June 26, 1998



Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC  20549

       Boston Financial Tax Credit Fund VII, A Limited Partnership
       Annual Report on Form 10-K for the Year Ended March 31, 1998
       File No. 0-24584

Gentlemen:

Pursuant to the  requirements of Section 15(d) of the Securities  Exchange Act 
of 1934, there is filed herewith one copy of the subject report.

Very truly yours,



\s\Dianne Groark
Dianne Groark
Assistant Controller


TC710K-K.98


<PAGE>




                                     UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                                  Washington, DC 20549

                                     FORM 10-K

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

For the fiscal year ended                               Commission file number
March 31, 1998                                               0-24584

                   BOSTON  FINANCIAL  TAX CREDIT  FUND VII, A
                     LIMITED   PARTNERSHIP   (Exact  name  of
                      registrant as specified in its charter)

Massachusetts                                            04-3166203
-------------------                                     ---------------------
(State of organization)                                   (I.R.S. Employer
                                                          Identification No.)

 101 Arch Street, 16th Floor
 Boston, Massachusetts                                 02110-1106
-------------------------------                   -----------------------
        (Address of Principal                         (Zip Code)
          executive office)

Registrant's telephone number, including area code 617/439-3911

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

                                                      Name on each exchange on
          Title of each class                          which registered
------------------------------                     -----------------------------
                  None                                    None

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

                        UNITS OF LIMITED PARTNERSHIP INTEREST
                                    (Title of Class)
                                       100,000

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 (Subsection  229.405 of this chapter) is not contained herein,
and will not be contained,  to the best of registrant's knowledge, in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]

State the aggregate sales price of partnership units held by non-affiliates of 
the registrant.
                          $45,581,000 as of March 31, 1998


<PAGE>




                                                                 
DOCUMENTS  INCORPORATED  BY REFERENCE:  LIST THE FOLLOWING  DOCUMENTS IF  
INCORPORATED  BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED:  (1) ANY ANNUAL REPORT TO SECURITY HOLDERS: (2) ANY PROXY OR 
INFORMATION STATEMENT: AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b) OR 
(c) UNDER THE SECURITIES ACT OF 1933.

                                                            Part of Report on
                                                            Form 10-K into
                                                            Which the Document
Documents incorporated by reference                         is Incorporated

Report on Form 8-K dated March 18, 1993                     Part I, Item 1

Report on Form 8-K dated June 8, 1993                       Part I, Item 1

Report on Form 8-K dated September 10, 1993                 Part I, Item 1

Report on Form 8-K dated January 14, 1994                   Part I, Item 1

Post-Effective Amendment No. 1-3 to the Form S-11
     Registration Statement, File # 33-52468                Part I, Item 1

Post-Effective Amendment No. 4 to the Form S-11
     Registration Statement, File # 33-52468                Part III, Item 12

Prospectus - Sections Entitled:

     "Investment Objectives and Policies -
      Principal Investment Objectives"                      Part I, Item 1

     "Investment Risks"                                     Part I, Item 1

     "Estimated Use of Proceeds"                            Part III, Item 13

     "Management Compensation and Fees"                     Part III, Item 13

     "Profits and Losses for Tax Purposes, Tax
        Credits and Cash Distributions"                     Part III, Item 13







<PAGE>


                BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

               ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1998


                                    TABLE OF CONTENTS

                                                                        Page No.
 PART I

     Item 1      Business                                                   K-3
     Item 2      Properties                                                 K-5
     Item 3      Legal Proceedings                                          K-10
     Item 4      Submission of Matters to a Vote of
                    Security Holders                                        K-10

PART II

     Item 5      Market for the Registrant's Units and
                    Related Security Holder Matters                         K-11
     Item 6      Selected Financial Data                                    K-12
     Item 7      Management's Discussion and Analysis of
                    Financial Condition and Results of Operations           K-13
     Item 8      Financial Statements and Supplementary Data                K-15
     Item 9      Changes in and Disagreements with Accountants
                    on Accounting and Financial Disclosure                  K-15

PART III

     Item 10     Directors and Executive Officers
                    of the Registrant                                       K-16
     Item 11     Management Remuneration                                    K-17
     Item 12     Security Ownership of Certain Beneficial
                    Owners and Management                                   K-17
     Item 13     Certain Relationships and Related Transactions             K-18

PART IV

     Item 14     Exhibits, Financial Statement Schedule and
                  Reports on Form 8-K                                       K-21

SIGNATURES                                                                  K-22


<PAGE>


                               PART I

Item 1.  Business

Boston  Financial Tax Credit Fund VII, A Limited  Partnership  (the "Fund") is a
Massachusetts limited partnership formed on September 14, 1992 under the laws of
the   Commonwealth   of   Massachusetts.   The  Fund's   partnership   agreement
("Partnership  Agreement") authorizes the sale of up to 100,000 Units of limited
partnership interest at $1,000 per Unit. On November 30, 1993, the Fund held its
final  investor  closing.  In total,  the Fund received  $50,930,000  of capital
contributions  for 50,930 units.  Such amounts exclude five  unregistered  Units
previously acquired for $5,000 by the Initial Limited Partner, which is also one
of the General Partners. The offering of Units terminated on January 21, 1994.

The  Fund is  engaged  solely  in the  business  of real  estate  investment.  A
presentation of information  about industry segments is not applicable and would
not be material to an understanding of the Fund's business taken as a whole.

The Fund has invested as a limited partner in other limited partnerships ("Local
Limited  Partnerships")  which own and operate  residential  apartment complexes
("Properties")  some of which benefit from some form of federal,  state or local
assistance  programs and all of which qualify for low-income housing tax credits
("Tax  Credits")  added to the  Internal  Revenue  Code (the  "Code") by the Tax
Reform Act of 1986. The investment objectives of the Fund include the following:
(i) to provide  investors  with annual tax credits  which they may use to reduce
their federal income taxes; (ii) to provide limited cash  distributions from the
operations of apartment complexes;  and (iii) to preserve and protect the Fund's
capital  with  the  possibility  of  realizing  a  profit  through  the  sale or
refinancing of apartment complexes.  There cannot be any assurance that the Fund
will  attain  any  or all  of  these  investment  objectives.  A  more  detailed
discussion  of these  investment  objectives,  along with the risks in achieving
them,  is  contained  in the  sections of the  Prospectus  entitled  "Investment
Objectives  and  Policies - Principal  Investment  Objectives"  and  "Investment
Risks", which are herein incorporated by this reference.

Table A on the following  page lists the  properties  owned by the Local Limited
Partnerships  in which the Fund has  invested.  Item 7 of this  Report  contains
other significant  information with respect to such Local Limited  Partnerships.
The terms of the  acquisition  of each Local Limited  Partnership  interest have
been  described  in  a  supplement  to  the  Prospectus  and  collected  in  the
post-effective  amendment to the Registration  Statement;  such descriptions are
incorporated herein by this reference.


<PAGE>


                                        TABLE A

                              SELECTED LOCAL LIMITED
                                 PARTNERSHIP DATA
<TABLE>
<CAPTION>


    Properties owned by                                                                          Date
       Local Limited                                                                           Interest
       Partnerships                                        Location                            Acquired
----------------------------                           ------------------                   ---------------
<S>                                                   <C>                                       <C>   

Oak Ridge                                             Macon, GA                                 12/31/92
Santa Fe Oaks II                                      Gainesville, FL                           12/31/92
Andrew's Pointe                                       Burnsville, MN                            04/13/92
Palo Verde II                                         Henderson, NV                             05/19/93
Woods Lane                                            Rogers, AR                                07/30/93
Crafton Place                                         Fayetteville, AR                          07/30/93
Guardian Place                                        Richmond, VA                              10/07/93
Twin Oaks Meadows                                     Lansing, MI                               10/29/93
Sunrise Terrace                                       Madera, CA                                11/24/93
Wynmor                                                Brooklyn Park, MN                         12/22/93
Citrus Glen                                           Orlando, FL                               12/30/93
St. Andrews Pointe                                    Columbia, SC                              01/05/94
Des Moines St. Village                                Des Moines, IA                            01/31/94
Fountain Lakes                                        Benton, AR                                02/02/94
Fairhaven Manor                                       Burlington, WA                            03/08/94
Grand Boulevard Renaissance                           Chicago, IL                               08/03/94
Los Claveles II                                       Trujillio Alto, PR                        08/31/94
Springwood                                            Tallahassee, FL                           12/15/94
Harford Commons                                       Baltimore, MD                             02/28/95

</TABLE>


The Fund's  interest  in profits  and losses of each Local  Limited  Partnership
arising from normal operations is 99%, with the exception of Springwood which is
19.80%.  Profits and losses  arising from sale or refinancing  transactions  are
allocated  in  accordance   with  the  respective   Local  Limited   Partnership
Agreements.

Although the Fund's investments in Local Limited Partnerships are not subject to
seasonal   fluctuations,   the  Fund's   equity  in  losses  of  Local   Limited
Partnerships, to the extent it reflects the operations of individual Properties,
may vary from quarter to quarter  based upon changes in occupancy  and operating
expenses as a result of seasonal factors.

Each Local Limited  Partnership  has, as its general  partners  ("Local  General
Partners"),  one or more individuals or entities not affiliated with the Fund or
its General Partners. In accordance with the partnership  agreements under which
such entities are organized ("Local Limited Partnership  Agreements"),  the Fund
depends on the Local General  Partners for the  management of each Local Limited
Partnership. As of March 31, 1998, the following Local Limited Partnerships have
a common Local  General  Partner or affiliated  group of Local General  Partners
accounting for the specified  percentage of the total capital  contributions  to
Local Limited  Partnerships:  (i) Oak Ridge,  Santa Fe Oaks Phase II, Springwood
and St. Andrews Pointe,  representing  23.92%, have Flournoy Development Company
and John Flournoy as Local General Partners;  (ii) Woods Lane, Crafton Place and
Fountain Lakes,  representing  16.92%,  have Lindsey Management Company as Local
General  Partner.  The Local  General  Partners of the  remaining  Local Limited
Partnerships  are identified in the Acquisition  Reports  reported on Forms 8-K,
which are herein incorporated by reference.

The  Properties  owned  by Local  Limited  Partnerships  in  which  the Fund has
invested are, and will continue to be, subject to competition  from existing and
future  apartment  complexes  in the same  areas.  The  success of the Fund will
depend on many outside factors, most of which are beyond the control of the Fund
and which  cannot be  predicted  at this  time.  Such  factors  include  general
economic  and real estate  market  conditions,  both on a national  basis and in
those areas where the  Properties  are  located,  the  availability  and cost of
borrowed  funds,  real estate tax rates,  operating  expenses,  energy costs and
governmental  regulations.  In  addition,  other  risks  inherent in real estate
investment  may  influence  the  ultimate  success of the Fund,  including:  (i)
possible  reduction  in rental  income  due to an  inability  to  maintain  high
occupancy  levels or adequate  rental levels;  (ii) possible  adverse changes in
general economic  conditions and adverse local  conditions,  such as competitive
over-building  or a decrease  in  employment  or adverse  changes in real estate
laws,  including  building  codes;  and (iii) possible  future  adoption of rent
control  legislation  which would not permit  increased costs to be passed on to
the tenants in the form of rent  increases or which  suppress the ability of the
Local Limited  Partnerships to generate  operating cash flow.  Since some of the
Properties  benefit  from  some  form of  governmental  assistance,  the Fund is
subject  to the risks  inherent  in that  area  including  decreased  subsidies,
difficulties  in finding  suitable  tenants and  obtaining  permission  for rent
increases. In addition, any Tax Credits allocated to investors with respect to a
Property are subject to recapture to the extent that the Property or any portion
thereof  ceases to qualify for the Tax Credits.  Other future changes in federal
and  state  income  tax  laws  affecting   real  estate   ownership  or  limited
partnerships  could have a material  and adverse  affect on the  business of the
Fund.

The Fund is managed by Arch Street VII,  Inc., the Managing  General  Partner of
the Fund.  The other  General  Partner of the Fund is Arch  Street  VII  Limited
Partnership.  To economize on direct and indirect payroll costs, the Fund, which
does not have any  employees,  reimburses  The Boston  Financial  Group  Limited
Partnership,  an affiliate  of the General  Partners,  for certain  expenses and
overhead costs. A complete discussion of the management of the Fund is set forth
in Item 10 of this Report.


Item 2.  Properties

The  Fund  owns  limited   partnership   interests  in  nineteen  Local  Limited
Partnerships which own and operate  Properties,  some of which benefit from some
form of federal, state or local assistance programs and all of which qualify for
the Tax  Credits  added to the Code by the Tax  Reform  Act of 1986.  The Fund's
ownership interest in each Local Limited  Partnership is 99%, with the exception
of Springwood, which is 19.80%.

Each of the Local Limited Partnerships has received an allocation of Tax Credits
from the relevant state tax credit agency.  In general,  the Tax Credit runs for
ten years from the date the Property is placed in service.  The required holding
period (the  "Compliance  Period") of the  Properties is fifteen  years.  During
these fifteen  years,  the  Properties  must satisfy rent  restrictions,  tenant
income  limitations  and other  requirements,  as  promulgated  by the  Internal
Revenue  Service,  in order to  maintain  eligibility  for the Tax Credit at all
times during the Compliance Period.  Once a Local Limited Partnership has become
eligible for the Tax Credits,  it may lose such  eligibility and suffer an event
of  recapture  if  its  Property   fails  to  remain  in  compliance   with  the
requirements.  To date, none of the Local Limited  Partnerships have suffered an
event of recapture of Tax Credits.

In  addition,  some of the Local  Limited  Partnerships  have  obtained one or a
combination  of different  types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable  terms;  or iii) loans that have  repayment
terms that are based on a percentage of cash flow.

The schedules on the  following  pages provide  certain key  information  on the
Local Limited Partnership interests acquired by the Fund.


<PAGE>



<TABLE>
<CAPTION>

                                     

                                                      Capital Contributions             Mtge. loans                       Occupancy
Local Limited Partnership       Number       Total Committed       Paid Through          payable at                            at
Property Name                    of           at March 31,          March 31,           December 31,      Type of         March 31,
Property Location             Apt. Units          1998               1998                  1997          Subsidy*            1998
-------------------------    -----------    ---------------      --------------         -------------    ------------    -----------
<S>                             <C>            <C>                 <C>                  <C>                 <C>               <C>

Oak Ridge Apartments,
   a Limited Partnership
Oak Ridge
Macon, GA                       152            $2,870,245          $2,870,245           $4,119,060          None               65%

Santa Fe Oaks Phase II,
   a Limited Partnership
Santa Fe Oaks II
Gainesville, FL                 129             2,698,586           2,698,586            3,725,839          None               99%

Andrew's Pointe Limited
   Partnership
Andrew's Pointe
Burnsville, MN                   57             1,333,800           1,333,800            2,344,035          None              100%

Palo Verde II, a Nevada
   Limited Partnership
Palo Verde II
Henderson, NV                    60             1,324,801           1,324,801            1,096,357          None              100%

Woods Lane, a Limited
   Partnership
Woods Lane
Rogers, AR                      156             2,574,180           2,574,180            3,354,692          None               59%

Crafton Place, a Limited
   Partnership
Crafton Place
Fayetteville, AR                 84             1,365,120           1,365,120            1,677,356          None               91%
</TABLE>



<PAGE>
<TABLE>
<CAPTION>



                                                      Capital Contributions              Mtge. loans                     Occupancy
Local Limited Partnership      Number       Total Committed       Paid Through           payable at                        at
Property Name                    of           at March 31,         March 31,            December 31,       Type of       March 31,
Property Location             Apt. Units           1998               1998                   1997          Subsidy*        1998
--------------------------   ------------   ----------------      -------------         --------------   ------------    ----------
<S>                             <C>             <C>                 <C>                   <C>                <C>              <C>

Guardian Place
   Limited Partnership
Guardian Place
Richmond, VA                    120             2,174,390           2,174,390             2,975,651          None              99%

Twin Oaks Meadows Limited
   Dividend Housing Association
   Limited Partnership
Twin Oaks Meadows
Lansing, MI                      63             1,436,401           1,436,401             1,915,540          None              93%

Madera Sunrise Terrace
   Limited Partnership
Sunrise Terrace
Madera, CA                       52             1,523,196           1,523,196             1,184,337          None             100%

Eden Park Limited
   Partnership
Wynmor
Brooklyn Park, MN               324             5,527,758           5,527,758             5,838,452          None              94%

Affordable Citrus Glen
   Limited Partnership
Citrus Glen
Orlando, FL                     176             4,581,360           4,581,360             5,442,788          None              96%

St. Andrews Pointe Apartments,
   A Limited Partnership
St. Andrews Pointe
Columbia, SC                    150             3,414,528           3,414,528             4,668,512          None              96%

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                                      Capital Contributions             Mtge. loans                     Occupancy
Local Limited Partnership     Number       Total Committed       Paid Through            payable at                         at
Property Name                  of           at March 31,           March 31,           December 31,      Type of          March 31,
Property Location            Apt. Units         1998                1998                  1997          Subsidy*           1998
------------------------    -----------    ---------------   -----------------         --------------  ------------    ------------
<S>                             <C>             <C>                 <C>                   <C>              <C>                 <C>

Des Moines Street Associates
   Limited Partnership
Des Moines St. Village
Des Moines, IA                   42             1,083,996           1,083,996             1,721,515        Section 8            98%

Fountain Lakes, A Limited
   Partnership
Fountain Lakes
Benton, AR                      180             2,854,593           2,854,593             4,218,066        None                100%

Fairhaven Manor Limited
   Partnership
Fairhaven Manor
Burlington, WA                   40             1,232,020           1,232,020               948,248        None                100%

Grand Boulevard Renaissance I
   Limited Partnership
Grand Boulevard Renaissance
Chicago, IL                      30             1,085,000             868,000             1,906,598        Section 8            97%

Los Claveles, S.E. Limited
   Partnership
Los Claveles II
Trujilio Alto, PR               180             1,272,000             698,373             6,553,050        Section 8            85%

BHP/Harford Commons
   Limited Partnership
Harford Commons
Baltimore, MD                    30             1,187,000           1,103,000             1,736,092        None                100%

</TABLE>
 
<PAGE>
<TABLE>
<CAPTION>


                                                      Capital Contributions             Mtge. loans                      Occupancy
Local Limited Partnership     Number       Total Committed      Paid Through            payable at                           at
Property Name                   of          at March 31,          March 31,            December 31,       Type of        March 31,
Property Location           Apt. Units           1998               1998                  1997            Subsidy*          1998
------------------------  -------------    ---------------      --------------         --------------    -----------   ------------
<S>                           <C>             <C>                <C>                  <C>                   <C>                <C>

Springwood Apartments,
   A Limited Partnership
Springwood (1)
Tallahassee, FL                 113              624,805             624,805             3,931,815          None                86%
                               -----          -----------          ----------           ---------- 
                              2,138           $40,163,779         $39,289,152          $59,358,003
                              =====           ===========         ===========          ===========
</TABLE>

(1)            Boston Financial Tax Credit Fund VII has a 19.8% interest in 
               Springwood Apartments,  A Limited Partnership.  The mortgage 
               payable represents 100% of the outstanding balance.

Section 8      This subsidy,  which is authorized under Section 8 of Title II of
               the Housing and Community  Development Act of 1974, allows 
               qualified low-income tenants to pay 30% of their monthly income 
               as rent with the balance paid by the federal government.





<PAGE>


                                                                              
Two Local Limited Partnerships  invested in by the Fund each represent more than
10% of the total capital  contributions to be made to Local Limited Partnerships
by the Fund. The first is Eden Park Limited  Partnership  which owns Wynmor,  an
existing property located in Brooklyn Park, Minnesota. The property contains 324
apartments in eleven  three-story  buildings and represents  13.76% of the total
capital contributions to be made to the Local Limited Partnerships.

Eden Park Limited Partnership has obtained a $6,000,000 first mortgage loan. The
mortgage is payable in monthly  installments  of  principal  and interest in the
amount of $48,922,  based on a 25 year amortization period, and accrues interest
at a rate of 8.65%.  The unpaid  principal  and  interest  is due in one balloon
payment in October of 2020.

The other Local Limited  Partnership which represents more than 10% of the total
capital  contributions  to be made to Local Limited  Partnerships  is Affordable
Citrus Glen Limited  Partnership which owns Citrus Glen Apartments.  Citrus Glen
Apartments,  which is located in Orlando,  Florida,  contains 176 apartments and
represents  11.41% of the total  capital  contributions  to be made to the Local
Limited Partnerships.

Affordable  Citrus Glen Limited  Partnership  (the  "Partnership")  has obtained
permanent  financing in the amount of  $3,848,000  at an interest rate of 9.55%.
The note requires monthly principal and interest payments of $32,497,  amortized
over a 30 year period, with the unpaid principal balance due in full on February
1, 2010.  Additional  financing has been  obtained in the amount of  $1,670,000,
with stated  interest at 9%, from the Florida  Housing  Finance  Agency.  Due to
other claims  against cash flows,  the maximum  effective rate will be 4.5%, the
rate at which  interest is currently  being  accrued.  Repayment is based on the
cash flow of the  partnership,  beginning  on  January  10,  1995,  with  annual
payments  due each  January  10  through  2009,  at which  time all  outstanding
principal and interest is due. The loan is non-recourse and is collateralized by
a second  mortgage on the  partnership's  rental  property and an  assignment of
leases, rents and contract rights.

The duration of the leases for occupancy in the  Properties  described  above is
six to twelve  months.  The Managing  General  Partner  believes the  Properties
described herein are adequately covered by insurance.

Additional  information required under this item, as it pertains to the Fund, is
contained in Items 1, 7 and 8 of this Report.

Item 3.  Legal Proceedings

The Fund is not a party to any pending legal or administrative  proceeding,  and
to the  best  of  its  knowledge,  no  legal  or  administrative  proceeding  is
threatened or contemplated against it.

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

None.


<PAGE>

                                PART II

Item 5.  Market for the Registrant's Units and Related Security Holder Matters

There is no public  market for the Units,  and it is not expected  that a public
market will develop.  If a Limited Partner  desires to sell Units,  the buyer of
those Units will be required to comply with the minimum  purchase and  retention
requirements and investor suitability standards imposed by applicable federal or
state  securities  laws and the  minimum  purchase  and  retention  requirements
imposed  by the  Fund.  The  price  to be  paid  for the  Units,  as well as the
commissions to be received by any participating broker-dealers,  will be subject
to negotiation by the Limited Partner seeking to sell his Units.  Units will not
be redeemed or repurchased by the Fund.

The  Partnership  Agreement does not impose on the Fund or its General  Partners
any  obligation to obtain  periodic  appraisals of assets or to provide  Limited
Partners with any estimates of the current value of Units.

As of June 15, 1998, there were 2,512 record holders of Units of the Fund.

Cash distributions, when made, are paid annually.  No cash distributions were 
paid during the years ended March 31, 1998, 1997 and 1996.


<PAGE>


Item 6.  Selected Financial Data

The following  table sets forth  selected  financial  information  regarding the
Fund's financial position and operating results. This information should be read
in conjunction with Management's  Discussion and Analysis of Financial Condition
and Results of Operations and the Financial Statements and Notes thereto,  which
are included in Items 7 and 8 of this Report.
<TABLE>
<CAPTION>

                                            March 31,       March 31,     March 31,        March 31,           March 31,
                                             1998            1997           1996            1995            1994
<S>                                      <C>              <C>            <C>            <C>             <C>   

Revenue                                  $    254,185     $    400,349   $    257,160   $    333,523    $     365,312
Equity in losses of Local Limited
 Partnerships                              (3,325,494)      (2,967,826)    (2,570,732)    (2,190,648)        (536,848)
Net Loss                                   (3,626,340)      (3,131,087)    (2,870,229)    (2,465,750)        (735,660)
   Per Limited Partnership Unit (A)            (70.49)          (60.86)        (55.79)        (47.93)          (21.34)
Cash and cash equivalents                     375,168          373,729        334,845      1,768,604        1,637,056
Marketable securities                       3,106,645        3,240,944      3,855,342      5,688,064       18,301,710

Investments in Local Limited
   Partnerships                            28,387,876       31,792,098     34,328,400     34,310,871       24,033,164
Long-term debt                                      -                -              -              -                -
Total assets (B)                           32,158,308       35,694,649     38,795,017     41,924,559       44,145,937
Cash Distribution                                   -                -              -              -                -
Other data:
Passive loss (C)                           (4,473,368)      (3,697,126)    (3,835,484)    (3,604,962)        (822,547)
   Per Limited Partnership Unit (C)            (86.95)          (71.87)        (74.56)        (70.07)          (39.28)
Portfolio income (C)                          301,029          359,903        477,042      1,026,953          415,206
   Per Limited Partnership Unit (C)              5.85             7.00           9.27          19.96            19.83
Net short term capital losses (C)                   -                -           (610)      (510,142)               -
   Per Limited Partnership Unit (C)                 -                -           (.01)         (9.92)               -
Low-Income Housing Tax Credit (C)           7,547,206        7,531,209      7,016,512      4,226,746          750,876
   Per Limited Partnership Unit (C)            148.19           146.39         136.39          82.16            35.86
Local Limited Partnership interests
   owned at end of period                          19               19             19             19               15

</TABLE>


(A)    Per Limited  Partnership  Unit data is based upon 50,930 Units for the 
       years ended March 31, 1998,  1997, 1996 and 1995 and a weighted average 
       number of units outstanding of 34,127 for the year ended March 31, 1994.

(B)    Total assets include the investments in Local Limited Partnerships.

(C)    Income tax  information  is as of December  31, the year end of the Fund
       for income tax purposes.


<PAGE>


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

Liquidity and Capital Resources

At March 31, 1998, the Fund had cash and cash  equivalents of $375,168  compared
with  $373,729 at March 31,  1997.  The increase is  primarily  attributable  to
proceeds  from  sales  and  maturities  of  marketable  securities  in excess of
purchases of marketable  securities and cash  distributions  received from Local
Limited  Partnerships.  This increase is partially offset by investments made in
Local Limited Partnership and cash used for operating activities.

As of March 31, 1998, approximately $2,478,000 of marketable securities has been
designated  as Reserves by the  Managing  General  Partner.  The  Reserves  were
established to be used for working capital of the Fund and contingencies related
to the ownership of Local Limited  Partnership  interests.  Management  believes
that the  interest  income  earned on  Reserves,  along with cash  distributions
received  from Local  Limited  Partnerships,  to the extent  available,  will be
sufficient to fund the Fund's ongoing  operations.  Reserves may be used to fund
operating deficits, if the Managing General Partner deems funding appropriate.

At March 31, 1998, the Fund has committed to make future  capital  contributions
and pay future  purchase price  installments on its investments in Local Limited
Partnerships.  These future  payments are  contingent  upon the  achievement  of
certain  criteria as set forth in the Local Limited  Partnership  Agreements and
total approximately  $658,000. In addition,  the Fund has set aside $217,000 for
future capital contributions to one Local Limited Partnership.

Since the Fund invests as a limited partner, the Fund has no contractual duty to
provide  additional  funds to Local  Limited  Partnerships  beyond its specified
investment.  Thus, as of March 31, 1998,  the Fund had no  contractual  or other
obligation to any Local Limited  Partnership which had not been paid or provided
for, except as described above.

In the  event a Local  Limited  Partnership  encounters  operating  difficulties
requiring  additional  funds,  the Fund might deem it in its best  interests  to
provide such funds,  voluntarily,  in order to protect its  investment.  No such
event has occurred to date.

Cash Distributions

No cash distributions were made in the year ended March 31, 1998.

Results of Operations

1998 versus 1997

The Fund's results of operations for the year ended March 31, 1998 resulted in a
net loss of  $3,626,340  as  compared to a net loss of  $3,131,087  for the same
period in 1997. The increase in net loss is primary  attributable to an increase
in equity  in  losses of Local  Limited  Partnerships  and a  decrease  in other
revenue.  Equity in  losses of Local  Limited  Partnership  increased  due to an
increase in general operating expenses of the Local Limited Partnerships, offset
by an increase in rental revenues due to an improvement in local rental markets.
Other revenue decreased as a result of a decrease in escrow interest paid to the
Fund from Local Limited Partnerships.

1997 versus 1996

The Fund's results of operations for the year ended March 31, 1997 resulted in a
net loss of  $3,131,087  as  compared to a net loss of  $2,870,229  for the same
period  in 1996.  The  increase  in net  loss is  primarily  attributable  to an
increase in equity in losses of Local Limited  Partnerships  partially offset by
an increase in other revenue.  The increase in equity in losses of Local Limited
Partnerships  is due to an increase in the number of Local  Limited  Partnership
interests  which had a full year of operations.  This  resulted  in  increased
depreciation, interest and operating expenses over total revenue earned.  The

<PAGE>


increase in other revenue is primarily  due to an increase in interest paid to 
the Fund from Local Limited Partnerships.

Effect of recently issued Accounting Standard

The Financial  Accounting Standards Board recently issued Statement of Financial
Accounting  Standards  No. 130,  Reporting  Comprehensive  Income.  The standard
requires that changes in comprehensive  income be shown in a financial statement
that is displayed with the same  prominence as other financial  statements.  The
standard will become  effective for fiscal years  beginning  after  December 15,
1997. The Fund will adopt the new standard beginning in the first quarter of the
fiscal year ending  March 31, 1999,  but is not  expected to have a  significant
effect on financial position or results of operations.


Low-Income Housing Tax Credits

The 1998, 1997 and 1996 Tax Credits per unit were $148.19,  $146.39 and $136.39,
respectively, for investor limited partners. Tax Credits are not available for a
property  until the  property is placed in service and its  apartment  units are
occupied by  qualified  tenants.  In the first year the Tax Credits are claimed,
the  allowable  credit  amount is  determined  using an averaging  convention to
reflect the number of months that apartment units comprising the qualified basis
were occupied by qualified  tenants during the year. To the extent that the full
amount of the annual  credit is not  allocated in the first year,  an additional
credit equal to the difference is available in the 11th taxable year.

As of December 31, 1997, the tax year end of the Local Limited  Partnerships,  
all of the properties  have been placed in service and all generated Tax Credits
in 1997.

The Tax Credits per Limited  Partnership  Unit have stabilized at  approximately
$147 per unit,  as  properties  have  reached  completion  and have become fully
leased.  Since the Tax Credits have  stabilized,  the annual amount allocated to
investors is expected to remain the same for about seven  years.  In years eight
through ten, the credits are expected to decrease as Properties reach the end of
the ten year credit period.

Property Discussions

The Fund is invested in nineteen Local Limited  Partnerships  which own nineteen
properties  located in twelve states and Puerto Rico. Fifteen of the properties,
consisting  of 1,574 units,  are new  construction  and four of the  properties,
consisting of 564 units,  were  rehabilitated.  All  properties  have  completed
construction or rehabilitation and initial lease-up.

Even  though  occupancy  for Grand  Boulevard  Renaissance,  located in Chicago,
Illinois,  has  been  ranging  between  97% and  100%,  the  property  has  been
experiencing operating  difficulties,  in particular difficulty maintaining debt
service coverage.  These issues are mainly due to poor collections from tenants.
On April 1, 1998,  a new  management  agent was  brought in to monitor  property
operations and increase tenant collections. The Managing General Partner will be
working closely with the Local General  Partner and the new management  agent to
monitor operations.

As previously reported, Los Claveles II, located in Trujillio Alto, Puerto Rico,
continues to experience  operating  difficulties  due to ongoing  capital repair
needs and  management  issues.  In 1996,  an affiliate  of the Managing  General
Partner of the Fund  successfully  negotiated  with the Local General  Partners,
lender and local  housing  authority  to replace  the  management  agent for Los
Claveles  II  as  well  as  its  neighboring   property,   Los  Claveles  I.  By
consolidating management, the Managing General Partner feels that it can achieve
greater control over both sites and attain certain  operating  efficiencies that
will benefit both properties.  The new management  agent assumed  responsibility
for the  property  in  December  1996 and has  successfully  obtained  Section 8
subsidy  increases.  The Local General  Partners agreed to step down voluntarily
and will be replaced by an unaffiliated  general partner,  once the workout plan
is approved by the lender.  In addition,  the Local General Partners  executed a
delegation  agreement  which  grants  authority  to an affiliate of the Managing
General  Partner  to  implement  the  capital   improvement  plan  and  complete
negotiations  with the lender.  The lender continues to indicate its willingness
to work with the  Managing  General  Partner  and  management  agent to  improve
operations and cure defaults.  Although there appears to be sufficient resources
to turn the project  around,  no  agreement  has been reached with the lender to
date.

Woods Lane, located in Rogers,  Arkansas, has been suffering from poor occupancy
due to local  competition.  Occupancy  as of  December  31,  1997 was 57%. A new
management team was recently hired to step-up the marketing efforts, review rent
concessions, install a resident referral plan and monitor competing rent levels.
In addition,  capital  improvements  have recently been completed  which include
exterior painting,  carpet replacement and landscaping and grounds  improvement.
The Managing  General Partner will closely monitor the new management  agent and
also  review  possible  debt  restructuring.  The  Managing  General  Partner is
currently funding operating deficits.

In accordance with Financial  Accounting  Standard No. 121,  "Accounting for the
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed Of",
which is effective for fiscal years  beginning after December 15, 1995, the Fund
has  implemented  policies and practices  for  assessing  impairment of its real
estate  assets and  investments  in local  limited  partnerships.  Each asset is
analyzed by real estate experts to determine if an impairment  indicator exists.
If so,  the  current  value  is  compared  to the fair  value  and if there is a
significant  impairment  in value,  a provision  to write down the asset to fair
value will be charged against income.

Inflation and Other Economic Factors

Inflation had no material impact on the operations or financial condition of the
Fund for the years ended March 31, 1998, 1997 and 1996.

Item 8.  Financial Statements and Supplementary Data

Information  required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.


Item 9.  Changes in and Disagreements with Accountants on Accounting and 
         Financial Disclosure

None.


<PAGE>


                                     PART III

Item 10.  Directors and Executive Officers of the Registrant

The  Managing  General  Partner  of  the  Fund  is  Arch  Street  VII,  Inc.,  a
Massachusetts  corporation (the "Managing General Partner"), an affiliate of The
Boston Financial Group Limited Partnership ("Boston Financial"), a Massachusetts
limited  partnership.  George  Fantini,  Jr., a Vice  President  of the Managing
General Partner,  resigned his position effective June 30, 1995. Donna Gibson, a
Vice President of the Managing  General  Partner,  resigned from her position on
September 13, 1996. Georgia Murray resigned as Managing Director,  Treasurer and
Chief Financial Officer of the Managing General Partner on May 25, 1997. Fred N.
Pratt, Jr. resigned as Managing  Director of the Managing General Partner on May
28,  1997.  William E.  Haynsworth  resigned  as a Managing  Director  and Chief
Operating Officer of the Managing General Partner on March 23, 1998.

The Managing  General Partner was  incorporated  in September 1992.  Randolph G.
Hawthorne is the Chief Operating Officer of the Managing General Partner and had
the primary responsibility for evaluating, selecting and negotiating investments
for the Fund. The Investment  Committee of the Managing General Partner approved
all  investments.  The names and  positions  of the  principal  officers and the
directors of the Managing General Partner are set forth below.

     Name                                           Position

Jenny Netzer                        Managing Director and President
Michael H. Gladstone                Managing Director, Vice President and Clerk
Randolph G. Hawthorne               Managing Director, Vice President and
                                      Chief Operating Officer
James D. Hart                       Chief Financial Officer and Treasurer
Paul F. Coughlan                    Vice President
Peter G. Fallon, Jr.                Vice President
William E. Haynsworth               Vice President

The other General Partner of the Fund is Arch Street VII Limited Partnership,  
a Massachusetts  limited partnership ("Arch Street VII L.P.") that was organized
in September 1992.  The managing general partner of Arch Street VII L.P. is Arch
Street VII, Inc.  The limited partner of Arch Street VII L.P. is Boston 
Financial.

The Managing General Partner provides  day-to-day  management of the Fund.  
Compensation is discussed in Item 11 of this report.  Such day-to-day management
does not include the management of the Properties.

The business experience of each of the persons listed above is described  below.
There is no family  relationship  between any of the persons  listed in this
section.

Jenny  Netzer,  age 42,  graduated  from  Harvard  University  (B.A.,  1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982.  She joined  Boston  Financial  in 1987 and is a Senior Vice  President
leading the  Institutional  Tax Credit Team.  She is also a member of the Senior
Leadership  Team.  Previously,  Ms. Netzer led Boston  Financial's  new business
initiatives  and  managed  the  firm's  Asset  Management  division,   which  is
responsible  for the  performance  of 750  properties  and providing  service to
35,000  investors.  Before  joining  Boston  Financial,  she was  Deputy  Budget
Director for the  Commonwealth of  Massachusetts,  where she was responsible for
the Commonwealth's  health care and public pension programs' budgets. Ms. Netzer
was also  Assistant  Controller at Yale  University and has been a member of the
Watertown Zoning Board of Appeals.

Michael H. Gladstone,  age 41,  graduated from Emory  University (B.A. 1978) and
Cornell  University  (J.D.,  MBA 1982). He joined Boston  Financial in 1985, and
currently serves as Vice President and as the company's  General Counsel.  Prior
to joining Boston  Financial,  Mr. Gladstone was associated with the law firm of
Herrick & Smith.  Mr. Gladstone is a member of the National Realty Committee and
has served on the  advisory  board to the Housing and  Development  Reporter,  a
national publication on housing issues.

Randolph G.  Hawthorne,  age 48, is a graduate  of  Massachusetts  Institute  of
Technology (B.S., 1971) and Harvard Graduate School of Business (M.B.A.,  1973).
He has been  associated  with Boston  Financial since 1973 and has served as the
Treasurer of Boston  Financial.  Currently a Senior Vice  President of the firm,
Mr. Hawthorne's primary  responsibility is structuring and acquiring real estate
investments.  Mr.  Hawthorne is Past Chairman of the Board of the National Multi
Housing  Council,  having served on the board since 1989. He is a past president
of the  National  Housing  and  Rehabilitation  Association,  is a member of the
Residential Development Council of the Urban Land Institute, as well as a member
of the Advisory  Board of the Berkeley Real Estate  Center at the  University of
California.  In  addition to  speaking  at  industry  conferences,  he is on the
Editorial Advisory Boards of the Tax Credit Advisor and Multi-Housing News.

James D. Hart,  age 40, earned his Bachelor of Arts degree from Trinity  College
and his  Masters  of  Business  Administration  from the  Amos  Tuck  School  at
Dartmouth College. Mr. Hart serves as Chief Financial Officer and is a member of
the Senior  Leadership  Team.  Prior to joining Boston  Financial,  Mr. Hart was
engaged in venture  capital  management  on behalf of  institutional  investors,
including  the  negotiation  and  structuring  of private  equity and  mezzanine
transactions  as a Vice President of Interfid Ltd., and later in the operational
management of a venture-backed  software company, as Managing Director and Chief
Financial  Officer of  Bitstream  Inc.  Mr. Hart has also served on the Board of
Directors  of  several  investee  companies,  including  those  that  went on to
complete initial public offerings.

Paul F. Coughlan,  age 54, is a graduate of Brown  University  (B.A.,  1965) and
served in the United  States Navy before  entering  the  securities  business in
1969. He was employed as an Account Executive by Bache & Company until 1972, and
then by Reynolds  Securities  Inc.  He joined  Boston  Financial  in 1975 and is
currently a Senior Vice President on the Institutional Tax Credit Team.

Peter G.  Fallon,  Jr.,  age 59,  graduated  from the  College of the Holy Cross
(B.S.,  1960) and Babson College  (M.B.A.,  1965). He joined Boston Financial in
1970, shortly after its formation,  to raise capital for the firm's investments.
He is currently a Senior Vice  President and a member of the  Institutional  Tax
Credits  Team  with  responsibility  for  marketing  institutional  investments.
Previously,  he has served as  president  of BFG  Securities,  as a director  of
Boston Financial,  and as marketing director for public and corporate funds. Mr.
Fallon has also served as Chairman of the Board of Directors for Boston  College
High School as well as a director of a local bank.

William E. Haynsworth,  age 58, is a graduate of Dartmouth College (B.A.,  1961)
and Harvard Law School (L.L.B.,  1964;  L.L.M.,  1969).  Prior to joining Boston
Financial in 1977,  Mr.  Haynsworth  was Acting  Executive  Director and General
Counsel of the Massachusetts Housing Finance Agency. He was also the Director of
Non-Residential  Development  of  the  Boston  Redevelopment  Authority  and  an
associate  of the law firm of  Goodwin,  Procter & Hoar.  Appointed  Senior Vice
President in 1986, Mr. Haynsworth brings over 25 years of experience structuring
real estate  investments.  Mr. Haynsworth is a member of the Executive Committee
and the Board of Directors of the Affordable Housing Tax Credit Coalition. He is
a member of the Senior  Leadership Team, the firm's Executive  Committee and the
Board of Directors of Boston Financial.

Item 11.  Management Remuneration

Neither the directors or officers of Arch Street VII,  Inc., nor the partners of
Arch Street VII L.P., nor any other individual with  significant  involvement in
the business of the Fund receives any current or proposed  remuneration from the
Fund.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

As of March 31, 1998,  the  following is the only entity known to the Fund to be
the beneficial owner of more than 5% of the Units outstanding:



<TABLE>
<CAPTION>


                                                                         Amount
     Title of                     Name and Address of                 Beneficially               Percent
     Class                         Beneficial Owner                       Owned                 of Class
<S>                      <C>                                           <C>                       <C>

Limited Partner          Oldham Institutional Tax Credits LLC          5,349 units               10.5%
                         101 Arch Street
                         Boston, MA
</TABLE>

Oldham  Institutional  Tax Credits LLC is an affiliate of Arch Street VII, Inc.,
the Managing General Partner.

The equity  securities  registered  by the Fund under  Section  12(g) of the Act
consist  of  100,000  Units,  50,930 of which had been sold to the  public.  The
remaining  Units  were  deregistered  in  Post-Effective  Amendment  No. 4 dated
January 20, 1995, which is herein incorporated by reference.

Holders of Units are  permitted  to vote on matters  affecting  the Fund only in
certain unusual circumstances and do not generally have the right to vote on the
operation or management of the Fund.

Arch Street VII, L.P. owns five (unregistered) Units not included in the Units 
sold to the public.

Except as described in the preceding paragraphs,  neither Arch Street VII, Inc.,
Arch Street VII L.P.,  Boston  Financial,  nor any of their executive  officers,
directors,  partners or affiliates is the beneficial owner of any Units. None of
the  foregoing  persons  possesses a right to acquire  beneficial  ownership  of
Units.

The Fund does not know of any  existing  arrangement  that might at a later date
result in a change in control of the Fund.

Item 13.  Certain Relationships and Related Transactions

The Fund is required to pay certain fees to and  reimburse  certain  expenses of
the Managing General Partner or its affiliates  (including  Boston Financial) in
connection with the organization of the Fund and the offering of Units. The Fund
is also  required to pay certain fees to and reimburse  certain  expenses of the
Managing  General  Partner or its  affiliates  (including  Boston  Financial) in
connection  with  the  administration  of  the  Fund  and  its  acquisition  and
disposition  of  investments  in Local Limited  Partnerships.  In addition,  the
General Partners are entitled to certain Fund  distributions  under the terms of
the  Partnership  Agreement.  Also,  an affiliate of the General  Partners  will
receive  up to  $10,000  from the sale or  refinancing  proceeds  of each  Local
Limited  Partnership,  if it is  still a  limited  partner  at the  time of such
transaction.  All such fees,  expenses and  distributions  paid during the years
ended March 31, 1998,  1997, and 1996 are described below and in the sections of
the Prospectus  entitled "Estimated Use of Proceeds",  "Management  Compensation
and Fees" and  "Profits  and  Losses  for Tax  Purposes,  Tax  Credits  and Cash
Distributions." Such sections are incorporated herein by reference.

The Fund is permitted to enter into  transactions  involving  affiliates  of the
Managing  General  Partner,  subject to certain  limitations  established in the
Partnership Agreement.

Information  required  under this Item is contained  in Note 5 to the  Financial
Statements presented as a separate section of this Report. The affiliates of the
Managing   General   Partner  which  have  received  fee  payments  and  expense
reimbursements from the Fund are as follows:

Organizational fees and expenses and selling expenses

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
certain  fees to and  reimburse  expenses of the  Managing  General  Partner and
others in connection  with the  organization of the Fund and the offering of its
Limited Partnership Units. Commissions, fees and accountable expenses related to
the sale of the Units totaling  $6,304,898 have been charged directly to Limited
Partners'  equity. In connection  therewith,  $4,329,050 of selling expenses and
$1,975,848 of offering expenses incurred on behalf of the Fund have been paid to
an  affiliate  of the Managing  General  Partner.  The Fund is required to pay a
non-accountable expense allowance for marketing expense equal to a maximum of 1%
of Gross  Proceeds.  This  allowance  has not yet been  charged to the Fund.  In
addition, the Fund has paid $50,000 in organization costs to an affiliate of the
Managing  General  Partner.  This cost has been  included in the balance  sheet.
Total  organization and offering expenses  exclusive of selling  commissions and
underwriting  advisory  fees did not  exceed  5.5% of the  Gross  Proceeds,  and
organizational  and  offering  expenses,  inclusive of selling  commissions  and
underwriting advisory fees, did not exceed 15.0% of the Gross Proceeds. Payments
made and expenses  reimbursed  during the years ended March 31, 1998,  1997, and
1996 are as follows:


                                         1998            1997             1996
                                    -------------    ------------    ----------

  Organizational fees and expenses   $       -         $     -         $4,364

Acquisition fees and expenses

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
acquisition fees to and reimburse  acquisition  expenses of the Managing General
Partner or its affiliates for selecting,  evaluating,  structuring,  negotiating
and closing the Fund's  investments in Local Limited  Partnerships.  Acquisition
fees totaled 6% of the Gross Proceeds. Acquisition expenses, which include legal
fees and expenses,  travel and communications  expenses, costs of appraisals and
accounting fees and expenses,  totaled 1.5% of the Gross  Proceeds.  Acquisition
fees totaling $3,055,800 for the closing of the Fund's Local Limited Partnership
Investments have been paid to an affiliate of the Managing  General Partner.  Of
this amount,  approximately  $2,567,000 is included as capital  contributions to
Local Limited Partnerships. Acquisition expenses totaling $763,950 were incurred
and have been  reimbursed  to an  affiliate  of the  Managing  General  Partner.
Payments made (refunds received) and expenses  reimbursed during the years ended
March 31, 1998, 1997 and 1996 are as follows:

                                      1998            1997             1996
                                 -------------    ------------    -------------

 Acquisition fees and expenses   $        -      $    (3,017)      $   57,598


Asset Management Fees

In  accordance  with the  Partnership  Agreement,  an  affiliate of the Managing
General  Partner  is paid an annual  fee for  services  in  connection  with the
administration of the affairs of the Fund. The affiliate  currently receives the
base amount of .571% (as adjusted by the CPI factor) of Gross Proceeds  annually
as the Asset  Management Fee. Fees earned during the years ended March 31, 1998,
1997 and 1996 are as follows:

                                      1998            1997             1996
                                 -------------    ------------    -------------

   Asset Management Fees          $   286,044    $    277,575      $   270,264


Salaries and benefits expense reimbursements

An affiliate of the Managing  General  Partner is reimbursed for the cost of the
Fund's salaries and benefits  expenses.  The  reimbursements  are based upon the
size and  complexity of the Fund's  operations.  Reimbursements  paid or accrued
during the years ended March 31, 1998, 1997 and 1996 are as follows:

                                    1998            1997             1996
                               -------------    ------------    -------------

   Salaries and benefits
     expense reimbursements     $  108,845    $    115,310      $   123,712



Property Management Fees

Upon construction  completion,  in August of 1994,  Lansing  Management  Company
("LMC"),  an affiliate of the Managing  General  Partner,  became the management
agent for Twin Oaks Meadows. The management fee charged to the property is equal
to 5% of the  property  gross  revenues.  Fees charged for the three years ended
March 31, 1998, 1997 and 1996 are as follows:
                                  1998             1997             1996
                              --------------  --------------    ---------


Property Management Fees      $ 19,530      $      19,215   $       17,388

Cash distributions paid to the General Partners

In accordance with the Partnership Agreement,  the General Partners of the Fund,
Arch Street VII,  Inc.  and Arch Street VII Limited  Partnership,  receive 1% of
cash  distributions  made to partners.  To date,  the Fund has not paid any cash
distributions to partners.

Additional  information  concerning  cash  distributions  and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Boston  Financial and its  affiliates  during the
years  ended  March  31,  1998,  1997  and  1996 is  presented  in Note 5 to the
Financial Statements.


 
                                PART IV

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

(a)(1) and (a)(2) Documents filed as a part of this Report

In  response to this  portion of Item 14, the  financial  statements,  financial
statement  schedule and the auditors' report relating thereto are submitted as a
separate section of this Report. See Index on page F-1 hereof.

The reports of auditors of the Local Limited Partnerships relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
28.1 of this Report.

All other financial statement schedules and exhibits for which provision is made
in  the  applicable  accounting  regulations  of  the  Securities  and  Exchange
Commission are not required under related  instructions or are  inapplicable and
therefore have been omitted.

(a)(3)

(a)(3)(b)  Reports on Form 8-K:
           No reports on Form 8-K were filed during the quarter  ended March 31,
1998.

(a)(3)(c)   Exhibits

Number and Description in Accordance with
  Item 601 of Regulation S-K

   27.  Financial Data Schedule

   28.  Additional Exhibits

     (a)  28.1 Reports of Other Independent Auditors


(a)(3)(d) None.




















                                  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.

      BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

      By:  Arch Street VII, Inc.
           its Managing General Partner



     By:   /s/Randolph G. Hawthorne                          Date:06/26/98
           Randolph G. Hawthorne,
           Managing Director, Vice President and
           Chief Operating Officer

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



     By:   /s/ Randolph G. Hawthorne                         Date:06/26/98
           Randolph G. Hawthorne,
           Managing Director, Vice President and
           Chief Operating Officer



     By:   /s/Michael H. Gladstone                           Date:06/26/98
           Michael H. Gladstone,
           A Managing Director



                                       
Item 8.  Financial Statements and Supplementary Data

           BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

          ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1998
                                      INDEX


                                                                       Page No.


Report of Independent Accountants
   For the years ended March 31, 1998, 1997 and 1996                       F-2

Financial Statements

   Balance Sheets - March 31, 1998 and 1997                                F-3

   Statements of Operations - Years ended
     March 31, 1998, 1997, and 1996                                        F-4

   Statements of Changes in Partners' Equity (Deficiency) -
     Years ended March 31, 1998, 1997, and 1996                            F-5

   Statements of Cash Flows - Years ended
     March 31, 1998, 1997, and 1996                                        F-6

   Notes to Financial Statements                                           F-7

Financial Statement Schedule

   Schedule III - Real Estate and Accumulated
     Depreciation                                                          F-16


      Other  schedules  have been omitted as they are either not required or the
      information required to be presented therein is available elsewhere in the
      financial statements and the accompanying notes and schedules.




<PAGE>


           BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP



                                      


                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners
Boston Financial Tax Credit Fund VII, A Limited Partnership:


We have audited the  accompanying  balance sheets of Boston Financial Tax Credit
Fund VII, A Limited  Partnership  ("the Fund") as of March 31, 1998 and 1997 and
the related statements of operations,  changes in partners' equity  (deficiency)
and cash flows and the financial statement schedule listed in Item 14(a) of this
Report on Form 10-K, for each of the three years in the period ended March 31, 
1998.  These financial statements and the financial statement schedule are the 
responsibility of the Fund's  management.  Our responsibility is to express an 
opinion on these financial  statements and the financial  statement schedule 
based on our audits. As of March 31, 1998 and 1997, 85% and 86%,  respectively, 
of total assets, and for the years ended March 31, 1998,  1997 and 1996, 100% of
the equity in losses of Local  Limited  Partnerships, reflected in the financial
statements of the Fund, relate to Local Limited  Partnerships for which we did 
not audit the financial statements.   The financial statements of these Local  
Limited Partnerships were audited by other auditors whose reports have been 
furnished to us, and our opinion, insofar as it relates to those investments in 
Local Limited Partnerships, is based solely on the reports of other auditors.

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

In our  opinion,  based on our audits and the  reports  of other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position  of Boston  Financial  Tax  Credit  Fund VII, A Limited
Partnership,  as of March 31, 1998 and 1997,  and the results of its  operations
and its cash flows for each of the three years in the period ended March 31,
1998, in conformity with generally accepted accounting  principles. In addition,
in our opinion,  the financial statement schedule referred to above, when 
considered in relation to the basic financial statements taken as a whole, 
presents fairly, in all material respects, the information required to be 
included therein.




Coopers & Lybrand L.L.P.
Boston, Massachusetts
June 11, 1998


<PAGE>
          BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

<TABLE>
<CAPTION>


                                       
                                 BALANCE SHEETS

                             March 31, 1998 and 1997


                                                                          1998                  1997
                                                                      ------------        ----------
<S>                                                                   <C>                   <C>  
         
Cash and cash equivalents                                             $    375,168          $    373,729
Marketable securities, at fair value  (Note 3)                           3,106,645             3,240,944
Restricted cash (Note 4)                                                   252,555               239,155
Investments in Local Limited Partnerships (Note 4)                      28,387,876            31,792,098
Organization costs, net of accumulated
   amortization of  $50,000 in 1998 and
   $40,833 in 1997 (Note 2)                                                      -                 9,167
Other assets                                                                36,064                39,556
                                                                      ------------        --------------
          Total Assets                                                $32,158,308          $  35,694,649
                                                                      ============      ================


Liabilities and Partners' Equity
Accounts payable to affiliates (Notes 4 and 5)                        $    309,172          $    304,382
Accounts payable and accrued expenses                                       63,932                34,940
                                                                      ------------          ------------
          Total Liabilities                                                373,104               339,322
                                                                      ------------          ------------

Commitments (Note 6)

General, Initial and Investor Limited Partners' Equity                  31,779,079            35,405,419
Net unrealized gains (losses) on marketable securities                       6,125               (50,092)
                                                                      ------------          ------------
          Total Partners' Equity                                        31,785,204            35,355,327
                                                                      ------------          ------------
          Total Liabilities and Partners' Equity                      $ 32,158,308          $ 35,694,649
                                                                      ============          ============
</TABLE>

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

<PAGE>
          BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
<TABLE>
<CAPTION>


                            STATEMENTS OF OPERATIONS

                For the Years Ended March 31, 1998, 1997 and 1996


                                                                1998             1997             1996
                                                            ------------    ------------      --------
<S>                                                         <C>             <C>               <C>

Revenue:
     Investment (Note 3)                                    $    202,202    $    223,158      $    219,674
     Other                                                        51,983         177,191            37,486
                                                            ------------    ------------      ------------
Total Revenue                                                    254,185         400,349           257,160
                                                            ------------    ------------      ------------

Expenses:
     General and administrative expenses (includes
       reimbursements to an affiliate in the amounts of
       $108,845, $115,310 and $123,712 in 1998,
       1997 and 1996, respectively (Note 5))                     227,685         240,204           245,641
     Asset management fees, related party (Note 5)               286,044         277,575           270,264
     Amortization                                                 41,302          45,831            40,752
                                                            ------------    ------------      ------------
        Total Expenses                                           555,031         563,610           556,657
                                                            ------------    ------------      ------------

Loss before equity in losses of
   Local Limited Partnerships                                   (300,846)       (163,261)         (299,497)

Equity in losses of
   Local Limited Partnerships (Note 4)                        (3,325,494)     (2,967,826)       (2,570,732)
                                                            ------------    ------------      ------------

Net Loss                                                    $ (3,626,340)   $(3,131,087)      $ (2,870,229)
                                                            ============    ===========       =============

Net Loss allocated:
     To General Partners                                    $    (36,263)   $    (31,311)     $    (28,702)
     To Limited Partners                                      (3,590,077)     (3,099,776)       (2,841,527)
                                                            ------------    ------------      ------------
                                                            $ (3,626,340)   $ (3,131,087)     $ (2,870,229)
                                                            ============    ============      ============

Net Loss per Limited Partnership Unit
     (50,930 Units)                                         $    (70.49)    $     (60.86)     $     (55.79)
                                                            ===========     ============      ============
</TABLE>

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


<PAGE>
          BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
<TABLE>
<CAPTION>


             STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)

                For the Years Ended March 31, 1998, 1997 and 1996

                                                                                     Net
                                                    Initial       Investor       Unrealized
                                    General         Limited        Limited          Gains
                                    Partners       Partner        Partners        (Losses)         Total
<S>                                <C>             <C>          <C>              <C>           <C>  
               
Balance at March 31, 1995          $ (30,254)      $  5,000     $41,435,572      $(138,091)    $ 41,272,227

Less:
   Other issuance expenses                 -              -          (3,583)             -           (3,583)

Net change in net unrealized losses
   on marketable securities
   available for sale (Note 3)             -              -               -        117,210          117,210

Net Loss                              (28,702)            -      (2,841,527)             -       (2,870,229)
                                      -------      --------    ------------      ---------     ------------

Balance at March 31, 1996            (58,956)         5,000      38,590,462        (20,881)      38,515,625

Net change in net unrealized losses
   on marketable securities
   available for sale (Note 3)             -              -               -        (29,211)         (29,211)

Net Loss                             (31,311)             -      (3,099,776)             -       (3,131,087)
                                   ---------       --------    ------------      ---------     ------------

Balance at March 31, 1997            (90,267)         5,000      35,490,686        (50,092)      35,355,327

Net change in net unrealized losses
   on marketable securities
   available for sale (Note 3)             -              -               -         56,217           56,217

Net Loss                             (36,263)             -      (3,590,077)             -       (3,626,340)
                                   ---------       --------    ------------      ---------     ------------

Balance at March 31, 1998          $(126,530)      $  5,000    $ 31,900,609      $   6,125     $ 31,785,204
                                   =========       ========    ============      =========     ============

</TABLE>

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


<PAGE>
          BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
<TABLE>
<CAPTION>


                            STATEMENTS OF CASH FLOWS

                For the Years Ended March 31, 1998, 1997 and 1996

                                                             1998                1997            1996
                                                        --------------     --------------    --------
<S>                                                     <C>                <C>               <C>  

Cash flows from operating activities:
   Net Loss                                             $   (3,626,340)    $  (3,131,087)    $ (2,870,229)
   Adjustments to reconcile net loss
     to net cash used for operating activities:
   Equity in losses of Local Limited Partnerships            3,325,494         2,967,826        2,570,732
   Amortization                                                 41,302            45,831           40,752
   Loss on sale of marketable securities                         1,778             6,034           47,442
   Increase (decrease) in cash arising from
    changes in operating assets and liabilities:
     Restricted cash                                           (13,400)          (11,835)         (10,320)
     Other assets                                                3,492            (9,613)          97,910
     Accounts payable to affiliates                              4,790            91,407          (46,611)
     Accounts payable and accrued expenses                      28,992           (31,477)         (18,250)
                                                        --------------     -------------     ------------
Net cash used for operating activities                        (233,892)          (72,914)        (188,574)
                                                        --------------     -------------     ------------

Cash flows from investing activities:
   Purchases of marketable securities                       (2,295,469)       (1,194,741)      (9,964,941)
   Proceeds from sales and maturities
     of marketable securities                                2,484,207         1,773,894       11,867,431
   Investments in Local Limited Partnerships                   (99,191)         (663,227)      (2,907,333)
   Restricted cash                                                   -                 -         (217,000)
   Cash distributions received from Local
     Limited Partnerships                                      145,784           192,855           85,078
   Reimbursement of acquisition expenses                             -             3,017                -
   Payment of acquisition fees and expenses                          -                 -         (104,056)
                                                        --------------     -------------     ------------
Net cash provided by (used for) investing activities           235,331           111,798        (1,240,821)
                                                        --------------     -------------     -------------

Cash flows from financing activities:
   Payment of issuance expenses                                      -                 -           (4,364)
                                                        --------------     -------------     ------------
Net cash used for financing activities                               -                 -           (4,364)
                                                        --------------     -------------     ------------

Net increase (decrease) in cash and cash equivalents             1,439            38,884       (1,433,759)

Cash and cash equivalents, beginning of period                 373,729           334,845        1,768,604
                                                        --------------     -------------     ------------

Cash and cash equivalents, end of period                $      375,168     $     373,729     $    334,845
                                                        ==============     =============     ============
</TABLE>

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

<PAGE>
          BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP


                                      
                          NOTES TO FINANCIAL STATEMENTS

1.   Organization

Boston  Financial Tax Credit Fund VII, A Limited  Partnership  (the "Fund") is a
Massachusetts   limited  partnership   organized  to  invest  in  other  limited
partnerships  ("Local  Limited  Partnerships")  which own and operate  apartment
complexes  which are  eligible for low income  housing tax credits  which may be
applied against the federal income tax liability of an investor.

Arch Street VII, Inc., a Massachusetts  corporation ("Arch Street, Inc.") is the
Managing  General  Partner of the Fund. Arch Street VII Limited  Partnership,  a
Massachusetts  limited  partnership  ("Arch Street L.P.") whose general  partner
consists of Arch  Street,  Inc.,  is also a General  Partner.  Both the Managing
General  Partner and Arch Street L.P.  are  affiliates  of The Boston  Financial
Group  Limited  Partnership,   a  Massachusetts   limited  partnership  ("Boston
Financial"). An affiliate of the General Partners ("SLP Affiliate") is a special
limited  partner in each Local  Limited  Partnership  in which the Fund invests,
with the right to become a general  partner  under  certain  circumstances.  The
fiscal year of the Fund ends on March 31.

The Partnership  Agreement authorized the sale of up to 100,000 Units of limited
partnership interests ("Units") at $1,000 per Unit. Boston Financial Securities,
Inc., an affiliate of the General  Partners,  received  selling  commissions and
underwriting advisory fees which did not exceed 7.0% and 1.5%, respectively,  of
Gross Proceeds for Units sold by the entity as a soliciting  dealer. On November
30, 1993, the Fund held its final investor closing.  In total, the Fund received
$50,930,000 of capital contributions from investors admitted as Limited Partners
for 50,930 Units.

The Partnership Agreement provides that all cash available for distribution will
be allocated 99% to the Limited Partners and 1% to the General Partners. Sale or
refinancing proceeds generally will be distributed first to the Limited Partners
in an  amount  equal to their  adjusted  capital  contributions,  second  to the
General Partners in an amount equal to their capital contributions, third to the
General  Partners  (after payment of the 6% return as set forth in Section 4.2.3
of the  Partnership  Agreement,  and  of any  accrued  but  unpaid  Subordinated
Disposition  Fee, a fee equal to 1% of the sales price of a property  owned by a
Local Limited  Partnership)  in such amount as is necessary to cause the General
Partners to have received 5% of all  distributions to the Partners,  and lastly,
95% to the Limited Partners and 5% to the General Partners.

Profits and losses for tax  purposes  arising from  general  operations  and tax
credits  generally  will be allocated 99% to the Limited  Partners and 1% to the
General Partners.  However, as set forth in the Partnership  Agreement,  profits
and losses for tax purposes arising from a sale or refinancing generally will be
allocated  among the  Partners  in such  manner as is  necessary  to cause their
respective capital accounts to reflect the amount that would be distributable to
them in accordance with the priorities set forth in the preceding paragraph,  if
all of the Fund's assets were sold for their federal adjusted basis and the Fund
were then liquidated.

All distributions of cash available for distribution or distributions of sale or
refinancing proceeds, and all allocations of profits and losses for tax purposes
from normal  operations and from a sale or refinancing or of tax credits,  which
are  distributed or allocated to the General  Partners,  will be allocated 1% to
Arch Street, Inc. and 99% to Arch Street L.P.

Under the terms of the Partnership  Agreement,  the Fund initially designated 5%
of the Gross Proceeds from the sale of Units as a reserve for working capital of
the Fund and  contingencies  related to ownership of Local  Limited  Partnership
interests.  The Managing  General  Partner may increase or decrease such amounts
from time to time,  as it deems  appropriate.  At March 31,  1998,  the Managing
General Partner has designated approximately $2,478,000 of marketable securities
as such Reserve.




<PAGE>
          BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP


                    NOTES TO FINANCIAL STATEMENTS (Continued)

2.   Significant Accounting Policies

Basis of Presentation

The Fund accounts for its  investments in Local Limited  Partnerships  using the
equity method of accounting because the Fund does not have a majority control of
the major operating and financial policies of the Local Limited  Partnerships in
which it invests.  Under the equity  method,  the investment is carried at cost,
adjusted  for  the  Fund's  share  of  income  or  loss  of  the  Local  Limited
Partnerships,  for additional  investments and for cash  distributions  from the
Local  Limited  Partnerships.  Equity in  income  or loss of the  Local  Limited
Partnerships  is included  currently in the Fund's  operations.  The Fund has no
obligation  to fund  liabilities  of the Local Limited  Partnerships  beyond its
investment,  therefore,  a Local  Limited  Partnership  investment  will  not be
carried  below zero.  To the extent that  equity in losses are  incurred  when a
Local Limited  Partnership's  respective  investment balance has been reduced to
zero, losses will be suspended to be used against future income.

Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the Fund. These
fees and  expenses  are  included  in the Fund's  Investments  in Local  Limited
Partnerships  and will be amortized on a straight-line  basis over 35 years once
construction of the properties is completed.

The Fund  recognizes a decline in the carrying  value of its investment in Local
Limited  Partnerships  when there is evidence of a non-temporary  decline in the
recoverable amount of the investment.  There is a possibility that the estimates
relating to reserves for non-temporary declines in carrying value of investments
in Local Limited Partnerships may be subject to material near term adjustments.

The Fund, as a limited partner in the Local Limited Partnerships,  is subject to
risks inherent in the ownership of property  which are beyond its control,  such
as fluctuations in occupancy rates and operating expenses,  variations in rental
schedules,  proper maintenance and continued  eligibility of tax credits. If the
cost of  operating a property  exceeds the rental  income  earned  thereon,  the
Partnership  may deem it in its best  interest to  voluntarily  provide funds in
order to protect its investment.

The  General  Partners  have  decided  to report  results  of the Local  Limited
Partnerships on a 90 day lag basis because the Local Limited Partnerships report
their results on a calendar year basis.  Accordingly,  the financial information
about  the Local  Limited  Partnerships  that is  included  in the  accompanying
financial statements is as of December 31, 1997, 1996 and 1995.

Use of Estimates

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

Cash and Cash Equivalents

Cash and cash  equivalents  consist of short-term  money market  instruments  
with original  maturities of 90 days or less at acquisition and approximate fair
value.



<PAGE>
          BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP


                    NOTES TO FINANCIAL STATEMENTS (Continued)

2.   Significant Accounting Policies (continued)

Marketable Securities

The Fund's  investments  in securities  are  classified as "Available  for Sale"
securities and reported at fair value as reported by the brokerage firm at which
the securities  are held.  Realized gains or losses from the sales of securities
are based on the specific identification method. Unrealized gains and losses are
excluded from earnings and reported as a separate component of partners' equity.

Deferred Fees

Costs  incurred in connection  with the  organization  of the Fund,  amounting 
to $50,000,  were deferred and were amortized on a  straight-line  basis over 60
months.  As of March 31, 1998 these costs have been fully amortized.

Income Taxes

No provision  for income taxes has been made as the  liability for such taxes is
an obligation of the partners of the Fund.

Reclassifications

Certain amounts in the prior years' financial  statements have been reclassified
herein to conform to the current year presentation.

Effect of recently issued Accounting Standard

The Financial  Accounting Standards Board recently issued Statement of Financial
Accounting  Standards  No. 130,  Reporting  Comprehensive  Income.  The standard
requires that changes in comprehensive  income be shown in a financial statement
that is displayed with the same  prominence as other financial  statements.  The
standard is effective for fiscal years  beginning  after  December 15, 1997. The
Fund will adopt the new standard  beginning  in the first  quarter of the fiscal
year ending March 31, 1999, but it is not expected to have a significant  effect
on the Fund's financial position or results of operations.

<PAGE>
          BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP



                    NOTES TO FINANCIAL STATEMENTS (Continued)


3.   Marketable Securities

A summary of the marketable securities is as follows:
<TABLE>
<CAPTION>

                                                                 Gross           Gross
                                                              Unrealized     Unrealized
                                                  Cost           Gains          Losses       Fair Value
<S>                                            <C>               <C>          <C>            <C> 
                     
Debt securities issued by
   the US Treasury and other
   US government corporations
   and agencies                                $ 2,134,048       $  3,693     $   (2,328)    $2,135,413

Mortgage backed securities                         966,472          4,760              -        971,232
                                               -----------       --------     ----------     -----------

Marketable securities at
   March 31, 1998                              $ 3,100,520       $  8,453     $   (2,328)    $ 3,106,645
                                               ===========       ========     ==========     ===========

Debt securities issued by
   the US Treasury and other
   US government corporations
   and agencies                                $ 2,125,647       $    164     $  (19,591)    $ 2,106,220

Mortgage backed securities                       1,165,389              -        (30,665)      1,134,724
                                               -----------       --------     ----------     -----------

Marketable securities at
   March 31, 1997                              $ 3,291,036       $    164     $  (50,256)    $ 3,240,944
                                               ===========       ========     ==========     ===========
</TABLE>

The contractual maturities at March 31, 1998 are as follows:
                                                                     Fair
                                           Cost                      Value

Due in one year or less               $   933,845                $   933,147
Due in one to five years                1,200,203                  1,202,266
Mortgage backed securities                966,472                    971,232
                                       -----------                -----------
                                      $ 3,100,520                $ 3,106,645
                                      ===========                ===========

Actual maturities may differ from contractual  maturities because some borrowers
have the right to call or prepay obligations. Proceeds from sales and maturities
of  marketable   securities  were  approximately   $2,484,000,   $1,774,000  and
$11,867,000  for the years ended March 31,  1998,  1997 and 1996,  respectively.
Included in investment income are gross gains of $5,672,  $1,110 and $46,425 and
gross losses of $7,450,  $7,144 and $93,867  which were  realized on these sales
during the years ended March 31, 1998, 1997 and 1996, respectively.


4.   Investments in Local Limited Partnerships

The Fund has acquired interests in nineteen Local Limited Partnerships which own
and operate  multi-family  housing  complexes.  The Fund,  as  Investor  Limited
Partner,  pursuant to the various  Local  Limited  Partnership  Agreements,  has
generally  acquired a 99% interest,  with the exception of Springwood which is a
19.8%  interest,  in the  profits,  losses,  tax  credits  and cash  flows  from
operations of each of the Local Limited Partnerships. Upon dissolution, proceeds
will be distributed according to each respective partnership agreement.


<PAGE>
          BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP


                    NOTES TO FINANCIAL STATEMENTS (Continued)

4.  Investments in Local Limited Partnerships (continued)

The following is a summary of Investments in Local Limited Partnerships at March
31:
<TABLE>
<CAPTION>

                                                                                  1998                  1997
                                                                            --------------        ----------
<S>                                                                         <C>                    <C>  

Capital Contributions paid to Local Limited
   Partnerships and purchase price paid to
   withdrawing partners of Local Limited
   Partnerships                                                             $  39,289,152          $  39,189,961

Cumulative equity in losses of Local Limited Partnerships
   (excluding unrecognized losses of $138,300 in 1998)                        (11,591,548)            (8,266,054)

Cash distributions received from Local Limited Partnerships                      (438,787)              (293,003)
                                                                            -------------          -------------

Investments in Local Limited Partnerships before adjustments                   27,258,817             30,630,904

Excess of investment cost over the underlying net assets acquired:

   Acquisition fees and expenses                                                1,252,338              1,252,338

   Accumulated amortization of acquisition fees and expenses                     (123,279)               (91,144)
                                                                            -------------          -------------

Investments in Local Limited Partnerships                                   $  28,387,876          $  31,792,098
                                                                            =============          =============
</TABLE>

Summarized financial  information as of December 31, 1997, 1996 and 1995 (due to
the Fund's policy of reporting the  financial  information  of its Local Limited
Partnership  interests  on a 90 day lag  basis) of the  nineteen  Local  Limited
Partnerships in which the Fund was invested as of that date is as follows:

Summarized Balance Sheets - as of December 31,
<TABLE>
<CAPTION>

                                                     1997                1996                1995
                                                --------------    ----------------    -----------
<S>                                            <C>                <C>                 <C>

Assets:
   Investment property, net                    $    94,703,692    $     98,519,189    $   103,534,360
   Current assets                                    2,798,228           3,275,453          3,318,534
   Other assets                                      4,068,904           4,260,927          3,433,261
                                               ---------------    ----------------    ---------------
       Total Assets                            $   101,570,824    $    106,055,569    $   110,286,155
                                               ===============    ================    ===============

Liabilities and Partners' Equity:
   Current liabilities (includes current
     portion of long term debt)                $     4,083,692    $      3,554,946    $     3,181,041
   Long-term debt                                   58,686,199          59,302,789         59,422,079
   Other debt                                        2,876,908           3,475,208          5,152,338
                                               ---------------    ----------------    ---------------
       Total Liabilities                            65,646,799          66,332,943         67,755,458

Fund's Equity                                       27,000,331          30,144,694         32,391,978
Other Partners' Equity                               8,923,694           9,577,932         10,138,719
                                               ---------------    ----------------    ---------------
Total Liabilities and Partners' Equity         $   101,570,824    $    106,055,569    $   110,286,155
                                               ===============    ================    ===============
</TABLE>

<PAGE>
         BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (Continued)

4.   Investments in Local Limited Partnerships (continued)

Summarized Statements of Operations-
for the years ended December 31,
<TABLE>
<CAPTION>
                                                               1997                  1996                  1995
                                                           -------------         -------------         --------

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

Rental and other revenue                                   $  12,245,232         $  12,310,800         $ 11,088,736
                                                           -------------         -------------         ------------

Expenses:
   Operating                                                   6,745,745             6,189,975            5,393,417
   Interest                                                    5,030,571             5,112,085            4,730,658
   Depreciation and amortization                               4,282,140             4,404,662            3,979,209
                                                           -------------         -------------         ------------
       Total Expenses                                         16,058,456            15,706,722           14,103,284
                                                           -------------         -------------         ------------

Net loss                                                   $  (3,813,224)        $  (3,395,922)        $ (3,014,548)
                                                           =============         =============         ============

Fund's share of net loss                                   $  (3,463,794)        $  (2,967,826)        $ (2,570,732)
                                                           =============         =============         ============
Other Partners' share of net loss                          $    (349,430)        $    (428,096)        $   (443,816)
                                                           =============         =============         ============
</TABLE>

For the year ended  March 31,  1998,  the Fund has not  recognized  $138,300  of
equity in losses  relating to one Local  Limited  Partnership  where  cumulative
equity in losses and cumulative  distributions  exceeded its total investment in
this Local Limited Partnership.

The Fund's equity as reflected by the Local Limited  Partnerships of $27,000,331
differs  from the  Fund's  Investments  in  Local  Limited  Partnerships  before
adjustment of $27,258,817  principally because: a) capital contributions made by
the  Partnership  and held in escrow by the Local Limited  Partnerships  are not
currently  reflected in the equity of the Local Limited  Partnerships and b) the
Fund has not  recognized  $138,300  of equity  in  losses  of one Local  Limited
Partnership whose equity in losses exceeded its total investment.

The Fund has set aside in an escrow account future capital contributions related
to its  investment in one Local  Limited  Partnership.  Interest  earned on this
deposit is payable to the local  general  partner.  At March 31,  1998 and 1997,
$27,297 and $13,897,  respectively,  of interest is included in accounts payable
to an affiliate.

5.   Transactions with Affiliates

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
certain  fees to and  reimburse  expenses of the  Managing  General  Partner and
others in connection  with the  organization of the Fund and the offering of its
Limited  Partnership  Units.  As  of  March  31,  1998,  commissions,  fees  and
accountable  expenses related to the sale of the Units totaling  $6,304,898 have
been charged  directly to Limited  Partners'  equity.  In connection  therewith,
$4,329,050 of selling expenses and $1,975,848 of offering  expenses  incurred on
behalf  of the Fund  have  been paid to an  affiliate  of the  Managing  General
Partner.  The Fund is required to pay a  non-accountable  expense  allowance for
marketing expense equal to a maximum of 1% of Gross Proceeds; this allowance has
not yet been  charged to the Fund.  In  addition,  the Fund has paid  $50,000 in
organization  costs to an affiliate of the Managing General  Partner.  This cost
has been included in the balance sheet. Total organization and offering expenses
exclusive of selling  commissions and underwriting  advisory fees did not exceed
5.5% of the Gross Proceeds and organizational  and offering expenses,  inclusive
of selling  commissions and underwriting  advisory fees, did not exceed 15.0% of
the Gross Proceeds.

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
acquisition fees to and reimburse  acquisition  expenses of the Managing General
Partner or its affiliates for selecting,  evaluating,  structuring,  negotiating
and closing the Fund's  investments in Local Limited  Partnerships.  Acquisition
fees totaled 6.0% of Gross Proceeds.  Acquisition expenses totaled 1.5% of Gross
Proceeds. Acquisition fees totaling $3,055,800 have been paid to an affiliate of
the  Managing  General  Partner  for the  closing  of the Fund's  Local  Limited
Partnership Investments.


<PAGE>
         BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP


                    NOTES TO FINANCIAL STATEMENTS (Continued)

5.  Transactions with Affiliates (continued)

Approximately  $2,567,000 of these fees are classified as capital  contributions
to Local Limited Partnerships in Note 4 to the Financial Statements. Acquisition
expenses  totaling $763,950 have been reimbursed to an affiliate of the Managing
General Partner.

An affiliate of the Managing  General Partner  receives the base amount of .571%
(as  adjusted  by the  CPI  factor)  of  Gross  Proceeds  annually  as an  Asset
Management Fee for  administering the affairs of the Fund. Asset Management Fees
of $286,044,  $277,575 and $270,264 have been included in expenses for the years
ended March 31, 1998, 1997, and 1996 respectively.  Included in accounts payable
to affiliates is $266,198 and $264,542 for Asset  Management  Fees for March 31,
1998 and 1997, respectively.

An affiliate of the Managing  General  Partner is reimbursed for the actual cost
of the  Fund's  operating  expenses.  Included  in  general  and  administrative
expenses for the years ended March 31, 1998, 1997 and 1996 is $108,845, $115,310
and $123,712,  respectively, that the Fund has paid or accrued for reimbursement
for  salaries  and  benefits.  The amounts  payable for salaries and benefits at
March 31, 1998 and 1997 totaled $15,677 and $25,943, respectively.

Upon  construction  completion  in August of 1994,  Lansing  Management  Company
("LMC"),  an affiliate of the Managing  General  Partner,  became the management
agent for Twin Oaks Meadows. The management fee charged to the property is equal
to 5% of the property  gross  revenues.  Included in  operating  expenses of the
summarized income  statements in Note 4 to the Financial  Statements is $19,530,
$19,215 and $17,388 of property  management  fees at December 31, 1997, 1996 and
1995, respectively.

6.   Commitments

At March 31, 1998, the Fund has committed to make future  capital  contributions
and pay future  purchase price  installments on its investments in Local Limited
Partnerships.  These future  payments are  contingent  upon the  achievement  of
certain  criteria as set forth in the Local Limited  Partnership  Agreements and
total approximately  $658,000.  In addition, the Fund has set aside $217,000 for
future capital contributions to one Local Limited Partnership.


<PAGE>
         BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP


                    NOTES TO FINANCIAL STATEMENTS (Continued)

7.   Federal Income Taxes

A  reconciliation  of the loss  reported in the  Statements  of  Operations  for
the fiscal years ended March 31, 1998,  1997 and 1996 to the loss reported for
federal income tax purposes for the years ended December 31, 1997, 1996 and 1995
are as follows:
<TABLE>
<CAPTION>

                                                                   1998           1997             1996
                                                              ------------   ------------      --------

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

Net Loss per Statements of Operations                         $ (3,626,340)  $ (3,131,087)     $ (2,870,229)

   Adjustment to reflect March 31, fiscal year-end
     to December 31, tax year end                                  112,520       (121,888)           71,877

   Adjustment for equity in losses of Local Limited  
     Partnerships  for financial reporting purposes 
     over (under) equity in losses for tax purposes             (1,768,498)       839,370          (601,658)

   Adjustment for amortization for financial reporting
     purposes under amortization for tax purposes                  (13,405)        (9,709)           (2,016)

   Related party expenses not paid at December 31,
     not deductible for tax purposes                               193,445        262,410           199,758

   Related party expenses paid in current year
     but expensed for financial reporting purposes
     in prior year                                                (262,410)      (199,758)         (156,174)

   Income not recognized for financial
     reporting purposes                                                  -              -              (610)
                                                              ------------   ------------      ------------

Net Loss for federal income tax purposes                      $ (5,364,688)   $(2,360,662)     $(3,359,052)
                                                              ============   ============      ===========
</TABLE>

The differences of the assets and liabilities of the Fund for financial 
reporting purposes and tax reporting purposes as of  March 31, 1998 are as 
follows:
<TABLE>
<CAPTION>

                                                      Financial                  Tax
                                                      Reporting               Reporting
                                                      Purposes                Purposes          Differences

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

Investments in Local Limited Partnerships          $  28,387,876           $  26,329,967       $   2,057,903
                                                   =============           =============       =============
Other assets                                       $   3,770,432           $  10,039,583       $  (6,269,151)
                                                   =============           =============       =============
Liabilities                                        $     373,104           $      78,560       $     294,544
                                                   =============           =============       =============
</TABLE>

The  differences in assets and  liabilities of the Fund for financial  reporting
purposes are primarily  attributable to: (i) the cumulative  equity in loss from
Local  Limited   Partnerships  for  tax  reporting   purposes  is  approximately
$2,044,000   greater   than  for   financial   reporting   purposes,   including
approximately  $138,000  of losses the Fund has not  recognized  relating to one
Local Limited  Partnership  whose cumulative equity in losses exceeded its total
investment;  (ii) the  amortization of acquisition  fees for tax return purposes
exceeds   financial   reporting   purposes  by  approximately   $24,000;   (iii)
approximately  $10,000  of  cash  distributions   received  from  Local  Limited
Partnerships  during the quarter  ended  March 31, 1998 are not  included in the
Fund's  Investments  in Local Limited  Partnerships  for tax return  purposes at
December 31, 1997; (iv) organizational and offering costs of approximately

<PAGE>
         BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP


                    NOTES TO FINANCIAL STATEMENTS (Continued)


7.   Federal Income Taxes (continued)

$6,305,000 that have been capitalized for tax reporting  purposes are charged to
Limited Partners' equity for financial  reporting purposes and (v) related party
expenses which are deductible for financial  reporting purposes of approximately
$67,000 are not deductible for tax reporting purposes.

The differences of the assets and liabilities of the Fund for financial 
reporting purposes and tax  purposes as of March 31, 1997 are as follows:
<TABLE>
<CAPTION>


                                                      Financial                  Tax
                                                      Reporting               Reporting
                                                      Purposes                Purposes          Differences

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

Investments in Local Limited Partnerships          $  31,792,098           $  31,561,199       $     230,899
                                                   =============           =============       =============
Other Assets                                       $   3,902,551           $  10,145,981       $  (6,243,430)
                                                   =============           =============       =============
Liabilities                                        $     339,322           $      60,823       $     278,499
                                                   =============           =============       =============
</TABLE>


The  difference in assets and  liabilities  of the Fund for financial  reporting
purposes are primary  attributable  to: (i) the  cumulative  equity in loss from
Local Limited Partnerships for tax reporting purposes is approximately  $210,000
greater  than  for  financial  reporting  purposes;  (ii)  the  amortization  of
acquisition fees for tax return purposes exceeds financial reporting purposes by
approximately   $11,000;  (iii)  approximately  $66,000  of  cash  distributions
received from Local Limited Partnerships during the quarter ended March 31, 1997
are not included in the Fund's Investments in Local Limited Partnerships for tax
return purposes at December 31, 1996; (iv)  organizational and offering costs if
approximately  $6,305,000 that have been capitalized for tax reporting  purposes
are charged to Limited Partners' equity for financial reporting purposes and (v)
related party expenses which are deductible for financial  reporting purposes of
approximately $65,000, but which are not deductible for tax reporting purposes.


<PAGE>
<TABLE>
<CAPTION>
                                                      COST OF INTEREST AT ACQU'N DATE                          GROSS AMOUNT
                                                                                                                 AT WHICH
                                                                                                                CARRIED AT
                                                                                                               DECEMBER 31,
                                                                                                                   1997
                                                      ------------------------------------                    ---------------
                                                                                           NET IMPROVEMENTS
                              NUMBER       TOTAL                          BUILDINGS /         CAPITALIZED
                                OF        ENCUM-                         IMPROVEMENTS        SUBSEQUENT TO
DESCRIPTION                   UNITS      BRANCES *         LAND           & EQUIPMENT         ACQUISITION          LAND
-----------                   -----      ---------         ----           -----------         -----------          ----

Low and Moderate
   Income Apartment
Complexes
<S>                               <C>      <C>               <C>               <C>                 <C>             <C>
Oak Ridge Apartments              152      $4,119,060        $727,440          $  583,725          $5,703,137      $ 727,440
  Macon, GA
Santa Fe Oaks Phase II            129       3,725,839         382,394             642,179           5,982,140        382,394
  Gainesville, FL
Andrew's Pointe                    57       2,344,035          95,000           3,430,523              64,506         98,994
  Burnsville, MN
Palo Verde II                      60       1,096,357         148,858           2,537,261              11,579        148,858
  Henderson, NY
Woods Lane                        156       3,354,692         312,000           5,817,580              39,600        312,000
  Rogers, AR
Crafton Place                      84       1,677,356         126,001           3,083,929               1,600        126,001
  Fayetteville, AR
Guardian Place                    120       2,975,651         677,786           1,838,034           2,972,628        677,786
  Richmond, VA
Twin Oaks Meadows                  63       1,915,540               0             720,394           2,529,371        307,264
  Lansing, MI
Sunrise Terrace                    52       1,184,337         149,959           2,719,607                   0        149,959
  Madera,CA
Wynmor                            324       5,838,452         324,000           6,553,123           9,134,399      1,247,952
  Brooklyn Park, MN
Citrus Glen                       176       5,442,788         500,000             759,632           9,226,242             10
  Orlando, FL
St. Andrews Pointe                150       4,668,512         491,634           7,349,439             790,926        491,634
  Columbia, SC
Des Moines Street Village          42       1,721,515         300,000           2,223,447             499,047        303,451
  Des Moines, IA
Fountain Lakes                    180       4,218,066         357,800           4,057,935           2,901,615        357,800
  Benton, AR
Fairhaven Manor                    40         948,248         176,182           2,043,351               3,271        176,182
  Burlington, WA
Grand Boulevard                    30       1,906,598          25,580           1,570,044           1,346,267         31,580
  Chicago, IL
Los Claveles II                   180       6,553,050         335,000           6,842,254             142,725        335,000
  Trujilio Alto, PR
Harford Commons                    30       1,736,092          28,000           2,680,017              31,702         28,000
  Baltimore, MD
Springwood (2)                    113       3,931,815         296,280           2,937,028           4,248,155        296,280
  Tallahassee, FL


                             ------------------------------------------------------------------------------------------------

               Totals           2,138     $59,358,003      $5,453,914         $58,389,502         $45,628,910     $6,198,585
                             ================================================================================================

</TABLE>

<PAGE>


<TABLE>
<CAPTION>

                                                                                              LIFE ON
                                                                                               WHICH
                                  BUILDINGS                                                 DEPRECIATION
                                     AND                         ACCUMULATED      DATE      IS COMPUTED        DATE
DESCRIPTION                     IMPROVEMENTS        TOTAL       DEPRECIATION     BUILT        (YEARS)        ACQUIRED
-----------                     ------------        -----       ------------     -----        -------        --------

Low and Moderate
   Income Apartment Complexes
<S>                                  <C>            <C>             <C>           <C>         <C>            <C>
Oak Ridge Apartments                 $6,286,862     $7,014,302      $1,152,443    8/93        10 & 30        12/31/92
  Macon, GA
Santa Fe Oaks Phase II                6,624,319      7,006,713       1,185,252    5/93        10 & 30        12/31/92
  Gainesville, FL
Andrew's Pointe                       3,491,035      3,590,029         548,897   12/93        7 & 27.5       04/13/92
  Burnsville, MN
Palo Verde II                         2,548,840      2,697,698         386,544   10/93        5 - 27.5       05/19/93
  Henderson, NY
Woods Lane                            5,857,180      6,169,180         980,845    7/93        7 & 27.5       07/30/93
  Rogers, AR
Crafton Place                         3,085,529      3,211,530         527,565    7/93        7 & 27.5       07/30/93
  Fayetteville, AR
Guardian Place                        4,810,662      5,488,448         567,786    8/94         5 - 40        10/07/93
  Richmond, VA
Twin Oaks Meadows                     2,942,501      3,249,765         538,618    8/94      useful lives     10/29/93
  Lansing, MI
Sunrise Terrace                       2,719,607      2,869,566         414,117   11/93      useful lives     11/24/93
  Madera,CA
Wynmor                               14,763,570     16,011,522       2,135,141    9/94      7, 15, & 30      12/22/93
  Brooklyn Park, MN
Citrus Glen                          10,485,864     10,485,874       1,427,962    9/94        5 - 27.5       12/30/93
  Orlando, FL
St. Andrews Pointe                    8,140,365      8,631,999       1,041,907    8/94        10 & 30        01/05/94
  Columbia, SC
Des Moines Street Village             2,719,043      3,022,494         219,779    4/95      useful lives     01/31/94
  Des Moines, IA
Fountain Lakes                        6,959,550      7,317,350       1,066,159    1/94        7 - 27.5       02/02/94
  Benton, AR
Fairhaven Manor                       2,046,622      2,222,804         236,669    2/94       5 - 7 & 40      03/08/94
  Burlington, WA
Grand Boulevard                       2,910,311      2,941,891         250,743    7/95      useful lives     08/03/94
  Chicago, IL
Los Claveles II                       6,984,979      7,319,979         708,901    8/94         8 & 40        08/31/94
  Trujilio Alto, PR
Harford Commons                       2,711,719      2,739,719         193,100   12/95      useful lives     2/28/95
  Baltimore, MD
Springwood (2)                        7,185,183      7,481,463       1,186,206    8/95      useful lives     12/31/94
  Tallahassee, FL


                              -------------------------------------------------

               Totals              $103,273,741   $109,472,326     $14,768,634
                              =================================================

</TABLE>

<PAGE>



(1) Total  aggregate  cost for  Federal  Income Tax  purposes  is  approximately
$110,460,000.

(2)   Boston  Financial  Tax Credit  Fund VII has a 20%  ownership  interest  in
      Springwood Apartments, A Limited
Partnership.


                    * Mortgage notes payable  generally  represent  non-recourse
                      financing  of  low-income  housing  projects  payable with
                      terms of up to 40 years  with  interest  payable  at rates
                      ranging  from  6.25% to  10.5%.  The  Fund  has not
                      guaranteed any of these mortgage notes payable.


<PAGE>




Summary of property owned and accumulated depreciation:

Property Owned December 31, 1997
-------------------------------------------------------------------------------
Balance at beginning of period                                     $109,243,229 
   Additions during period:

     Acquisitions                                        175,171
     Improvements etc.                                    53,926
                                                -----------------
                                                                        229,097
  Deductions during period:
Disposition of real estate                                     0
                                                -----------------
                                                                              0
                                                              ------------------
Balance at close of period                                         $109,472,326
                                                              ==================



Property Owned December 31, 1996
--------------------------------------------------------------------------------
Balance at beginning of period                                     $110,075,465 
  Additions during period:

     Acquisitions                                              0
     Improvements etc.                                   155,579
                                                -----------------
                                                                        155,579
  Deductions during period:
  Reduction of building due to developer
     fee write off                                     (987,430)
  Disposition of real estate                               (385)
                                                -----------------
                                                                       (987,815)
                                                              ------------------
Balance at close of period                                         $109,243,229
                                                              ==================



Property Owned December 31, 1995
--------------------------------------------------------------------------------
Balance at beginning of period                                     $100,659,642 
  Additions during period:

     Acquisitions                                      8,778,830
     Improvements etc.                                 1,937,926
                                                -----------------
                                                                     10,716,756
  Deductions during period
Disposition of real estate                           (1,300,933)
                                                -----------------
                                                                     (1,300,933)
                                                              ------------------
Balance at close of period                                          $110,075,465
                                                              ==================


<PAGE>





Accumulated Depreciation December 31, 1997
-----------------------------------------------------------
Balance at beginning of period                 $10,724,040 
  Additions during period:
     Depreciation                                4,044,594
                                             --------------
Balance at close of period                     $14,768,634
                                             ==============
Accumulated Depreciation December 31, 1996
-----------------------------------------------------------
Balance at beginning of period                 $ 6,540,475 
   Additions during period:
     Depreciation                                4,183,565
                                             --------------
Balance at close of period                     $10,724,040
                                             ==============

Accumulated Depreciation December 31, 1995
-----------------------------------------------------------
Balance at beginning of period                 $ 2,742,246 
Additions during period:
     Depreciation                                3,798,229
                                             --------------
Balance at close of period                     $ 6,540,475
                                             ==============
<PAGE>
       BOSTON FINANCIAL TAX CREDIT FUND VII
              (A Limited Partnership)

             Annual Report on form 10-K
           For The Year Ended March 31, 1998
            Reports of Independent Auditors

<PAGE>


 [Letterhead]

[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA

           Independent Auditors Report

The Partners
Springwood Apartments,
A Limited Partnership:


We have audited the  accompanying  balance  sheets of Springwood  Apartments,  A
Limited Partnership as of December 31, 1997 and 1996, and the related statements
of loss,  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
misstatements. 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 statements 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  Springwood  Apartments,  A
Limited  Partnership  as of  December  31,  1997 and 1996 and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
February 16, 1998





<PAGE>


 [Letterhead]

[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA

           Independent Auditors Report

The Partners
Springwood Apartments,
A Limited Partnership:


We have audited the  accompanying  balance  sheets of Springwood  Apartments,  A
Limited Partnership as of December 31, 1996 and 1995, and the related statements
of loss, partners' capital, and cash flows for the year ended December 31, 1995.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  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
misstatements. 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 statements 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  Springwood  Apartments,  A
Limited  Partnership  as of  December  31,  1996 and 1995 and the results of its
operations and its cash flows for the year ended December 31, 1996 in conformity
with generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
February 7, 1997


<PAGE>
[Letterhead]

[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA

           Independent Auditors Report

The Partners
Springwood Apartments,
A Limited Partnership:


We have audited the  accompanying  balance  sheets of Springwood  Apartments,  A
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of loss, partners' capital, and cash flows for the year ended December 31, 1995.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  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
misstatements. 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 statements 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  Springwood  Apartments,  A
Limited  Partnership  as of  December  31,  1995 and 1994 and the results of its
operations and its cash flows for the year ended December 31, 1995 in conformity
with generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
February 16, 1996

<PAGE>

[Letterhead]

[LOGO]
Reznick Fedder & Silverman

To the Partners
BHP/Harford Commons Limited Partnership
Baltimore, Maryland

INDEPENDENT AUDITOR'S REPORT


We have audited the  accompanying  balance sheet of BHP/Harford  Commons Limited
Partnership  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  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 statements 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 BHP/Harford  Commons Limited
Partnership as of 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 made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The supplemental  information on pages 20
through  32 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic  financial  statements Such  information,  except for
that  portion  marked  "unaudited",  on which we  express no  opinion,  has been
subjected to the audit  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 Guide for
Audits of HUD Programs,  we have also issued  reports dated February 5, 1998, on
our consideration of BHP/Harford Commons Limited Partnership's  internal control
structure and on its  compliance  with specific  requirements  applicable to CDA
programs, fair housing and nondiscrimination, laws and regulations applicable to
the financial statements.

/s/Reznick Fedder & Silverman
Federal Employer
Identification Number:
52-1088612

Baltimore, Maryland
February 5, 1998

Audit Principal: William T. Riley, Jr.
<PAGE>
[Letterhead]

[LOGO]
Reznick Fedder & Silverman

To the Partners
BHP/Harford Commons Limited Partnership
Baltimore, Maryland

INDEPENDENT AUDITOR'S REPORT

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

We conducted our audit in accordance with generally  accepted auditing standards
and  Government  Auditing  Standards,  issued by the  Comptroller  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 statements 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 BHP/Harford  Commons Limited
Partnership as of December 31, 1996, and the results of its operations,  changes
in partners'  equity and its cash flows for the year then ended,  in  conformity
with generally accepted accounting principles.

    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  31 is  presented  for  purposes  of  additional  analysis  and is not a
required part of the basic  financial  statements Such  information,  except for
that  portion  marked  "unaudited",  on which we  express no  opinion,  has been
subjected to the audit  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 Guide for
Audits of HUD Programs,  we have also issued reports dated February 28, 1997, on
our consideration of BHP/Harford Commons Limited Partnership's  internal control
structure and on its  compliance  with specific  requirements  applicable to CDA
programs,  affirmative fair housing, and laws and regulations  applicable to the
financial statements.

/s/Reznick Fedder & Silverman
Federal Employer
Identification Number:
52-1088612

Baltimore, Maryland
February 28, 1997

Audit Principal: William T. Riley, Jr.
<PAGE>
[Letterhead]

[LOGO]
WOLPOFF & COMPANY, LLP



To the Partners
BHP/Harford Commons Limited Partnership
Baltimore, Maryland

INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS


We have audited the  accompanying  balance sheet of BHP/Harford  Commons Limited
Partnership  (a  development  stage  company) as of December 31,  1995,  and the
related  statements  of partners'  capital and cash flows from  February 1, 1995
(inception)  through  December  31, 1995.  These  financial  statements  are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our 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
misstatements. 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 statements 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 BHP/Harford  Commons Limited
Partnership (a development  stage company) as of December 31, 1995, and its cash
flows from February 1, 1995 (inception) through December 31, 1995, in conformity
with generally accepted accounting principles.

/s/ Walpoff & Company, LLP
WOLPOFF & COMPANY, LLP
Baltimore, Maryland
March 29, 1996
<PAGE>


<PAGE>


[Letterhead]

[LOGO]
KEVANE, PETERSON SOTO & PASARELL

INDEPENDENT AUDITORS' REPORT

To the Partners of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP            HUD Field Office Director
San Juan, Puerto Rico                             San Juan, Puerto Rico


    We have audited the  accompanying  statements  of financial  position of LOS
CLAVELES,  S.E. LIMITED PARTNERSHIP,  FHA Project No. RQ-46-E-005-019 (a Limited
Partnership)  as of December 31, 1997 and 1996,  and the related  statements  of
loss, changes in partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our 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 audits  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 CLAVELES,  S.E. Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations,
changes  in  partners'  equity and its cash  flows for the year then  ended,  in
conformity with generally accepted accounting principles.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial  statements taken as a whole.  The supplemental  data included in this
report  (shown  as  Exhibits  A  though  H) are  presented  for the  purpose  of
additional  analysis  and  are  not a  required  part  of  the  basic  financial
statements  of  HUD  Project  No.  RQ46-E-005-019.  Such  information  has  been
subjected to the auditing procedures applied in the audit of the basic financial
statements,  and in our opinion,  is fairly  stated in all material  respects in
relation  to  the  basic  financial  statements  taken  as a  whole.  <PAGE>  In
accordance  with  Government  Auditing  Standards,  we have also issued a report
dated February 10,1998,  on our consideration of the projects'  internal control
structure and a report dated February 10, 1998, on its compliance  with laws and
regulations.

/s/ Kevane, Peterson, Soto & Pasarell
San Juan, Puerto Rico
February 10, 1998,

<PAGE>
[Letterhead]

[LOGO]
KEVANE, PETERSON SOTO & PASARELL


INDEPENDENT AUDITORS' REPORT

To the Partners of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP            HUD Field Office Director
San Juan, Puerto Rico                             San Juan, Puerto Rico


    We have audited the  accompanying  statements  of financial  position of LOS
CLAVELES,  S.E. LIMITED PARTNERSHIP,  FHA Project No. RQ-46-E-005-019 (a Limited
Partnership)  as of December 31, 1996 and 1995,  and the related  statements  of
loss, changes in partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our 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 audits  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 CLAVELES,  S.E. Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations,
changes  in  partners'  equity and its cash  flows for the year then  ended,  in
conformity with generally accepted accounting principles.

Our audit  were  conducted  for the  purpose  of forming an opinion on the basic
financial  statements taken as a whole.  The supplemental  data included in this
report  (shown  as  Exhibits  A  though  H) are  presented  for the  purpose  of
additional  analysis  and  are  not a  required  part  of  the  basic  financial
statements of HUD Project No. RQ46-E-005-19. Such information has been subjected
to  the  auditing  procedures  applied  in the  audit  of  the  basic  financial
statements,  and in our opinion,  is fairly  stated in all material  respects in
relation  to  the  basic  financial  statements  taken  as a  whole.  <PAGE>  In
accordance  with  Government  Auditing  Standards,  we have also issued a report
dated February 5,1997,  on our  consideration of the projects'  internal control
structure and a report dated February 5, 1997, on its  compliance  with laws and
regulations.

/s/ Kevane, Peterson, Soto & Pasarell
San Juan, Puerto Rico
February 5, 1997,
<PAGE>
[Letterhead]

[LOGO]
KEVANE, PETERSON SOTO & PASARELL


INDEPENDENT AUDITORS' REPORT

To the Partners of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP            HUD Field Office Director
San Juan, Puerto Rico                             San Juan, Puerto Rico


    We have audited the  accompanying  statements  of financial  position of LOS
CLAVELES,  S.E. LIMITED PARTNERSHIP,  FHA Project No. RQ-46-E-005-019 (a Limited
Partnership)  as of  December  31,  1995,  and the related  statements  of loss,
changes in  partners'  equity and cash  flows for the years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our 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 audits  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 CLAVELES,  S.E. Limited
Partnership as of December 31, 1995, and the results of its operations,  changes
in partners'  equity and its cash flows for the year then ended,  in  conformity
with generally accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole.  The supplemental  data included in this
report  (shown  as  Exhibits  A  though  H) are  presented  for the  purpose  of
additional  analysis  and  are  not a  required  part  of  the  basic  financial
statements of HUD Project No. RQ46-E-005-19. Such information has been subjected
to  the  auditing  procedures  applied  in the  audit  of  the  basic  financial
statements,  and in our opinion,  is fairly  stated in all material  respects in
relation  to  the  basic  financial  statements  taken  as a  whole.  <PAGE>  In
accordance  with  Government  Auditing  Standards,  we have also issued a report
dated February 9,1996,  on our  consideration of the projects'  internal control
structure and a report dated February 9, 1996, on its  compliance  with laws and
regulations.

/s/ Kevane, Peterson, Soto & Pasarell
San Juan,  Puerto Rico February 9, 1996, except for note 13 which is dated April
8, 1996.

<PAGE>

[Letterhead]

[LOGO]
Haran & Associates Ltd
Certified Public Accountants


INDEPENDENT AUDITORS' REPORT

To the Partners
GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP
Chicago, Illinois

We have audited the accompanying balance sheet of GRAND BOULEVARD  RENAISSANCE I
LIMITED  PARTNERSHIP,  (a Limited  Partnership) as of December 31, 1997, and the
related statements of profit and loss, changes in partners' equity and statement
of 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.
These 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 provided 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 GRAND BOULEVARD  RENAISSANCE I
LIMITED  PARTNERSHIP  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.

The  accompanying  supplementary  information  shown on Page 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 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/ Haran & Associates LTD

HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692

January 21, 1998
<PAGE>
 [Letterhead]

[LOGO]
Haran & Associates Ltd
Certified Public Accountants


INDEPENDENT AUDITORS' REPORT

To the Partners
GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP
Chicago, Illinois

We have audited the accompanying balance sheet of GRAND BOULEVARD  RENAISSANCE I
LIMITED  PARTNERSHIP,  (a Limited  Partnership) as of December 31, 1996, and the
related statements of profit and loss, changes in partners' equity and statement
of 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.
These 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 provided 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 GRAND BOULEVARD  RENAISSANCE I
LIMITED  PARTNERSHIP  as of December 31, 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

The  accompanying  supplementary  information  shown on Page 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 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/ Haran & Associates LTD

HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692

January 21, 1997
<PAGE>
[Letterhead]

[LOGO]
Haran & Associates Ltd
Certified Public Accountants


INDEPENDENT AUDITORS' REPORT

To the Partners
GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP
Chicago, Illinois

We have audited the accompanying balance sheet of GRAND BOULEVARD  RENAISSANCE I
LIMITED  PARTNERSHIP,  (a Limited  Partnership) as of December 31, 1995, and the
related statements of profit and loss, changes in partners' equity and statement
of 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.
These 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 provided 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 GRAND BOULEVARD  RENAISSANCE I
LIMITED  PARTNERSHIP  as of December 31, 1995, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

The  accompanying  supplementary  information  shown on Page 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 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/ Haran & Associates LTD

HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692

February 2, 1996


<PAGE>
[Letterhead]

[LOGO]
Hoekstra & Hoekstra
Certified Public Accountants


To the Partners of
Fairhaven Manor Limited Partnership


We have  audited the  accompanying  balance  sheet of  Fairhaven  Manor  Limited
Partnership  as of December  31,  1997,  and the related  statements  of income,
changes  in  partners'  equity  and cash  flows for the year then  ended.  These
financial  statements are the responsibility of the  Organization'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  Fairhaven  Manor  Limited
Partnership  as of December 31, 1997,  and the results of its operations 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 basic
financial statements taken as a whole. The schedule of supplementary information
on page 14 is presented for the purposes of additional  information and is not a
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/ Hoekstra & Hoekstra
Mount Vernon, Washington               Hoekstra & Hoekstra
February 6, 1998                             Certified Public Accountants

<PAGE>

[Letterhead]

[LOGO]
Hoekstra & Hoekstra
Certified Public Accountants


To the Partners of
Fairhaven Manor Limited Partnership


We have  audited the  accompanying  balance  sheet of  Fairhaven  Manor  Limited
Partnership  as of December  31,  1996,  and the related  statements  of income,
changes  in  partners'  equity  and cash  flows for the year then  ended.  These
financial  statements are the responsibility of the  Organization'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  Fairhaven  Manor  Limited
Partnership  as of December 31, 1996,  and the results of its operations 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 basic
financial statements taken as a whole. The schedule of supplementary information
on page 14 is presented for the purposes of additional  information and is not a
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/ Hoekstra & Hoekstra
Mount Vernon, Washington               Hoekstra & Hoekstra
February 2, 1997                             Certified Public Accountants


<PAGE>
[Letterhead]

[LOGO]
Hoekstra & Hoekstra
Certified Public Accountants


To the Partners of
Fairhaven Manor Limited Partnership


We have  audited the  accompanying  balance  sheet of  Fairhaven  Manor  Limited
Partnership  as of December  31,  1995,  and the related  statements  of income,
changes  in  partners'  equity  and cash  flows for the year then  ended.  These
financial  statements are the responsibility of the  Organization'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  Fairhaven  Manor  Limited
Partnership  as of December 31, 1995,  and the results of its operations 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 basic
financial statements taken as a whole. The schedule of supplementary information
on page 14 is presented for the purposes of additional  information and is not a
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/ Hoekstra & Hoekstra
Mount Vernon, Washington               Hoekstra & Hoekstra
February 1, 1996                             Certified Public Accountants

<PAGE>
 [Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
Fountain Lakes, A Limited Partnership

We have audited the  accompanying  balance  sheets of Fountain  Lakes, A Limited
Partnership,  as of December 31, 1997 and 1996,  and the related  statements  of
income,  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 audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  These 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 Fountain  Lakes,  A Limited
Partnership  as of December 31, 1997 and 1996, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information  presented
on page  11 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
January 26, 1998
<PAGE>
 [Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report


The Partners
Fountain Lakes, A Limited Partnership

We have audited the  accompanying  balance  sheets of Fountain  Lakes, A Limited
Partnership,  as of December 31, 1996 and 1995,  and the related  statements  of
income,  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 audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  These 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 Fountain  Lakes,  A Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information  presented
on page 11 is  presented  for the purpose of  additional  analysis  and is not a
required  part of the basic  financial  statements.  Such  information  has been
subjected to the auditing procedures applied in the audit of the basic financial
statements  and, in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 13, 1997

<PAGE>

[Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
Fountain Lakes, A Limited Partnership

We have audited the  accompanying  balance  sheets of Fountain  Lakes, A Limited
Partnership,  as of December 31,  1995,  and the related  statements  of income,
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 audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  These 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 Fountain  Lakes,  A Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information  presented
on page 11 is  presented  for the purpose of  additional  analysis  and is not a
required  part of the basic  financial  statements.  Such  information  has been
subjected to the auditing procedures applied in the audit of the basic financial
statements  and, in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 12, 1996

<PAGE>

 [Letterhead]

[LOGO]
VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT

To the Partners
Des Moines Street Associates, L.P.
Des Moines, Iowa

We have audited the accompanying balance sheets of Des Moines Street Associates,
L.P., (a limited partnership), as of December 31, 1997 and 1996, and the related
statements of  operations,  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 Des Moines Street Associates,
L.P.,  as of  December  31, 1997 and 1996,  and the  results of its  operations,
changes in its partners' capital and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/S/ Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
January 31, 1998
<PAGE>

 [Letterhead]

[LOGO]
VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT


To the Partners
Des Moines Street Associates, L.P.
Des Moines, Iowa


We have audited the accompanying balance sheets of Des Moines Street Associates,
L.P., (a limited partnership), as of December 31, 1996 and 1995, and the related
statements of  operations,  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 Des Moines Street Associates,
L.P.,  as of  December  31, 1996 and 1995,  and the  results of its  operations,
changes in its partners' capital and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/S/ Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa

January 31, 1997
<PAGE>
[Letterhead]

[LOGO]
VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT


To the Partners
Des Moines Street Associates, L.P.
Des Moines, Iowa


We have audited the accompanying balance sheets of Des Moines Street Associates,
L.P., (a limited partnership), as of December 31, 1995 and 1994, and the related
statements of  operations,  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 Des Moines Street Associates,
L.P.,  as of  December  31, 1995 and 1994,  and the  results of its  operations,
changes in its partners' capital and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/S/ Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
January 31, 1996

<PAGE>

[Letterhead]

[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA

Independent Auditor's Report

The Partners
St. Andrews Pointe Apartments,
A Limited Partnership:

We  have  audited  the  accompanying   balance  sheets  of  St.  Andrews  Pointe
Apartments,  A Limited  Partnership,  as of December 31, 1997 and 1996,  and the
related statements of loss,  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 St. Andrews Pointe Apartments,
A Limited  Partnership  as of December 31, 1997 and 1996, and the results of its
operations  and its cash  flows for the years then  ended,  in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

February 16, 1998

<PAGE>

[Letterhead]

[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA

Independent Auditor's Report

The Partners
St. Andrews Pointe Apartments,
A Limited Partnership:

We  have  audited  the  accompanying   balance  sheets  of  St.  Andrews  Pointe
Apartments,  A Limited  Partnership,  as of December 31, 1996 and 1995,  and the
related statements of loss,  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 St. Andrews Pointe Apartments,
A Limited  Partnership  as of December 31, 1996 and 1995, and the results of its
operations  and its cash  flows for the years then  ended,  in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

February 7, 1997
<PAGE>
[Letterhead]

[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA

Independent Auditor's Report

The Partners
St. Andrews Pointe Apartments,
A Limited Partnership:

We  have  audited  the  accompanying   balance  sheets  of  St.  Andrews  Pointe
Apartments,  A Limited  Partnership,  as of December 31, 1995 and 1994,  and the
related statements of loss,  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 St. Andrews Pointe Apartments,
A Limited  Partnership  as of December 31, 1995 and 1994, and the results of its
operations  and its cash  flows for the years then  ended,  in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
February 9, 1996

<PAGE>

[Letterhead]

[LOGO]
Deloitte & Touche LLP
Orlando, FL

INDEPENDENT AUDITORS' REPORT

To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:

We have audited the accompanying balance sheet of  Affordable/Citrus  Glen, Ltd.
(a Florida  Limited  Partnership)  as of  December  31,  1997,  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  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 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 Affordable/Citrus Glen, Ltd. (a
Florida  Limited  Partnership)  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.

/s/ Deloitte & Touche LLP
January 6, 1998
<PAGE>
[Letterhead]

[LOGO]
Deloitte & Touche LLP
Orlando, FL

INDEPENDENT AUDITORS' REPORT


To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:


We have audited the accompanying balance sheet of  Affordable/Citrus  Glen, Ltd.
(a Florida  Limited  Partnership)  as of  December  31,  1996,  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  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 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 Affordable/Citrus Glen, Ltd. (a
Florida  Limited  Partnership)  as of December 31, 1996,  and the results of its
operations  and its cash  flows  for the year then  ended,  in  conformity  with
generally accepted accounting principles.

/s/ Deloitte & Touche LLP
January 24, 1997

<PAGE>
 [Letterhead]

[LOGO]
Deloitte & Touche LLP
Orlando, FL

INDEPENDENT AUDITOR'S REPORT


To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:


We have audited the accompanying balance sheet of  Affordable/Citrus  Glen, Ltd.
(a Florida  Limited  Partnership)  as of  December  31,  1995,  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  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
misstatements. 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 statements 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 Affordable/Citrus Glen, Ltd. (a
Florida  Limited  Partnership)  as of December 31, 1995,  and the results of its
operations  and its cash  flows  for the year then  ended,  in  conformity  with
generally accepted accounting principles.

/s/ Deloitte & Touche LLP
February 2, 1996

<PAGE>

[Letterhead]

[LOGO]
MAHONEY
ULBRICH
CHRISTIANSEN
RUSS P.A.

To the Partners
Eden Park Limited Partnership
Saint Paul, Minnesota


INDEPENDENT AUDITOR'S REPORT


We have audited the accompanying balance sheets of Eden Park Limited Partnership
as of December  31, 1997 and 1996,  and the related  statements  of  operations,
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  also  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 Eden Park Limited  Partnership
as of December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted  accounting
principles.

/s/Mahoney Ulbrich
Christiansen Russ P.A.
Saint Paul, Minnesota
February 3, 1998

<PAGE>

[Letterhead]

[LOGO]
MAHONEY
ULBRICH
CHRISTIANSEN
RUSS P.A.

To the Partners
Eden Park Limited Partnership
Saint Paul, Minnesota


INDEPENDENT AUDITOR'S REPORT


We have audited the accompanying balance sheets of Eden Park Limited Partnership
as of December  31, 1996 and 1995,  and the related  statements  of  operations,
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  also  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 Eden Park Limited  Partnership
as of December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted  accounting
principles.

/s/Mahoney Ulbrich
Christiansen Russ P.A.

Saint Paul, Minnesota
January 24, 1997

<PAGE>

[Letterhead]

[LOGO]
MAHONEY
ULBRICH
CHRISTIANSEN
RUSS P.A.

To the Partners
Eden Park Limited Partnership
Saint Paul, Minnesota

INDEPENDENT AUDITOR'S REPORT


We have audited the accompanying balance sheets of Eden Park Limited Partnership
as of December  31, 1995 and 1994,  and the related  statements  of  operations,
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  also  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 Eden Park Limited  Partnership
as of December 31, 1995 and 1994, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted  accounting
principles.

/s/Mahoney Ulbrich
Christiansen Russ P.A.
Saint Paul, Minnesota
February 8, 1996

<PAGE>
[Letterhead]

[LOGO]
Reznick Fedder & Silverman
Boston, MA

To the Partners of
Madera Sunrise Terrace Limited Partnership

INDEPENDENT AUDITOR'S REPORT


We have  audited  the  accompanying  balance  sheets of Madera  Sunrise  Terrace
Limited  Partnership  as of December 31,  1997,  and the related  statements  of
operations, changes in partners' capital and cash flows for the year then ended.
The 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.  The  financial  statements  of Madera  Sunrise  Terrace  Limited
Partnership  for the year ended December 31, 1996 were audited by other auditors
whose report,  dated January 25, 1997 expressed an unqualified  opinion on those
statements

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 1997 financial statements referred to above present fairly,
in all material  respects,  the  financial  position of Madera  Sunrise  Terrace
Limited  Partnership  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.

/s/Reznick Fedder & Silverman
January 15, 1998

<PAGE>

[Letterhead]

[LOGO]
NOVOGRADAC
& COMPANY

To the Partners of
Madera Sunrise Terrace Limited Partnership


INDEPENDENT AUDITOR'S REPORT


We have  audited  the  accompanying  balance  sheets of Madera  Sunrise  Terrace
Limited Partnership as of December 31, 1996 and 1995, and the related statements
of  operations,  changes in partners'  capital and cash flows for the years then
ended.  These financial  statements are the  responsibility of  thePartnership'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 Madera Sunrise Terrace Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/Novogradac & Company LLP
Madera, CA
January 25, 1997

<PAGE>
[Letterhead]

[LOGO]
NOVOGRADAC
& COMPANY

To the Partners of
Madera Sunrise Terrace Limited Partnership

INDEPENDENT AUDITOR'S REPORT

We have  audited  the  accompanying  balance  sheets of Madera  Sunrise  Terrace
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of  operations,  changes in 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 Madera Sunrise Terrace Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/Novogradac & Company LLP
Madera, CA
January 29, 1996

<PAGE>

[Letterhead]

[LOGO]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
Southfield, Michigan

Independent Auditors Report
January 26, 1998

Partners
Twin Oaks Meadows Limited Dividend Housing
Association Limited Partnership


We have audited the  accompanying  balance  sheet of Twin Oaks  Meadows  Limited
Dividend Housing Association Limited  Partnership,  MSHDA Project No. 915, as of
December  31,  1997 and 1996,  and the  related  statements  of profit and loss,
partners'  equity  and cash  flows for the years  then  ended.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing standards
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 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 Twin Oaks  Meadows  Limited
Dividend  Housing  Association  Limited  Partnership as of December 31, 1997 and
1996,  and the results of its  operations  and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying  additional  information
on (pages 15 to 18) 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 audit of the basic financial
statements,  and in our opinion,  is fairly  stated in all material  respects in
relation to the basic financial statements taken as a whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 26,  1998,  on our  consideration  of Twin Oaks  Meadows  Limited
Dividend Housing  Association Limited  Partnership's  internal control structure
and  a  report  dated  January  26,  1998,  on  its  compliance  with  laws  and
regulations.

/s/Kirschner Hutton Perlin, P.C.

<PAGE>

[Letterhead]

[LOGO]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
Southfield, Michigan

Independent Auditors Report
January 30, 1997

Partners
Twin Oaks Meadows Limited Dividend Housing
Association Limited Partnership


We have audited the  accompanying  balance  sheet of Twin Oaks  Meadows  Limited
Dividend Housing Association Limited  Partnership,  MSHDA Project No. 915, as of
December  31,  1996 and 1995,  and the  related  statements  of profit and loss,
partners'  equity  and cash  flows for the years  then  ended.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing standards
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  misstatements.  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 Twin Oaks  Meadows  Limited
Dividend  Housing  Association  Limited  Partnership as of December 31, 1996 and
1995,  and the results of its  operations  and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 22,  1997,  on our  consideration  of Twin Oaks  Meadows  Limited
Dividend Housing  Association Limited  Partnership's  internal control structure
and  a  report  dated  January  22,  1997,  on  its  compliance  with  laws  and
regulations.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying  additional  information
on (pages 15 to 18) 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 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/Kirschner Hutton Perlin, P.C.
<PAGE>
[Letterhead]

[LOGO]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
Southfield, Michigan

Independent Auditors Report
January 30, 1996

Partners
Twin Oaks Meadows Limited Dividend Housing
Association Limited Partnership


We have audited the  accompanying  balance  sheet of Twin Oaks  Meadows  Limited
Dividend Housing Association Limited  Partnership,  MSHDA Project No. 915, as of
December  31,  1995 and 1994,  and the  related  statements  of profit and loss,
partners'  equity  and cash  flows for the years  then  ended.  These  financial
statements  are  the  responsibility  of  the  Organization'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
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 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 Twin Oaks  Meadows  Limited
Dividend  Housing  Association  Limited  Partnership as of December 31, 1995 and
1994,  and the results of its  operations  and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 30,  1996,  on our  consideration  of Twin Oaks  Meadows  Limited
Dividend Housing  Association Limited  Partnership's  internal control structure
and  a  report  dated  January  30,  1996,  on  its  compliance  with  laws  and
regulations.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying  additional  information
on (pages 14 to 17) 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 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/Kirschner Hutton Perlin, P.C.

<PAGE>


 [Letterhead]

[LOGO]
ERNST & YOUNG LLP

Report of Independent Auditors

The Partners
Guardian Place Limited Partnership


We have  audited  the  accompanying  balance  sheets of Guardian  Place  Limited
Partnership  as of December  31, 1997 and 1996,  and the related  statements  of
operations,  changes  in  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  Guardian  Place  Limited
Partnership  as of December 31, 1997 and 1996, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Ernst & Young LLP
Birmingham , Alabama
January 20, 1998

<PAGE>

 [Letterhead]

[LOGO]
ERNST & YOUNG LLP

Report of Independent Auditors

The Partners
Guardian Place Limited Partnership

We have  audited  the  accompanying  balance  sheets of Guardian  Place  Limited
Partnership  as of December  31, 1996 and 1995,  and the related  statements  of
operations,  changes  in  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  Guardian  Place  Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Ernst & Young LLP
Birmingham, Alabama
January 27, 1997

<PAGE>


 [Letterhead]

[LOGO]
ERNST & YOUNG LLP

Report of Independent Auditors

The Partners
Guardian Place Limited Partnership

We have  audited  the  accompanying  balance  sheets of Guardian  Place  Limited
Partnership  as of December  31, 1995 and 1994,  and the related  statements  of
operations,  changes  in  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  Guardian  Place  Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Ernst & Young LLP
Birmingham, Alabama
January 31, 1996

<PAGE>

 [Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
Woods Lane, A Limited Partnership

We have  audited  the  accompanying  balance  sheets  of Woods  Lane,  A Limited
Partnership,  as of December 31, 1997 and 1996,  and the related  statements  of
income,  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 audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  These 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  Woods  Lane,  A  Limited
Partnership  as of December 31, 1997 and 1996, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information on page 11
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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
January 28,  1998

<PAGE>

 [Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report


The Partners
Woods Lane, A Limited Partnership

We have  audited  the  accompanying  balance  sheets  of Woods  Lane,  A Limited
Partnership,  as of December 31, 1996 and 1995,  and the related  statements  of
income,  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 audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  These 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  Woods  Lane,  A  Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information on page 11
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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
January 27, 1997
<PAGE>
[Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report


The Partners
Woods Lane, A Limited Partnership

We have  audited  the  accompanying  balance  sheets  of Woods  Lane,  A Limited
Partnership,  as of December 31, 1995 and 1994,  and the related  statements  of
income,  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 audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  These 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  Woods  Lane,  A  Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary  information on page 11
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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
January 27, 1996

<PAGE>

[Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
Crafton Place, A Limited Partnership

We have audited the  accompanying  balance  sheets of Crafton  Place,  A Limited
Partnership,  as of December 31, 1997 and 1996,  and the related  statements  of
income,  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.  These 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 Crafton  Place,  A Limited
Partnership  as of December 31, 1997 and 1996, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary information presentedon
page 11 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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 21, 1998

<PAGE>

[Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
Crafton Place, A Limited Partnership

We have audited the  accompanying  balance  sheets of Crafton  Place,  A Limited
Partnership,  as of December 31, 1996 and 1995,  and the related  statements  of
income,  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.  These 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 Crafton  Place,  A Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary information presentedon
page 11 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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 5, 1997

<PAGE>

[Letterhead]

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
Crafton Place, A Limited Partnership

We have audited the  accompanying  balance  sheets of Crafton  Place,  A Limited
Partnership,  as of December 31, 1995 and 1994,  and the related  statements  of
income,  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.  These 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 Crafton  Place,  A Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplementary information presentedon
page 11 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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 10, 1996

<PAGE>

[Letterhead]

[LOGO]
Brotemarkle & Sadd
Glendale, CA
February 12,1998

Palo Verde II
A Nevada Limited Partnership
Bakersfield, California

We have  audited  the  accompanying  balance  sheet of Palo  Verde  II, A Nevada
Limited  Partnership  (Palo Verde II or the Partnership) as of December 31, 1997
and  1996,  and  the  related   statements  of  operations,   partners'  capital
(deficiency) 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 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 Palo Verde II as of December
31, 1997 and 1996,  and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.

/s/ Brotemarkle & Sadd
Glendale, CA

<PAGE>

[Letterhead]

[LOGO]
Brotemarkle & Sadd
Glendale, CA

February 19,1997

Palo Verde II
A Nevada Limited Partnership
Bakersfield, California


We have  audited  the  accompanying  balance  sheet of Palo  Verde  II, A Nevada
Limited  Partnership (Palo Verde II or the Partnership) as of December 31, 1996,
and the related statement of operations, partners' capital (deficiency) 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. The financial statements of Palo
Verde II as of December  31,1995,  were audited by other  auditors  whose report
dated February 8, 1996, expressed an unqualified opinion on those statements.

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 Palo Verde II as of December
31, 1996, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

/s/ Brotemarkle & Sadd
Glendale, CA

<PAGE>

[Letterhead]

[LOGO]
ERNST & YOUNG LLP

Report of Independent Auditors

To the Partners
Palo Verde II, A Nevada Limited Partnership


We have  audited  the  accompanying  balance  sheets of Palo  Verde II, A Nevada
Limited  Partnership  (Palo Verde II or the Partnership) as of December 31, 1995
and  1994,  and  the  related   statements  of  operations,   partners'  capital
(deficiency) 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
misstatements. 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 statements 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 Palo Verde II as of December
31, 1995 and 1994,  and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.

/s/Ernst & Young LLP
Glendale, CA
February 8, 1996

<PAGE>

[Letterhead]

[LOGO]
BERC
& FOX LIMITED
Certified Public Accountants

Independent Auditors' Report

To the Partners,
Andrew's Pointe Limited Partnership


We have  audited the  accompanying  balance  sheets of ANDREW'S  POINTE  LIMITED
PARTNERSHIP (a Minnesota Limited  Partnership) as of December 31, 1997 and 1996,
and the related  statements of operations,  partners'  equity and cash flows for
the years then ended.  These financial  statements are the responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Andrew's  Pointe  Limited
Partnership  as of December 31, 1997 and 1996, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Berc & Fox Limited
MINNEAPOLIS, MINNESOTA
February 2, 1998

<PAGE>

[Letterhead]

[LOGO]
BERC & FOX LIMITED
Certified Public Accountants

Independent Auditors' Report

To the Partners,
Andrew's Pointe Limited Partnership

We have  audited the  accompanying  balance  sheets of ANDREW'S  POINTE  LIMITED
PARTNERSHIP (a Minnesota Limited  Partnership) as of December 31, 1996 and 1995,
and the related  statements of operations,  partners'  equity and cash flows for
the years then ended.  These financial  statements are the responsibility of the
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 Andrew's  Pointe  Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Berc & Fox Limited
MINNEAPOLIS, MINNESOTA
January 23, 1997

<PAGE>

[Letterhead]

[LOGO]
BERC & FOX LIMITED
Certified Public Accountants

Independent Auditors' Report

To the Partners,
Andrew's Pointe Limited Partnership

We have  audited the  accompanying  balance  sheets of ANDREW'S  POINTE  LIMITED
PARTNERSHIP (a Minnesota Limited  Partnership) as of December 31, 1995 and 1994,
and the related  statements of operations,  partners'  equity and cash flows for
the years then ended.  These financial  statements are the responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Andrew's  Pointe  Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/Berc & Fox Limited
MINNEAPOLIS, MINNESOTA
February 8, 1996

<PAGE>
 [Letterhead]

[LOGO]
KPMG Peat Marwick LLP


Independent Auditors' Report

The Partners
Santa Fe Oaks Phase II, A Limited Partnership:


We have  audited the  accompanying  balance  sheets of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1997 and 1996, and the related statements
of loss,  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 Santa Fe Oaks Phase II, A
Limited  Partnership  as of December  31, 1997 and 1996,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/KPMG PEAT MARWICK LLP
Atlanta, GA
FEBRUARY 16, 1998

<PAGE>

 [Letterhead]

[LOGO]
KPMG Peat Marwick LLP

Independent Auditors' Report

The Partners
Santa Fe Oaks Phase II, A Limited Partnership:


We have  audited the  accompanying  balance  sheets of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1996 and 1995, and the related statements
of loss,  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 Santa Fe Oaks Phase II, A
Limited  Partnership  as of December  31, 1996 and 1995,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/KPMG PEAT MARWICK LLP
Atlanta, GA
FEBRUARY 14, 1997

<PAGE>

[Letterhead]

[LOGO]
KPMG Peat Marwick LLP

Independent Auditors' Report

The Partners
Santa Fe Oaks Phase II, A Limited Partnership:


We have  audited the  accompanying  balance  sheets of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of loss,  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 Santa Fe Oaks Phase II, A
Limited  Partnership  as of December  31, 1995 and 1994,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/KPMG PEAT MARWICK LLP
Atlanta, GA
FEBRUARY 9, 1996

<PAGE>

[Letterhead]

[LOGO]
KPMG Peat Marwick LLP

Independent Auditors' Report

The Partners
Oak Ridge Apartments, A Limited Partnership:


We have  audited the  accompanying  balance  sheets of Oak Ridge  Apartments,  A
Limited  Partnership,  as of  December  31,  1997  and  1996,  and  the  related
statements of loss,  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 Oak Ridge Apartments, A Limited
Partnership  as of December 31, 1997 and 1996, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/KPMG PEAT MARWICK LLP
Atlanta, GA
FEBRUARY 16, 1998

<PAGE>

[Letterhead]

[LOGO]
KPMG Peat Marwick LLP

Independent Auditors' Report

The Partners
Oak Ridge Apartments, A Limited Partnership:


We have  audited the  accompanying  balance  sheets of Oak Ridge  Apartments,  A
Limited  Partnership,  as of  December  31,  1996  and  1995,  and  the  related
statements of loss,  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 Oak Ridge Apartments, A Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/KPMG PEAT MARWICK LLP
Atlanta, GA
FEBRUARY 3, 1997

<PAGE>


[Letterhead]

[LOGO]
KPMG Peat Marwick LLP

Independent Auditors' Report

The Partners
Oak Ridge Apartments, A Limited Partnership:

We have  audited the  accompanying  balance  sheets of Oak Ridge  Apartments,  A
Limited  Partnership,  as of  December  31,  1995  and  1994,  and  the  related
statements of loss,  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 Oak Ridge Apartments, A Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/KPMG PEAT MARWICK LLP
Atlanta, GA
FEBRUARY 9, 1996

<PAGE>