltd. ("Town and Country") was assigned to the local general
partner effective January 15, 1998, resulting in a gain of approximately
$11,970,000.

On April 27, 1998, the property and the related assets and liabilities of
Riverside Gardens Limited Partnership ("Riverside") and Cudahy Gardens Limited
Partnership ("Cudahy") were sold to a third party for approximately $1,834,000
and $232,000, respectively, resulting in losses of approximately $432,000 and
$148,000 plus the assumption of the related mortgage notes. The Partnership used
approximately $451,000 and $56,000, respectively, of the net proceeds to settle
the associated Purchase Money Note and accrued interest thereon which had total
outstanding balances of approximately $5,402,000 and $2,672,000, respectively,
resulting in forgiveness of indebtedness income of approximately $4,951,000 and
$2,616,000, respectively.

On November 25, 1998, the Parktowne, Ltd., Westwood Apartments Company, Ltd.,
Eastwyck III, Ltd., New Jersey, Ltd., and Zeigler Boulevard, Ltd. Partnerships
entered into purchase and sale agreements to sell the properties and the related
assets and liabilities to an unaffiliated third party. During December 1998, the
purchaser failed to provide the necessary down payment thereby terminating the
contract. The Local General Partner is actively pursuing other interested
purchasers.


                                      -7-
<PAGE>

On April 28, 1999, Pacific Palms ("Pacific"), a limited partnership entered into
a letter of intent to sell the Pacific Palms apartments to an unaffiliated third
party purchaser for a price of $4,800,000. On November 9, 1999, Pacific entered
into an amendment to the purchase agreement. The amendment contemplated a
closing no later than April 30, 2000. In exchange for agreeing to the
amendments, the purchaser agreed to increase the purchase price to $4,900,000.
The third party purchaser released a deposit of $50,000 to Pacific as
consideration for additional time. The sale took place on April 28, 2000 (see
Item 8. Financial Statements and Supplemental Data, Note 12).

On May 5, 1999, the Wingate Associates Limited entered into an agreement for the
purchase and sale of real estate with an unaffiliated third party for a price of
$2,560,000. Since entering into the agreement the purchaser and Wingate
Associates Limited have negotiated amendments to such agreement. The amendments
call for a reduction in the purchase price to $2,360,000, an additional down
payment of $25,000, and a closing no later than May 31, 2000. The closing is
expected to occur in 2000. No assurances can be given that the sale will
actually occur.

On June 18, 1999, the Partnership's limited partnership interest in Warren Manor
Apartments Limited Partnership was sold to the local general partners for
approximately $935,000, resulting in a loss in the amount of approximately
$3,548,000. No proceeds were used to settle the associated Purchase Money Note
and accrued interest which had a total outstanding balance of approximately
$9,187,000, resulting in forgiveness of indebtedness income.

On June 18, 1999, the Partnership's limited partnership interest in Golf Manor
Apartments Limited Partnership was sold to the local general partners for
approximately $255,000, resulting in a loss in the amount of approximately
$544,000. No proceeds were used to settle the associated Purchase Money Note and
accrued interest which had a total outstanding balance of approximately
$2,227,000, resulting in forgiveness of indebtedness income.

On June 18, 1999, the Partnership's limited partnership interest in Warren Woods
Apartments, L.P. was sold to the local general partners for approximately
$377,000, resulting in a loss in the amount of approximately $1,914,000. No
proceeds were used to settle the associated Purchase Money Note and accrued
interest which had a total outstanding balance of approximately $3,532,000,
resulting in forgiveness of indebtedness income.

On June 18, 1999, the Partnership's limited partnership interest in Rosewood
Manor Apartments Limited Partnership was sold to the local general partners for
approximately $406,000, resulting in a loss in the amount of approximately
$1,031,000. No proceeds were used to settle the associated Purchase Money Note
and accrued interest which had a total outstanding balance of approximately
$3,568,000, resulting in forgiveness of indebtedness income.

On June 18, 1999, the Partnership's limited partnership interest in Canton
Commons Apartments Limited Partnership was sold to the local general partners
for approximately $855,000, resulting in a gain in the amount of approximately
$987,000. No proceeds were used to settle the associated Purchase Money Note and
accrued interest which had a total outstanding balance of approximately
$7,816,000, resulting in forgiveness of indebtedness income.

On October 6, 1999, Westgate Associates Limited ("Westgate") entered into an
agreement for the purchase and sale of real estate with an unaffiliated third
party for a purchase price of $2,055,000. The sale is expected to take place in
September 2000. No assurances can be given that the sale will actually occur.

On November 8, 1999, the property and the related assets and liabilities of
Bethany Glen Associates ("Bethany") were sold to an unaffiliated third party for
$3,450,000, resulting in a gain in


                                      -8-
<PAGE>

the amount of approximately $1,582,000. The Partnership used $2,494,000 of the
net proceed to settle the associated Purchase Money Note and accrued interest
thereon which had a total outstanding balance of approximately $2,889,000,
resulting in forgiveness of indebtedness income of $395,000.

On January 17, 2000, Rolling Meadows Apartments, Ltd. ("Rolling Meadows")
entered into an agreement for the purchase and sale of real estate with an
unaffiliated third party for a purchase price of $2,400,000. The sale is
expected to occur in August 2000. No assurances can be given that the sale will
actually occur.

On March 6, 2000, Westwood Apartments Company, Ltd. ("Westwood") entered into an
agreement for the purchase and sale of real estate with an unaffiliated third
party for a purchase price of $2,025,000. The sale is expected to occur in June
2000. No assurances can be given that the sale will actually occur.

Effective January 1, 1999, Parktowne Ltd. ("Parktowne") adopted a plan to sell
its property. Accordingly, the Subsidiary Partnership has revalued its assets
and liabilities to the amount expected to be collected and paid upon sale. Up
through January 1, 1999, Parktowne recorded its results of its operation using
accounting principles applicable to going concern entities. On March 6, 2000,
Parktowne, entered into an agreement for the purchase and sale of real estate
with an unaffiliated third party for a purchase price of $2,500,000. The sale is
expected to occur in June 2000. No assurances can be given that the sale will
actually occur.

OPERATING FUNDS

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.

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").


                                      -9-
<PAGE>

Item 2.  Properties.

As of February 29, 2000, the Partnership holds a 98.99% limited partnership
interest in each of twenty-four Local Partnerships, which own twenty-four
residential Apartment Complexes receiving Government Assistance. During the
fiscal year ended February 29, 2000, the property and the related assets and
liabilities owned by one Local Partnership were sold to third parties and the
Partnership's Local Partnership Interest in five other Local Partnerships were
sold to the Local Partnership's general partner. Through the fiscal year ended
February 29, 2000, the properties and the related assets and liabilities owned
by eight Local Partnerships were sold to third parties and the Partnership's
Local Partnership Interest in twelve other Local Partnerships were sold to the
Local Partnership's general partners, respectively. 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.

<TABLE>
<CAPTION>
                           LOCAL PARTNERSHIP SCHEDULE
                           --------------------------

                                           GOVERNMENT
                                 YEAR      ASSISTANCE
                                           ----------           PERCENTAGE OF UNITS
NAME AND LOCATION OF PROPERTY    COM-         HUD             OCCUPIED AT DECEMBER 31,
                                                          --------------------------------
(NUMBER OF UNITS) (B)            PLETED    PROGRAMS (A)   1999   1998   1997   1996   1995
---------------------            ------    -------------  ----   ----   ----   ----   ----
<S>                              <C>       <C>            <C>    <C>    <C>    <C>    <C>
Caddo Parish-Villas South, Ltd.   1972     Sec.221(d)(4)   86%    86%    86%    86%    86%
  Shreveport, Louisiana (172)

Oklahoma City-Town and            1973     Sec.207         (j)    (j)     67%   57%    81%
  Country Village
  Apartments, Ltd.
  Oklahoma City, Oklahoma (201)

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

New Jersey, Ltd.                  1977     Sec.221(d)(4)   83%    96%    98%    93%    95%
  Mobile, Alabama (112)

Zeigler Boulevard, Ltd.           1981     Sec.221(d)(4)   85%   100%    99%    88%    92%
  Mobile, Alabama (112)

Eastwyck III, Ltd.                1979     Sec.221(d)(4)   98%    96%    96%    98%    94%
  Mobile, Alabama (48)

Breckenridge-Chaparral
  Apartments II, Ltd.             1973     Sec.236         (k)    94%    98%    98%    99%
  Breckenridge, Texas (88)

Country, Ltd.                     1978     Sec.221(d)(4)   (i)    (i)    94%    92%    90%
  Ridgeland, Mississippi (112)(c)

Westwood Apartments
  Company, Ltd.                   1978     Sec.221(d)(4)   57%    45%    68%    86%    83%
  Montgomery, Alabama (176)


                                      -10-
<PAGE>

<CAPTION>
                           LOCAL PARTNERSHIP SCHEDULE
                           --------------------------
                                  (continued)
                                  -----------
                                           GOVERNMENT
                                 YEAR      ASSISTANCE
                                           ----------           PERCENTAGE OF UNITS
NAME AND LOCATION OF PROPERTY    COM-         HUD             OCCUPIED AT DECEMBER 31,
                                                          --------------------------------
(NUMBER OF UNITS) (B)            PLETED    PROGRAMS (A)   1999   1998   1997   1996   1995
---------------------            ------    -------------  ----   ----   ----   ----   ----
<S>                              <C>       <C>            <C>    <C>    <C>    <C>    <C>
Parktowne, Ltd.                   1978     Sec.221(d)(4)   93%    97%    97%    89%    98%
  Montgomery, Alabama (144)

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

Northbrook III, Ltd.              1981     Sec.221(d)(4)   (i)    (i)    85%    94%    92%
  Jackson, Mississippi (68)(c)             Sec.8

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

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

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

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

Golf Manor Apartments             1970     Sec.221(d)(4)   (m)    98%    96%    95%    97%
  Limited Partnership
  Roseville, Michigan (128)

Warren Woods Apartments           1971     Sec.221(d)(4)   (m)    99%    96%    98%    98%
  Limited Partnership
  Warren, Michigan (192)

Canton Commons Apartments         1973     Sec.221(d)(4)   (m)    96%    96%    98%    99%
  Canton, Michigan (452)                   Sec.236
                                           Sec.8

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

Rosewood Manor Apartments         1972     Sec.236         (m)    99%    96%    99%    99%
  Rosewood, Michigan (207)                 Sec.8

Grosvenor South Apartments        1969     Sec.221(d)(3)   (h)    (h)    (h)    98%    96%
  Limited Partnership


                                      -11-
<PAGE>

<CAPTION>
                           LOCAL PARTNERSHIP SCHEDULE
                           --------------------------
                                  (continued)
                                  -----------
                                           GOVERNMENT
                                 YEAR      ASSISTANCE
                                           ----------           PERCENTAGE OF UNITS
NAME AND LOCATION OF PROPERTY    COM-         HUD             OCCUPIED AT DECEMBER 31,
                                                          --------------------------------
(NUMBER OF UNITS) (B)            PLETED    PROGRAMS (A)   1999   1998   1997   1996   1995
---------------------            ------    -------------  ----   ----   ----   ----   ----
<S>                              <C>       <C>            <C>    <C>    <C>    <C>    <C>
  Taylor, Michigan (182)

Grosvenor South Apartments        1969     Sec.221(d)(4)   (h)    (h)    (h)    98%    90%
  #2 Limited Partnership
  Taylor, Michigan (54)

Clinton Plaza Apartments          1969     Sec.221(d)(3)   (h)    (h)    (h)    99%    96%
  Limited Partnership
  Clinton, Michigan (168)

Clinton Plaza Apartments          1970     Sec.221(d)(3)   (h)    (h)    (h)    99%    95%
  #2 Limited Partnership
  Clinton, Michigan (192)

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

San Diego-Logan Square
  Gardens Company                 1970     Sec.236         (k)    98%   100%   100%   100%
  San Diego, California (170)              Sec.8

Grandview-Blue Ridge Manor, Ltd.  1972     Sec.236         (k)    93%    74%    91%    94%
  Grandview, Missouri (80)

Ardmore-Rolling Meadows
  of Ardmore, Ltd.                1974     Sec.236         (k)    98%    91%    98%    97%
  Ardmore, Oklahoma (101)

El Paso-Gateway East, Ltd.        1972     Sec.236         (k)    96%   100%   100%    99%
  El Paso, Texas (104)                     Sec.8

Fort Worth-Northwood
  Apartments, Ltd.                1972     Sec.236         (k)    92%    97%    98%    98%
  Fort Worth, Texas (100)

Stephenville-Tarleton Arms
  Apartments, Ltd.                1972     Sec.236         (k)    95%    94%    97%    99%
  Stephenville, Texas (128)                Sec.8

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

Pacific Palms,
  a Limited Partnership           1972     Sec.236         90%    98%    95%    92%    94%
  Palm Springs, California (139)


                                      -12-
<PAGE>

<CAPTION>
                           LOCAL PARTNERSHIP SCHEDULE
                           --------------------------
                                  (continued)
                                  -----------
                                           GOVERNMENT
                                 YEAR      ASSISTANCE
                                           ----------           PERCENTAGE OF UNITS
NAME AND LOCATION OF PROPERTY    COM-         HUD             OCCUPIED AT DECEMBER 31,
                                                          --------------------------------
(NUMBER OF UNITS) (B)            PLETED    PROGRAMS (A)   1999   1998   1997   1996   1995
---------------------            ------    -------------  ----   ----   ----   ----   ----
<S>                              <C>       <C>            <C>    <C>    <C>    <C>    <C>
Riverside Gardens,
  a Limited Partnership           1971     Sec.236         (i)    (i)    99%    94%    96%
  Riverside, California (192)

Bay Village Company               1971     Sec.236         99%    95%    96%    98%    98%
  Fall River, Massachusetts (206)          Sec.8

Buena Vista Manor
  Apartments, Ltd.                1969     Sec.221(d)(3)   98%   100%    96%    98%    93%
  Nashville, Tennessee (200)               Sec.8

Rolling Meadows
  Apartments, Ltd.                1971     Sec.236         98%    96%    99%    99%    95%
  Midwest City, Oklahoma (200)             Sec.8

Westgate Associates, Limited      1971     Sec.236         93%    89%    98%    98%    97%
  Brattleboro, Vermont (100)               Sec.8

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

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

Cedar Hill Apartments, Ltd.       1973     Sec.236        100%    93%    97%    97%   100%b
  Monticello, Arkansas (60)

Char-Mur Apartments, Ltd.         1973     Sec.236         77%    58%    71%    88%    89%
  Trumann, Arkansas (48)

Crossett Apartments, Ltd.         1973     Sec.236        100%    98%   100%   100%   100%
  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.

1) 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 pro-


                                      -13-
<PAGE>

vided 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.

2) 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"). 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.

3) 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).


                                      -14-
<PAGE>

(g) The property and the related assets and liabilities were sold during the
fiscal year ended February 28, 1998 (see Note 10 in Item 8. Financial Statements
and Supplemental Data).

(h) The Partnership's Local Partnership Interests in these Local Partnerships
were sold during the fiscal year ended February 28, 1998 (see Note 10 in Item 8.
Financial Statements and Supplemental Data).

(i) The property and the related assets and liabilities were sold during the
fiscal year ended February 29, 1999 (see Note 10 in Item 8. Financial Statements
and Supplemental Data).

(j) The Partnership's Local Partnership Interests in these Local Partnerships
were sold during the fiscal year ended February 29, 1999 (see note 10 in Item 8.
Financial Statements and Supplemental Data).

(k) As a result of on-going litigation related to the Roar Properties (as
defined herein), occupancy rates have not been provided by the management agent
pursuant to the instructions from the Local General Partner.

(l) The property and the related assets and liabilities were sold during the
fiscal year ended February 29, 2000 (see Note 10 in Item 8. Financial Statements
and Supplemental Data).

(m) The Partnership's Local Partnership Interests in these Local Partnerships
were sold during the fiscal year ended February 29, 2000 (see Note 10 in Item 8.
Financial Statements and Supplemental Data).

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 flows 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.

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.

WESTWOOD APARTMENTS COMPANY LTD.
On October 16, 1998, the Westwood Apartments Company Ltd. ("Westwood") commenced
this action in the Supreme Court of the State of New York, County of New York,
against Edward Osborn, Charles V. Welden, Jr. and Westwood, Ltd. In the
complaint, Westwood asserted that defendants improperly took the position that
the maturity dates of promissory notes signed by Westwood in the amounts of
$850,000 and $1,225,000, respectively, were not extended by Westwood as the
result of which, according to defendants, the notes were past due and defen-


                                      -15-
<PAGE>

dants were entitled to sell Westwood's 99% partnership interests in Parktowne,
Ltd. and Westwood which collateralized the notes.

In May, 1999, Westwood entered into a settlement agreement discontinuing the
litigation with the defendants pursuant to which, among other things, the
defendants have acknowledged that the notes were properly extended and spelling
out the percentage of the proceeds to which Westwood will be entitled upon the
sale of the underlying properties, depending on when they are sold.

GRANDVIEW-BLUE RIDGE MANOR LIMITED, BRECKENRIDGE-CHAPARRAL APARTMENTS II, LTD.,
EL PASO-GATEWAY EAST, LTD., ALBUQUERQUE-LAFAYETTE SQUARE APARTMENTS, LTD.,
CORPUS CHRISTI-OSO BAY APARTMENTS, LTD., SAN DIEGO-LOGAN SQUARE GARDENS CO.,
ARDMORE-ROLLING MEADOWS OF ARDMORE, LTD., FORT WORTH-NORTHWOODS APARTMENTS,
LTD., STEPHENVILLE-TARLETON ARMS APARTMENTS, LTD., AND CADDO PARRISH-VILLAS
SOUTH, A LOUISIANA LIMITED PARTNERSHIP F/K/A VILLAS SOUTH, LTD. (THE "ROAR
PROPERTIES").

In 1998, the Purchase Money Note holder, Roar Company (the "Noteholders")
disputed the exact calculation of the extension fee. At the same time,
negotiations began with the Noteholders to refinance or sell the Partnership's
investments in the Roar Properties in order to pay the Purchase Money Notes. The
Partnership cannot sell or otherwise liquidate its investments in those Local
Partnerships that have subsidy agreements with HUD during the period that such
agreements are in existence without HUD's approval. It is uncertain as to
whether the proceeds from such sales will be sufficient to meet the outstanding
balances of principal, accrued interest and extension fees. No agreement has
been reached with the Noteholders regarding the sale of the Roar Properties or
the calculation of the extension fee.

In order to facilitate an orderly disposition of the Partnership's assets, the
Partnership formed Cambridge Liquidating Trust II ("Trust II"), a Massachusetts
general partnership, on December 31, 1998, which is owned 99% by Cambridge
Liquidating GP II, L.L.C. ("GP II") and 1% by Cambridge Liquidating GP I, L.L.C.
("GP I"). Both GP I and GP II are owned by the Partnership.

The Partnership then assigned its limited partnership interests in the Roar
Properties to Trust II. In each case, the interests were assigned subject to
each respective Purchase Money Note. The assignment did not involve any
consideration being paid to the Partnership; therefore, there should not be any
tax effect to the limited partners of the Partnership.

Prior to September 1, 1999, the Noteholders were tendered the sums calculated to
be due as the extension fees under the Purchase Money Notes as of August 31,
1999. The Noteholders did not formally respond to this tender or dispute the
calculation of the extension fee amount and did not return the fees. However, a
representative stated that the tender of the fees will be rejected and the fees
will be returned.

On August 27, 1999, Trust II filed a Declaratory Judgment Action styled
Cambridge Liquidating Trust II v. Roar Company, et al, Cause No. 99-6802 in the
191st District Court of Dallas County Texas seeking a court ruling as to the
proper calculation of the extension fee (the "Action"). On September 20, 1999,
the Noteholders filed an Answer in the Action and denied all allegations. The
Noteholders have previously asserted that they have a valid security interest in
the Local Partnership Interests. It is possible that the Noteholders will
attempt to declare the Purchase Money Notes to be due and commence foreclosure
on the Local Partnership Interests based upon a contention that the extension
fees were not paid in the proper amount. The Action has now been set for trial
in August of 2000 and discovery is not complete. Management of the Partnership
will vigorously prosecute the Action and may asserts claims


                                      -16-
<PAGE>

against the Noteholders. The General Partner can express no opinion on the
outcome of the case.

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, 2000, 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 Partnership 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, 2000, the Partnership had
4,296 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.

In March 2000 and 1999, distributions of approximately $994,000 and $2,000,000
and $10,000 and $20,000 were paid to the limited partners and General Partners,
respectively, from net proceeds from the sale of properties (see Item 7. below).
Of the total distributions of approximately $1,004,000 and $2,020,000 for the
years ended February 29, 2000 and February 28, 1999, there was no return of
capital determined in accordance with generally accepted accounting principles.
As of March 2000, the aggregate amount of the distribution made since the
commencement of the offering representing a return of capital, in accordance
with generally accepted accounting principles, totaled approximately $0. There
are no material restrictions upon the Partnership's present or future ability to
make distributions in accordance with the provisions of 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
11(i). The Partnership does not anticipate providing cash distributions to its
Limited Partners in circumstances other than refinancing or sale.


                                      -17-
<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.

<TABLE>
<CAPTION>
                                                        Year Ended
                        ----------------------------------------------------------------------------
                        February 29,    February 28,    February 28,    February 28,    February 29,
OPERATIONS                  2000             1999           1998            1997            1996
----------              ------------    ------------    ------------    ------------    ------------
<S>                     <C>             <C>             <C>             <C>             <C>
Revenues                $ 14,075,165    $ 35,823,217    $ 24,780,246    $ 37,586,529    $ 30,593,556
Operating expenses        22,632,634      31,032,957      36,942,698      44,453,062      38,678,297
                        ------------    ------------    ------------    ------------    ------------
(Loss) income before      (8,557,469)      4,790,260     (12,162,452)     (6,866,533)     (8,084,741)
  minority interest
  and extra-ordinary
  item
Minority interest in          (1,430)       (424,099)       (102,344)        (18,466)          1,752
  (income) loss of      ------------    ------------    ------------    ------------    ------------
  subsidiaries
(Loss) gain before        (8,558,899)      4,366,161     (12,264,796)     (6,884,999)     (8,082,989)
  extra-ordinary item
Extraordinary             26,725,364       7,583,482      21,447,564       5,069,484               0
  item-forgiveness      ------------    ------------    ------------    ------------    ------------
  of indebtedness
Net income (loss)       $ 18,166,465    $ 11,949,643    $  9,182,768    $ (1,815,515)   $ (8,082,989)
                        ============    ============    ============    ============    ============
(Loss) gain before      $       (844)   $        431    $     (1,209)   $       (679)   $       (797)
  extra-ordinary        ------------    ------------    ------------    ------------    ------------
  item per limited
  partnership unit
Extraordinary item             2,636             748           2,115             500               0
  per limited
  partnership unit
Net gain (loss) per     $      1,792    $      1,179    $        906    $       (179)   $       (797)
  limited               ============    ============    ============    ============    ============
  partnership unit

<CAPTION>

                                                       Year Ended
                        ------------------------------------------------------------------------
                        February 29,   February 28,   February 28,   February 28,   February 29,
FINANCIAL POSITION          2000            1999          1998           1997           1996
------------------      ------------   ------------   ------------   ------------   ------------
<S>                     <C>            <C>            <C>            <C>            <C>
Total assets            $ 49,506,785   $ 74,790,559   $ 90,771,154   $110,362,021   $126,569,652
                        ============   ============   ============   ============   ============
Long-term obligations   $ 93,199,151   $134,392,143   $156,769,256   $184,080,536   $195,424,384
                        ============   ============   ============   ============   ============
Total liabilities       $ 98,569,533   $141,014,105   $166,092,977   $193,616,657   $206,901,246
                        ============   ============   ============   ============   ============
Minority interest       $     28,932   $     30,399   $    167,391   $     80,374   $     76,347
                        ============   ============   ============   ============   ============
</TABLE>

During the year ended February 29, 1996, total assets decreased primarily due to
depreciation, partially offset by net additions to property and equipment.
During the same period, 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 years ended February 28, 1997, 1998, 1999 and February
29, 2000, total assets decreased primarily due to the sale of properties (see
Item 8., Note 10), depreciation and a loss 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 years ended February 28,
1996, 1997, 1998, 1999 and February 29, 2000 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.


                                      -18-
<PAGE>

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

LIQUIDITY AND CAPITAL RESOURCES

GENERAL

The Partnership's primary sources of funds are (i) cash distributions from
operations and cash distributions from sales 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. During the fiscal year ended February 29, 2000, the property and
the related assets and liabilities owned by one Local Partnership was sold to
third parties and the Partnership's Local Partnership Interest in five other
Local Partnerships' was sold to the Local Partnership's general partners,
respectively. Through the fiscal year ended February 29, 2000, the properties
and the related assets and liabilities owned by eight Local Partnerships were
sold to third parties and the Partnership's Local Partnership Interest in twelve
other Local Partnerships were sold to third parties and the Local Partnership's
general partners, respectively.

The Partnership had a working capital reserve of approximately $1,170,000 (which
does not include approximately $1,004,000 of net proceeds from the sales of
properties which was distributed to the limited partners and General Partners in
March 2000) and $282,000 (which does not include approximately $2,020,000 of net
proceeds from the sale of properties which was distributed to the limited
partners and General Partners in March 1999) at February 29, 2000 and February
28, 1999, respectively. 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. The General Partners
fees are being paid currently other than approximately $875,000 of Partnership
management fees which were accrued and continue to be deferred. In March 2000
and 1999, a distribution of approximately $994,000 and $2,000,000, and $10,000
and $20,000 was paid to the limited partners and General Partners, respectively,
from net proceeds from the sale of properties. None of the total distributions
of approximately $1,004,000 and $2,020,000 for the years ended February 28, 1999
and 1998, was deemed to be a return of capital in accordance with generally
accepted accounting principles.

During the fiscal year ended February 29, 2000, cash and cash equivalents of the
Partnership and its 30 consolidated Local Partnerships (including the activity
through the dates of sale for the five Local Partnerships noted above) decreased
approximately $3,475,000. This decrease was primarily due to the cash flow used
by operations ($1,034,000), costs paid relating to sale of properties
($437,000), acquisition of property and equipment ($676,000), decreases in
mortgage escrows ($318,000), distributions ($2,020,000), payments of interest on
purchase money notes ($1,394,000) and principal payments of mortgage notes and
purchase money notes ($3,871,000) which exceeded proceeds form the sale of
properties ($6,278,000). Included in the adjustments to reconcile the net income
to cash used in operating activities is loss on sale of properties ($4,468,000),
forgiveness of indebtedness income ($26,725,000), depreciation ($2,570,000) and
a loss on impairment of assets ($97,000).


                                      -19-
<PAGE>

Cash flow distributions aggregating $166,699, $156,292 and $311,625 were made to
the Partnership in the fiscal years ended 1999, 1998 and 1997 which does not
include $5,397 and $5,397 escrow monies held for the Preservation Acts program
in the fiscal years ended 1998 and 1997. Of such distributions, $100,019,
$93,776 and $214,171, respectively, was used to pay interest on the Purchase
Money Notes. Distribution of proceeds from sales aggregating $2,493,720 and
$1,883,036 were made to the Partnership in the 1999 and 1998 Fiscal Years,
respectively of which $2,493,720 and $496,704, respectively, was used to pay
principal and interest on the Purchase Money Notes.

PURCHASE MONEY NOTES

For a discussion of Purchase Money Notes Payable, see Note 7 to the Financial
Statements.

GOVERNMENT PROGRAMS AND REGULATIONS

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 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,
Limited. The South Munjoy Associates, Limited property and the Riverside Gardens
limited partnership were sold on September 9, 1997 and April 27, 1998,
respectively. The Bethany Glen Associates, property and Canton Commons
Associates and Rosewood Manor Associates limited partnership interests were sold
on November 8, 1999 and June 18, 1999. The Westgate Associates Limited
Partnership entered into a purchase and sale contract with an unaffiliated third
party purchaser as of March 6, 2000. No assurance can be given that the
transaction will be consummated. The local general partners of the other
properties are either negotiating purchase and sale contracts or exploring their
alternatives under the 1996 Act.

In September 1997, Congress enacted the Multi-Family Assisted Housing Reform and
Affordability Act of 1997 ("MAHRA") which provides for the renewal of Section 8
Housing Assistance Payments Contracts ("Section 8 Contracts") to be based upon
market rentals instead of the above-market rentals which is generally the case
under existing Section 8 Contracts. As a result, Section 8 Contracts that are
renewed in the future in projects insured by the Federal Housing Administration
("FHA") may not provide sufficient cash flow to permit owners of properties to
meet the debt service requirements of these existing FHA-insured mortgages.
MAHRA also provides for the restructuring of these mortgage loans so that the
annual debt


                                      -20-
<PAGE>

service on the restructured loan (or loans) can be supported by Section 8 rents
established at the market rents. The restructured loans will be held by the
current lender or another lender. There can be no assurance that a property
owner will be permitted to restructure its mortgage indebtedness pursuant to the
new rules implementing MAHRA or that an owner, or the holder of the mortgage,
would choose to restructure the mortgage if it were able to participate. MAHRA
went into effect on September 11, 1998 when interim regulations implementing the
program were published. It should be noted that there are many uncertainties as
to the economic and tax impact on a property owner because of the combination of
the reduced Section 8 contract rents and the restructuring of the existing
FHA-insured mortgage loan under MAHRA.

On October 21, 1998 President Clinton signed the Fiscal Year 1999 Departments of
Veteran Affairs, Housing and Urban Development and Independent Agencies
Appropriation Legislation into law. The bill provides, among other things, that
owners of a property that was eligible for prepayment had to give notice of such
prepayment to HUD tenants and to the chief executive of the state or local
government for the jurisdiction in which the housing is located. The notice must
be provided not less than 150 days, but not more than 270 days, before such
payment. Moreover, the owner may not increase the rent charged to tenants for a
period of 60 days following such prepayment. The bill also provides for
tenant-based vouchers for eligible tenants (generally below 80% of area median
income) at the true comparable market rents for unassisted units in order to
protect current residents from substantial increases in rent.

On October 20, 1999, President Clinton signed FY 2000 VA, the HUD Independent
Agencies Appropriations Act (the "Appropriations Act"). The Appropriations Act
contains revisions to the HUD Mark-to-Market Program and other HUD programs
concerning the preservation of the HUD housing stock. On December 29, 1999 HUD
issued Notice H99-36 addressing "Project Based Section 8 Contracts Expiring in
Fiscal Year 2000" reflecting the changes in the Appropriations Act and
superceding earlier HUD Notices 98-34, 99-08, 99-15, 99-21 and 99-32. Notice
99-36 clarifies many of the earlier uncertainties with respect to the earlier
HUD Section 8 Mark-to-Market Programs and continued the Mark-up-to-Market
Program which allows owners with Section 8 contracts to increase the rents to
market levels where contract rents are currently below market.

SALES OF UNDERLYING PROPERTIES/LOCAL PARTNERSHIP INTERESTS

GENERAL

The Partnership is currently in the process of winding up its operations and
disposing of its investments. It is anticipated that this process will take a
number of years. As of February 29, 2000, the Partnership has disposed of twenty
of its forty-four original investments. Nine additional investments are listed
for sale and the General Partner anticipates that the fifteen remaining
investments will be listed for sale by December 31, 2001. There can be no
assurance as to when the Partnership will dispose of its last remaining
investments or the amount of proceeds which may be received. However, based on
the historical operating results of the Local Partnerships and the current
economic conditions including changes in tax laws, it is unlikely that the
proceeds from such sales will be sufficient to return the limited partners,
original investment.

In order to facilitate an orderly disposition of the Partnership's assets, the
Partnership formed two entities: Cambridge Liquidating Trust LLC ("Trust I"), a
Massachusetts limited liability company which is owned 99.99% by the Partnership
and .01% by affiliates of Related; and, Cambridge Liquidating Trust II ("Trust
II"), a Massachusetts general partnership which is owned 99% by Cambridge
Liquidating GP II, L.L.C. ("GP II") and 1% by Cambridge Liquidating GP I, L.L.C.
("GP I"). Both GP I and GP II are owned by the Partnership.


                                      -21-
<PAGE>

On December 30, 1998, the Partnership contributed its limited partnership
interest in Bethany Glen Associates, Westwood, Ltd., Parktowne, Ltd., Rolling
Meadows Apartments, Ltd., Buena Vista Apartments, Ltd. and Wingate Associates,
Ltd. to Trust I. On December 31, 1998, the Partnership contributed its limited
partnership interests in Grandview-Blue Ridge Manor Limited,
Breckenridge-Chaparral Apartments II, Ltd., El Paso-Gateway East, Ltd.,
Albequerque-Lafayette Square Apartments, Ltd., Corpus Christi-Oso Bay
Apartments, Ltd., Westgate Associates Limited, San Diego-Logan Square Gardens
Co., Ardmore-Rolling Meadows of Ardmore, Ltd., Fort Worth-Northwoods Apartments,
Ltd. and Stephenville-Tarleton Arms Apartments, Ltd. to Trust II. In each case,
the interests were contributed subject to each respective Purchase Money Note.
The contribution did not involve any consideration being paid to the
Partnership, therefore, there was no tax effect to the limited partners of the
Partnership.

INFORMATION REGARDING DISPOSITION

For a discussion of the sale of properties in which the Partnership owns direct
and indirect interest, see Note 10 to the Financial Statements.

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 United States is experiencing downturns in the economy, the
remaining properties in the portfolio may be experiencing upswings. However, the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy.

RESULTS OF OPERATIONS

Property and equipment to be held and used are carried at cost which 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
loss on impairment of assets is recorded when management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At the time 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.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated. All property and equipment for sub-


                                      -22-
<PAGE>

sidiary partnerships whose assets and liabilities are under sales contracts are
classified as assets held for sale.

Through February 29, 2000, the Partnership has recorded approximately $8,889,000
as a loss on impairment of assets.

The following is a summary of the results of operations of the Partnership for
the Fiscal Years ended February 29, 2000, February 28, 1999 and 1998 (the 1999,
1998 and 1997 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 1999, 1998 and 1997 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, seven of the thirty Local Partnerships are receiving rental
subsidies and nineteen 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 income for the 1999, 1998 and 1997 Fiscal Years aggregated $18,166,465,
$11,949,643 and $9,182,768, respectively. These represent income per Limited
Partnership unit of $1,792, $1,179 and $906, respectively.

Excluding the 1999, 1998 and 1997 Fiscal Years 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 carryforward 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.


                                      -23-
<PAGE>

1999 VS. 1998
Rental income decreased by approximately 20% during the 1999 Fiscal Year as
compared to the 1998 Fiscal Year. Excluding Country, Northbrook III, Riverside,
Cudahy and Bethany Glen, which sold their properties and Town and Country,
Canton Commons, Golf Manor, Rosewood Manor, Warren Manor and Warren Woods, in
which the Partnership's interest was sold (collectively the "Sold Assets"),
rental income decreased approximately 1% during the 1999 Fiscal Year as compared
to the 1998 Fiscal Year primarily due to an increase in vacancies at one Local
Partnership.

A loss on sale of properties and forgiveness of indebtedness was recorded in the
1999 Fiscal Year (see Notes 10 and 11, respectively, in Item 8. Financial
Statements and Supplemental Data).

Total expenses, excluding Sold Assets, administrative and management and loss on
impairment of assets remained fairly consistent with a decrease of less than 1%
for the 1999 Fiscal Year as compared to the 1998 Fiscal Year.

Administrative and management increased by approximately 7% during the 1999
Fiscal Year as compared to the 1998 Fiscal Year. Excluding the Sold Assets, such
expenses increased approximately 23% during the 1999 Fiscal Year as compared to
the 1998 Fiscal Year primarily due to increases in legal fees incurred by the
Partnership and the amortization of the Purchase Money Note extension fees.

Administrative and management-related parties, operating, repairs and
maintenance, taxes and insurance, financial and depreciation expense decreased
approximately $331,000, $600,000, $1,196,000, $651,000, $1,217,000 and
$1,575,000, respectively, for the 1999 Fiscal Year as compared to the 1998
Fiscal Year. Excluding the Sold Assets, and Pacific Palms, Zeigler Boulevard
Ltd, New Jersey, Ltd., Eastwyck III, Ltd., Westwood Apartments Ltd., Parktowne,
Ltd., Rolling Meadows Apartments, Ltd., Westgate Associates, Limited and Wingate
Associates Limited for depreciation only, such expenses remained fairly
consistent with increases (decreases) of approximately $4,000, ($58,000),
$43,000, ($8,000), ($46,000) and ($6,000), respectively, for the 1999 Fiscal
Year as compared to the 1998 Fiscal Year. Pacific Palms, Zeigler Boulevard Ltd.,
New Jersey Ltd., Eastwyck III, Ltd., Westood Apartments Ltd., Parktowne Ltd.,
Rolling Meadows Apartment Ltd., Westgate Associates, Limited and Wingate
Associates, Limited are not depreciated during the period because they are
classified as assets held for sale.

A loss on impairment of assets was recorded in the 1999 Fiscal Year (see Note 4
in Item 8. Financial Statements and Supplemental Data).

1998 VS. 1997
Rental income decreased approximately 21% during the 1998 Fiscal Year as
compared to the 1997 Fiscal Year. Excluding Keller Plaza, South Munjoy, Country,
Northbrook III, Riverside and Cudahy, which sold their properties, and Los
Cabelleros, Clinton Plaza, Clinton Plaza #2, Grosvenor Plaza, Grosvenor Plaza #2
and Town & Country, in which the Partnership's interest was sold (collectively
the "1998 Sold Assets"), rental income increased approximately 1% during the
1998 Fiscal year as compared to the 1997 Fiscal Year primarily due to rental
rate increases.

Other income decreased approximately 3% during the 1998 Fiscal year as compared
to the 1997 Fiscal Year. Excluding the 1998 Sold Assets, such income increased
approximately 22% during the 1998 Fiscal Year as compared to the 1997 Fiscal
Year primarily due to increases in interest income and late charges at two Local
Partnerships and gain from insurance proceeds related to fire damages at two
Local Partnerships.


                                      -24-
<PAGE>

A gain on sale of properties and forgiveness of indebtedness was recorded in the
1998 Fiscal Year (see Notes 10 and 11, respectively, in Item 8. Financial
Statements and Supplemental Data).

Total expenses, excluding the 1998 Sold Assets and loss on impairment of assets,
remained fairly consistent with a decrease of less than 2% for the 1998 Fiscal
Year as compared to the 1997 Fiscal Year.

Administrative and management, administrative and management-related parties,
operating, repairs and maintenance, taxes and insurance, financial and
depreciation expense decreased approximately $660,000, $353,000, $1,321,000,
$2,046,000, $868,000, $1,879,000 and $1,539,000 respectively, for the 1998
Fiscal Year as compared to the 1997 Fiscal Year. Excluding the 1998 Sold Assets,
and Pacific Palms, Zeigler Boulevard, Ltd., New Jersey, Ltd., Eastwyck III,
Ltd., Westwood Apartments and Parktowne, Ltd. for depreciation only, such
expenses remained fairly consistent with increases (decreases) of approximately
$209,000, $7,000, $(296,000), $(121,000), $20,000, $(138,000) and $(211,000),
respectively, for the 1998 fiscal year as compared to the 1997 Fiscal Year.
Pacific Palms, Zeigler Boulevard, Ltd., New Jersey, Ltd., Eastwyck III, Ltd.,
Westwood Apartments and Parktowne Ltd., have stopped being depreciated because
they are classified as an asset held for sale.

A loss on impairment of assets was recorded in the 1998 Fiscal Year (see Note 4
in Item 8. Financial Statements and Supplemental Data).

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. 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. The Partnership's investment in Villas South was approximately
$0 and $0 at February 29, 2000 and February 28, 1999, respectively, and the
minority interest balance was zero at each date. Villas South's net loss after
minority interest amounted to approximately $0, $3,136,923 and $151,000, for the
1999, 1998 and 1997 Fiscal Years, respectively. Accordingly, for the Fiscal Year
ended February 28, 1999 a loss on impairment in the amount of $3,191,072 was
recognized. As of February 28, 1999, the building was written down to zero.

CHAR-MUR APARTMENTS, LTD.
During the year ended December 31, 1999, Char-Mur Apartments, Ltd. ("Char-Mur ")
incurred a net loss of approximately $18,000 and, as of that date, the local
partnership's total current liabilities exceeded its total current assets by
approximately $135,000. These factors, among others, raise substantial doubt
about the partnership's ability to continue as a going concern. Char-Mur's
continuation as a going concern is dependent upon its ability to generate
sufficient cash flow to meet its obligations on a timely basis, to comply with
the terms of its mortgage, to obtain additional capital contributions from
partners, and ultimately, to attain successful operations. Management is making
all efforts possible to increase the occupancy and the rental income of the
project and to make the necessary improvements to enhance the property, in an
attempt to improve Char-Mur's cash flow. The Partnership's investment in
Char-Mur was approximately $164,000 and $182,000 at February 29, 2000 and
February 28, 1999, respectively,


                                      -25-
<PAGE>

and the minority interest balance was zero at each date. Char-Mur's net loss
after minority interest amounted to approximately $18,000, $39,000 and
$31,000 for the 1998, 1997 and 1996 Fiscal Years, respectively.

WESTWOOD APARTMENTS COMPANY, LTD.
Westwood Apartments Company, Ltd. ("Westwood") has experienced a significant
decrease in occupancy levels in 1997, 1998, and 1999. As a result, the
partnership has incurred operating losses and cash deficits. In addition, the
partnership is twelve months in arrears on their mortgage payments and twenty
months in arrears in making deposits to the reserve for replacements. Effective
January 1, 1999, Westwood adopted a plan to sell its property. Accordingly, the
subsidiary partnership has revalued its assets and liabilities to the amount
expected to be collected and paid upon sale. Up through that date, Westwood
recorded its results of operations using accounting principles applicable to
going concern entities. The partnership's investment in Westwood was
approximately $108,000 and $99,000 at February 29, 2000 and February 28, 1999,
and the minority interest balance was zero at each date. Westwood's net income
(loss) after minority interest amounted to approximately $9,000, $(197,000) and
$(101,000) for the 1999, 1998 and 1997 Fiscal Years, respectively. The mortgage
was assigned HUD on February 18, 1999.

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


                                      -26-
<PAGE>

required to refinance or sell its investments in
Local Partnerships in order to meet its obligations under the Purchase Money
Notes.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

None.



                                      -27-
<PAGE>


Item 8. Financial Statements and Supplementary Data.

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

        Independent Auditors' Report                               28

        Consolidated Balance Sheets at February 29, 2000
        and February 28, 1999                                      121

        Consolidated Statements of Operations for the Years
        Ended February 29, 2000, February 28, 1999 and 1998        122

        Consolidated Statements of Partners' Deficit for
        the Years Ended February 29, 2000, February 28,
        1999 and 1998                                              123

        Consolidated Statements of Cash Flows for the Years
        Ended February 29, 2000, February 28, 1999 and 1998        124

        Notes to Consolidated Financial Statements                 127




                                      -28-
<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 29, 2000 and
February 28, 1999, and the related consolidated statements of operations,
partners' deficit, and cash flows for the years ended February 29, 2000,
February 28, 1999 and 1998 (the 1999, 1998 and 1997 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 29
(1999 Fiscal Year), 32 (1998 Fiscal Year) and 38 (1997 Fiscal Year) subsidiary
partnerships whose losses constituted $6,455,621, $1,888,891 and $1,894,969 of
the Partnership's net loss during the 1999, 1998 and 1997 Fiscal Years,
respectively, and whose assets constituted 89% (1999 Fiscal Year) and 92% (1998
Fiscal Year) of the Partnership's assets at February 29, 2000 and February 28,
1999, presented in the accompanying consolidated financial statements. The
financial statements for 28 (1999 Fiscal Year), 31 (1998 Fiscal Year) and 37
(1997 Fiscal Year) 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 one (1999, 1998 and 1997 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 29, 2000 and
February 28, 1999, and the results of their operations, and cash flows for the
years ended February 29, 2000, February 28, 1999 and 1998, in conformity with
generally accepted accounting principles.

As discussed in Note 10, the Partnership is currently in the process of winding
up its operations and disposing of its investments. It is anticipated that this
process will take a number of years.

As discussed in Note 11(a), one subsidiary partnership is in default of its
mortgage agreement and another subsidiary partnership has incurred losses and
its current liabilities exceed current assets. This raises substantial doubt
about these subsidiary partnerships' abilities to continue as going concerns.
The financial statements for one of these subsidiary partnerships were unaudited
and the auditors for the other subsidiary partnership modified their reports due
to the uncertainty of the ability of the subsidiary partnership to continue in
existence. In addition, during the 1999 Fiscal Year three subsidiary
partnerships adopted plans to sell the property and liquidate in lieu of
continuing the business. As a result, the financial statements for these three
subsidiary partnerships are presented on the liquidating basis of accounting.
Such subsidiary partnerships' assets aggregated $5,491,798 at February 29, 2000.
The consoli-


                                      -29-
<PAGE>

dated financial statements do not include any adjustments that might result from
the outcome of these uncertainties.

As discussed in Note 7, the principal and all accrued interest on the purchase
money notes became due during 1998 to 1999. The Partnership exercised its option
to extend the maturity of such notes for three to five years. The Partnership
expects that upon final 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, LLP

New York, New York
May 22, 2000



                                      -30-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Town & Country Village Apartments, Ltd.
Oklahoma City, Oklahoma

We have audited the accompanying balance sheet of Town & Country Village
Apartments, Ltd. (the Project), as of January 15, 1998, and the related
statements of profit and loss, changes in partners' equity, and cash flows for
the period January 1, 1998 through January 15, 1998. 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 the Project as of January 15,
1998 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 the
Project will continue as a going concern. As discussed in the Notes 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. A receiver has been appointed to preserve and protect the mortgaged
property pending foreclosure. These conditions raise substantial doubt about its
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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
October 12, 1998


                                      -31-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Town & Country Village Apartments, Ltd.
Oklahoma City, Oklahoma

We have audited the accompanying balance sheet of Town & Country Village
Apartments, Ltd. (the Project), as of December 31, 1997, 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.
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 the Project as of December 31,
1997 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 the
Project will continue as a going concern. As discussed in the Notes 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. A receiver has been appointed to preserve and protect the mortgaged
property pending foreclosure. These conditions raise substantial doubt about its
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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
February 16, 1998



                                      -32-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
New Jersey, Ltd.

We have audited the accompanying balance sheet of New Jersey, Ltd. as of
December 31, 1999, and the related statements of operations, partners' equity
(deficit) 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, 1999, and the results of its operations, the changes in partners' equity
(deficit) 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 20 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.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 25,
2000 on our consideration of New Jersey, Ltd.' s internal control and on its
compliance with specific requirements applicable to major HUD programs and fair
housing and non-discrimination.

/s/ Reznick Fedder & Silverman
Lead Auditor: Philip A. Weitzel
Boston, Massachusetts
Taxpayer Identification Number: 52-1088612
January 25, 2000



                                      -33-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
New Jersey, Ltd.

We have audited the accompanying balance sheet of New Jersey, Ltd. as of
December 31, 1998, and the related statements of operations, partners' equity
(deficit) 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, 1998 and the results of its operations, the changes in partners'
equity (deficit) 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 21 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.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated February 4,
1999 on our consideration of New Jersey, Ltd.'s internal control and on its
compliance with specific requirements applicable to major and nonmajor HUD
programs and fair housing and non-discrimination.

/s/ Reznick Fedder & Silverman
Lead Auditor: Philip A. Weitzel
Boston, Massachusetts
Taxpayer Identification Number: 52-1088612
February 4, 1999




                                      -34-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
New Jersey, Ltd.

We have audited the accompanying balance sheet of New Jersey, Ltd. as of
December 31, 1997 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, 1997 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.

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, 1998 on our consideration of New Jersey, Ltd's internal
control and on its compliance with specific requirements applicable to major and
nonmajor HUD programs, fair housing and non-discrimination, and laws and
regulations applicable to the financial statements.

/s/ Reznick Fedder & Silverman
Lead Auditor: Philip A. Weitzel
Boston, Massachusetts
Taxpayer Identification Number: 52-1088612
January 29, 1998



                                      -35-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Zeigler Boulevard, Ltd.

We have audited the accompanying balance sheet of Zeigler Boulevard, Ltd. as of
December 31, 1999, and the related statements of operations, 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, 1999, 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 20 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.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January
27,2000, on our consideration of Zeigler Boulevard, Ltd.'s internal control and
on its compliance with specific requirements applicable to major HUD programs
and fair housing and non-discrimination.

/s/ Reznick Fedder & Silverman
Lead Auditor: Philip A. Weitzel
Boston, Massachusetts
Taxpayer Identification Number: 52-1088612
January 27, 2000



                                      -36-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Zeigler Boulevard, Ltd.

We have audited the accompanying balance sheet of Zeigler Boulevard, Ltd. as of
December 31, 1998, and the related statements of operations, partners' equity
(deficit) 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, 1998, and the results of its operations, the changes in partners'
equity (deficit) 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 20 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.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated February 4,
1999 on our consideration of Zeigler Boulevard, Ltd's internal control and on
its compliance with specific requirements applicable to major and non-major HUD
programs and fair housing and non-discrimination.

/s/ Reznick Fedder & Silverman
Lead Auditor: Philip A. Weitzel
Boston, Massachusetts
Taxpayer Identification Number: 52-1088612
February 4, 1999



                                      -37-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Zeigler Boulevard, Ltd.

We have audited the accompanying balance sheet of Zeigler Boulevard, Ltd. as of
December 31, 1997 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, 1997, 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 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.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 29,
1998 on our consideration of Zeigler Boulevard, Ltd's internal control and on
its compliance with specific requirements applicable to major and nonmajor HUD
programs, fair housing and non-discrimination, and laws and regulations
applicable to the financial statements.

/s/ Reznick Fedder & Silverman
Lead Auditor: Philip A. Weitzel
Boston, Massachusetts
Taxpayer Identification Number: 52-1088612
January 29, 1998



                                      -38-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Eastwyck III, Ltd.

We have audited the accompanying balance sheet of Eastwyck III, Ltd. as of
December 31, 1999, and the related statements of operations, partners' equity
(deficit) 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, 1999, and the results of its operations, the changes in partners'
equity (deficit) 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 20 through 23
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 and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January
24,2000 on our consideration of Eastwyck III, Ltd.'s internal control and on its
compliance with specific requirements applicable to major HUD programs and fair
housing and non-discrimination.


/s/ Reznick Fedder & Silverman
Lead Auditor: Philip A. Weitzel
Boston, Massachusetts
Taxpayer Identification Number: 52-1088612
January 24, 2000



                                      -39-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Eastwyck III, Ltd.

We have audited the accompanying balance sheet of Eastwyck III, Ltd., as of
December 31, 1998, and the related statements of operations, 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, 1998, 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 20 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.

In accordance with Government Auditing Standards, and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated February 4,
1999 on our consideration of Eastwyck III, Ltd.'s internal control and on its
compliance with specific requirements applicable to major HUD programs and fair
housing and non-discrimination.

/s/ Reznick Fedder & Silverman
Lead Auditor: Philip A. Weitzel
Boston, Massachusetts
Taxpayer Identification Number: 52-1088612
February 4, 1999




                                      -40-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Eastwyck III, Ltd.

We have audited the accompanying balance sheet of Eastwyck III, Ltd., as of
December 31, 1997, 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, 1997, 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.

In accordance with Government Auditing Standards, and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 29,
1998 on our consideration of Eastwyck III, Ltd.'s internal control and on its
compliance with specific requirements applicable to major and nonmajor HUD
programs, fair housing and non-discrimination, and laws and regulations
applicable to the financial statements.

/s/ Reznick Fedder & Silverman
Audit Principal: Philip A. Weitzel
Boston, Massachusetts
Federal Employer Identification Number: 52-1088612
January 29, 1998


                                      -41-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Breckenridge-Chaparral Apartments 11, Ltd.  HUD Field Office Director
Breckenridge, Texas                         Fort Worth, TX

We have audited the accompanying balance sheet of Breckenridge-Chaparral
Apartments II, Ltd. (the Project), Project No. 113-44016-LD, as of December 31,
1999, and the related statements of profit and loss, changes in owners' 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
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 the Project as of December 31,
1999 and the results of its operations, changes in owners' equity 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 January 17, 2000 on our
consideration of the Project's internal controls and reports dated January 17,
2000 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 FIUD program, and specific
requirements applicable to Fair Housing and Non-Discrimination.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 17, 2000




                                      -42-
<PAGE>


[Letterhead of Browder & Associates, P.C.]

Independent Auditor's Report

To the Partners of
Breckenridge-Chaparral Apartments II, Ltd.
Breckenridge, Texas

We have audited the accompanying balance sheet of Breckenridge-Chaparral
Apartments II, Ltd. (the Project), as of December 31, 1998, 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.
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 the Project as of December 31,
1998 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1999



                                      -43-
<PAGE>


[Letterhead of Browder & Associates, P.C.]

Independent Auditor's Report

To the Partners of
Breckenridge-Chaparral Apartments II, Ltd.
Breckenridge, Texas

We have audited the accompanying balance sheet of Breckenridge-Chaparral
Apartments II, Ltd. (the Project), as of December 31, 1997, 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.
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 the Project as of December 31,
1997 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1998



                                      -44-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Country, Ltd.

We have audited the accompanying balance sheet of Country, Ltd. as of March 31,
1998, and the related statements of operations, partners' equity and cash flows
for the three months 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.
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 March 31,
1998, and the results of its operations and its cash flows for the three months
then ended, in conformity with generally accepted accounting principles.

/s/ Reznick Fedder & Silverman
Boston, Massachusetts
May 7, 1998



                                      -45-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Country, Ltd.

We have audited the accompanying balance sheet of Country, Ltd. as of December
31, 1997 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, 1997, 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 23
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 and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated on January
29, 1998 on our consideration of Country, Ltd.'s internal control and on its
compliance with specific requirements applicable to major HUD programs, fair
housing and non-discrimination, and laws and regulations applicable to the
financial statements.

/s/ Reznick Fedder & Silverman
Audit Principal: Philip A. Weitzel
Boston, Massachusetts
Federal Employer Identification Number: G52-1088612
January 29, 1998 (except for Note which is as of April 10, 1998)



                                      -46-
<PAGE>

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Westwood Apartments Company, Ltd.

We have audited the accompanying statement of net assets in liquidation of
Westwood Apartments Company, Ltd. as of December 31, 1999, and the related
statement of changes in net assets in liquidation 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.
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.

As discussed in note A to the financial statements, during 1999, the partnership
adopted a plan to sell the rental property and liquidate the partnership in lieu
of continuing the business. As a result, the partnership's financial statements
are presented on the liquidation basis of accounting.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets in liquidation of Westwood Apartments
Company, Ltd. as of December 31, 1999, and the changes in net assets in
liquidation for the year then ended, in conformity with generally accepted
accounting principles.

As discussed in note A to the financial statements, there is a letter of intent
to purchase the property.

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 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 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
Bethesda, Maryland
February 8, 2000


                                      -47-
<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, 1998 and 1997, 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, 1998 and 1997, 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 13
through 15 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.

The accompanying financial statements have been prepared assuming that the
partnership will continue as a going concern. As discussed in note B to the
financial statements, low occupancy levels have resulted in operating losses and
cash flow deficits which raise substantial doubt about the partnership's ability
to continue as a going concern. Management's plans in regard to these matters
are also described in note B. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/S/ REZNICK FEDDER & SILVERMAN
Bethesda, Maryland
January 29, 1999



                                      -48-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Parktowne, Ltd.

We have audited the accompanying statement of net assets in liquidation of
Parktowne, Ltd. as of December 31, 1999, and the related statement of changes in
net assets in liquidation 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.
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.

As discussed in note A to the financial statements, during 1999, the partnership
adopted a plan to sell the rental property and liquidate the partnership in lieu
of continuing the business. As a result, the partnership's financial statements
are presented on the liquidation basis of accounting.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets in liquidation of Parktowne, Ltd. as of
December 31, 1999, and the changes in net assets in liquidation for the year
then ended, in conformity with generally accepted accounting principles.

As discussed in note A to the financial statements, there is a letter of intent
to purchase the property.

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 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 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
Bethesda, Maryland
February 8, 2000



                                      -49-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Parktowne, Ltd.

We have audited the accompanying balance sheets of Parktowne, Ltd. as of
December 31, 1998 and 1997, 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, 1998 and 1997, 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
January 28, 1999


                                      -50-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Corpus Christi-Oso Bay Apartments, Ltd.     HUD Field Office Director
Corpus Christi, Texas                       San Antonio, TX

We have audited the accompanying balance sheet of Corpus Christi-Oso Bay
Apartments, Ltd. (the Project), Project No. 115-44129-LDP, as of December 31,
1999, and the related statements of profit and loss, changes in owners' 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
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 the Project as of December 31,
1999 and the results of its operations, changes in owners' equity and cash flows
for the year then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards and the ConsolidatedAudit Guide
for Audits of HUD Programs issued by the U.S. Department of Housing and Urban
Development, we have also issued a report dated January 17, 2000 on our
consideration of the Project's internal controls and reports dated January 17,
2000 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 Fair Housing and
Non-Discrimination.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 17, 2000


                                      -51-
<PAGE>

[Letterhead of Browder & Associates, P.C.]

Independent Auditor's Report

To the Partners of
Corpus Christi-Oso Bay Apartments, Ltd.
Corpus Christi, Texas

We have audited the accompanying balance sheet of Corpus Christi-Oso Bay
Apartments, Ltd. (the Project), as of December 31, 1998, 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.
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 the Project as of December 31,
1998 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1999


                                      -52-
<PAGE>

[Letterhead of Browder & Associates, P.C.]

Independent Auditor's Report

To the Partners of
Corpus Christi-Oso Bay Apartments, Ltd.
Corpus Christi, Texas

We have audited the accompanying balance sheet of Corpus Christi-Oso Bay
Apartments, Ltd. (the Project), as of December 31, 1997, 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.
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 the Project as of December 31,
1997 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 16, 1998


                                      -53-
<PAGE>


[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Northbrook III, Ltd.

We have audited the accompanying balance sheet of Northbrook III, Ltd. as of
March 31, 1998, and the related statements of operations, partners' equity and
cash flows for the three months 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.
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
March 31, 1998, and the results of its operations and its cash flows for the
three months then ended, in conformity with generally accepted accounting
principles.

/s/ Reznick Fedder & Silverman
Boston, Massachusetts
May 7, 1998


                                      -54-
<PAGE>

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Northbrook III, Ltd.

We have audited the accompanying balance sheet of Northbrook III, Ltd. as of
December 31, 1997, 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, 1997, 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 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, and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 29,
1998 on our consideration of Northbrook III, Ltd.'s internal control and on its
compliance with specific requirements applicable to major and nonmajor HUD
programs, fair housing and non-discrimination, and laws and regulations
applicable to the financial statements.

/s/ Reznick Fedder & Silverman
Audit Principal: Philip Weitzel
Boston, Massachusetts
Federal Employer Identification Number: G 52-1088612
January 29, 1998 (except for Note which is as of April 10, 1998)


                                      -55-
<PAGE>

[Letterhead of Grass Coffey & Scharlau, C.P.A.'s, P.C.]

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 November 9, 1999 (Date of Liquidation) and December 31, 1998, and the related
statements of operations, partners' equity, and cash flows for the periods 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
November 9, 1999 (Date of Liquidation) and December 31, 1998, and the results of
its operations and its cash flows for the periods then ended in conformity with
generally accepted accounting principles applied on the basis described in the
following paragraph.

As described in Note 1 to the financial statements, the partners of Bethany Glen
Associates approved a sale of the principal assets of the Partnership on June 1,
1999, and the partnership commenced liquidation shortly thereafter. As a result,
the partnership has changed its basis of accounting for the period subsequent to
June 1, 1999 to the liquidation basis.

/s/ Grass Coffey & Scharlau, C.P.A.'s, P.C.
Phoenix, Arizona
November 10, 1999


                                      -56-
<PAGE>


[Letterhead of Grass Coffey & Scharlau, C.P.A.'s, P.C.]

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, 1998 and 1997, 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, 1998 and 1997, 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 & Scharlau, C.P.A.'s, P.C.
Phoenix, Arizona
January 28, 1999



                                      -57-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Albuquerque-Lafayette Square Apartments, Ltd.      HUD Field Office Director
Albuquerque, New Mexico                            Albuquerque, NM

We have audited the accompanying balance sheet of Albuquerque-Lafayette Square
Apartments, Ltd. (the Project), Project No. 1 16-44022-LDP, as of December 31,
1999, and the related statements of profit and loss, changes in owners' 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
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 the Project as of December 31,
1999 and the results of its operations, changes in owners' equity 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 January 17, 2000 on our
consideration of the Project's internal controls and reports dated January 17,
2000 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 Fair Housing and Non-Discrimination.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 17, 2000


                                      -58-
<PAGE>

[Letterhead of BROWDER & ASSOCIATES, P.C.]

Independent Auditor's Report

To the Partners of
Albuquerque-Lafayette Square Apartments, Ltd.
Albuquerque, New Mexico

We have audited the accompanying balance sheet of Albuquerque-Lafayette Square
Apartments, Ltd. (the Project), as of December 31, 1998, 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.
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 the Project as of December 31,
1998 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1999


                                      -59-
<PAGE>


[Letterhead of BROWDER & ASSOCIATES, P.C.]

Independent Auditor's Report

To the Partners of
Albuquerque-Lafayette Square Apartments, Ltd.
Albuquerque, New Mexico

We have audited the accompanying balance sheet of Albuquerque-Lafayette Square
Apartments, Ltd. (the Project), as of December 31, 1997, 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.
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 the Project as of December 31,
1997 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1998


                                      -60-
<PAGE>


[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheet of Warren Manor Apartments
Limited Partnership (a limited partnership) as of June 18, 1999 and the related
statements of revenue and expense, partners' equity, and cash flows and,
supplemental schedules on pages 9-11 for the period January 1, 1999 through June
18, 1999. 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 June 18, 1999 and the results of its operations and its cash
flows for the period January 1, 1999 through June 18, 1999, 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/ NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
January 19, 2000


                                      -61-
<PAGE>


[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]

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, 1998
and 1997 and the related comparative statements of revenue and expense,
partners' equity, and 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, 1998 and 1997 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/ Nessel, Smith, Leff & Borsen, PLLC
Certified Public Accountants
Farmington Hills, MI
February 8, 1999


                                      -62-
<PAGE>

[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheet of Golf Manor Apartments Limited
Partnership (a limited partnership) as of June 18, 1999 and the related
statements of revenue and expense, partners' equity, and cash flows and,
supplemental schedules on pages 9-11 for the period January 1, 1999 through June
18, 1999. 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 June 18, 1999 and the results of its operations and its cash
flows for the period January 1, 1999 through June 18, 1999, 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/ NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
January 15, 2000


                                      -63-
<PAGE>


[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]

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, 1998
and 1997 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, 1998 and 1997 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/ Nessel, Smith, Leff & Borsen, PLLC
Certified Public Accountants
Farmington Hills, MI
February 8, 1999


                                      -64-
<PAGE>


[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]

INDEPENDENT AUDITORS' REPORT

To the Partners
WARREN WOODS APARTMENTS LIMITED PARTNERSHIP
28777 Northwestern Highway, Suite 100
Southfield, MI 48034

We have audited the accompanying balance sheet of Warren Woods Apartments
Limited Partnership (a limited partnership) as of June 18, 1999 and the related
statements of revenue and expense, partners' equity, and cash flows and,
supplemental schedules on pages 9-11 for the period January 1, 1999 through June
18, 1999. 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 Woods Apartments Limited
Partnership as of June 18, 1999 and the results of its operations and its cash
flows for the period January 1, 1999 through June 18, 1999, 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/ NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
January 19, 2000



                                      -65-
<PAGE>

[Nessel, Smith, Leff & Borsen, 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, 1998
and 1997 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, 1998 and 1997 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/ NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
February 6, 1999


                                      -66-
<PAGE>


[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]

INDEPENDENT AUDITORS' REPORT

CANTON COMMONS APARTMENTS LIMITED PARTNERSHIP
28777 Northwestern Highway, Suite
100 Southfield, MI 48034

We have audited the accompanying balance sheet of Canton Commons Apartments
Limited Partnership (a limited partnership) as of June 18, 1999 and the related
statements of revenue and expense, partners' equity, and cash flows and,
supplemental schedules on pages 9-11 for the period January 1, 1999 through June
18, 1999. 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 Canton Commons Apartments Limited
Partnership as of June 18, 1999 and the results of its operations and its cash
flows for the period January 1, 1999 through June 18, 1999, 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/ NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
January 5, 2000


                                      -67-
<PAGE>

[Nessel, Smith, Leff & Borsen, 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
Apartments Limited Partnership (a limited partnership) as of December 31, 1998
and 1997 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, 1998 and 1997 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/ NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
February 8, 1999



                                      -68-
<PAGE>

[Nessel, Smith, Leff & Borsen, PLLC Letterhead]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying Balance Sheet of Los Caballeros Apartments (a
limited partnership) as of and April 25, 1997 and the related Statements of
Revenue and Expense, Partners' Deficiency, Cash Flows and Supplemental
Information on Pages 9-11 for the period 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 Los Caballeros Apartments as of
April 25, 1997 and the results of its operations and its cash flows for the
period 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
Payments 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/ NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
February 10, 1998



                                      -69-
<PAGE>


[Letterhead of Nessel, Smith, Leff & Borsen, PLLC]

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheet of Rosewood Manor Apartments (a
limited partnership) as of June 18, 1999 and the related statements of revenue
and expense, partners' equity, and cash flows and, supplemental schedules on
pages 9-11 for the period January 1, 1999 through June 18, 1999. 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 Rosewood Manor Apartments as of June
18, 1999 and the results of its operations and its cash flows for the period
January 1, 1999 through June 18, 1999, 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/ NESSEL, SMITH, LEFF & BORSEN, PLLC
Certified Public Accountants
Farmington Hills, MI
January 17, 2000


                                      -70-
<PAGE>


[Nessel, Smith, Leff & Borsen, 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, 1998 and 1997 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, 1998 and 1997 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/ Nessel, Smith, Leff & Borsen, PLLC
Certified Public Accountants
Farmington Hills, MI
February 8, 1999


                                      -71-
<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 12, 1997, and the
related Statements of Revenue and Expense, Partners' Equity and Cash Flows for
the period 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 12, 1997, and the results of its operations,
changes in partners' equity and its cash flows for the period 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
Certified Public Accountants
Professional Corporation
Bloomfield Hills, Michigan
February 5, 1998



                                      -72-
<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 12, 1997, and the
related Statements of Revenue and Expense, Partners' Equity and Cash Flows for
the period 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 12, 1997, and the results of its operations,
changes in partners' equity and its cash flows for the period 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
Certified Public Accountants
Professional Corporation
Bloomfield Hills, Michigan
February 5, 1998


                                      -73-
<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 12, 1997, and the
related Statements of Revenue and Expense, Partners' Equity and Cash Flows for
the period 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 12, 1997, and the results of its operations,
changes in partners' equity and its cash flows for the period 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
Certified Public Accountants
Professional Corporation
Bloomfield Hills, Michigan
February 5, 1998


                                      -74-
<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 12, 1997, and the
related Statements of Revenue and Expense, Partners' Equity and Cash Flows for
the period 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 12, 1997, and the results of its operations,
changes in partners' equity and its cash flows for the period 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
Certified Public Accountants
Professional Corporation
Bloomfield Hills, Michigan
February 5, 1998


                                      -75-
<PAGE>


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

Independent Auditor's Report

To the Partners of
San Diego-Logan Square Gardens Company      HUD Field Office Director
San Diego, California                       San Diego, CA

We have audited the accompanying balance sheet of San Diego-Logan Square Gardens
Company (the Project), Project No. 129-4405 l-LD, as of December 31, 1999, and
the related statements of profit and loss, changes in owners' 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
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 the Project as of December 31,
1999 and the results of its operations, changes in owners' equity 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 January 17, 2000 on our
consideration of the Project's internal controls and reports dated January 17,
2000 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 Fair Housing and
Non-Discrimination.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 17,2000


                                      -76-
<PAGE>


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

Independent Auditor's Report

To the Partners of
San Diego-Logan Square Gardens Company
San Diego, California

We have audited the accompanying balance sheet of San Diego-Logan Square Gardens
Company (the Project), as of December 31, 1998, 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.
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 the Project as of December 31,
1998 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1999


                                      -77-
<PAGE>


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

Independent Auditor's Report

To the Partners of
San Diego-Logan Square Gardens Company
San Diego, California

We have audited the accompanying balance sheet of San Diego-Logan Square Gardens
Company (the Project), as of December 31, 1997, 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.
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 the Project as of December 31,
1997 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1998


                                      -78-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Blue Ridge Manor, Ltd.       HUD Field Office Director
Grandview, Missouri          Kansas City, MO

We have audited the accompanying balance sheet of Blue Ridge Manor, Ltd. (the
Project), Project No. 084-44127-LDP, as of December 31, 1999, and the related
statements of profit and loss, changes in owners' 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
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 the Project as of December 31,
1999 and the results of its operations, changes in owners' equity 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 January 17, 2000 on our
consideration of the Project's internal controls and reports dated January 17,
2000 on its compliance with laws and regulations applicable to the basic
financial statements, specific requirements applicable to the major HUD program,
and specific requirements applicable to Fair Housing and Non-Discrimination.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 17,2000


                                      -79-
<PAGE>

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

Independent Auditor's Report
To the Partners of
Blue Ridge Manor, Ltd.
Grandview, Missouri

We have audited the accompanying balance sheet of Blue Ridge Manor, Ltd. (the
Project), as of December 31, 1998, 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.
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 the Project as of December 31,
1998 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1999


                                      -80-
<PAGE>


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

Independent Auditor's Report
To the Partners of
Blue Ridge Manor, Ltd.
Grandview, Missouri

We have audited the accompanying balance sheet of Blue Ridge Manor, Ltd. (the
Project), as of December 31, 1997, 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.
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 the Project as of December 31,
1997 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 16, 1998


                                      -81-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Ardmore-Rolling Meadows of Ardmore, Ltd.    HUD Field Office Director
Ardmore, Oklahoma                           Oklahoma City, OK

We have audited the accompanying balance sheet of Ardmore-Rolling Meadows of
Ardmore, Ltd. (the Project), Project No. 117-44044-LD, as of December 31, 1999,
and the related statements of profit and loss, changes in owners' 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
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 the Project as of December 31,
1999 and the results of its operations, changes in owners' equity 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 January 17, 2000 on our
consideration of the Project's internal controls and reports dated January 17,
2000 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 Fair Housing and
Non-Discrimination.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 17, 2000



                                      -82-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Ardmore-Rolling Meadows of Ardmore, Ltd.
Ardmore, Oklahoma

We have audited the accompanying balance sheet of Ardmore-Rolling Meadows of
Ardmore, Ltd. (the Project), as of December 31, 1998, 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.
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 the Project as of December 31,
1998 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1999


                                      -83-
<PAGE>

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

Independent Auditor's Report

To the Partners of
Ardmore-Rolling Meadows of Ardmore, Ltd.
Ardmore, Oklahoma

We have audited the accompanying balance sheet of Ardmore-Rolling Meadows of
Ardmore, Ltd. (the Project), as of December 31, 1997, 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.
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 the Project as of December 31,
1997 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1998


                                      -84-
<PAGE>

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

Independent Auditor's Report

To the Partners of
El Paso-Gateway East Apartments, Ltd.       HUD Field Office Director
El Paso, Texas                              Fort Worth, TX

We have audited the accompanying balance sheet of El Paso-Gateway East
Apartments, Ltd. (the Project), Project No. 133-44016-LD, as of December 31,
1999, and the related statements of profit and loss, changes in owners' 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
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 the Project as of December 31,
1999 and the results of its operations, changes in owners' equity 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 January 17, 2000 on our
consideration of the Project's internal controls and reports dated January 17,
2000 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 Fair Housing and Non-Discrimination.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 17, 2000


                                      -85-
<PAGE>

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

Independent Auditor's Report

To the Partners of
El Paso-Gateway East Apartments, Ltd.
El Paso, Texas

We have audited the accompanying balance sheet of El Paso-Gateway East
Apartments, Ltd. (the Project), as of December 31, 1998, 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.
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 the Project as of December 31,
1998 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1999


                                      -86-
<PAGE>


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

Independent Auditor's Report

To the Partners of
El Paso-Gateway East Apartments, Ltd.
El Paso, Texas

We have audited the accompanying balance sheet of El Paso-Gateway East
Apartments, Ltd. (the Project), as of December 31, 1997, 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.
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 the Project as of December 31,
1997 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1998



                                      -87-
<PAGE>

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

Independent Auditor's Report

To the Partners of
Fort Worth-Northwood Apartments, Ltd.       HUD Field Office Director
Fort Worth, Texas                           Fort Worth, TX

We have audited the accompanying balance sheet of Fort Worth-Northwood
Apartments, Ltd. (the Project), Project No. 1 13-44025-LDP-SUP, as of December
31, 1999, and the related statements of profit and loss, changes in owners'
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
and Government Auditinc 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 the Project as of December 31,
1999 and the results of its operations, changes in owners' equity 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 January 17. 2000 on our
consideration of the Project's internal controls and reports dated January 17,
2000 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 Fair Housing and Non-Discrimination.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 17, 2000


                                      -88-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Fort Worth-Northwood Apartments, Ltd.
Fort Worth, Texas

We have audited the accompanying balance sheet of Fort Worth-Northwood
Apartments, Ltd. (the Project), as of December 31, 1998, 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.
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 the Project as of December 31,
1998 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1999



                                      -89-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Fort Worth-Northwood Apartments, Ltd.
Fort Worth, Texas

We have audited the accompanying balance sheet of Fort Worth-Northwood
Apartments, Ltd. (the Project), as of December 31, 1997, 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.
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 the Project as of December 31,
1997 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1998


                                      -90-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Stephenville-Tarleton Arms Apartments, Ltd.   HUD Field Office Director
Stephenville, Texas                           Fort Worth, TX

We have audited the accompanying balance sheet of Stephenville-Tarleton Arms
Apartments, Ltd. (the Project), Project No. I 13-44034-LD, as of December 31,
1999, and the related statements of profit and loss, changes in owners' 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
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 the Project as of December 31,
1999 and the results of its operations, changes in owners' equity 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 January 17, 2000 on our
consideration of the Project's internal controls and reports dated January 17,
2000 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 Fair Housing and Non-Discrimination.

Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 17, 2000



                                      -91-
<PAGE>

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

Independent Auditor's Report

To the Partners of
Stephenville-Tarleton Arms Apartments, Ltd.
Stephenville, Texas

We have audited the accompanying balance sheet of Stephenville-Tarleton Arms
Apartments, Ltd. (the Project), as of December 31, 1998, 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.
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 the Project as of December 31,
1998 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1999


                                      -92-
<PAGE>


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

Independent Auditor's Report

To the Partners of
Stephenville-Tarleton Arms Apartments, Ltd.
Stephenville, Texas

We have audited the accompanying balance sheet of Stephenville-Tarleton Arms
Apartments, Ltd. (the Project), as of December 31, 1997, 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.
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 the Project as of December 31,
1997 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 supplemental information included in the report
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of the Project. 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.
Audit Principal: E.O. Browder, Jr.
Birmingham, Alabama
Federal Employer Identification Number: 63-0986156
January 19, 1998


                                      -93-
<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, 1999 and 1998 and the
related statements of operations, partners' equity, and cash flows for each of
the three years in the period ended December 31, 1999. 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, 1999 and 1998, 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, 1999, in conformity
with generally accepted accounting principles.

/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 18, 2000


                                      -94-
<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, 1998 and 1997 and the
related statements of operations, partners' equity, and cash flows for each of
the three years in the period ended December 31, 1998. 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, 1998 and 1997, 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, 1998, in conformity
with generally accepted accounting principles.

/s/ Robert Ercolini & Company LLP
Boston, Massachusetts
January 26, 1999


                                      -95-
<PAGE>


[Akersloot, Wall & Associates, P.L.L.C. Letterhead]

Independent Auditors' Report

To the Partners of
Buena Vista Manor Apartments, Ltd.

We have audited the accompanying balance sheet of Buena Vista Manor Apartments,
Ltd. (a limited partnership), which includes HUD Project No. 086-35009-SUP-LD as
of December 31, 1999, and the related statements of operations, 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,
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 the Inspector General. 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 the significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe 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. (a limited partnership) as of December 31, 1999, and the results of its
operations, changes in partners' equity, and its cash flows for the year then
ended in accordance with generally accepted accounting principles.

/s/ Akersloot, Wall & Associates, P.L.L.C.
Brentwood, Tennessee
January 18, 2000


                                      -96-
<PAGE>


[Akersloot, DePriest, Wall & Associates, P.L.L.C. Letterhead]

Independent Auditors' Report

To The Partners of
Buena Vista Manor Apartments, Ltd.

We have audited the accompanying balance sheet of Buena Vista Manor Apartments,
Ltd. (a Tennessee limited partnership), which includes HUD Project No.
086-35009-SUP-LD as of December 31, 1998, and the related statements of
operations, 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,
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 the Inspector General. 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 the 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., (a limited partnership) as of December 31, 1998, 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.

/s/ Akersloot, DePriest, Wall & Associates, P.L.L.C.
Brentwood, Tennessee
February 1, 1999


                                      -97-
<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, 1997, 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, 1997, 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 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.


                                      -98-

<PAGE>

In accordance with Government Auditing Standards 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 August 1997, we
have also issued reports dated January 26, 1998 on our consideration of Buena
Vista Manor Apartments, Ltd.'s, internal controls, 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 fair housing and non-discrimination.

/s/ Williams, Crosslin, Sparks & Vaden, P.C.
Nashville, Tennessee
January 26, 1998


                                      -99-
<PAGE>

[Call, Barrick, Ethridge, Webb & Co., LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

January 31, 2000

To the Partners
Rolling Meadows Apartments, Ltd.

We have audited the accompanying balance sheet of Rolling Meadows Apartments,
Ltd. (A Limited Partnership), HUD Project No.: 1 17-44009-LD, as of December 31,
1999, and the related statements of income, partners' capital (deficit) 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 in the first paragraph
present fairly, in all material respects, the financial position of HUD Project
No. 11 7-44009-LD Rolling Meadows Apartments, Ltd. at December 31, 1999, and the
results of its operations, changes in partners' capital (deficit) 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, we have also issued a report dated January 31, 2000 on our
consideration of Rolling Meadows Apartments, Ltd's internal control and reports
dated January 31, 2000, on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to Fair Housing and
Non-Discrimination and specific requirements applicable to nonmajor HUD program
transactions.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information shown on pages 14-19
is presented for the purpose of additional analysis and is not a required part
of the basic financial statements of HUD Project No. 117-44009-LD, Rolling
Meadows 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 basic
financial statements taken as a whole.

/s/ Call, Barrick, Ethridge, Webb & Co., LLP
Certified Public Accountants
Cushing, Oklahoma


                                     -100-
<PAGE>

[Onstott, Craddick & Hyde CPA's, Inc. Letterhead]

Independent Auditor's Report

To the Partners
Rolling Meadows Apartments, Ltd.

We have audited the accompanying balance sheet of HUD Project No. 117-44009-LD,
Rolling Meadows Apartments, LTD., (a limited partnership) as of December 31,
1998, and the related statements of income, changes in partners' capital 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
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, 1998 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 4, 1999, on our
consideration of Rolling Meadows Apartments, LTD.'s internal control and reports
dated February 4, 1999, on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD program
transactions.

Our 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 Schedules 1, 2 and 3 is presented for the purposes of
additional analysis and is not a required part of the basic financial statements
of HUD Project No. 117-44009-LD, Rolling Meadows 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 basic financial statements taken as a
whole.

/s/ Onstott, Craddick & Hyde CPA's, Inc.
Oklahoma City, Oklahoma
February 4, 1999


                                     -101-
<PAGE>

[Onstott, Craddick & Hyde CPA's, Inc. Letterhead]

Independent Auditor's Report

To the Partners
Rolling Meadows Apartments, Ltd.

We have audited the accompanying balance sheet of HUD Project No. 117-44009-LD,
Rolling Meadows Apartments, LTD., (a limited partnership) as of December 31,
1997, and the related statements of income, 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, 1997 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, 1998, on our
consideration of Rolling Meadows Apartments, LTD.'s internal control and reports
dated February 25, 1998, 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.

/s/ Onstott, Craddick & Hyde CPA's, Inc.
Oklahoma City, Oklahoma
February 25, 1998


                                     -102-
<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, 1999, and the related statements of income, changes in 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, 1999, and the results of its
operations, 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 January 31, 2000, on my
consideration of Westgate Associates Limited's internal control and reports
dated January 31, 2000, on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD
programs 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 16-19 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
Certified Public Accountant
Orange, Connecticut
January 31, 2000


                                     -103-
<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, 1998, and the related statements of income, changes in 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 Governing 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, 1998, 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 2, 1999, on my
consideration of Westgate Associates Limited's internal control and reports
dated February 2, 1999, on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD
programs 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 16-19 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
Certified Public Accountant
Orange, Connecticut
February 2, 1999


                                     -104-
<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, 1997, 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 Governing 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, 1997, 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, 1998, on my
consideration of Westgate Associates Limited's internal control structure and
reports dated February 3, 1998, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to Fair
Housing and Non-Discrimination, and specific requirements applicable to nonmajor
HUD programs 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
Certified Public Accountant
Orange, Connecticut
February 3, 1998


                                     -105-
<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, 1999, and the related statements of income, changes in 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, 1999, and the results of its
operations, 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, I have also issued a report dated January 30, 2000, on my
consideration of Wingate Associates Limited's internal control and reports dated
January 30, 2000, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD
programs 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 17-20 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
Certified Public Accountant
Orange, Connecticut
January 30, 2000


                                     -106-
<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, 1998, and the related statements of income, changes in 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, 1998, 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 2, 1999, on my
consideration of Wingate Associates Limited's internal control and reports dated
February 2, 1999, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD
programs 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 17-21 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
Certified Public Accountant
Orange, Connecticut
February 2, 1999


                                     -107-
<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, 1997, 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, 1997, 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, 1998, on my
consideration of Wingate Associates Limited's internal control structure and
reports dated February 3, 1998, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to Fair
Housing and Non-Discrimination, and specific requirements applicable to nonmajor
HUD programs 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 respects in relation to the basic financial
statements taken as a whole.

/s/ Edward Lemkin
Certified Public Accountant
Orange, Connecticut
February 3, 1998


                                     -108-
<PAGE>

[EDWARD LEMKIN Letterhead]
INDEPENDENT AUDTOR'S REPORT

To the Partners
South Munjoy Associates Limited

I have audited the accompanying statement of loss on sale of apartment project
of South Munjoy Associates Limited, HUD Project No.: 022-55002-LDP-R (a Maine
limited partnership) as of September 9, 1997, and the related statements of
profit & loss (HUD Form #92410), partners' capital, and cash flows for the
period 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 September 9, 1997, and the results of
its operations, its changes in partners' capital, and its cash flows for the
period 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 January 11, 1998, on my
consideration of South Munjoy Associates Limited's internal control structure
and reports dated January 11, 1998, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to Fair
Housing and Non-Discrimination, and specific requirements applicable to nonmajor
HUD programs 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 16 to 22 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
Certified Public Accountant
Orange, Connecticut
January 11, 1998


                                     -109-
<PAGE>

[Jeffrey, Phillips, Mosley & Scott, P.A. - Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Cedar Hill Apartments:

We have audited the accompanying balance sheet of Cedar Hill Apartments, (the
"Partnership) as of December 31, 1999 and the related statements of income,
changes in partners' capital, 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
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, such financial statements present fairly, in all material
respects, the financial position of Cedar Hill Apartments as of December 31,
1999, and the results of its operations, 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 January 25, 2000, on our
consideration of Cedar Hill Apartments' internal control, and reports dated
January 25, 2000, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions and specific requirements applicable to Fair Housing and
Non-Discrimination.

Our 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 10 and 11 is presented for the purpose of additional
analysis and are not a required part of the basic financial statements of Cedar
Hill Apartments. 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/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 25, 2000


                                     -110-
<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, 1998, 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, 1998, 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 Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 13, 1999, on our
consideration of Cedar Hill Apartments' internal control and reports dated
January 13, 1999, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions and specific requirements applicable to fair housing and
non-discrimination.

Our 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 11-13 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 13, 1999


                                     -111-
<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, 1997, 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. It 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, 1997, 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 Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 16, 1998, on our
consideration of Cedar Hill Apartments' internal control and reports dated
January 16, 1998, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions and specific requirements applicable to fair housing and
non-discrimination.

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 11-14 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 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.
Little Rock, Arkansas
January 16, 1998


                                     -112-
<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
(the "Partnership") as of December 31, 1999, 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 referred to above present fairly, in
all material respects, the financial position of the Partnership as of December
31, 1999, 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 the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has incurred a net loss and its total
current liabilities exceed its total current assets, which raises substantial
doubt about its ability to continue as a going concern. Management's plan
regarding those matters are also described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

In accordance with Government Auditing Standards, and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 27, 2000, on our
consideration of Char-Mur Apartments' internal control and reports dated January
27, 2000, on its compliance with specific requirements applicable to major HUD
programs, specific requirements applicable to nonmajor HUD transactions and
specific requirements applicable to fair housing and non-discrimination.


                                     -113-
<PAGE>

Our 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 11 and 12 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 27, 2000


                                     -114-
<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, 1998, 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 referred to above present fairly, in
all material respects, the financial position of the Partnership as of December
31, 1998, 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 the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has incurred a net loss and its total
current liabilities exceed its total current assets, which raises substantial
doubt about its ability to continue as a going concern. Management's plan
regarding those matters are also described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

In accordance with Government Auditing Standards, and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 18, 1999, on our
consideration of Char-Mur Apartments' internal control and reports dated January
18, 1999, on its compliance with specific requirements applicable to major HUD
programs, specific requirements applicable to nonmajor HUD transactions and
specific requirements applicable to fair housing and non-discrimination.


                                     -115-
<PAGE>

Our 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 13-15 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 18, 1999


                                     -116-
<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, 1997, 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, 1997, 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 the
Partnership will continue as a going concern. As discussed in Note 1 to the
financial statements, the Partnership has incurred a net loss and its total
current liabilities exceed its total current assets, which raises substantial
doubt about its ability to continue as a going concern. Management's plan
regarding those matters also are described in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

In accordance with Government Auditing Standards, and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 23, 1998, on our
consideration of Char-Mur Apartments' internal control and reports dated January
23, 1998, on its compliance with specific requirements applicable to major HUD
programs, specific requirements applicable to nonmajor HUD transactions and
specific requirements applicable to fair housing and non-discrimination.


                                     -117-
<PAGE>

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 11-14 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 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.
Little Rock, Arkansas
January 28, 1998


                                     -118-
<PAGE>

[Jeffrey, Phillips, Mosley & Scott, P.A. - Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Crossett Apartments, Ltd.:

We have audited the accompanying balance sheet of Crossett Apartments, Ltd. (the
"Partnership"), as of December 31, 1999, and the related statements of income,
changes in partners' capital, and cash flows for the year then ended. These
financial statements are the responsibility of the General Partner. Our
responsibility is to express an opinion on these financial statements based on
our 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 the Partnership as of December
31, 1999, and the results of its operations, changes in partners' capital, and
cash flows for the years 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 January 25, 2000, on our
consideration of the Partnership's internal control, and reports dated January
25, 2000, on its compliance with specific requirements applicable to major HUD
programs, specific requirements applicable to nonmajor HUD transactions and
specific requirement applicable to fair housing and non-discrimination.

Our 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 11 and 12 is presented for purposes of additional
analysis and are not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 25, 2000


                                     -119-
<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, 1998, and for the year then
ended, listed in the foregoing table of contents. These financial statements are
the responsibility of the General Partners. 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 Partners, 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 the Partnership as of December
31, 1998, 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 Consolidated Audit
Guide for Audits of Hud Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 18, 1999, on our
consideration of Crossett Apartments, Ltd.'s internal control and a report dated
January 18, 1999, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions, and specific requirement applicable to fair housing and
non-discrimination.

Our 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 11-13 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ Jeffrey Phillips Mosley & Scott, P.A.
Little Rock, Arkansas
January 18, 1999


                                     -120-
<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, 1997, 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, 1997, 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 Consolidated Audit
Guide for Audits of Hud Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 13, 1998, on our
consideration of Crossett Apartments, Ltd.'s internal control and a report dated
January 13, 1998, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to nonmajor HUD
transactions and specific requirement applicable to fair housing and
non-discrimination.

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 11-14 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 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.
Little Rock, Arkansas
January 13, 1998


                                     -121-
<PAGE>

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

<TABLE>
<CAPTION>
                                     ASSETS
                                                                    February 29,     February 28,
                                                                       2000              1999
                                                                    ------------     ------------
<S>                                                                <C>              <C>
Property and equipment - at cost, less accumulated
  depreciation (Notes 2, 4, 6 and 7)                                $ 21,782,960     $ 48,351,071
Property and equipment-held for sale                                  17,929,686       11,272,289
Cash and cash equivalents (Notes 2 and 11)                             3,431,673        6,906,857
Cash - restricted for tenants' security deposits                         420,362          752,732
Mortgage escrow deposits (Notes 5, 6 and 11)                           5,306,020        5,874,507
Rents receivable                                                         130,231          336,017
Prepaid expenses and other assets                                        505,853        1,297,086
                                                                    ------------     ------------

  Total assets                                                      $ 49,506,785     $ 74,790,559
                                                                     ===========      ===========

                        LIABILITIES AND PARTNERS' DEFICIT

Mortgage notes payable (Notes 6 and 11)                              $29,892,264     $ 44,713,166
Purchase money notes payable (Note 7)                                 26,637,019       39,902,759
Due to selling partners (Note 7)                                      36,669,868       49,776,218
Accounts payable, accrued expenses and other liabilities               1,913,437        2,435,855
Tenants' security deposits payable                                       420,362          752,732
Due to general partners of subsidiaries and their
  affiliates (Note 8)                                                    326,159           81,652
Due to general partners and affiliates (Note 8)                        1,706,224        1,331,349
Distributions payable (Note 12)                                        1,004,200        2,020,374
                                                                    ------------     ------------

                                                                      98,569,533      141,014,105
                                                                    ------------     ------------

Minority interest (Note 2)                                                28,932           30,399
                                                                    ------------     ------------

Commitments and contingencies (Note 11)

Partners' deficit:

  Limited partners                                                   (48,152,233)     (65,142,875)
  General Partners                                                      (939,447)      (1,111,070)
                                                                    ------------     ------------
  Total partners' deficit                                            (49,091,680)     (66,253,945)
                                                                    ------------      -----------

  Total liabilities and partners' deficit                           $ 49,506,785     $ 74,790,559
                                                                     ===========      ===========
</TABLE>


See accompanying notes to consolidated financial statements.


                                     -122-
<PAGE>



           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                      Year Ended
                                                      ---------------------------------------------
                                                       February 29,  February 28,      February 28,
                                                          2000           1999             1998*
                                                      -------------  -------------    ------------
<S>                                                  <C>             <C>              <C>
Revenues
  Rentals, net                                        $17,641,932    $22,017,541      $27,748,364
  Other                                                   901,098        907,225          933,699
  (Loss) gain on sale of properties (Note 10)          (4,467,865)    12,898,451       (3,901,817)
                                                      -----------     ----------       ----------

   Total revenues                                      14,075,165     35,823,217       24,780,246
                                                      -----------     ----------       ----------

Expenses
  Administrative and management                         4,294,265      4,029,798        4,705,642
  Administrative and management-related
   parties (Note 8)                                     1,961,159      2,291,742        2,628,898
  Operating                                             2,835,808      3,435,316        4,756,064
  Repairs and maintenance                               4,614,090      5,809,880        7,855,877
  Taxes and insurance                                   2,257,083      2,909,012        3,777,360
  Financial, principally interest                       4,003,661      5,220,989        7,099,494
  Depreciation                                          2,569,844      4,145,148        5,684,363
  Loss on impairment of assets (Note 4)                    96,724      3,191,072          435,000
                                                      -----------     ----------       ----------

   Total expenses                                      22,632,634     31,032,957       36,942,698
                                                      -----------     ----------       ----------

(Loss) income before minority interest and
  extraordinary item                                   (8,557,469)     4,790,260      (12,162,452)
Minority interest in income of subsidiaries                (1,430)      (424,099)        (102,344)
                                                      -----------     ----------       ----------
(Loss) income before extraordinary item                (8,558,899)     4,366,161      (12,264,796)
Extraordinary item - forgiveness of
  indebtedness income (Note 10)                        26,725,364      7,583,482       21,447,564
                                                      -----------     ----------       ----------
Net income                                            $18,166,465    $11,949,643     $  9,182,768
                                                       ==========     ==========      ===========

(Loss) income before extraordinary item -
  limited partners                                    $(8,473,310)   $ 4,322,499     $(12,142,148)
Extraordinary item - limited partners                  26,458,110      7,507,647       21,233,088
                                                      -----------     ----------       ----------

Net income - limited partners                         $17,984,800    $11,830,146     $  9,090,940
                                                       ==========     ==========      ===========
Number of limited partnership units outstanding            10,038         10,038           10,038
                                                       ==========     ==========      ===========

(Loss) income before extraordinary item per
  limited partnership unit                            $     (844)    $       431     $     (1,209)
Extraordinary item per limited partnership unit             2,636            748            2,115
                                                      -----------     ----------       ----------

Net income per limited partnership unit               $     1,792    $     1,179     $        906
                                                       ==========     ==========      ===========
</TABLE>


*Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.


                                     -123-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIT

<TABLE>
<CAPTION>
                                                                      Limited         General
                                                           Total      Partners        Partners
                                                     ------------   ------------    -----------
<S>                                                  <C>            <C>             <C>
Balance - March 1, 1997                              $(83,335,010)  $(82,053,129)   $(1,281,881)

Net income - year ended February 28, 1998               9,182,768      9,090,940         91,828

Distributions                                          (2,030,972)    (2,010,662)       (20,310)
                                                     ------------   ------------    -----------

Balance - February 28, 1998                           (76,183,214)   (74,972,851)    (1,210,363)

Net income - year ended February 28, 1999              11,949,643     11,830,146        119,497

Distributions                                          (2,020,374)    (2,000,170)       (20,204)
                                                     ------------   ------------    -----------

Balance - February 28, 1999                           (66,253,945)   (65,142,875)    (1,111,070)

Net income - year ended February 29, 2000              18,166,465     17,984,800        181,665

Distributions                                          (1,004,200)      (994,158)       (10,042)
                                                     ------------   ------------    -----------

Balance - February 29, 2000                          $(49,091,680)  $(48,152,233)   $  (939,447)
                                                      ===========    ===========     ==========
</TABLE>

See accompanying notes to consolidated financial statements.


                                     -124-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                (Decrease ) increase in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                                       Year Ended
                                                     --------------------------------------------
                                                      February 29,   February 28,     February 28,
                                                         2000           1999               1998
                                                      -----------    -----------      -----------
<S>                                                  <C>             <C>             <C>
Cash flows from operating activities:
  Net income                                         $ 18,166,465   $ 11,949,643     $  9,182,768
                                                      -----------    -----------      -----------
  Adjustments to reconcile net income to net
   cash (used in) provided by operating activities:
  Loss (gain) on sale of properties (Note 10)           4,467,865    (12,898,451)       3,901,817
  Extraordinary item - forgiveness of
   indebtedness income (Note 10)                      (26,725,364)    (7,583,482)     (21,447,564)
  Depreciation                                          2,569,844      4,145,148        5,622,990
  Loss on impairment of assets (Note 4)                    96,724      3,191,072          435,000
  (Increase) decrease in assets
   Cash restricted for tenants' security deposits         196,790          1,849          (47,498)
   Mortgage escrow deposits                               127,648        239,535          (11,761)
   Rents receivable                                       165,986        (51,523)         (49,706)
   Prepaid expenses and other assets                      707,959        (34,145)          19,926
  Increase (decrease) in liabilities
   Due to selling partners                              2,770,875      3,569,130        4,814,077
   Accounts payable, accrued expenses and
    other liabilities                                  (2,888,991)      (437,234)        (211,558)
   Tenants' security deposits payable                     (17,943)        (8,197)          45,357
   Increase in due to general partners of
    subsidiaries and their affiliates                      30,362        106,070          329,919
   Decrease in due to general partners of
    subsidiaries and their affiliates                  (1,078,046)      (363,941)        (203,647)
   Due to general partners and affiliates                 374,875         22,735         (433,413)
   Minority interest in income of
    subsidiaries                                            1,430        424,099          102,344
                                                      -----------    -----------      -----------
    Total adjustments                                 (19,199,986)    (9,677,335)      (7,133,717)
                                                      -----------    -----------      -----------
  Net cash (used in) provided by
    operating activities                               (1,033,521)     2,272,308        2,049,051
                                                      -----------    -----------      -----------

Cash flows from investing activities:
  Decrease (increase) in certificates of deposit                0        159,348           (3,523)
  Proceeds from sale of properties                      6,278,103      7,496,000        5,887,700
  Costs paid relating to sale of properties              (436,524)      (408,472)        (111,240)
  Acquisitions of property and equipment                 (676,231)      (518,212)      (1,217,360)
  (Increase) decrease in mortgage escrow deposits        (318,344)      (235,320)         482,988
                                                      -----------    -----------      -----------
  Net cash provided by investing activities             4,847,004      6,493,344        5,038,565
                                                      -----------    -----------      -----------



                                     -125-
<PAGE>

<CAPTION>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                (Decrease) increase in Cash and Cash Equivalents
                                   (continued)

                                                                      Year Ended
                                                     --------------------------------------------
                                                      February 29,   February 28,     February 28,
                                                         2000           1999             1998
                                                      -----------    -----------      -----------
<S>                                                  <C>             <C>             <C>
Cash flows from financing activities:
  Distributions                                        (2,020,374)    (2,030,972)      (1,111,554)
  Principal payments of mortgage notes payable         (2,518,997)    (4,736,084)      (3,329,416)
  Payments to selling partners                         (1,393,987)      (600,491)        (541,831)
  Principal payments of purchase money
   notes payable                                       (1,352,412)             0       (2,001,151)
  Decrease in minority interest                            (2,897)      (561,091)         (15,327)
                                                      -----------    -----------      -----------
  Net cash used in financing activities                (7,288,667)    (7,928,638)      (6,999,279)
                                                      -----------    -----------      -----------

Net (decrease) increase in cash and cash equivalents   (3,475,184)       837,014           88,337
Cash and cash equivalents, beginning of year            6,906,857      6,069,843        5,981,506
                                                      -----------    -----------      -----------
Cash and cash equivalents, end of year               $  3,431,673   $  6,906,857    $   6,069,843
                                                      ===========    ===========     ============

Supplemental disclosure of cash flows information:
  Cash paid during the year for interest             $  1,213,668   $  1,984,880    $   2,378,132
                                                      ===========    ===========     ============

Supplemental disclosures of noncash investing
  and financing activities:
  Distributions payable                              $  1,004,200   $  2,020,374    $   2,030,972
  Increase in property and equipment-held for
   sale reclassified from property and equipment        6,657,397     11,272,289        8,372,413
  Increase in purchase money notes payable due
   to the capitalization of prepaid expenses and
   other assets                                           328,798        388,295                0
  Forgiveness of indebtedness (Note 10):
  Decrease in purchase money notes payable            (12,242,126)     3,588,492        8,575,008
  Decrease in due to selling partners                 (14,483,238)     3,979,229       12,872,556
  Decrease in due to general partners of
   subsidiaries and their affiliates                            0         15,761                0


                                     -126-
<PAGE>

<CAPTION>


           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                (Decrease) increase in Cash and Cash Equivalents
                                   (continued)


                                                                      Year Ended
                                                     --------------------------------------------
                                                      February 29,   February 28,     February 28,
                                                         2000           1999             1998
                                                      -----------    -----------      -----------
<S>                                                  <C>             <C>             <C>
Summarized below are the components of the
  gain on sale of properties:
  Decrease in property and equipment, net of
   accumulated depreciation                          $ 17,920,377   $    100,000     $ 13,776,108
  Decrease in property and equipment-held for sale              0      8,372,413                0
  Decrease in certificates of deposit                           0         46,161                0
  Decrease in cash-restricted for tenants'
   security deposits                                      135,580         88,980          286,192
  Decrease in rents receivable                             39,800         20,394           47,990
  Decrease in mortgage escrow deposits                    759,183        905,626          842,652
  Decrease in prepaid expenses and other assets           412,072         80,578          189,206
  (Decrease) increase in accounts payable, accrued
   expenses and other liabilities                       2,366,573     (1,764,892)         401,507
  Decrease in tenants' security deposits payable         (314,427)       (82,632)        (284,051)
  Decrease in mortgage payable                        (12,301,905)    (6,015,327)      (4,805,395)
  Decrease in due to general partners and affiliates    1,292,191       (147,309)        (775,932)
  Decrease in purchase money notes payable                      0     (3,250,000)               0
  Decrease in due to selling partners                           0     (4,164,915)               0
</TABLE>


See accompanying notes to consolidated financial statements.




                                     -127-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

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
(an "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").

As of February 29, 2000, the Partnership holds an interest in twenty-four Local
Partnerships, each of which owns one Apartment Complex which receives Government
Assistance. During the fiscal year ended February 29, 2000, the properties and
the related assets and liabilities owned by one Local Partnership were sold to
third parties and the Partnership's Local Partnership Interest in five other
Local Partnerships was sold to the Local Partnership's general partners. Through
the fiscal year ended February 29, 2000, the properties and the related assets
and liabilities owned by eight Local Partnerships were sold to third parties and
the Partnership's Local Partnership Interest in twelve other Local Partnerships
were sold to third parties and the Local Partnership's general partners,
respectively. A portion of the net proceeds was 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") and Related Housing Programs Corporation (the
"Related General Partner"), both of which are Delaware corporations affiliated
with 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 30 (one of which only has activity through the date of sale of its property
and the related assets and liabilities and five of which only have activity
through the date of sale of the Partnership's interest), and 35 (four of which
only have activity through the date of sale of their properties and the related
assets and liabilities and one of which only has activity through the date of
sale of

                                     -128-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

the Partnership's interest), and 41 (three of which only have activity
through the date of sale of their properties and the related assets and
liabilities and five of which only have activity through the date of sale of
the Partnership's interest) in which the Partnership is a limited partner for
the years ended February 29, 2000, February 28, 1999 and 1998, respectively.
Through the rights of the Partnership and/or a General Partner, which General
Partner has a contractual obligation to act on behalf of the Partnership, to
remove the general partner of the subsidiary partnerships and to approve
certain major operating and financial decisions, the Partnership has a
controlling financial interest in the subsidiary partnerships.

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. The Partnership's fiscal year ends on the last
day of February in order to allow adequate time for the subsidiaries financial
statements to be prepared and consolidated. The books and records of the
Partnership are maintained on the accrual basis of accounting, in accordance
with generally accepted accounting principles ("GAAP").

All intercompany accounts and transactions have been eliminated in
consolidation.

Increases (decreases) in the capitalization of consolidated subsidiaries
attributable to minority interest arise 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 $68,520, $0 and $84,862 for the years ended February 29, 2000,
February 28, 1999 and 1998, (the 1999, 1998 and 1997 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

Property and equipment to be held and used are carried at cost which 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
loss on impairment of assets is recorded when management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time 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.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated. All property and equipment for subsidiary partnerships whose assets
and liabilities are under sales contracts are classified as assets held for
sale.


                                     -129-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

Through February 29, 2000, the Partnership has recorded approximately $8,889,000
as a 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).

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 GAAP requires
management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ from those
estimates.

(h)  Adoption of New Accounting Standards

During April of 1998, the Financial Accounting Standards Board issued Statement
of Position 98-5 ("SOP 98-5") "Reporting on the Costs of Start-Up Activities".
This statement provides guidance on the financial reporting of start-up costs
and organization costs. This statement is effective for all fiscal quarters
beginning after December 15, 1998.


                                     -130-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

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 (all of which are held for non-trading
purposes) 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 notes payable are as
follows:

<TABLE>
<CAPTION>
                                        February 29, 2000                   February 28, 1999
                                 -------------------------------      -------------------------
                                     Carrying                         Carrying
                                     Amount*        Fair Value         Amount*       Fair Value
                                 ---------------   -------------      ----------     ----------
<S>                              <C>               <C>                <C>            <C>
Mortgage Notes Payable for which it is:

Practicable to estimate
  fair value                         $10,253,555      $9,920,943     $24,324,901    $24,200,490
Not Practicable (a)                  $19,638,709                     $20,388,265    $         0

Purchase Money Notes
  Payable for which it is
  Not Practicable (b)                $26,637,019                     $39,902,759    $         0
</TABLE>

(a) The mortgage notes payable are insured by the Department of Housing and
Urban Development (the "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.

*The carrying amount of other assets and liabilities, except for related party
liabilities, reported on the statement of financial position that require such
disclosure approximate fair value. Regarding the fair value of the related party
liabilities, it has been determined that fair value is not practicable to
determine due to the unique nature, repayment terms and related conditions
pertaining to these instruments.


                                     -131-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

NOTE 4 - Property and Equipment and Property and Equipment-Held for Sale

The components of property and equipment and their estimated useful lives are as
follows:

<TABLE>
<CAPTION>
                                     February 29,     February 28,      Estimated
                                        2000             1999          Useful Lives
                                     ------------     ------------     ------------
<S>                                  <C>              <C>              <C>
Land                                 $  2,828,577     $  6,257,117
Building and improvements              41,606,414       91,269,013      15-40 years
Furniture and fixtures                  4,976,751        6,620,647       3-10 years
                                     ------------     ------------
                                       49,411,742      104,146,777
Less:  Accumulated depreciation        27,628,782       55,795,706
                                     ------------     ------------
                                     $ 21,782,960     $ 48,351,071
                                      ===========      ===========
</TABLE>

Depreciation expense for the 1999, 1998 and 1997 Fiscal Years amounted to
$2,569,844, $4,145,148 and $5,684,363, respectively.

The components of property and equipment-held for sale are as follows:

<TABLE>
<CAPTION>
                                                       February 29,  February 28,
                                                           2000          1999
                                                       ------------  ------------
<S>                                                    <C>           <C>
Land                                                    $ 1,794,141   $ 1,152,095
Building and improvement                                 32,532,451    21,729,610
Furniture and fixtures                                    1,234,296       539,342
                                                        -----------   -----------
                                                         35,560,888    23,421,047
Less:  Accumulated depreciation                          17,631,202    12,148,758
                                                        -----------   -----------

                                                        $17,929,686   $11,272,289
                                                        ===========   ===========
</TABLE>

During the year ended December 31, 1999, Westgate Associates, Limited and
Wingate Associates, Limited had losses on impairment of assets of $38,079 and
$58,645 respectively.

During the year ended December 31, 1998, Caddo Parish-Villas South, Ltd. had a
loss on impairment of assets of $3,191,072. As of December 31, 1998, the
building has been written down to zero.

During the year ended December 31, 1997, Cudahy Gardens Limited Partnership
("Cudahy") had a loss on impairment of assets of $435,000. On April 27, 1998,
the property and related assets and liabilities of Cudahy were sold to a third
party for approximately $232,000 (See Note 10).


                                     -132-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

NOTE 5 - Mortgage Escrow Deposits

Mortgage escrow deposits consist of the following:

<TABLE>
<CAPTION>
                                                         February 29,  February 28,
                                                             2000          1999
                                                         ------------  ------------
<S>                                                      <C>           <C>
Reserve for replacements                                   $3,748,776    $3,723,192
Real estate taxes, insurance and other                      1,537,446     2,131,517
Preservation Acts                                              19,798        19,798
                                                          -----------   -----------
                                                           $5,306,020    $5,874,507
                                                          ===========   ===========
</TABLE>

NOTE 6 - Mortgage Notes Payable

The mortgage notes are payable in aggregate monthly installments of
approximately $259,000, including principal and interest at rates ranging from
6.75% to 9.0% 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 $16,151,957 and $24,932,774 at
December 31, 1999 and 1998, 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 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:

<TABLE>
<CAPTION>
Year Ending December 31                 Amount
-----------------------             ------------
<S>                                  <C>
2000                                 $3,749,683
2001                                  1,245,050
2002                                  1,339,806
2003                                  1,441,770
2004                                  1,554,723
Thereafter                           20,561,232
                                     ----------
                                    $29,892,264
                                     ==========
</TABLE>

The above principal payment requirements have been adjusted for principal
acceleration which may result from the event of default of one subsidiary
partnership.

The mortgage agreements require monthly deposits to reserves for replacements
aggregating approximately $92,000 and monthly deposits to escrow accounts for
real estate taxes, insurance and other (Note 5).


                                     -133-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

NOTE 7 - Purchase Money Notes Payable

Nonrecourse Purchase Money Notes (the "Purchase Money Notes") 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 Purchase Money Note relates.

The Purchase Money Notes, which provide for simple interest, will not be in
default, 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. As of February 29, 2000, the maturity dates of the Purchase
Money Notes associated with the remaining properties owned by the Subsidiary
Partnerships were extended for three to five years (see below). Any interest not
paid currently accrues, without further interest thereon, through the extended
due date of the Purchase Money Note. Continued accrual of such interest without
payment would impact the effective rate of the Purchase Money 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 Purchase Money Notes.
Unpaid interest of $36,560,820 and $49,651,170 at February 29, 2000 and February
28, 1999, 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 was permitted to extend the term of the Purchase Money Notes for
up to five additional years. In connection with such extensions, the Partnership
incurred an extension fee of 1/2% per annum of the outstanding principal balance
of the Purchase Money Notes. The Partnership sent an extension notice to each
Purchase Money Note holder that pursuant to the Purchase Money Note it was
extending the maturity. However in certain cases, the Partnership did not pay
the extension fee at that time, deferring such payment to the future. Extension
fees in the amount of $719,010 were incurred by the Partnership through February
29, 2000. Such Purchase Money Notes are now extended with maturity dates ranging
from July 2001 to December 2004. Extension fees of $564,682 were accrued and
added to the Purchase Money Notes balance.

The Partnership expects that upon final 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 unlikely that the proceeds from such sales
will be sufficient to meet the outstanding balances. Management is working with
the Purchase Money Note holders to restructure and/or refinance the Purchase
Money Notes. No assurance can be given that management's efforts will be
successful. 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 $166,699, $156,292 and $311,625 were made to
the Partnership in the 1999, 1998 and 1997 Fiscal Years which do not include
$5,397 and $5,397 escrow monies held for the Preservation Acts program in the
1998 and 1997 Fiscal Years. Of such


                                     -134-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

distributions, $100,019, $93,776 and $214,171, respectively, was used to pay
interest on the Purchase Money Notes. Distribution of proceeds from sales
aggregating $2,493,720 and $1,883,036 were made to the Partnership in the 1999
and 1998 Fiscal Years, respectively, of which $2,493,720 and $496,704,
respectively, was used to pay principal and interest on the Purchase Money
Notes.

NOTE 8 - Related Party Transactions

The costs incurred to related parties for the years ended February 29, 2000,
February 28, 1999 and 1998 were as follows:

<TABLE>
<CAPTION>
                                                              Year Ended
                                                -----------------------------------------
                                                February 29,   February 28,  February 28,
                                                   2000           1999          1998
                                                ------------   ------------  ------------
<S>                                             <C>            <C>           <C>
Partnership management fees (a)                  $   966,838    $   966,838   $   950,977
Expense reimbursement (b)                            124,661        111,233       148,493
Property management fees incurred
  to affiliates of the General Partners (c)          108,880        157,645       268,192
Local administrative fee (d)                          18,750         21,250        26,250
                                                 -----------    -----------   -----------
                                                   1,219,129      1,256,966     1,393,912

Property management fees incurred
  to affiliates of the subsidiary partnerships
  general partners (c)                               738,865      1,034,776     1,234,986
Subsidiary Partnerships general partners
  incentive fee (e)                                    3,165              0             0
                                                 -----------    -----------   -----------
Total general and administrative
  related parties                                $ 1,961,159    $ 2,291,742   $ 2,628,898
                                                 ===========    ===========   ===========
</TABLE>

(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 $875,000 and $464,000 were accrued and unpaid as of February 29,
2000 and February 28, 1999.

(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 $847,745, $1,192,421 and $1,503,178
for the 1999, 1998 and 1997 Fiscal Years, respectively. Of such fees $108,880,
$157,645 and $268,192 was paid to a


                                     -135-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

company which is also an affiliate of the Related General Partner for the 1999,
1998 and 1997 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.

(e) The Partnership entered into an agreement with the local general partner of
Parktowne Ltd. and Westwood Apartment Company Ltd., which provides for an annual
incentive fee based on cash flow distributed from the respective properties.
Such fee amounted to $3,165 and $0 for the years ended February 29, 2000 and
February 28,1999, respectively.

Cambridge/Related Associates has a .01% interest, as a limited partner, in each
of the subsidiary partnerships.

Due to local general partners and affiliates at December 31, 1999 and 1998
consists of the following:

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                            -----------------------
                                                              1999          1998
                                                            ---------    ----------
<S>                                                         <C>          <C>
Operating advances (*)                                      $  50,640    $   44,440
General partner distributions                                  50,000        50,000
Management and other operating advances                       225,519       (12,788)
                                                            ---------    ----------

                                                            $ 326,159    $   81,652
                                                            =========    ==========
</TABLE>

(*) Operating advances include zero and three loans payable to local general
partners and affiliates for the years ended December 31, 1999 and 1998,
respectively, 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.


                                     -136-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

NOTE 9 - Income Taxes

A reconciliation of the financial statement net income to the income tax income
for the Partnership and its consolidated subsidiaries is as follows:

<TABLE>
<CAPTION>
                                                              Year Ended December 31
                                                   -----------------------------------------------
                                                      1999              1998              1997
                                                   -----------       -----------       -----------
<S>                                                <C>               <C>               <C>
Financial statement net income                     $18,166,465       $11,955,665       $ 9,182,768

Difference between depreciation expense
recorded for financial reporting purposes and
the accelerated cost recovery system utilized
for income tax purposes                              1,782,411           609,973        (1,596,191)

Difference resulting from accruals for financial
reporting purposes not deductible for tax
purposes until paid                                     33,900            87,708           (18,542)

Difference resulting from parent company
having a different fiscal year for income tax
and financial reporting purposes                      (288,047)         (198,480)         (935,853)

Difference between gain on sale of properties
recorded for financial reporting purposes and
for income tax purposes                              6,529,256        (1,896,868)       10,981,175

Loss on impairment of assets                            96,724         3,191,072           435,000


Difference between extraordinary item-forgiveness
of indebtedness income recorded for financial
reporting purposes and for income tax purposes       6,996,683         9,001,362        (1,641,970)

Other                                                 (137,092)           23,053           265,417
                                                   -----------       -----------       -----------
Net income as shown on the income tax return
for the calendar year ended                        $33,180,300       $22,773,485       $16,671,804
                                                   ===========       ===========       ===========
</TABLE>

NOTE 10 - Sale of Properties

GENERAL

The Partnership is currently in the process of winding up its operations and
disposing of its investments. It is anticipated that this process will take a
number of years. As of February 29, 2000, the Partnership has disposed of twenty
of its forty-four original investments. Nine additional investments are listed
for sale and the General Partner anticipates that the fifteen re-


                                     -137-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

maining investments will be listed for sale by December 31, 2001. There can be
no assurance as to when the Partnership will dispose of its last remaining
investments or the amount of proceeds which may be received. However, based on
the historical operating results of the Local Partnerships and the current
economic conditions including changes in tax laws, it is unlikely that the
proceeds from such sales will be sufficient to return the limited partners,
original investment.

In order to facilitate an orderly disposition of the Partnership's assets, the
Partnership formed two entities: Cambridge Liquidating Trust LLC ("Trust I"), a
Massachusetts limited liability company which is owned 99.99% by the Partnership
and .01% by affiliates of Related; and, Cambridge Liquidating Trust II ("Trust
II"), a Massachusetts general partnership which is owned 99% by Cambridge
Liquidating GP II, L.L.C. ("GP II") and 1% by Cambridge Liquidating GP I, L.L.C.
("GP I"). Both GP I and GP II are owned by the Partnership.

On December 30, 1998, the Partnership contributed its limited partnership
interest in Bethany Glen Associates, Westwood, Ltd., Parktowne, Ltd., Rolling
Meadows Apartments, Ltd., Buena Vista Apartments, Ltd. and Wingate Associates,
Ltd. to Trust I. On December 31, 1998, the Partnership contributed its limited
partnership interests in Grandview-Blue Ridge Manor Limited,
Breckenridge-Chaparral Apartments II, Ltd., El Paso-Gateway East, Ltd.,
Albequerque-Lafayette Square Apartments, Ltd., Corpus Christi-Oso Bay
Apartments, Ltd., Westgate Associates Limited, San Diego-Logan Square Gardens
Co., Ardmore-Rolling Meadows of Ardmore, Ltd., Fort Worth-Northwoods Apartments,
Ltd. and Stephenville-Tarleton Arms Apartments, Ltd. to Trust II. In each case,
the interests were contributed subject to each respective Purchase Money Note.
The contribution did not involve any consideration being paid to the
Partnership, therefore, there was no tax effect to the limited partners of the
Partnership.

INFORMATION REGARDING DISPOSITION

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 approximately $4,937,000. The Partnership
used approximately $3,473,000 of the net proceeds to settle the associated
Purchase Money Note and accrued interest which had a total outstanding balance
of approximately $4,066,000 resulting in forgiveness of indebtedness income of
approximately $593,000. In 1997, additional proceeds were received and paid to
the Purchase Money Note holder resulting in a decrease in the forgiveness of
indebtedness income of approximately $66,000.

On April 25, 1997, the Partnership's Local Partnership Interest in Los
Caballeros Apartments ("Los Caballeros") was sold to the general partners of Los
Caballeros for $100,000, resulting in a gain in the amount of approximately
$501,000. No proceeds were used to settle the associated Purchase Money Note and
accrued interest thereon which had a total outstanding balance of approximately
$3,188,000, resulting in forgiveness of indebtedness income.

On September 9, 1997, the property and the related assets and liabilities of
South Munjoy Associates, Limited ("South Munjoy") were sold to Montfort Housing
Limited Partnership, which is an affiliate of Mainland Development Company of
Portland, Maine ("Mainland Development") for $3,000,000, resulting in a loss in
the amount of approximately $225,000. The Partnership used approximately
$1,313,000 of the net proceeds to settle the associated Purchase


                                     -138-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

Money Note and accrued interest thereon which had a total outstanding balance of
approximately $3,247,000, resulting in forgiveness of indebtedness income of
approximately $1,934,000.

On December 12, 1997, the Partnership's limited partnership interests in
Grosvenor South Apartments Limited Partnership and Grosvenor South Apartments #2
Limited Partnership (together, the "Grosvenors") were sold to the general
partners of the Grosvenors for approximately $1,114,000, resulting in a loss in
the amount of approximately $1,409,000. No proceeds were used to settle the
associated Purchase Money Notes and accrued interest which had a total
outstanding balance of approximately $5,058,000, resulting in forgiveness of
indebtedness income.

On December 12, 1997, the Partnership's limited partnership interests in Clinton
Plaza Apartments Limited Partnership and Clinton Plaza Apartments #2 Limited
Partnership (together the "Clintons") were sold to the general partners of the
Clintons for approximately $1,673,000, resulting in a loss in the amount of
approximately $2,769,000. No proceeds were used to settle the associated
Purchase Money Notes and accrued interest which had a total outstanding balance
of approximately $9,690,000, resulting in forgiveness of indebtedness income.

On January 16, 1998, the property and related assets and liabilities of Country
Ltd. ("Country") and Northbrook III, Ltd. ("Northbrook") were sold to a third
party for a combined purchase price of $5,256,000, resulting in gains of
approximately $1,508,000 during the year ended February 1998. The Partnership
used approximately $861,000 and $90,000, respectively, of the net proceeds to
settle the associated Purchase Money Note and accrued interest thereon which had
total outstanding balances of $2,517,000 and $77,000, respectively, resulting in
forgiveness of indebtedness income (loss) of $1,656,119 and ($13,044) and
related Purchase Money Note and interest thereon, during the year ended February
28, 1998.

On April 21, 1998, the Partnership's limited partnership interest and related
Purchase Money Note and interest thereon in Oklahoma City - Town and Country
Village Apartments, Ltd. ("Town and Country") was assigned to the local general
partner effective January 15, 1998, resulting in a gain of approximately
$11,970,000.

On April 27, 1998, the property and the related assets and liabilities of
Riverside Gardens Limited Partnership ("Riverside") and Cudahy Gardens Limited
Partnership ("Cudahy") were sold to a third party for approximately $1,834,000
and $232,000, respectively, resulting in losses of approximately $432,000 and
$148,000 plus the assumption of the related mortgage notes. The Partnership used
approximately $451,000 and $56,000, respectively, of the net proceeds to settle
the associated Purchase Money Note and accrued interest thereon which had total
outstanding balances of approximately $5,402,000 and $2,672,000, respectively,
resulting in forgiveness of indebtedness income of approximately $4,951,000 and
$2,616,000, respectively.

On November 25, 1998, the Parktowne, Ltd., Westwood Apartments Company, Ltd.,
Eastwyck III, Ltd., New Jersey, Ltd., and Zeigler Boulevard, Ltd. Partnerships
entered into purchase and sale agreements to sell the properties and the related
assets and liabilities to an unaffiliated third party. During December 1998, the
purchaser failed to provide the necessary down payment thereby terminating the
contract. The Local General Partner is actively pursuing other interested
purchasers.


                                     -139-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

On April 28, 1999, Pacific Palms ("Pacific"), a limited partnership entered into
a letter of intent to sell the Pacific Palms apartments to an unaffiliated third
party purchaser for a price of $4,800,000. On November 9, 1999, Pacific entered
into an amendment to the purchase agreement. The amendment contemplated a
closing no later than April 30, 2000. In exchange for agreeing to the
amendments, the purchaser agreed to increase the purchase price to $4,900,000.
The third party purchaser released a deposit of $50,000 to Pacific as
consideration for additional time. The sale took place on April 28, 2000 (see
Note 12).

On May 5, 1999, the Wingate Associates Limited entered into an agreement for the
purchase and sale of real estate with an unaffiliated third party for a price of
$2,560,000. Since entering into the agreement the purchaser and Wingate
Associates Limited have negotiated amendments to such agreement. The amendments
call for a reduction in the purchase price to $2,360,000, an additional down
payment of $25,000, and a closing no later than May 31, 2000. The closing is
expected to occur in 2000. No assurances can be given that the sale will
actually occur.

On June 18, 1999, the Partnership's limited partnership interest in Warren Manor
Apartments Limited Partnership was sold to the local general partners for
approximately $935,000, resulting in a loss in the amount of approximately
$3,548,000. No proceeds were used to settle the associated Purchase Money Note
and accrued interest which had a total outstanding balance of approximately
$9,187,000, resulting in forgiveness of indebtedness income.

On June 18, 1999, the Partnership's limited partnership interest in Golf Manor
Apartments Limited Partnership was sold to the local general partners for
approximately $255,000, resulting in a loss in the amount of approximately
$544,000. No proceeds were used to settle the associated Purchase Money Note and
accrued interest which had a total outstanding balance of approximately
$2,227,000, resulting in forgiveness of indebtedness income.

On June 18, 1999, the Partnership's limited partnership interest in Warren Woods
Apartments, L.P. was sold to the local general partners for approximately
$377,000, resulting in a loss in the amount of approximately $1,914,000. No
proceeds were used to settle the associated Purchase Money Note and accrued
interest which had a total outstanding balance of approximately $3,532,000,
resulting in forgiveness of indebtedness income.

On June 18, 1999, the Partnership's limited partnership interest in Rosewood
Manor Apartments Limited Partnership was sold to the local general partners for
approximately $406,000, resulting in a loss in the amount of approximately
$1,031,000. No proceeds were used to settle the associated Purchase Money Note
and accrued interest which had a total outstanding balance of approximately
$3,568,000, resulting in forgiveness of indebtedness income.

On June 18, 1999, the Partnership's limited partnership interest in Canton
Commons Apartments Limited Partnership was sold to the local general partners
for approximately $855,000, resulting in a gain in the amount of approximately
$987,000. No proceeds were used to settle the associated Purchase Money Note and
accrued interest which had a total outstanding balance of approximately
$7,816,000, resulting in forgiveness of indebtedness income.

On October 6, 1999, Westgate Associates Limited ("Westgate") entered into an
agreement for the purchase and sale of real estate with an unaffiliated third
party for a purchase price of


                                     -140-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

$2,055,000. The sale is expected to take place in September 2000. No assurances
can be given that the sale will actually occur.

On November 8, 1999, the property and the related assets and liabilities of
Bethany Glen Associates ("Bethany") were sold to an unaffiliated third party for
$3,450,000, resulting in a gain in the amount of approximately $1,582,000. The
Partnership used $2,494,000 of the net proceed to settle the associated Purchase
Money Note and accrued interest thereon which had a total outstanding balance of
approximately $2,889,000, resulting in forgiveness of indebtedness income of
$395,000.

On January 17, 2000, Rolling Meadows Apartments, Ltd. ("Rolling Meadows")
entered into an agreement for the purchase and sale of real estate with an
unaffiliated third party for a purchase price of $2,400,000. The sale is
expected to occur in August 2000. No assurances can be given that the sale will
actually occur.

On March 6, 2000, Westwood Apartments Company, Ltd. ("Westwood") entered into an
agreement for the purchase and sale of real estate with an unaffiliated third
party for a purchase price of $2,025,000. The sale is expected to occur in June
2000. No assurances can be given that the sale will actually occur.

Effective January 1, 1999, Parktowne Ltd. ("Parktowne") adopted a plan to sell
its property. Accordingly, the Subsidiary Partnership has revalued its assets
and liabilities to the amount expected to be collected and paid upon sale. Up
through January 1, 1999, Parktowne recorded its results of its operation using
accounting principles applicable to going concern entities. On March 6, 2000,
Parktowne, entered into an agreement for the purchase and sale of real estate
with an unaffiliated third party for a purchase price of $2,500,000. The sale is
expected to occur in June 2000. No assurances can be given that the sale will
actually occur.

NOTE 11 - Commitments and Contingencies

a)  Events of Default and Going Concern

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. 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. The Partnership's investment in Villas South was approximately
$0 and $0 at February 29, 2000 and February 28, 1999, respectively, and the
minority interest balance was zero at each date. Villas South's net loss after
minority interest amounted to approximately $0, $3,136,923 and $151,000, for the
1999, 1998 and 1997 Fiscal Years, respectively. Accordingly, for the Fiscal Year
ended February 28, 1999 a loss on impairment in the amount of $3,191,072 was
recognized. As of February 28, 1999, the building was written down to zero.


                                     -141-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

CHAR-MUR APARTMENTS, LTD.
During the year ended December 31, 1999, Char-Mur Apartments, Ltd. ("Char-Mur ")
incurred a net loss of approximately $18,000 and, as of that date, the local
partnership's total current liabilities exceeded its total current assets by
approximately $135,000. These factors, among others, raise substantial doubt
about the partnership's ability to continue as a going concern. Char-Mur's
continuation as a going concern is dependent upon its ability to generate
sufficient cash flow to meet its obligations on a timely basis, to comply with
the terms of its mortgage, to obtain additional capital contributions from
partners, and ultimately, to attain successful operations. Management is making
all efforts possible to increase the occupancy and the rental income of the
project and to make the necessary improvements to enhance the property, in an
attempt to improve Char-Mur's cash flow. The Partnership's investment in
Char-Mur was approximately $164,000 and $182,000 at February 29, 2000 and
February 28, 1999, respectively, and the minority interest balance was zero at
each date. Char-Mur's net loss after minority interest amounted to approximately
$18,000, $39,000 and $31,000 for the 1999, 1998 and 1997 Fiscal Years,
respectively.

WESTWOOD APARTMENTS COMPANY, LTD.
Westwood Apartments Company, Ltd. ("Westwood") has experienced a significant
decrease in occupancy levels in 1997, 1998, and 1999. As a result, the
partnership has incurred operating losses and cash deficits. In addition, the
partnership is twelve months in arrears on their mortgage payments and twenty
months in arrears in making deposits to the reserve for replacements. Effective
January 1, 1999, Westwood adopted a plan to sell its property. Accordingly, the
subsidiary partnership has revalued its assets and liabilities to the amount
expected to be collected and paid upon sale. Up through that date, Westwood
recorded its results of operations using accounting principles applicable to
going concern entities. The partnership's investment in Westwood was
approximately $108,000 and $99,000 at February 29, 2000 and February 28, 1999,
and the minority interest balance was zero at each date. Westwood's net income
(loss) after minority interest amounted to approximately $9,000, $(197,000) and
$(101,000) for the 1999, 1998 and 1997 Fiscal Years, respectively. The mortgage
was assigned HUD on February 18, 1999.

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 1999 Fiscal Year, unpaid accrued interest on the Purchase Money Notes
amounted to approximately $36,561,000. The principal of and all accrued interest
on the Purchase Money Notes is due at maturity. The Partnership was permitted to
extend the term of the Purchase Money Notes for up to five additional years. In
connection with such extensions, the Partnership incurred an extension fee of
1/2% per annum of the outstanding principal balance of the assets. The
Partnership sent an extension notice to each Purchase Money Note holder that
pursuant to the note, it was extending the maturity. However, in certain cases
the Partnership did not pay the extension fee at that time, deferring such
payment to the future. The holders of the Note could argue that until the fee is
paid the Note has not been properly extended.


                                     -142-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

c)  Legal Proceedings

WESTWOOD APARTMENTS COMPANY LTD.
On October 16, 1998, the Westwood Apartments Company Ltd. ("Westwood") commenced
this action in the Supreme Court of the State of New York, County of New York,
against Edward Osborn, Charles V. Welden, Jr. and Westwood, Ltd. In the
complaint, Westwood asserted that defendants improperly took the position that
the maturity dates of promissory notes signed by Westwood in the amounts of
$850,000 and $1,225,000, respectively, were not extended by Westwood as the
result of which, according to defendants, the notes were past due and defendants
were entitled to sell Westwood's 99% partnership interests in Parktowne, Ltd.
and Westwood which collateralized the notes.

In May, 1999, Westwood entered into a settlement agreement discontinuing the
litigation with the defendants pursuant to which, among other things, the
defendants have acknowledged that the notes were properly extended and spelling
out the percentage of the proceeds to which Westwood will be entitled upon the
sale of the underlying properties, depending on when they are sold.

GRANDVIEW-BLUE RIDGE MANOR LIMITED, BRECKENRIDGE-CHAPARRAL APARTMENTS II, LTD.,
EL PASO-GATEWAY EAST, LTD., ALBUQUERQUE-LAFAYETTE SQUARE APARTMENTS, LTD.,
CORPUS CHRISTI-OSO BAY APARTMENTS, LTD., SAN DIEGO-LOGAN SQUARE GARDENS CO.,
ARDMORE-ROLLING MEADOWS OF ARDMORE, LTD., FORT WORTH-NORTHWOODS APARTMENTS,
LTD., STEPHENVILLE-TARLETON ARMS APARTMENTS, LTD., AND CADDO PARRISH-VILLAS
SOUTH, A LOUISIANA LIMITED PARTNERSHIP F/K/A VILLAS SOUTH, LTD. (THE "ROAR
PROPERTIES").

In 1998, the Purchase Money Note holder, Roar Company (the "Noteholders")
disputed the exact calculation of the extension fee. At the same time,
negotiations began with the Noteholders to refinance or sell the Partnership's
investments in the Roar Properties in order to pay the Purchase Money Notes. The
Partnership cannot sell or otherwise liquidate its investments in those Local
Partnerships that have subsidy agreements with HUD during the period that such
agreements are in existence without HUD's approval. It is uncertain as to
whether the proceeds from such sales will be sufficient to meet the outstanding
balances of principal, accrued interest and extension fees. No agreement has
been reached with the Noteholders regarding the sale of the Roar Properties or
the calculation of the extension fee.

In order to facilitate an orderly disposition of the Partnership's assets, the
Partnership formed Cambridge Liquidating Trust II ("Trust II"), a Massachusetts
general partnership, on December 31, 1998, which is owned 99% by Cambridge
Liquidating GP II, L.L.C. ("GP II") and 1% by Cambridge Liquidating GP I, L.L.C.
("GP I"). Both GP I and GP II are owned by the Partnership.

The Partnership then assigned its limited partnership interests in the Roar
Properties to Trust II. In each case, the interests were assigned subject to
each respective Purchase Money Note. The assignment did not involve any
consideration being paid to the Partnership; therefore, there should not be any
tax effect to the limited partners of the Partnership.

Prior to September 1, 1999, the Noteholders were tendered the sums calculated to
be due as the extension fees under the Purchase Money Notes as of August 31,
1999. The Noteholders did not formally respond to this tender or dispute the
calculation of the extension fee amount and


                                     -143-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

did not return the fees. However, a representative stated that the tender of the
fees will be rejected and the fees will be returned.

On August 27, 1999, Trust II filed a Declaratory Judgment Action styled
Cambridge Liquidating Trust II v. Roar Company, et al, Cause No. 99-06802 in the
191st District Court of Dallas County Texas seeking a court ruling as to the
proper calculation of the extension fee [the "Action"]. On September 20, 1999,
the Noteholders filed an Answer in the Action and denied all allegations. The
Noteholders have previously asserted that they have a valid security interest in
the Local Partnership Interests. It is possible that the Noteholders will
attempt to declare the Purchase Money Notes to be due and commence foreclosure
on the Local Partnership Interests based upon a contention that the extension
fees were not paid in the proper amount. The Action has now been set for trial
in August of 2000 and discovery is not complete. Management of the Partnership
will vigorously prosecute the Action and may assert claims against the
Noteholders. The General Partner can express no opinion on the outcome of the
case.

d)  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 29, 2000, uninsured cash and
cash equivalents and mortgage escrow deposits approximated $2,308,000.

e)  Housing Assistance Payments Contracts

In September 1997, Congress enacted the Multi-Family Assisted Housing Reform and
Affordability Act of 1997 ("MAHRA") which provides for the renewal of Section 8
Housing Assistance Payments Contracts ("Section 8 Contracts") to be based upon
market rentals instead of the above-market rentals which is generally the case
under existing Section 8 Contracts. As a result, Section 8 Contracts that are
renewed in the future in projects insured by the Federal Housing Administration
("FHA") may not provide sufficient cash flow to permit owners of properties to
meet the debt service requirements of these existing FHA-insured mortgages.
MAHRA also provides for the restructuring of these mortgage loans so that the
annual debt service on the restructured loan (or loans) can be supported by
Section 8 rents established at the market rents. The restructured loans will be
held by the current lender or another lender. There can be no assurance that a
property owner will be permitted to restructure its mortgage indebtedness
pursuant to the new rules implementing MAHRA or that an owner, or the holder of
the mortgage, would choose to restructure the mortgage if it were able to
participate. MAHRA went into effect on September 11, 1998 when interim
regulations implementing the program were published. It should be noted that
there are many uncertainties as to the economic and tax impact on a property
owner because of the combination of the reduced Section 8 contract rents and the
restructuring of the existing FHA-insured mortgage loan under MAHRA.

f)  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 12%
of the properties are located in any single state. There are also substantial
risks associated with owning properties receiving Gov-


                                     -144-
<PAGE>

           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                FEBRUARY 29, 2000

ernment 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 owner's equity contribution. The 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 2000, a distribution of approximately $994,000 and $10,000 which was
accrued at February 29, 2000 was paid to the limited partners and General
Partners, respectively, from net proceeds from the sale of underlying
properties.

On April 28, 2000, the property and the related assets and liabilities of
Pacific Palms were sold to a third party for approximately $4,900,000. The
Partnership used approximately $1,668,000 of the net proceeds to settle the
associated Purchase Money Notes and accrued interest thereon which had a total
outstanding balance of approximately $5,183,000, resulting in forgiveness of
indebtedness of approximately $3,515,000. The Partnership netted approximately
$1,785,000 of cash which was placed into working capital to pay Partnership
expenses.


                                     -145-
<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. (the "Assisted General Partner") and
Related Housing Programs Corporation (the "Related General Partners") are
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.

The Assisted General Partner was incorporated in Delaware on April 15, 1983 and
the Related General Partner was incorporated in Delaware on July 2, 1982.

On November 25, 1997, an affiliate of the Related General Partner purchased 100%
of the stock of the Assisted General Partner (the "Transfer"). In addition to
the Transfer, an affiliate of the Related General Partner also acquired the
Assisted General Partner's general partner interest in Cambridge/Related Housing
Associates Limited Partnership, the special limited partner of the Partnership.
Pursuant to the Partnership's Amended and Restated Partnership Agreement, the
consent of the limited partners was not required to approve the Transfer. In
connection with the Transfer, the Partnership paid to the Assisted General
Partner the accrued asset management fees owed to it in the aggregate amount of
$1,000,814. See Note 8 to the Financial Statements in Item 8 above.

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.


                                     -146-
<PAGE>

The director and officers of the Related General Partner are as follows:

Name                                Position
----                                --------
Stephen M. Ross                     Director

Alan P. Hirmes                      President

Stuart J. Boesky                    Senior Vice President

Denise Kiley                        Vice President

Marc Schnitzer                      Vice President

Mark E. Carbone                     Vice President

Robert Bordonaro                    Vice President

Glenn F. Hopps                      Treasurer

Teresa Wicelinski                   Secretary

Susan J. McGuire                    Assistant Secretary

STEPHEN M. ROSS, 60, 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. Mr. Ross also serves on the
Board of Trustees of Charter Municipal Mortgage Acceptance Company.

ALAN P. HIRMES, 45, 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, 43, 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.

DENISE L. KILEY, 40, is responsible for overseeing the due diligence and asset
management of all multifamily residential properties invested in RCC sponsored
corporate, public and private equity and debt funds. Prior to joining Related in
1990, Ms. Kiley had experience acquiring, financing and asset managing
multifamily residential properties. From 1981 through


                                     -147-
<PAGE>

1985 she was an auditor with Price Waterhouse. Ms. Kiley holds a
Bachelor of Science in Accounting from Boston College.

MARC D. SCHNITZER, 39, joined Related in January 1988 after receiving his Master
of Business Administration degree from The Wharton School of The University of
Pennsylvania in December 1987. From 1983 to 1986, Mr. Schnitzer was a Financial
Analyst with The First Boston Corporation in New York, an international
investment banking firm. Mr. Schnitzer received a Bachelor of Science degree,
summa cum laude, in Business Administration, from the School of Management at
Boston University in May 1983.

MARK E. CARBONE, 43, rejoined Related in 1998 where his primary responsibility
has been disposition of real estate. From 1994 to 1998 he was President of WHC,
Inc., a distressed asset real estate fund. From 1986 to 1994 he was President of
Marigold Real Estate and Development, Inc., a real estate development company
located in Greenwich, CT. From 1979 to 1986 he was a Vice President at Related
Capital Company. He received a Bachelor of Arts in Government from Harvard
University in 1979.

ROBERT BORDONARO, 46, is a Vice President - Finance of Related. He has also
served as Controller of Related. Mr. Bordonaro has been a Certified Public
Accountant in New York since 1977. Prior to joining Related, Mr. Bordonaro was
employed by the accounting firms of Weiner & Co. from 1982 to 1985 and Arthur
Young from 1975 to 1981. Mr. Bordonaro graduated summa cum laude from New York
University with a Bachelor of Science degree and with a Masters degree in
Business Administration.

GLENN F. HOPPS, 37, joined Related in December 1990, and prior to that date was
employed by Marks Shron & Company and Weissbarth, Altman and Michaelson
certified public accountants. Mr. Hopps graduated from New York State University
at Albany with a Bachelor of Science Degree in Accounting.

TERESA WICELINSKI, 34, joined Related in June 1992, and prior to that date was
employed by Friedman, Alpren & Green, certified public accountants. Ms.
Wicelinski, graduated from Pace University with a Bachelor of Arts Degree in
Accounting.

SUSAN J. McGUIRE, 53, 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.


                                     -148-
<PAGE>

The directors and executive officers of the Assisted General Partner are as
follows:

Name                                Position
----                                --------
Michael Brenner                     Director

Alan P. Hirmes                      President

Stuart J. Boesky                    Executive Vice President

Marc D. Schnitzer                   Vice President

Denise L. Kiley                     Vice President

Mark E. Carbone                     Vice President

Glenn F. Hopps                      Treasurer

Teresa Wicelinski                   Secretary

MICHAEL BRENNER, 54, is a Director of Aegis, and is the Executive Vice President
and Chief Financial Officer of TRCLP. Prior to joining TRCLP in 1996, Mr.
Brenner was a partner with Coopers & Lybrand, having served as managing partner
of its Industry Programs and Client Satisfaction initiatives from 1993-1996,
managing partner of the Detroit group of offices from 1986-1993 and Chairman of
its National Real Estate Industry Group from 1984-1986. Mr. Brenner graduated
summa cum laude from the University of Detroit with a Bachelors degree in
Business Administration and from the University of Michigan with a Masters of
Business Administration, with distinction. Mr. Brenner also serves on the Board
of Trustees of Charter Municipal Mortgage Acceptance Company and Aegis Realty,
Inc.

Biographical information with respect to Messrs. Hirmes, Boesky, Schnitzer,
Kiley, Carbone, Hopps and Ms. Wicelinski is set forth above.

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.


                                     -149-
<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 29, 2000, security ownership by the General Partners and their
affiliates was 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        Properties, Inc.                    $ 1                  25%
Partnership            625 Madison Avenue
                       New York, NY  10022

                       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. J. Michael Fried is no longer affiliated as of December
31, 1999.

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 $158,000 in
management fees during the 1998 Fiscal Year for providing property management
services to eight of the Local Partnerships.


                                     -150-
<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

<TABLE>
<CAPTION>
                                                                             Sequential
                                                                                Page
                                                                             ----------
<S>                                                                          <C>
(a) 1.   Financial Statements

         Independent Auditors' Report                                            28

         Consolidated Balance Sheets at February 29, 2000 and February 28,
         1999                                                                   121

         Consolidated Statements of Operations for the Years Ended February
         29, 2000, February 28, 1999 and 1998                                   122

         Consolidated Statements of Partners' Deficit for the Years Ended
         February 29, 2000, February 28, 1999 and 1998                          123

         Consolidated Statements of Cash Flows for the Years Ended February
         29, 2000, February 28, 1999 and 1998                                   124

         Notes to Consolidated Financial Statements                             127

(a) 2.   FINANCIAL STATEMENT SCHEDULES

         Independent Auditors' Report                                           153

         Schedule I - Condensed Financial Information of Registrant             154

         Schedule III - Real Estate and Accumulated Depreciation                157

         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)                               160

(b)      REPORTS ON FORM 8-K

         None
</TABLE>


                                     -151-
<PAGE>

                                   SIGNATURES

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


                     CAMBRIDGE + RELATED HOUSING PROPERTIES
                               LIMITED PARTNERSHIP



                               By:  GOVERNMENT ASSISTED PROPERTIES, INC.,
                                    a general partner

Date:  May 25, 2000

                                    By: /s/ Alan P. Hirmes
                                        ------------------
                                        Alan P. Hirmes
                                        President


                               and


                               By:  RELATED HOUSING PROGRAMS CORPORATION,
                                    a general partner

Date:  May 25, 2000

                                    By: /s/ Alan P. Hirmes
                                        ------------------
                                        Alan P. Hirmes
                                        President


<PAGE>

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:


    Signature                         Title                              Date
---------------------        -----------------------------------    ------------

                             President (principal financial
/s/ Alan P. Hirmes           officer) of Related Housing
------------------
Alan P. Hirmes               Programs Corporation and
                             Government Assisted Properties, Inc.   May 25, 2000



                             Treasurer (principal accounting
/s/ Glenn F. Hopps           officer) of Related Housing
------------------
Glenn F. Hopps               Programs Corporation and
                             Government Assisted Properties, Inc.   May 25, 2000



/s/ Stephen M. Ross          Director of Related Housing
------------------
Stephen M. Ross              Programs Corporation                   May 25, 2000


<PAGE>
                          INDEPENDENT AUDITORS' 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 on pages 28 and 29,
and based on the reports of other auditors, we have also audited supporting
Schedules I and III for the 1999, 1998 and 1997 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 10, the Partnership is currently in the process of winding
up its operations and disposing of its investments. It is anticipated that this
process will take a number of years.

As discussed in Note 11(a), one subsidiary partnership is in default of its
mortgage agreement and another subsidiary partnership has incurred losses and
its current liabilities exceed current assets. This raises substantial doubt
about these subsidiary partnerships' abilities to continue as going concerns.
The financial statements for one of these subsidiary partnerships were unaudited
and the auditors for the other subsidiary partnership modified their reports due
to the uncertainty of the ability of the subsidiary partnership to continue in
existence. In addition, during the 1999 Fiscal Year three subsidiary
partnerships adopted plans to sell the property and liquidate in lieu of
continuing the business. As a result, the financial statements for these three
subsidiary partnerships are presented on the liquidating basis of accounting.
Such subsidiary partnerships' assets aggregated $5,491,798 at February 29, 2000.
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 and all accrued interest on the purchase
money notes became due during 1998 to 1999. The Partnership exercised its option
to extend the maturity of such notes for three to five years. The Partnership
expects that upon final 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, LLP

New York, New York
May 22, 2000

<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

<TABLE>
<CAPTION>

                                                         February 29,  February 28,
                                                             2000         1999
                                                         ------------- ------------
<S>                                                      <C>           <C>
Cash and cash equivalents                                $  2,174,349  $  2,301,527
Investment in and advances to subsidiary partnerships      17,036,931    26,470,033
Other assets                                                  237,369       494,111
                                                         ------------- ------------

  Total assets                                           $ 19,448,649  $ 29,265,671
                                                         ============  ============

                        LIABILITIES AND PARTNERS' DEFICIT

Purchase money notes payable                             $ 26,637,019  $ 39,902,759
Due to general partner and affiliates                       1,452,351     1,085,998
Due to selling partners                                    36,560,820    49,667,170
Other liabilities                                              97,008        28,533
Distribution payable                                        1,004,200     2,020,374
                                                         ------------- ------------
Total liabilities                                          65,751,398    92,704,834

Partners' deficit                                         (46,302,749)  (63,439,163)
                                                         ------------- ------------

  Total liabilities and partners' deficit                $ 19,448,649  $ 29,265,671
                                                         ============  ============
</TABLE>


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.

<PAGE>

            CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                   SCHEDULE I
                   CONDENSED FINANCIAL INFORMATION OF REGISTRANT



                       CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                          Year Ended
                                           ------------------------------------------
                                           February 29,   February 28,  February 28,*
                                              2000            1999          1998
                                           ------------   ------------  -------------
<S>                                        <C>            <C>           <C>
Revenues

  Other                                    $    242,582   $   111,462   $    86,033
                                           ------------   ------------  -------------

                                                242,582       111,462        86,033
                                           ------------   ------------  -------------

Expenses

  Administrative and management                 995,278       311,992       203,140
  Administrative and management-
   related parties                            1,094,664     1,078,071     1,099,470
  Financial, principally interest             2,770,875     3,569,130     4,814,077
                                           ------------   ------------  -------------

                                              4,860,817     4,959,193     6,116,687
                                           ------------   ------------  -------------
                                             (4,618,235)   (4,847,731)   (6,030,654)

  (Loss) gain on sale of investments
   in subsidiary partnerships                (4,467,865)   11,970,286    (3,676,571)
  Forgiveness of indebtedness income         26,725,364     7,567,720    21,447,564
  Equity in gain (loss) income of
   subsidiary partnerships (a)                  501,350    (5,843,290)   (1,543,682)
                                           ------------   ------------  -------------

Net income (loss)                          $ 18,140,614   $ 8,846,985   $10,196,657
                                           ============   ============  =============
</TABLE>




(a) Includes suspended prior year losses in excess of investment in accordance
with equity method of accounting amounting to ($66,913), ($4,742,328) and
($377,597) for 2000, 1999 and 1998.

*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 29,   February 28,  February 28,*
                                              2000            1999          1998
                                           ------------   ------------  -------------
<S>                                        <C>            <C>           <C>
Cash flows from operating activities:
Net income                                 $ 18,140,614   $ 8,846,985   $ 10,196,657
                                           ------------   ------------  -------------
Adjustments to reconcile net income to
   net cash used in operating activities:
  Loss (gain) on sale of investments in
   subsidiary partnerships                    4,467,865   (11,970,286)     3,676,571
  Forgiveness of indebtedness income        (26,725,364)   (7,567,720)   (21,447,564)

  (Increase) decrease in assets:
  Decrease (increase) in certificates
   of deposit                                         0       159,348         (3,523)
  Equity in (income) loss of subsidiary
   partnerships                                (501,350)    5,843,290      1,543,682
  Decrease (increase) in other assets           562,605        15,661         54,061

  Increase (decrease) in liabilities:
  Due to general partners and affiliates        366,353        63,158       (477,149)
  Due to selling partners                     2,770,875     3,569,130      4,814,077
  Other liabilities                              68,475        10,868             64
                                           ------------   ------------  -------------
  Total adjustments                         (18,990,541)   (9,876,551)   (11,839,781)
                                           ------------   ------------  -------------
  Net cash used in operating activities        (849,927)   (1,029,566)    (1,643,124)
                                           ------------   ------------  -------------

Cash flows from investing activities:
  Proceeds from sale of investments in
   subsidiary partnerships                    2,828,103             0      2,887,700
  Investment in and advances to subsidiary      (91,906)     (242,213)       (23,486)
  Distributions from subsidiaries             2,753,325     2,039,907      4,477,450
                                           ------------   ------------  -------------
  Net cash provided by investing
   activities                                 5,489,522     1,797,694      7,341,664
                                           ------------   ------------  -------------

Cash flows from financing activities:
  Principal payments of purchase
   money notes                               (1,352,412)            0     (2,001,151)
  Payments to selling partners               (1,393,987)     (600,492)      (541,831)
  Distributions to partners                  (2,020,374)   (2,030,972)    (1,111,554)
                                           ------------   ------------  -------------
  Net cash used in financing activities      (4,766,773)   (2,631,464)    (3,654,536)
                                           ------------   ------------  -------------

Net (decrease) increase in cash and
   cash equivalents                            (127,178)   (1,863,336)     2,044,004
Cash and cash equivalents, beginning
   of year                                    2,301,527     4,164,863      2,120,859
                                           ------------   ------------  -------------

Cash and cash equivalents, end of year     $  2,174,349   $ 2,301,527   $  4,164,863
                                           ============   ============  =============
</TABLE>
<PAGE>
           CAMBRIDGE + RELATED HOUSING PROPERTIES LIMITED PARTNERSHIP
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                FEBRUARY 29, 2000
<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>
(9)     Bay Village Company                                       $4,123,616     $    333,604    $   6,053,390     $    798,704
(12)    Bethany Glen Associates                                            0          341,004        3,025,540       (3,366,544)
(11)    Grandview-Blue Ridge Manor, Limited                        1,387,635          128,604        2,011,867           50,303
(4)     Buena Vista Manor Apts. Ltd.                               2,966,657          258,604        4,355,907          709,489
(7)     Canton Commons Apartments                                          0          683,605       11,875,258      (12,558,863)
(18)    Cedar Hill Apartments, Ltd.                                  957,751           67,419        1,337,361           53,218
(10)    Breckenridge-Chaparral Apartments II, Ltd.                 1,409,600          123,604        2,010,522          163,915
(18)    Char-mur Apartments                                          783,939           55,048        1,080,372           41,634
(7)     Clinton Plaza Apartments L. P.                                     0          238,604        4,443,787       (4,682,391)
(7)     Clinton Plaza Apartments #2 L. P.                                  0          288,604        5,293,492       (5,582,096)
(18)    Crossett Apartments, Ltd.                                    890,043           61,840        1,176,962           79,375
(8)     Cudahy Gardens, Ltd.                                               0          168,604        3,092,733       (3,261,337)
(10)    El Paso-Gateway East, Ltd.                                 1,744,861          158,604        2,422,623          350,062
(7)     Golf Manor Apartments, Ltd.                                        0          183,605        3,060,084       (3,243,689)
(7)     Grosvenor South Apartments L. P.                                   0          233,604        4,341,549       (4,575,153)
(7)     Grosvenor South Apartments #2 L. P.                                0           81,104        1,460,463       (1,541,567)
(3)     Oakland-Keller Plaza                                               0          358,605        5,742,056       (6,100,661)
(16)    Lafayette Square Apartment's Ltd.                          3,127,202          348,604        4,116,308          371,739
(8)     San Diego-Logan Square Gardens Co.                         3,885,602          308,604        5,005,103          558,555
(6)     Los Caballeros Apartments                                          0          223,604        4,124,963       (4,348,567)
(3)     South Munjoy Associates Ltd.                                       0          208,604        3,456,920       (3,665,524)
(13)    Country, Ltd.                                                      0          210,827        3,807,680       (4,018,507)
(13)    Northbrook III, Ltd.                                               0          131,383        2,305,900       (2,437,283)
(10)    Forth Worth-Northwood Apartments, Ltd.                     1,539,385          118,604        2,226,552          283,561
(10)    Corpus Christi-Oso Bay Apartments, Ltd.                    1,823,743          158,604        2,501,173          214,820
(8)     Pacific Palms, Ltd.                                        3,612,467          233,604        4,819,956          660,216
(14)    Zeigler Blvd., Ltd.                                        2,826,165          218,605        3,945,003          121,652
(14)    Parktowne, Ltd.                                            2,418,992          176,605        3,273,501          158,726
(8)     Riverside Gardens, Ltd.                                            0          308,604        5,357,903       (5,666,507)
(5)     Rolling Meadows Apts., Ltd.                                3,238,630          258,604        4,418,421          596,979
(5)     Ardmore-Rolling Meadows of Ardmore, Ltd.                   1,634,763          138,604        2,320,412          263,839
(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                                          0          508,604        5,328,672       (5,837,276)
(14)    New Jersey, Ltd.                                           2,358,962          178,605        3,214,241          112,737
(10)    Stephenville-Tarleton Arms                                 2,109,429          238,604        2,832,970          212,039
(5)     Oklahoma City-Town & Country Village                               0          408,604        7,307,195       (7,715,799)
(17)    Caddo Parish-Villas South, Ltd.                            5,247,308          298,604        6,019,236       (3,007,824)
(14)    Eastwyck III, Ltd.                                         1,196,682          108,605        1,790,877            8,226
(7)     Warren Manor Apts., Ltd.-Property A and B                          0          758,604       10,506,325      (11,264,929)
(7)     Warren Woods Apartments, Ltd.                                      0          308,605        4,697,009       (5,005,614)
(1)     Westgate Associates Ltd.                                   1,892,319          183,604        2,824,512          222,121

<CAPTION>

                                                              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>
(9)     Bay Village Company                                 $  334,015      $   6,851,683    $   7,185,698      $(  3,607,583)
(12)    Bethany Glen Associates                                      0                  0                0                  0
(11)    Grandview-Blue Ridge Manor, Limited                    129,015          2,061,759        2,190,774         (1,163,187)
(4)     Buena Vista Manor Apts. Ltd.                           294,581          5,029,419        5,324,000         (3,912,272)
(7)     Canton Commons Apartments                                    0                  0                0                  0
(18)    Cedar Hill Apartments, Ltd.                             69,380          1,388,618        1,457,998           (605,055)
(10)    Breckenridge-Chaparral Apartments II, Ltd.             124,015          2,174,026        2,298,041         (1,176,734)
(18)    Char-mur Apartments                                     57,009          1,120,045        1,177,054           (490,423)
(7)     Clinton Plaza Apartments L. P.                               0                  0                0                  0
(7)     Clinton Plaza Apartments #2 L. P.                            0                  0                0                  0
(18)    Crossett Apartments, Ltd.                               63,801          1,254,376        1,318,177           (638,585)
(8)     Cudahy Gardens, Ltd.                                         0                  0                0                  0
(10)    El Paso-Gateway East, Ltd.                             164,656          2,766,633        2,931,289         (1,537,209)
(7)     Golf Manor Apartments, Ltd.                                  0                  0                0                  0
(7)     Grosvenor South Apartments L. P.                             0                  0                0                  0
(7)     Grosvenor South Apartments #2 L. P.                          0                  0                0                  0
(3)     Oakland-Keller Plaza                                         0                  0                0                  0
(16)    Lafayette Square Apartment's Ltd.                      349,015          4,487,636        4,836,651         (2,451,611)
(8)     San Diego-Logan Square Gardens Co.                     309,015          5,563,247        5,872,262         (3,055,510)
(6)     Los Caballeros Apartments                                    0                  0                0                  0
(3)     South Munjoy Associates Ltd.                                 0                  0                0                  0
(13)    Country, Ltd.                                                0                  0                0                  0
(13)    Northbrook III, Ltd.                                         0                  0                0                  0
(10)    Forth Worth-Northwood Apartments, Ltd.                 119,015          2,509,702        2,628,717         (1,358,920)
(10)    Corpus Christi-Oso Bay Apartments, Ltd.                159,015          2,715,582        2,874,597         (1,468,158)
(8)     Pacific Palms, Ltd.                                    234,015          5,479,761        5,713,776         (3,727,545)
(14)    Zeigler Blvd., Ltd.                                    219,016          4,066,244        4,285,260         (1,995,361)
(14)    Parktowne, Ltd.                                        177,016          3,431,816        3,608,832         (1,727,106)
(8)     Riverside Gardens, Ltd.                                      0                  0                0                  0
(5)     Rolling Meadows Apts., Ltd.                            259,015          5,014,989        5,274,004         (3,071,207)
(5)     Ardmore-Rolling Meadows of Ardmore, Ltd.               118,015          2,604,840        2,722,855         (1,473,717)
(5)     Rolling Meadows of Chickasha, Limited                        0                  0                0                  0
(15)    Roper Mountain Apartments                                    0                  0                0                  0
(7)     Rosewood Manor Apartments                                    0                  0                0                  0
(14)    New Jersey, Ltd.                                       179,016          3,326,567        3,505,583         (1,628,258)
(10)    Stephenville-Tarleton Arms                             239,015          3,044,598        3,283,613         (1,678,817)
(5)     Oklahoma City-Town & Country Village                         0                  0                0                  0
(17)    Caddo Parish-Villas South, Ltd.                        299,015          3,011,001        3,310,016         (3,011,001)
(14)    Eastwyck III, Ltd.                                     109,016          1,798,692        1,907,708           (904,777)
(7)     Warren Manor Apts., Ltd.-Property A and B                    0                  0                0                  0
(7)     Warren Woods Apartments, Ltd.                                0                  0                0                  0
(1)     Westgate Associates Ltd.                               184,015          3,046,222        3,230,237         (1,175,237)


<CAPTION>
                                                                                         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>
(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)            11/83          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          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           10-30
(10)    El Paso-Gateway East, Ltd.                              (c)            9/83           25-30
(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           15-30
(8)     San Diego-Logan Square Gardens Co.                      (c)            9/83           7-30
(6)     Los Caballeros Apartments                               (c)            9/83           30
(3)     South Munjoy Associates Ltd.                            (c)            11/83          30-40
(13)    Country, Ltd.                                           (c)            8/83           5-30
(13)    Northbrook III, Ltd.                                    (c)            8/83           30
(10)    Forth Worth-Northwood Apartments, Ltd.                  (c)            9/83           10-30
(10)    Corpus Christi-Oso Bay Apartments, Ltd.                 (c)            9/83           27.5-30
(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           15-30
(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           30
(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           30
(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
<PAGE>

<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>
(14)    Westwood Apartments Company, Limited                       3,255,167          233,605        4,168,757           37,126
(2)     Wingate Associates Ltd.                                    2,098,365          198,604        2,968,529          428,867
                                                                ------------      -----------     ------------      -----------

                                                               $  56,529,283      $10,619,983     $173,345,865     $(98,993,218)
                                                                ============       ==========      ===========      ===========


<CAPTION>


                                                              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>
(14)    Westwood Apartments Company, Limited                   234,016          4,205,472        4,439,488         (2,165,711)
(2)     Wingate Associates Ltd.                                199,016          3,396,984        3,596,000         (1,236,000)
                                                            ----------       ------------     ------------       -------------

                                                            $4,622,718        $80,349,912      $84,972,630       $(45,259,984)
                                                             =========         ==========       ==========        ===========


<CAPTION>
                                                                                         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>
(14)    Westwood Apartments Company, Limited                      (c)            8/83           15-30
(2)     Wingate Associates Ltd.                                   (c)            11/83          30-40
</TABLE>

(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 29,    February 28,    February 28,    February 29,     February 28,  February 28,
                                           2000            1999            1998            2000             1999          1998
                                     -------------    ------------    ------------    -------------   --------------  ------------
<S>                                   <C>             <C>             <C>              <C>              <C>           <C>
Balance at beginning of period        $127,567,824    $149,785,384    $173,714,196     $67,944,464      $74,871,603   $80,183,677
Additions during period:
    Improvements                           676,231         518,621       1,282,938
    Depreciation expense                                                                 2,569,844        4,145,148     5,684,363
Reductions during period:
    Dispositions                       (43,174,701)    (19,545,109)    (24,776,750)    (25,254,324)     (11,072,287)  (10,996,437)
    Loss on impairment of assets           (96,724)     (3,191,072)       (435,000)              0                0             0
                                     -------------    ------------    ------------    -------------   --------------  ------------

Balance at end of period             $  84,972,630    $127,567,824    $149,785,384     $45,259,984      $67,944,464   $74,871,603
                                      ============     ===========     ===========      ==========       ==========    ==========
</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.