June 25, 1999




Securities and Exchange Commission
Filer Support, Edgar
Operation Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312

       Boston Financial Qualified Housing Limited Partnership
       Form 10-K Annual Report for the Year Ended March 31, 1999
       File Number 0-16796


Dear Sir/Madam:

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


Very truly yours,


/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller

QH110K-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, 1999                                                    0-16796

              BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
              (Exact name of registrant as specified in its charter)

         Delaware                                                  04-2947737
(State of organization)                                       (I.R.S. Employer
                                                             Identification No.)
    101 Arch Street, 16th Floor
         Boston, Massachusetts                                    02110-1106
 (Address of Principal executive office)                           (Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:
                                                       Name of 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)
                                                      50,000

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  nonaffiliates  of
the registrant.

                                         $50,000,000 as of March 31, 1999



<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

Post-Effective Amendments Nos. 1 through 3
 to the Form S-11 Registration Statement,
 File # 33-11910                                                 Part I, Item 1

Report on Form 8-K filed on July 7, 1988                         Part I, Item 1

Report on Form 8-K filed on January 20, 1989                     Part I, Item 1

Acquisition Reports                                              Part I, Item 1

Prospectus - Sections Entitled:

     "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 QUALIFIED HOUSING LIMITED PARTNERSHIP
                                   (A Limited Partnership)

                 ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1999

                                      TABLE OF CONTENTS



PART 1           Page No.

       Item 1     Business                                                  K-3
       Item 2     Properties                                                K-6
       Item 3     Legal Proceedings                                        K-13
       Item 4     Submission of Matters to a
                     Vote of Security Holders                              K-13

PART II

       Item 5     Market for the Registrant's Units
                    and Related Security Holder Matters                    K-14
       Item 6     Selected Financial Data                                  K-15
       Item 7     Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                    K-16
       Item 7A    Quantitative and Qualitative Disclosures about
                    Market Risk                                            K-20
       Item 8     Financial Statements and Supplementary Data              K-20
       Item 9     Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosure                   K-20

PART III

       Item 10    Directors and Executive Officers
                    of the Registrant                                      K-20
       Item 11    Management Remuneration                                  K-22
       Item 12    Security Ownership of Certain Beneficial
                    Owners and Management                                  K-22
       Item 13    Certain Relationships and Related
                    Transactions                                           K-22

PART IV

       Item 14    Exhibits, Financial Statement Schedule
                   and Reports on Form 8-K                                 K-25


SIGNATURES                                                                 K-26


<PAGE>


                                                      PART I

Item 1.  Business

Boston Financial  Qualified Housing Limited Partnership (the "Partnership") is a
limited  partnership  formed on  January  22,  1987  under the  Uniform  Limited
Partnership  Act  of  the  State  of  Delaware.  The  Partnership's  partnership
agreement ("Partnership Agreement") authorized the sale of up to 50,000 units of
Limited Partnership  Interest ("Units") at $1,000 per Unit, adjusted for certain
discounts.  The  Partnership  raised  $49,963,740  ("Gross  Proceeds"),  net  of
discounts of $36,260,  through the sale of 50,000  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 April 29, 1988.

The  Partnership  is engaged  solely in the business of real estate  investment.
Accordingly,  a  presentation  of  information  about  industry  segments is not
applicable and would not be material to an  understanding  of the  Partnership's
business  taken  as  a  whole.   On  October  27,  1995,  an  affiliate  of  the
Partnership's Managing General Partners, BF Harbour View, Inc., became the Local
General  Partner  of  Hughes  Apartments,   Ltd.  ("Hughes"),  a  Local  Limited
Partnership in which the Partnership has invested.  As a result, the Partnership
is deemed to have control over Hughes,  and  commencing on November 1, 1995, the
accompanying financial statements are presented in combined form to conform with
the  required   accounting   treatment  under  generally   accepted   accounting
principles.  This change  only  affects the  presentation  of the  Partnership's
financial condition and operating results, not the business of the Partnership.

The Partnership has invested as a limited partner in other limited  partnerships
("Local  Limited  Partnerships")  which own and  operate  residential  apartment
complexes ("Properties"),  all of which benefit from some form of federal, state
or local  assistance  programs and which qualify for the low-income  housing tax
credits ("Tax Credits") that were added to the Internal Revenue Code (the "Code)
by the Tax Reform Act of 1986.  The  investment  objectives  of the  Partnership
include the  following:  (i) to provide  current tax benefits in the form of Tax
Credits which qualified  limited partners may use to offset their federal income
tax liability;  (ii) to preserve and protect the Partnership's capital; (iii) to
provide  limited  cash  distributions  from  property  operations  which are not
expected  to  constitute  taxable  income  during the  expected  duration of the
Partnership's  operations;  and (iv) to provide cash  distributions from sale or
refinancing  transactions.  There cannot be any assurance  that the  Partnership
will attain any or all of these investment objectives.

Table A on the following  page lists the  properties  owned by the Local Limited
Partnerships  in which  the  Partnership  has  invested.  Item 7 of this  Report
contains  other  significant  information  with  respect to such  Local  Limited
Partnerships.  As required by applicable  rules, the terms of the acquisition of
Local Limited  Partnership  interests  have been described in supplements to the
Prospectus and collected in three post-effective  amendments to the Registration
Statement  and in two Form 8-K filings  listed in Part IV of this Report on Form
10-K   (collectively,   the  "Acquisition   Reports");   such  descriptions  are
incorporated herein by this reference.


<PAGE>


                                                      TABLE A

                                              SELECTED LOCAL LIMITED
                                                 PARTNERSHIP DATA
<TABLE>



                 Properties owned by                                                  Date
                    Local Limited                                                   Interest
                     Partnerships                          Location                 Acquired

              <S>                                     <C>                          <C>
              Barrington Manor                        Fargo, ND                     12/31/87
              Bingham                                 Bingham, ME                   12/30/87
              Birmingham Village                      Randolph, ME                  12/30/87
              Bittersweet                             Randolph, MA                  10/27/87
              Boulevard Commons                       Chicago, IL                   07/14/88
              Brentwood Manor II                      Nashua, NH                    01/20/89
              Cass House/Roxbury Hills                Boston, MA                    06/08/88
              Chestnut Lane                           Newnan, GA                    08/01/88
              Coronado Courts                         Douglas, AZ                   12/18/87
              Country Estates                         Glennville, GA                03/01/88
              600 Dakota                              Wahpeton, ND                  10/01/88
              Delmar                                  Gillette, WY                  10/01/88
              Duluth                                  Sioux Falls, SD               10/01/88
              Elmore Hotel                            Great Falls, MT               12/22/87
              Graver Inn                              Fargo, ND                     12/31/87
              Hazel-Winthrop                          Chicago, IL                   12/30/87
              Hughes                                  Mandan, ND                    12/31/87
              Lakeview Heights                        Clearfield, UT                12/30/87
              Logan Plaza                             New York, NY                  05/10/88
              New Medford Hotel                       Medford, OR                   12/22/87
              Heritage View                           New Sweden, ME                12/30/87
              Park Terrace                            Dundalk, MD                   01/20/89
              Pebble Creek                            Arlington, TX                 06/20/88
              Hillcrest III                           Perryville, MO                03/31/89
              Pine Village                            Pine Mountain, GA             03/01/88
              Rolling Green                           Edmond, OK                    09/30/87
              Sierra Pointe                           Las Vegas, NV                 09/01/87
              Sierra Vista                            Aurora, CO                    09/30/87
              Talbot Village                          Talbotton, GA                 03/01/88
              Terrace                                 Oklahoma City, OK             11/20/87
              Trenton                                 Salt Lake City, UT            12/30/87
              Verdean Gardens                         New Bedford, MA               05/31/88
              Willowpeg Village                       Rincon, GA                    03/01/88
              Windsor Court                           Aurora, CO                    12/30/87
</TABLE>


*     The  Partnership's  interest in profits  and losses of each Local  Limited
      Partnership  arising from normal operations is 99%, except for Logan Plaza
      where the  Partnership's  ownership  interest is 98% and Barrington Manor,
      Graver  Inn,  600  Dakota  and Duluth  where the  Partnership's  ownership
      interest is 49.5%.  Profits and losses  arising  from sale or  refinancing
      transactions are allocated in accordance with the respective Local Limited
      Partnership Agreements.


<PAGE>


Although the  Partnership's  investments in Local Limited  Partnerships  are not
subject to seasonal  fluctuations,  the Partnership'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.

Since the  Partnership  invests as a limited  partner,  the  Partnership  has no
contracted  obligation to provide additional funds to Local Limited Partnerships
beyond its specified investment. Thus, at March 31, 1999, the Partnership had no
contractual or other obligation to any Local Limited  Partnership  which had not
been paid or provided for.

In the  event a Local  Limited  Partnership  encounters  operating  difficulties
requiring  additional funds, the  Partnership's  management might deem it in its
best  interest  to  voluntarily  provide  such  funds in order  to  protect  its
investment.  During the years  ended March 31,  1999 and 1998,  the  Partnership
advanced  approximately $2,601 and $3,000,  respectively,  to five Local Limited
Partnerships to fund operating deficits and other various property issues.

The Partnership's  primary source of working capital is investment income earned
on the Reserves.  Additionally, the Partnership expects to receive distributions
from cash flow from operations of its Local Limited Partnership interests. It is
expected that these sources of funds will provide  adequate  working  capital to
the Partnership.

With the exception of Hughes, each Local Limited Partnership has, as its general
partners  ("Local General  Partners"),  one or more  individuals or entities not
affiliated with the Partnership or its General Partners.  In accordance with the
partnership  agreements under which such entities are organized  ("Local Limited
Partnership Agreements"),  the Partnership depends on the Local General Partners
for the management of each Local Limited Partnership.  As of March 31, 1999, the
following  Local Limited  Partnerships  have a common Local  General  Partner or
affiliated  group  of  Local  General  Partners  accounting  for  the  specified
percentage of capital contributions to Local Limited  Partnerships:  (i) Rolling
Green,  Sierra Vista,  Terrace,  Windsor and Sierra Point Limited  Partnerships,
representing  29.78%, have Phillip Abrams Ventures,  Inc. and PDW, Inc. as Local
General  Partners;  (ii) Graver  Inn,  Barrington  Manor,  600 Dakota and Duluth
Limited Partnerships, representing 3.32%, have Jerry L. Meide and RRABB, Inc. as
Local General  Partners  (see  discussion  below);  (iii) New Medford and Oregon
Landmark Limited  Partnerships,  representing 6.52%, have WHP Holdings,  Inc. as
the Local General  Partners;  (iv) Trenton,  Delmar and Lakeview Heights Limited
Partnerships,  representing  2.59%,  have PSC Real  Estate,  Inc. and J. Michael
Queenan &  Associates,  Inc.  (which is a  corporation  controlled by J. Michael
Queenan) as Local  General  Partners;  (v)  Bingham,  Birmingham  and New Sweden
Limited  Partnerships,  representing  1.95%,  have  Charles B.  Mattson and Todd
Mattson as Local General  Partners;  (vi) Cass House and Verdean Gardens Limited
Partnerships,  representing  12.42%,  have Cruz  Development  Corporation as the
Local General Partner;  and (vii) Willowpeg Village,  Pine Village,  Glennville,
Talbot Village and Chestnut Lane Limited Partnerships,  representing 2.74%, have
Norsouth  Corporation as the General Partner.  The Local General Partners of the
remaining Local Limited  Partnerships are identified in the Acquisition Reports,
which are incorporated herein by reference.

On  November  10,  1997,  the  Partnership  transferred  50% of its  interest in
Barrington  Manor,  Graver  Inn,  600  Dakota  and  Duluth to the local  general
partner.  Included in these  transfers  is a put option  granting  the  Managing
General  Partner the right to put the  Partnership's  remaining  interest to the
local  general  partner any time after one year has  elapsed.  These  properties
represent 3.32% of capital contributions.

The properties owned by Local Limited  Partnerships in which the Partnership has
invested are, and will continue to be, subject to competition  from existing and
future  apartment  complexes  in the same areas.  The  continued  success of the
Partnership  will depend on many outside  factors,  most of which are beyond the
control of the  Partnership  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  government  regulations.  In addition,  other risks
inherent in real estate  investment  may influence  the ultimate  success of the
Partnership,  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  overbuilding,  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 would suppress the ability of the Local Limited  Partnerships  to generate
operating  cash  flow.  Since all of the  properties  benefit  from some form of
government assistance,  the Partnership 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 Partnership.

The  Partnership is managed by 29 Franklin  Street,  Inc., the Managing  General
Partner of the  Partnership.  The other General  Partner of the  Partnership  is
Franklin  29  Limited  Partnership.  The  Partnership,  which  does not have any
employees,  reimburses  The  Boston  Financial  Group  Limited  Partnership,  an
affiliate of the General  Partner,  for certain  expenses and overhead  costs. A
complete discussion of the management of the Partnership is set forth in Item 10
of this Report.

Item 2.  Properties

The Partnership owns limited partnership  interests in thirty-four Local Limited
Partnerships  which own and operate  Properties,  all of which benefit from some
form of federal, state or local assistance program and which qualify for the Tax
Credits  added to the Code by the Tax  Reform  Act of  1986.  The  Partnership's
ownership  interest in each Local Limited  Partnership is 99%,  except for Logan
Plaza where the  Partnership's  ownership  interest is 98% and Barrington Manor,
Graver Inn, 600 Dakota, and Duluth where the Partnership's ownership interest is
49.5%.

Each of the Local Limited Partnerships has received an allocation of Tax Credits
from its 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 Partnership.


<PAGE>

<TABLE>


                                                   Capital Contributions

      Local Limited Partnership                       Total             Paid          Mtge. Loans                      Occupancy at
            Property Name           Number of       Committed at       Through        Payable at         Type of         March 31,
          Property Location        Apts. Units     March 31, 1999  March 31, 1999  December 31, 1998     Subsidy *         1999
-----------------------------------------------------------------------------------------------------------------------------------

<S>                                   <C>         <C>               <C>             <C>                   <C>                 <C>
Barrington Manor
   Limited Partnership
Barrington Manor
Fargo, ND                               18        $     175,200     $    175,200    $    595,000          Section 8            89%

Bingham Family Housing
   Associates (A Limited
   Partnership)
Gingham
Gingham, ME                             24              240,900          240,900       1,160,527            FmHA               96%

Birmingham Housing Associates
   (A Limited Partnership)
Birmingham Village
Randolph, ME                            24              236,520          236,520       1,155,244            FmHA              100%

MB Bittersweet Associates Limited
   Partnership (a Massachusetts
   Limited Partnership)
Bittersweet
Randolph, MA                            35              620,500          620,500       2,383,518            None              100%

Boulevard Commons
   Limited Partnership
Boulevard Commons
Chicago, IL                            212            4,527,850        4,527,850      10,684,574          Section 8            85%

Michael J. Dobens
   Limited Partnership I
Brentwood Manor II
Nashua, NH                              22              300,000          300,000         760,183          Section 8            95%


<PAGE>


                                            Capital Contributions
      Local Limited Partnership                         Total             Paid          Mtge. Loans                     Occupancy at
            Property Name          Number of         Committed at        Through         Payable at        Type of       March 31,
          Property Location       Apts. Units       March 31, 1999    March 31, 1999  December 31, 1998    Subsidy *       1999
-----------------------------------------------------------------------------------------------------------------------------------

Cass House Associates Limited
   Partnership (a Massachusetts
   Limited Partnership)
Cass House/Roxbury Hills
Boston, MA                             111             2,141,090       2,141,090      12,685,999            None              100%

Chestnut Lane Limited
   Partnership (A Limited
   Partnership)
Chestnut Lane
Newnan, GA                              50               282,510         282,510       1,468,129            None               92%

Coronado Courts Limited
   Partnership
Coronado Courts
Douglas, AZ                            145             1,800,000       1,800,000       3,696,251          Section 8            98%

Glennville Properties
   (A Limited Partnership)
Country Estates
Glennville, GA                          24               121,910         121,910         593,661            FmHA              100%

600 Dakota Properties
   Limited Partnership
600 Dakota
Wahpeton, ND                            28               113,000         113,000         620,000          Section 8            83%

Delmar Housing Associates
   Limited Partnership
Delmar
Gillette, WY                            16               128,000         128,000         413,205          Section 8            99%


<PAGE>


                                                  Capital Contributions
      Local Limited Partnership                           Total             Paid         Mtge. Loans                    Occupancy at
            Property Name           Number of         Committed at        Through        Payable at        Type of       March 31,
          Property Location        Apts. Units       March 31, 1999    March 31, 1999  December 31, 1998   Subsidy *       1999
------------------------------------------------------------------------------------------------------------------------------------

Duluth Limited Partnership
Duluth
Sioux Falls, SD                         11               107,000         107,000          255,179         Section 8            60%

Oregon Landmark-Three
   Limited Partnership
Elmore Hotel
Great Falls, MT                         60             1,022,000       1,022,000        3,186,932         Section 8            95%

Graver Inn
   Limited Partnership
Graver Inn
Fargo, ND                               70               819,500         819,500        1,911,129         Section 8            78%

Hazel-Winthrop Apartments (An
   Illinois Limited Partnership)
Hazel-Winthrop
Chicago, IL                             30               350,400         350,400        2,110,234         Section 8            97%

Heritage Court
   Limited Partnership
Park Terrace
Dundalk, MD                            101             2,048,750       2,048,750        3,536,511           None               98%

Hughes Apartments
   Limited Partnership
Hughes
Mandan, ND                              47               379,453         379,453        1,210,000         Section 8            98%



<PAGE>


                                                  Capital Contributions
      Local Limited Partnership                          Total            Paid           Mtge. Loans                    Occupancy at
            Property Name           Number of         Committed at      Through          Payable at        Type of       March 31,
          Property Location        Apts. Units       March 31, 1999   March 31, 1999   December 31, 1998   Subsidy *        1999
-----------------------------------------------------------------------------------------------------------------------------------

Lakeview Heights Apartments,
   Ltd. (A Limited Partnership)
Lakeview Heights
Clearfield, UT                          83               584,000         584,000        2,765,967         Section 8            91%

Logan Plaza Associates
Logan Plaza
New York NY                            130             2,240,000       2,240,000       10,784,320           None               98%

New Medford Hotel Associates
   Limited Partnership
New Medford Hotel
Medford, OR                             76             1,365,100       1,365,100        3,146,176         Section 8            99%

New Sweden Housing Associates
   (A Limited Partnership)
Heritage View
New Sweden, ME                          24               237,250         237,250        1,158,762           FmHA               88%

2225 New York Avenue, Ltd.
   (A Limited Partnership)
Pebble Creek
Arlington, TX                          352             2,512,941       2,512,941        7,955,434         Section 8            95%

Perryville Associates I, L.P.
   (A Limited Partnership)
Hillcrest III
Perryville, MO                          24               128,115         128,115          638,634             FmHA             88%



<PAGE>


                                                  Capital Contributions
      Local Limited Partnership                         Total            Paid          Mtge. Loans                      Occupancy at
            Property Name            Number of       Committed at      Through         Payable at           Type of       March 31,
          Property Location         Apts. Units     March 31, 1999   March 31, 1999  December 31, 1998      Subsidy *       1999
-----------------------------------------------------------------------------------------------------------------------------------

Pine Village Limited Partnership
   (A Limited Partnership)
Pine Village
Pine Mountain, GA                      36                188,340         188,340          936,427           FmHA               98%

Rolling Green Housing Associates,
   Ltd. (a Limited Partnership)
Rolling Green
Edmond, OK                            166              1,855,650       1,855,650        4,756,724         Section 8            92%

Sierra Vista Housing Associates,
   Ltd. (a Limited Partnership)
Sierra Pointe
Las Vegas, NV                         209              3,016,008       3,016,008        7,401,300         Section 8            85%

Sundance Housing Associates,
   Ltd. (A Limited Partnership)
Sierra Vista
Aurora, CO                            160              2,271,751       2,271,751        6,246,475         Section 8           100%

Talbot Village Limited Partnership
   (A Limited Partnership)
Talbot Village
Talbotton, GA                          24                121,180         121,180          599,804           FmHA               96%

Terrace Housing Associates,
   Ltd. (a Limited Partnership)
Terrace
Oklahoma City, OK                     206              1,950,550       1,950,550        5,221,404         Section 8            91%


<PAGE>


                                                  Capital Contributions
      Local Limited Partnership                          Total           Paid           Mtge. Loans                     Occupancy at
            Property Name          Number of         Committed at       Through         Payable at         Type of       March 31,
          Property Location       Apts. Units       March 31, 1999   March 31, 1999   December 31, 1998    Subsidy *        1999
-----------------------------------------------------------------------------------------------------------------------------------

Trenton Apartments, Ltd.
   (A Limited Partnership)
Trenton
Salt Lake City, UT                    37                 237,250         237,250           821,747        Section 8           100%

Verdean Gardens Associates Limited
   Partnership (a Massachusetts
   limited partnership)
Verdean Gardens
New Bedford, MA                      110               2,409,000       2,409,000        14,189,091         None                90%

Willowpeg Village Limited Partnership
   (A Limited Partnership)
Willowpeg Village
Rincon, GA                            57                 288,400         288,400         1,472,966          FmHA              100%

Windsor Court Housing Associates,
   Ltd. (a Limited Partnership)
Windsor Court
Aurora, CO                           143               1,815,500       1,815,500         4,474,113       Section 8             96%
                                 -------            ------------    ------------     -------------
                                   2,865              36,635,618      36,635,618       120,995,620
                                 =======
   Less:  Hughes Apartments                              379,453         379,453         1,210,000
                                                    ------------    ------------     -------------
                                                    $ 36,256,165    $ 36,256,165     $ 119,785,620
                                                    ============    ============     =============

</TABLE>

     *FmHA        This  subsidy, which is authorized  under  Section  515 of the
                  Housing Act of 1949, can be one or a combination of  different
                  types of financing. For instance, FmHA may provide:  1) direct
                  below-market-rate  mortgage  loans for rural rental  housing;
                  2) mortgage  interest subsidies which effectively  lower the
                  interest  rate of  the loan to  1%;  3)  a  rental  assistance
                  subsidy to tenants which allows them to  pay no more than  30%
                  of their monthly income as  rent with the balance  paid by the
                  federal government; or 4) a combination of any of the above.

     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>




One Local Limited Partnership invested in by the Partnership, Boulevard Commons,
represents  more  than  10% of the  total  capital  contributions  made to Local
Limited  Partnerships  by  the  Partnership.  Boulevard  Commons  is a  212-unit
rehabilitation   apartment  complex  with  six  buildings  located  in  Chicago,
Illinois.

Boulevard  Commons was initially  financed by a first  mortgage at 10% interest,
insured by the U.S.  Department of Housing and Urban Development ("HUD") and was
refinanced  at 8.875% on April 6,  1995.  Principal  and  interest  payments  of
$74,916  commenced June 1, 1995 and continue to May 1, 2035. In addition,  there
is a junior  mortgage  payable to the City of Chicago which bears interest at 3%
per annum and matures at the later of July 1, 2030 or the  retirement of the FHA
insured mortgage. Principal and interest are due in a lump sum upon maturity.

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
Partnership, is contained in Items 1, 7 and 8 of this Report.

Item 3.  Legal Proceedings

The  Partnership  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  Partnership.  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 Partnership.

The  Partnership  Agreement  does not impose on the  Partnership  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,  1999,  there  were  3,301  record  holders  of  Units  of  the
Partnership.

Cash distributions,  when made,  are paid annually.   No cash distributions were
paid during the years ended March 31, 1999, 1998 and 1997.


<PAGE>


Item 6.  Selected Financial Data

The following  table sets forth  selected  financial  information  regarding the
Partnership'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>

                                    March 31,      March 31,          March 31,       March 31,         March 31,
                                      1999           1998               1997            1996              1995

<S>                              <C>             <C>              <C>               <C>              <C>
Revenue (B)                      $   465,783     $     414,211    $      435,791    $     191,229    $       77,348
Equity in losses of Local
   Limited Partnerships (B)         (311,996)       (2,321,647)       (2,041,502)      (2,657,886)       (2,732,227)
Net loss                            (542,258)       (2,927,278)       (2,048,112)      (2,278,003)       (3,142,627)
   Per Limited Partnership Unit       (10.74)           (57.96)           (40.55)          (45.10)           (62.22)
Cash and cash equivalents (B)        225,822           243,723           453,264          678,567           308,216
Marketable securities              1,935,991         2,025,236         1,923,032        1,998,381         2,066,336
Investment in Local Limited
   Partnerships                    1,436,677         1,809,097         4,558,388        6,411,602         8,922,540
Total assets                       4,913,505         5,428,937         8,369,107       10,458,754        11,358,168
Long-term debt                     1,210,000         1,210,000         1,210,000        1,210,000                 -
Cash distribution                          -                 -                 -                -                 -
   Per Limited Partnership Unit            -                 -                 -                -                 -
Other Data:
Passive loss (A)                  (7,543,721)       (7,045,034)       (7,537,782)      (6,502,105)       (6,757,956)
   Per Limited Partnership
     Unit (A)                        (149.37)          (139.49)          (149.25)         (128.74)          (133.81)
Portfolio income (A)                 327,862           308,954           389,939          442,059           321,042
   Per Limited Partnership
     Unit (A)                           6.49              6.12              7.72             8.75              6.36
Low-Income Housing
  Tax Credits (A)                  4,335,200         6,904,667         7,559,531        7,652,372         7,512,822
  Per Limited Partnership
     Unit (A)                          85.69            136.50            149.47           151.31            148.55
Local Limited Partnership
   interests owned at end
     of period                            34                34                34               34                34
</TABLE>

 (A)     Income  tax  information  is as of  December  31,  the  year end of the
         Partnership for income tax purposes.  The Low-Income Housing Tax Credit
         per  Limited  Partnership  Unit for  1998,  1997,  1996,  1995 and 1994
         represents the amount  distributed to individual  investors  based upon
         50,000  outstanding  Units.  Corporate  investors  received  Low-Income
         Housing Tax Credits of $92.64,  $146.42,  $159.39,  $161.23 and $158.40
         per Unit in 1998, 1997 1996, 1995 and 1994, respectively.

(B)      March  31,  1999,  1998,  1997  and  1996  revenue  includes  $239,149,
         $245,380,  $237,895  and  $28,827,  respectively,  of rental  and other
         revenue from Hughes Apartments that is included in the combined revenue
         in the Statements of Operations.

         March 31, 1999,  1998,  1997 and 1996 equity in losses of Local Limited
         Partnerships  does not include $26,568,  $25,528,  $36,820 and $13,329,
         respectively,  of losses from Hughes Apartments that have been combined
         with the Partnership's loss in the Statements of Operations

         March 31, 1999, 1998, 1997 and 1996 cash and cash equivalents  includes
         $4,064,  $2,464,  $2,544 and  $26,084,  respectively,  of cash and cash
         equivalents  from Hughes  Apartments  that has been  combined  with the
         Partnership in the Balance Sheets.

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

Certain matters  discussed herein constitute  forward-looking  statements within
the  meaning  of the  Private  Securities  Litigation  Reform  Act of 1995.  The
Partnership  intends such  forward-looking  statements to be covered by the safe
harbor  provisions  for  forward-looking   statements  and  are  including  this
statement for purposes of complying with these safe harbor provisions.  Although
the Partnership believes the forward-looking  statements are based on reasonable
assumptions,  the Partnership can give no assurance that their expectations will
be attained. Actual results and timing of certain events could differ materially
from those projected in or contemplated by the forward-looking statements due to
a number of factors,  including,  without limitation,  general economic and real
estate  conditions,  interest rates and unanticipated  delays or expenses on the
part of the Partnership and their suppliers in achieving year 2000 compliance.

Liquidity and Capital Resources

At March 31,  1999,  the  Partnership,  including  the combined  entity  (Hughes
Apartments,  Ltd.),  has cash and cash  equivalents of $225,822 as compared with
$243,723 at March 31, 1998. The decrease is primarily  attributable to cash used
for  operations.  These  decreases to cash and cash  equivalents  are  partially
offset by cash  distributions  received  from  Local  Limited  Partnerships  and
proceeds  from  sales  and  maturities  of  marketable  securities  in excess of
purchases of marketable securities.

At March 31,  1999,  approximately  $1,543,000  of cash,  cash  equivalents  and
marketable  securities  has been  designated  as  Reserves.  The  Reserves  were
established to be used for working capital of the Partnership and  contingencies
related to the ownership of Local Limited Partnership interests. Reserves may be
used to fund  Partnership  operating  deficits,  if the Managing General Partner
deems funding appropriate.

Since the  Partnership  invests as a limited  partner,  the  Partnership  has no
contractual  duty to  provide  additional  funds to Local  Limited  Partnerships
beyond its specified investment. Thus, at March 31, 1999, the Partnership had no
contractual or other obligation to any Local Limited Partnership,  which had not
been paid or provided for.

In the  event a Local  Limited  Partnership  encounters  operating  difficulties
requiring  additional funds, the  Partnership's  management might deem it in its
best  interests  to provide  such  funds,  voluntarily,  in order to protect its
investment.  During the year ended  March 31,  1999,  the  Partnership  advanced
$2,601 to one Local Limited Partnerships for various property issues.

Cash Distributions

No cash distributions to Limited Partners were made during the three years ended
March 31, 1999. In the event that  distributions are received from Local Limited
Partnerships, the Managing General Partner has decided that such amounts will be
used to increase Reserves. No assurance can be given as to the amounts of future
distributions  from the Local Limited  Partnerships since many of the Properties
benefit from some type of federal or state  subsidy and, as a  consequence,  are
subject to restrictions on cash  distributions.  Therefore,  it is expected that
only a limited  amount of cash will be distributed to investors from this source
in the future.

Results of Operations

1999 versus 1998

The  Partnership's  results  of  operations  for the year ended  March 31,  1999
resulted in a net loss of $542,258 as compared to a net loss of  $2,927,278  for
the same period in 1998. The decrease in net loss is primarily attributable to a
decrease in equity in losses of Local Limited Partnerships due to an increase in
losses not recognized by the  Partnership for Local Limited  Partnerships  whose
cumulative distributions exceeded its total investment in these Partnerships and
a decrease in provision for valuation of investments and bad debt expense.

1998 versus 1997

The  Partnership's  results  of  operations  for the year ended  March 31,  1998
resulted in a net loss of $2,927,278 as compared to a net loss of $2,048,112 for
the same period in 1997. The increase in net loss is primarily  attributable  to
an increase in equity in losses of Local  Limited  Partnerships  and a provision
for valuation of investments in five Local Limited Partnerships. As discussed in
Note 4 to the combined  financial  statements  in Item 8 of this Form 10-K,  the
increase in equity in losses of Local Limited  Partnerships  is due to equity in
income  recognized  during  the year  ended  March  31,  1997 due to a change in
accounting methods for two Local Limited Partnerships.  The Partnership provided
for a provision for valuation in five Local Limited  Partnerships  because there
is  evidence  of a  non-temporary  decline  in the  recoverable  amount of these
investments.

Low-Income Housing Tax Credits

The 1998, 1997 and 1996 Low-Income  Housing Tax Credits per Unit for individuals
were  $85.69,  $136.50  and  $149.47,  respectively.  The  1998,  1997  and 1996
Low-Income  Housing Tax Credits per Unit for corporations  were $92.64,  $146.42
and  $159.39,  respectively.  The  Tax  Credits  per  Limited  Partnership  Unit
stabilized in 1991 at approximately $148.00 per Unit for individuals and $158.00
per Unit for  corporations.  The  credits  have  begun to  decrease  as  certain
properties are reaching the end of the ten-year credit period. However,  because
the Tax Credit  compliance  periods  generally  extend five years beyond the Tax
Credits,   the  Partnership  intends  to  hold  its  Local  Limited  Partnership
investments for the foreseeable future.

Property Discussions

Limited  Partnership  interests have been acquired in thirty-four  Local Limited
Partnerships which own and operate rental properties located in nineteen states.
Fourteen of the  properties  with 774  apartments  were newly  constructed,  and
twenty of the properties with 2,091 apartments were rehabilitated.

Most of the thirty-four Local Limited  Partnerships have stabilized  operations.
The majority of these  stabilized  properties  are  operating at  break-even  or
generating positive operating cash flow. A number of properties are experiencing
operating  difficulties and cash flow deficits due to a variety of reasons.  The
Local  General  Partners  of those  properties  have funded  operating  deficits
through  project  expense loans,  subordinated  loans or payments from operating
escrows.  In certain  instances  where the Local  General  Partners have stopped
funding deficits because their obligation to do so has expired or otherwise, the
Managing  General Partner is working with the Local General Partners to increase
operating income,  reduce expenses or refinance the debt at lower interest rates
in order to improve cash flow.

As previously reported,  the Local General Partner of 600 Dakota, Graver Inn and
Barrington Manor, located in North Dakota, and Duluth,  located in South Dakota,
expressed  to the Managing  General  Partner some  concerns  over the  long-term
financial health of the properties.  In response to these concerns and to reduce
possible future risk, the Managing  General Partner  consummated the transfer of
50% of the  Partnership's  capital and profits in the properties to an affiliate
of the Local General Partner in November 1997. The Managing  General Partner has
the right to transfer the Partnership's  remaining interest to the Local General
Partner any time after one year has  elapsed.  In  addition,  the Local  General
Partner has the right to call the remaining interest after the tax credit period
has expired.  On April 9, 1999, due to concerns over the financial  viability of
600 Dakota and Graver Inn and to avoid the  potential  risk of  recapture of tax
credits  associated with the properties,  the Managing General Partner exercised
its right to transfer  the  Partnership's  remaining  interest in 600 Dakota and
Graver  Inn to the Local  General  Partner.  This  transfer  will not  trigger a
recapture  event for the  Partnership  nor have any impact on the  Partnership's
financial statement.  However, for tax purposes,  this event will result in both
Section 1231 gain and cancellation of indebtedness income for the 1999-tax year.
The Managing  General  Partner  continues to monitor  closely the  operations of
Barrington Manor and Duluth.

As previously  reported,  Boulevard Commons,  located in Chicago,  Illinois,  is
experiencing  operating  deficits  due to  expenses  increasing  because of high
turnover at the property, security issues and increasing maintenance and capital
needs.  As a result  of these  issues,  Boulevard  Common's  mortgage  went into
default.  In October 1998,  affiliates of the Managing  General Partner replaced
the Local General  Partners and a new  unaffiliated  non profit general partner.
The interest of the original  Local General  Partners was converted to a special
limited  partner  interest with no right to participate in the management of the
Local Limited Partnership. Further, the Managing General Partner consummated the
transfer of 48% of the Partnership's  capital and profits in the properties to
the new Local General  Partner.  The Managing  General Partner has the right to
transfer  the  Partnership's  remaining  interest to the New Local General
Partner any time after one year has  elapsed.  Occupancy as of March 31, 1999
was 85%.

Delmar, located in Gillette,  Wyoming, has been experiencing operating deficits.
In addition,  a significant amount of capital improvements on the property needs
to be completed in the very near future. In the past,  deficits were funded by a
combination  of the accrual of property  management  fees and the Local  General
Partner.  Due to the Managing General Partner's concerns regarding the long-term
viability of this property,  the Managing  General  Partner  negotiated with the
Local  General  Partner a plan that will  ultimately  transfer  ownership of the
property to the Local General Partner.  Effective  January 1, 1998, the Managing
General Partner  consummated the transfer of 49.5% of the Partnership's  capital
and profits in the property to the Local General  Partner.  The Managing General
Partner has the right to transfer the  Partnership's  remaining  interest in the
property to the Local General  Partner any time after one year has elapsed.  The
Partnership  will  retain its full share of tax  credits  until such time as the
remaining interest is put to the Local General Partner.  In addition,  the Local
General  Partner  has the  right to call the  remaining  interest  after the tax
credit period has expired.

As previously reported, the Managing General Partner at Pebble Creek, located in
Arlington,  Texas,  is still  negotiating  with HUD to extend  and/or modify the
existing workout agreement which expired May 31, 1998. In addition, the Managing
General Partner is involved in negotiations for the appointment of a replacement
Local General Partner. Occupancy as of March 30, 1999 was 95%.

As  previously  reported  Cass  House  and  Verdean  Gardens,  both  located  in
Massachusetts  and share a common  Local  General  Partner,  continue to operate
below break-even.  Both properties,  as well as Bittersweet Apartments,  receive
subsidy through the State Housing Assistance Rental Program (SHARP), which is an
important  part of their  annual  income.  As  originally  conceived,  the SHARP
subsidy was  scheduled to decline over time to match  expected  increases in net
operating income. However, increases in net operating income failed to keep pace
with the decline in the SHARP subsidy.  Many of the SHARP properties  (including
Cass,  Verdean and  Bittersweet)  structured  workouts that included  additional
subsidy in the form of Operating  Deficit Loans  (ODL's).  Effective  October 1,
1997, the Massachusetts  Housing Finance Agency (MHFA), which provided the SHARP
subsidies,  withdrew  funding of the ODL's from its  portfolio of 77  subsidized
properties.  Properties  unable to make full debt service payments were declared
in default by MHFA.  The  Managing  General  Partner has joined a group of SHARP
property  owners  called  the  Responsible  SHARP  Owners,  Inc.  (RSO)  and  is
negotiating with MHFA and the General Partners of Cass,  Verdean and Bittersweet
to  find a  solution  to the  problems  that  will  result  from  the  withdrawn
subsidies.  Due to the existing  operating  deficits and the dependence on these
subsidies, Cass and Verdean have defaulted on their mortgage obligations, and it
is likely that Bittersweet  will default on its mortgage  obligation in the near
future.  On December 16, 1998, the Partnership  joined with the RSO and about 20
SHARP  property  owners and filed suit against the MHFA (Mass.  Sup. Court Civil
Action  #98-4720).  Among  other  things,  the suit seeks to enforce  the MHFA's
previous financial  commitments to the SHARP properties.  The lawsuit is complex
and in its early stages,  so no  predictions  can be made at this time as to the
ultimate  outcome.  In the meantime,  the Managing  General  Partner  intends to
continue to  participate  in the RSO's efforts to negotiate a resolution of this
matter with MHFA.

The Local General  Partner for  Brentwood  Manor II, in Nashua,  New  Hampshire,
filed for protection  under the provisions of the Chapter 7 bankruptcy laws. The
Managing  General  Partner has  replaced  the former  Local  General  Partner as
management  agent of the property with an  unaffiliated  third-party  management
agent. As noted  previously,  although full mortgage  payments are being made at
this time,  partial  mortgage  payments  were made  earlier in 1998 prior to the
Local General Partner declaring  bankruptcy.  The lender required that the small
deficit generated by the deficient payments be cured  immediately.  The Managing
General  Partner  is  negotiating  with both the  lender  and the Local  General
Partner to develop a plan for the payment of this  amount.  It is possible  that
Partnership Reserves will be used to pay this deficit.

Sierra Pointe,  located in Las Vegas,  Nevada, and Terrace,  located in Oklahoma
City,  Oklahoma,  which share a common Local General  Partner,  are experiencing
operating  deficits due to occupancy  issues.  The March 31, 1999  occupancy for
Sierra  Pointe is 85% and for Terrace is 91%. The Managing  General  Partner and
the Local General Partner are working with the local Housing Authorities in both
Nevada and Oklahoma to fill vacant units. The Managing General Partner continues
to work with the Local  General  Partner  and  management  agent in an effort to
stabilize  operations and improve occupancy.  In addition,  the Managing General
Partner  is  negotiating  with  the  Local  General  Partner  a plan  that  will
ultimately transfer ownership of the property to the Local General Partner.
The plan includes provisions to minimize the risk of recapture.

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",
the Partnership 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 carrying value is compared to the  undiscounted  future cash
flows  expected  to be  derived  from the asset and,  if there is a  significant
impairment  in value,  a provision to write down the asset to fair value will be
charged against income. No such impairment writedowns were taken in 1999.

Inflation and Other Economic Factors

Inflation had no material impact on the operations or financial condition of the
Partnership for the years ended March 31, 1999, 1998 and 1997.

Impact of Year 2000

The Managing  General  Partner's  plan to resolve year 2000 issues  involves the
following four phases: assessment,  remediation, testing and implementation.  To
date,  the Managing  General  Partner has fully  completed an  assessment of all
information  systems that may not be operative  subsequent to 1999 and has begun
the remediation,  testing and implementation phase on both hardware and software
systems.  Because the hardware and software  systems of both the Partnership and
Local Limited  Partnerships are generally the  responsibility of obligated third
parties,  the plan primarily  involves  ongoing  discussions  with and obtaining
written  assurances from these third parties that pertinent systems will be 2000
compliant.   In  addition,   neither  the  Partnership  nor  the  Local  Limited
Partnerships are incurring significant  additional costs since such expenses are
principally  covered under the service contracts with vendors.  As of June 1999,
the General Partner is in the final stages of its Year 2000 remediation plan and
believes all major  systems are  compliant;  any systems still being updated are
not considered significant to the Partnership's operations. However, despite the
likelihood that all significant  year 2000 issues are expected to be resolved in
a timely manner,  the Managing General Partner has no means of ensuring that all
systems of outside vendors or other entities that impact operations will be 2000
compliant.  The Managing  General Partner does not believe that the inability of
third  parties to address  their year 2000 issues in a timely manner will have a
material impact on the Partnership.  However,  the effect of  non-compliance  by
third parties is not readily determinable.

Management has also evaluated a worst case scenario  projection  with respect to
the year 2000 and  expects  any  resulting  disruption  of either  the  Managing
General Partner's activities or any Local Limited Partnership's operations to be
short-term  inconveniences.  Such  problems,  however,  are not  likely to fully
impede the ability to carry out necessary duties of the  Partnership.  Moreover,
because  expected  problems  under a worst  case  scenario  are not  extensively
detrimental,   and  because  the  likelihood  that  all  systems  affecting  the
Partnership  will be compliant  before 2000,  the Managing  General  Partner has
determined  that a formal  contingency  plan that  responds to  material  system
failures is not necessary.




Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The table  below  provides  information  about  the  Partnership's  market  risk
sensitive instruments:
<TABLE>

----------------------------------------------------------------------------------------------------------------------
<S>                      <C>           <C>        <C>         <C>          <C>         <C>          <C>
                         1999          2000       2001        2002         2003        Thereafter    Face Value
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Debt Obligations
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Long Term Debt:
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
  Fixed Rate                                                                             1,210,000       1,210,000
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
  Average Interest
  Rate                                                                                 9.75%
----------------------------------------------------------------------------------------------------------------------

</TABLE>

Because of lack of market data for obligations with similar characteristics,  it
is not practicable to determine a fair value other than face value.

In addition to the debt obligations  included in this table, the Partnership has
invested in marketable  securities with a aggregate fair values of $1,935,991 at
March 31, 1999; these securities, with rates ranging from 4.87% to 6.42%, do not
subject the  Partnership to significant  market risk because of their short term
maturities and high liquidity.

The  Partnership has no other exposure to market risk associated with activities
in derivative financial instruments,  derivative commodity instruments, or other
financial instruments.

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.

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

The Managing General Partner of the Partnership is 29 Franklin  Street,  Inc., a
Massachusetts corporation (the "Managing General Partner" or "Franklin,  Inc."),
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 General Partner
on May 25, 1997. Fred N. Pratt, Jr. resigned as Managing Director of the General
Partner on May 28, 1997. William E. Haynsworth resigned as Managing Director and
Chief  Operating  Officer of the  General  Partner on March 23,  1998.  Peter G.
Fallon resigned as a Vice President of the General Partner on June 1, 1999.

The Managing  General  Partner was  incorporated  in January  1987.  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  Partnership.  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
William E. Haynsworth               Vice President

The other General Partner of the Partnership is Franklin 29 Limited Partnership,
a Massachusetts  limited partnership  ("Franklin L.P.") that was organized in
January 1987.  The General Partner of Franklin L.P. is 29 Franklin Street, Inc.

The Managing General Partner provides day-to-day  management of the Partnership.
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 43,  graduated  from  Harvard  University  (B.A.,  1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982.  Ms.  Netzer  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, the firm's Executive Committee.  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 42, graduated from Emory  University (B.A.,  1978) and
Cornell University (J.D., M.B.A., 1982).  Mr. Gladstone  joined Boston Financial
in 1985 and is Vice  President and General  Counsel.  He is also a member of the
Senior Leadership Team.  Prior to joining  Boston  Financial,  Mr. Gladstone was
associated with the Boston law firm of Herrick & Smith.  Mr. Gladstone is on the
Advisory Board of the Housing and Development  Reporter.  He is also a member of
the Investment Program Association, The National Realty Committee,  Cornell Real
Estate  Council,  National  Housing  Conference and the Massachusetts Bar.

Randolph G.  Hawthorne,  age 49, is a graduate  of  Massachusetts  Institute  of
Technology (S.B., 1971) and Harvard Graduate School of Business (M.B.A.,  1973).
Mr.  Hawthorne joined Boston Financial in 1973 and is currently a Vice President
responsible for structuring and acquiring real estate  investments.  Previously,
Mr.  Hawthorne  served as Treasurer of Boston  Financial.  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,  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 41,  graduated  from  Trinity  College  (B.A.) and Amos Tuck
School at Dartmouth College  (M.B.A.).  Mr. Hart joined Boston Financial in 1997
and serves as Chief Financial  Officer and as 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 the Board of  Directors  of several  companies,
including those that went on to complete initial public offerings.

Paul F. Coughlan,  age 55, is a graduate of Brown University  (A.B.,  1965). Mr.
Coughlan  joined  Boston  Financial  in 1975  and is  currently  a  Senior  Vice
President and a member of the Investment Management division with responsibility
for  marketing  institutional  investments.  Previously,  he was national  sales
manager for Boston  Financial's retail tax credit funds. Prior to joining Boston
Financial,  Mr.  Coughlan  was an  investment  broker  with Bache & Company  and
Reynolds Securities, Inc.

William E. Haynsworth, age 59, is a graduate of Dartmouth  College  (A.B., 1961)
and  Harvard Law School  (L.L.B.,  1964;  L.L.M.,  1969). Mr. Haynsworth  joined
Boston Financial  in 1977 and is a Senior  Vice  President  responsible  for the
structuring  of  real  estate  investments  and  the  acquisition  of   property
interests.   Prior to joining  Boston  Financial,   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.  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 and  the  Board of  Directors of  Boston Financial.  Mr.
Haynsworth has over 25 years of real estate experience.

Item 11.  Management Remuneration

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

Item 12.  Security Ownership of Certain Beneficial Owners and Management

No person is known to the Partnership to be the beneficial owner of more than 5%
of the outstanding Units.

The equity  securities  registered by the Partnership under Section 12(g) of the
Act consist of 50,000 Units, all of which have been sold to the public.  Holders
of Units are  permitted to vote on matters  affecting  the  Partnership  only in
certain unusual circumstances and do not generally have the right to vote on the
operation or management of the Partnership.

As of March 31, 1999, Franklin L.P. owns five (unregistered)  Units not included
in the 50,000 Units sold to the public.

Except as described in the preceding paragraph, neither Franklin, Inc., Franklin
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 Partnership does not know of any existing  arrangement that might at a later
date result in a change in control of the Partnership.

Item 13.  Certain Relationships and Related Transactions

The  Partnership  was  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  Partnership  and the
offering of Units.  The  Partnership 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
Partnership  and its acquisition and disposition of investments in Local Limited
Partnerships.  In  addition,  the  General  Partners  are  entitled  to  certain
Partnership 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 the Partnership is
still a limited partner at the time of such transaction. All such fees, expenses
and  distributions  paid in the three years  ended March 31, 1999 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.  In addition,  Boston  Financial  Property  Management,  an
affiliate of the Managing General Partner,  serves as property  management agent
for four of the properties in which the Partnership invested.

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

Organizational fees and expenses and selling expenses

In accordance  with the Partnership  Agreement,  the Partnership was required to
pay certain fees to and reimburse expenses of the General Partners and others in
connection  with the  organization  of the  Partnership  and the offering of its
Limited Partnership Units.  Selling  commissions,  fees and accountable expenses
related to the sale of the Units totaling  $6,164,983 have been charged directly
to Limited  Partners'  equity.  In connection  therewith,  $3,963,740 of selling
expenses  and  $2,201,243  of  offering  expenses  incurred  on  behalf  of  the
Partnership  have  been  paid  to an  affiliate  of  the  General  Partner.  The
Partnership has capitalized an additional $50,000 of organizational  costs which
were  reimbursed to an affiliate of the General  Partner.  These costs have been
fully amortized. 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.  No  organizational  fees and expenses and selling  expenses were paid
during the three years ended March 31, 1999.

Acquisition fees and expenses

In accordance  with the Partnership  Agreement,  the Partnership was 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   Partnership's   investments  in  Local  Limited
Partnerships.  Acquisition  fees totaled 8% of the Gross  Proceeds.  Acquisition
expenses  include  such  expenses  as  legal  fees  and  expenses,   travel  and
communications  expenses,  costs of appraisals and accounting fees and expenses.
Acquisition fees totaling  $4,000,000 for the closing of the Partnership's Local
Limited  Partnership  Investments have been paid to an affiliate of the Managing
General Partner.  Acquisition  expenses totaling $770,577 were incurred and have
been reimbursed to an affiliate of the Managing General Partner.  No acquisition
fees or expenses were paid during the three years ended March 31, 1999.

Salaries and benefits expense reimbursements

An affiliate of the Managing  General  Partner is reimbursed for the cost of the
Partnership's salaries, benefits and administrative expenses. The reimbursements
are  based  upon  the  size  and  complexity  of the  Partnership's  operations.
Reimbursements  made in each of the three  years  ended  March  31,  1999 are as
follows:

                                       1999              1998              1997
                                  -------------      ------------     ---------
       Salaries and benefits expense
         reimbursements          $  133,092        $  162,548       $   138,995


Property management fees

Boston  Financial  Property  Management  ("BFPM"),  an affiliate of the Managing
General Partner, currently manages three properties in which the Partnership has
invested.  In the year ended March 31, 1997, BFPM managed four properties.  Fees
earned  by BFPM in each of the  three  years  ended  December  31,  1998  are as
follows:

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

       Property management fees  $  128,246        $  136,095       $   194,057


Cash distributions paid to the General Partners

In  accordance  with the  Partnership  Agreement,  the  General  Partners of the
Partnership, Franklin, Inc. and Franklin Limited Partnership, receive 1% of cash
distributions  made to partners.  No cash distributions were paid to the General
Partners in each of the three years ended March 31, 1999.

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 each
of the three years ended March 31, 1999 is presented in Note 5 to the  Financial
Statements.




<PAGE>


                                     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' reports 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)(b)  Reports on Form 8-K
           No  Reports on Form 8-K were  filed  during the year ended  March 31,
1999.

(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

          (b)   Audited financial statements of Local Limited Partnerships

               Coronado Courts

(a)(3)(d)  None.


<PAGE>


                                   SIGNATURES



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

     BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP

     By:   29 Franklin Street, Inc.
           its Managing General Partner



     By:  /s/Randolph G. Hawthorne               Date:    June 25, 1999
          -------------------------------                 -------------
          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 Partnership and in the capacities and on the dates indicated:



     By:  /s/ Randolph G. Hawthorne              Date:    June 25, 1999
          -------------------------------                 -------------
          Randolph G. Hawthorne
          Managing Director, Vice President and
          Chief Operating Officer




     By:  /s/Michael H. Gladstone                 Date:    June 25, 1999
          -------------------------------                  -------------
           Michael H. Gladstone
           A Managing Director





<PAGE>



Item 8.  Financial Statements and Supplementary Data


BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)

Annual Report on Form 10-K For the Year Ended March 31, 1999
Index


                                    Page No.

Report of Independent Accountants
     For the Years Ended March 31, 1999 and 1998                            F-2

Combined Financial Statements

     Combined Balance Sheets - March 31, 1999 and 1998                      F-3

     Combined Statements of Operations - Years Ended
       March 31, 1999, 1998 and 1997                                        F-4

     Statements of Changes in Partners' Equity (Deficiency) -
       Years Ended March 31, 1999, 1998 and 1997                            F-5

     Combined Statements of Cash Flows - Years Ended
       March 31, 1999, 1998 and 1997                                        F-6

     Notes to Combined Financial Statements                                 F-7

Financial Statement Schedule:

     Schedule III - Real Estate and Accumulated Depreciation                F-22

See also  Index to  Exhibits on Page  K-25 for the  financial  statements of the
Local Limited Partnership  included as a separate exhibit in this Annual  Report
on Form 10-K.

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>


REPORT OF INDEPENDENT ACCOUNTANTS


To the Partners of
Boston Financial Qualified Housing Limited Partnership:

In our  opinion,  based on our audits and the  reports  of other  auditors,  the
combined  financial  statements listed in the accompanying index present fairly,
in all material respects,  the financial position of Boston Financial  Qualified
Housing Limited  Partnership (the "Partnership") at March 31, 1999 and 1998, and
the results of its  operations and its cash flows for each of the three years in
the  period  ended  March  31,  1999,  in  conformity  with  generally  accepted
accounting  principles.  In addition,  in our opinion,  the financial  statement
schedule  listed in the  accompanying  index  presents  fairly,  in all material
respects,  the information  set forth therein when read in conjunction  with the
related combined financial statements.  These financial statements and financial
statement schedule are the responsibility of the Partnership's  management;  our
responsibility  is to  express  an opinion  on these  financial  statements  and
financial statement schedule based on our audits. We did not audit the financial
statements of certain local  limited  partnerships  for which total assets of $0
and $149,526,  are included in these  financial  statements as of March 31, 1999
and 1998,  respectively,  and for which net losses of  $338,832, $2,321,647  and
$2,041,502 are included in the accompanying financial statements as of March 31,
1999, 1998, 1997, respectively.  Those statements were audited by other auditors
whose  reports  thereon  have been  furnished  to us, and our opinion  expressed
herein,  insofar as it relates to the  amounts  included  for the Local  Limited
Partnerships, is based solely on the reports of the other auditors. We conducted
our audits of these  statements in accordance with generally  accepted  auditing
standard,  which 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,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits and the  reports of other  auditors  provide a  reasonable  basis for the
opinions expressed above.


/S/PricewaterhouseCoopers LLP
June 18, 1999
Boston, Massachusetts



<PAGE>




BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
COMBINED BALANCE SHEETS - March 31, 1999 and 1998
<TABLE>



                                                                           1999                  1998
                                                                       -------------         --------


<S>                                                                    <C>                   <C>
Assets
Cash and cash equivalents                                              $     225,822         $     243,723
Tenant security deposits                                                       4,040                 4,731
Accounts receivable, net                                                       2,601                 3,000
Marketable securities, at fair value (Notes 1 and 3)                       1,935,991             2,025,236
Mortgagee escrow deposits                                                      9,543                 6,020
Replacement reserve escrow                                                     6,719                 6,398
Bond trusts (Note 7)                                                         122,093               107,572
Investments in Local Limited Partnerships,
   net of reserve for valuation of
   $685,201 in 1999 and 1998 (Note 4)                                      1,436,677             1,809,097
Deferred charges, net of accumulated
   amortization of $38,693 and $35,469
   in 1999 and 1998, respectively                                             41,921                45,145
Rental property, at cost, net of
   accumulated depreciation (Note 6)                                       1,099,860             1,145,822
Other assets                                                                  28,238                32,193
                                                                       -------------         -------------
     Total Assets                                                      $   4,913,505         $   5,428,937
                                                                       =============         =============

Liabilities and Partners' Equity

Accounts payable to affiliates (Note 5)                                $      25,799         $      22,773
Accounts payable and accrued expenses                                         43,860                27,577
Accrued interest (Note 7)                                                     68,819                68,819
Tenant security deposits payable                                               5,132                 4,731
Bonds payable (Note 7)                                                     1,210,000             1,210,000
                                                                       -------------         -------------
     Total Liabilities                                                     1,353,610             1,333,900
                                                                       -------------         -------------

Minority interest in Local Limited Partnership                                58,321                58,589


General, Initial and Investor Limited Partners' Equity                     3,489,132             4,031,390
Net unrealized gains on marketable securities                                 12,442                 5,058
                                                                       -------------         -------------
     Total Partners' Equity                                                3,501,574             4,036,448
                                                                       -------------         -------------
     Total Liabilities and Partners' Equity                            $   4,913,505         $   5,428,937
                                                                       =============         =============
The accompanying notes are an integral part of these combined financial statements.
</TABLE>

<PAGE>

<TABLE>
BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
COMBINED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997


                                                            1999                1998               1997
                                                       --------------      -------------       --------

<S>                                                    <C>                 <C>                 <C>
Revenue:
   Rental                                              $      224,199      $     228,680       $     227,492
   Investment, net (Note 3)                                   129,760            146,437             151,516
   Other                                                      111,824             39,094              56,783
                                                       --------------      -------------       -------------
     Total Revenue                                            465,783            414,211             435,791
                                                       --------------      -------------       -------------

Expenses:
   General and administrative (includes
     reimbursements to an affiliate of $133,092,
     $162,548 and $138,995 in 1999, 1998 and
     1997, respectively) (Note 5)                             400,926            276,279             207,292
   Bad debt expense                                                 -             52,665                   -
    Rental operations, exclusive of depreciation               99,894            104,426             111,221
   Interest (Note 7)                                          118,185            118,057             118,095
   Depreciation (Note 6)                                       44,682             45,459              42,547
   Amortization (Note 2)                                       32,626             66,816             100,691
   Provision for valuation of
     investments in Local
     Limited Partnerships (Note 4)                                  -            356,398            (137,073)
                                                       --------------      -------------       -------------
     Total Expenses                                           696,313          1,020,100             442,773
                                                       --------------      -------------       -------------

Loss before equity in losses
   of Local Limited Partnerships and
   minority interest                                         (230,530)          (605,889)             (6,982)

Equity in losses of Local Limited
   Partnerships, including income of
    $822,529 in 1997 for prior year
   adjustments (Note 4)                                      (311,996)        (2,321,647)         (2,041,502)

Minority interest in losses of
    Local Limited Partnership                                     268                258                 372
                                                       --------------      -------------       -------------

Net Loss                                               $     (542,258)     $  (2,927,278)      $  (2,048,112)
                                                       ==============      =============       =============

Net Loss allocated
   General Partners                                    $       (5,423)     $     (29,273)      $     (20,481)
   Limited Partners                                          (536,835)        (2,898,005)         (2,027,631)
                                                       --------------      -------------       -------------
                                                       $     (542,258)     $  (2,927,278)      $  (2,048,112)
                                                       ==============      =============       =============

Net Loss per Limited Partnership Unit
   (50,000 Units)                                      $       (10.74)     $      (57.96)      $      (40.55)
                                                       ==============      =============       =============
The  accompanying  notes are an  integral  part of these  combined financial statements.
</TABLE>


<PAGE>
BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
 (A Limited Partnership)

STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)

FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997

<TABLE>


                                                                                   Net
                                                    Initial      Investor       Unrealized
                                     General        Limited       Limited        Gains
                                    Partners       Partners      Partners         (Losses)         Total

<S>                              <C>                <C>        <C>              <C>            <C>
Balance at March 31, 1996        $   (344,429)      $  4,648   $  9,346,561     $        (37)  $  9,006,743
                                 ------------       --------   ------------     ------------   ------------

Comprehensive Loss:
   Net change in net unrealized
     losses on marketable
     securities available
     for sale (Note 3)                      -              -              -          (12,943)       (12,943)
   Net Loss                           (20,481)             -     (2,027,631)               -     (2,048,112)
                                 ------------       --------   ------------     ------------   ------------
Comprehensive Loss                    (20,481)             -     (2,027,631)         (12,943)    (2,061,055)
                                 ------------       --------   ------------     ------------   ------------

Balance at March 31, 1997            (364,910)         4,648      7,318,930          (12,980)     6,945,688
                                 ------------       --------   ------------     ------------   ------------

Comprehensive Income (Loss):
   Net change in net unrealized
     losses on marketable
     securities available
     for sale (Note 3)                      -              -              -           18,038         18,038
   Net Loss                           (29,273)             -     (2,898,005)               -     (2,927,278)
                                 ------------       --------   ------------     ------------   ------------
Comprehensive Income (Loss)           (29,273)             -     (2,898,005)          18,038     (2,909,240)
                                 ------------       --------   ------------     ------------   ------------

Balance at March 31, 1998            (394,183)         4,648      4,420,925            5,058      4,036,448
                                 ------------       --------   ------------     ------------   ------------

Comprehensive Income (Loss):
   Net change in net unrealized
     gains on marketable
     securities available
     for sale (Note 3)                      -              -              -            7,384          7,384

Net Loss                               (5,423)                     (536,835)               -       (542,258)
                                 ------------       --------   ------------         --------   ------------
Comprehensive Income (Loss)            (5,423)             -       (536,835)           7,384       (534,874)
                                 ------------       --------   ------------     ------------   ------------

Balance at March 31, 1999        $   (399,606)      $  4,648   $  3,884,090     $     12,442   $  3,501,574
                                 ============       ========   ============     ============   ============
The  accompanying  notes are an  integral  part of these  combined financial statements.
</TABLE>

<PAGE>

BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
COMBINED STATEMENTS OF CASH FLOWS

                FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
<TABLE>


                                                                1999               1998            1997
                                                            -------------    -------------     ------------

<S>                                                         <C>              <C>               <C>
Cash flows from operating activities:
 Net Loss                                                 $    (542,258)   $  (2,927,278)    $  (2,048,112)
   Adjustments to reconcile net loss to net
     cash used for operating activities:
     Equity in losses of Local Limited Partnerships               311,996        2,321,647         2,041,502
     Provision for valuation of investments in
       Local Limited Partnerships                                       -          356,398          (137,073)
     Bad debt expense                                                   -           52,665                 -
     (Gain) loss on sales and maturities of
       marketable securities                                       (4,990)          (1,711)            3,072
     Cash distribution income included in cash
       distributions from Local Limited Partnerships              (97,075)         (21,181)          (41,631)
     Depreciation and amortization                                 77,308          112,275           143,238
     Minority interest in losses of Local Limited
       Partnership                                                   (268)            (258)             (372)
     Increase  (decrease)  in cash arising from
       changes in operating assets and
       liabilities:
       Tenant security deposits                                       691              (23)             (642)
       Mortgagee escrow deposits                                   (3,523)           4,210           (10,230)
       Replacement reserve escrow                                    (321)            (306)             (276)
       Other assets                                                 3,955            1,395            33,895
       Accounts payable to affiliates                               3,026          (12,017)           18,027
       Accounts payable and accrued expenses                       16,682          (18,769)          (47,928)
Tenant Security deposits payable                                      401              114             1,681
                                                            -------------    -------------     -------------
Net cash used for operating activities                           (234,376)        (132,839)          (44,849)
                                                            -------------    -------------     -------------

Cash flows from investing activities:
   Purchases of marketable securities                          (1,594,531)      (2,292,303)       (1,234,961)
   Proceeds from sales and maturities
     of marketable securities                                   1,696,150        2,209,848         1,294,295
   Advances to Local Limited
     Partnerships                                                       -           (3,000)         (321,650)
   Cash distributions received from Local
     Limited Partnerships                                         129,377           30,116           163,216
   Purchase of rental property and equipment                            -                -           (65,285)
   Bond trust deposits                                            (14,521)         (21,363)          (16,069)
                                                            -------------    -------------     -------------
Net cash provided by (used for) investing activities              216,475          (76,702)         (180,454)
                                                            -------------    -------------     -------------

Net decrease in cash and cash
   equivalents                                                    (17,901)        (209,541)         (225,303)

Cash and cash equivalents, beginning                              243,723          453,264           678,567
                                                            -------------    -------------     -------------

Cash and cash equivalents, ending                           $     225,822    $     243,723     $     453,264
                                                            =============    =============     =============

Supplemental disclosure:
   Cash paid for interest                                   $     118,185    $     118,057     $     118,095
                                                            =============    =============     =============

The  accompanying  notes are an  integral  part of these  combined financial statements,
</TABLE>

<PAGE>



BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS


1.   Organization

Boston  Financial   Qualified  Housing  Tax  Credits  Limited  Partnership  (the
"Partnership")  was  formed on January  22,  1987 under the laws of the State of
Delaware for the primary purpose of investing,  as a limited  partner,  in other
limited  partnerships  ("Local  Limited  Partnerships"),  each of which owns and
operates  apartment  complexes  benefiting  from some form of federal,  state or
local assistance  program and each of which qualifies for low-income housing tax
credits.  The Partnership's  objectives are to: (i) provide current tax benefits
in the form of tax credits  which  qualified  investors  may use to offset their
federal  income tax  liability;  (ii)  preserve  and protect  the  Partnership's
capital; (iii) provide limited cash distributions from property operations which
are not expected to constitute taxable income during Partnership operations; and
iv)  provide  cash  distributions  from sale or  refinancing  transactions.  The
General Partners of the Partnership are 29 Franklin Street Inc., which serves as
the Managing General Partner, and Franklin 29 Limited Partnership,  which serves
as the Initial Limited  Partner.  Both of the General Partners are affiliates of
The Boston Financial Group Limited Partnership ("Boston Financial").  The fiscal
year of the Partnership ends on March 31.

The Partnership's partnership agreement ("Partnership Agreement") authorized the
sale of up to 50,000 units of Limited  Partnership  Interest ("Units") at $1,000
per Unit,  adjusted for certain  discounts.  The Partnership  raised $49,963,740
("Gross  Proceeds"),  net of  discounts  of $36,260,  through the sale of 50,000
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 April 29, 1988.

Generally,  profits,  losses,  tax  credits and cash flows from  operations  are
allocated  99% to the  Limited  Partners  and 1% to the  General  Partners.  Net
proceeds  from a sale  or  refinancing  will  be  allocated  95% to the  Limited
Partners and 5% to the General Partners after certain priority payments.

Under  the  terms  of the  Partnership  Agreement,  the  Partnership  originally
designated 5% of Gross  Proceeds from the sale of Units as a reserve for working
capital of the  Partnership  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.  As of March
31, 1999, the Managing General Partner has designated  approximately  $1,543,000
of cash, cash equivalents and marketable securities as such Reserve.

2.   Significant Accounting Policies

Basis of Presentation and Combination

The Partnership accounts for its investments in Local Limited Partnerships, with
the  exception  of Hughes  Apartments,  using the  equity  method of  accounting
because  the  Partnership  does  not have a  majority  control  over  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 Partnership's share of income or loss of the Local Limited  Partnership,
additional  investments  in  and  cash  distributions  from  the  Local  Limited
Partnerships.  Equity in income or loss of the  Local  Limited  Partnerships  is
included  currently in the  Partnership's  operations.  The  Partnership  has no
obligation  to fund  liabilities  of the Local  Limited  Partnership  beyond its
investment and therefore a Limited Partnership's  investment will not be carried
below  zero.  To the extent  that equity  losses are  incurred or  distributions
received when the Partnership's  respective  carrying value of the Local Limited
Partnership has been reduced to a zero balance,  the losses will be suspended to
be used against future income,  and  distributions  received will be recorded as
income.  In addition,  valuation  reserves  are  adjusted  for equity  losses in
subsequent years.

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


<PAGE>
BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


2.   Significant Accounting Policies (continued)

Basis of Presentation and Combination (continued)

The Managing  General Partner has elected 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
of the Local Limited Partnerships that is included in the accompanying  combined
financial statements is as of December 31, 1998, 1997 and 1996.

On  October  27,  1995,  an  affiliate  of the  Partnership's  Managing  General
Partners,  BF Harbour View,  Inc.,  became the Local  General  Partner of Hughes
Apartments,   Ltd.  ("Hughes"),   a  Local  Limited  Partnership  in  which  the
Partnership  has  invested.  Since the  Local  General  Partner  of Hughes is an
affiliate of the  Partnership  and has a controlling  financial  interest in the
Local Limited Partnership, these combined financial statements include financial
activity of Hughes for the years ended  December  31, 1998,  1997 and 1996.  All
significant intercompany balances and transactions have been eliminated.

The  Partnership  has elected to  report the results of  Hughes on a  90 day lag
basis,  consistent with  the  presentation of the  financial  information of all
Local Limited Partnerships.

The Partnership recognizes a decline in the carrying value of its investments 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 the carrying value
of  investments  in Local Limited  Partnerships  may be subject to material near
term adjustments.

The  Partnership,  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 for
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.

Cash and Cash Equivalents

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

Marketable Securities

Marketable securities consist primarily of U.S. treasury instruments and various
asset-backed  investment vehicles.  The Partnership's  marketable 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. All marketable
securities  have fixed  maturities.  Realized gains and 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.

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
Partnership  adopted the new standard  effective  April 1, 1998 and its adoption
did not have a significant  effect on the  Partnership's  financial  position or
results of operations. The only component of the Partnership's other accumulated
comprehensive   income  is  net  unrealized   gains  and  losses  on  marketable
securities.


<PAGE>

BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


2.   Significant Accounting Policies (continued)

Deferred Charges

Bond financing costs incurred in connection  with financing the  construction of
Hughes have been  capitalized  and are being  amortized over the 25-year term of
the bonds using the straight line method of amortization.

Rental Property

Real  estate and  personal  property of Hughes are  recorded at cost.  Valuation
allowances are established  when the carrying value of such assets exceeds their
estimated  receivable amounts.  Depreciation is computed using the straight-line
method over the estimated useful lives of the assets.

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",
the Partnership 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 carrying value is compared to the  undiscounted  future cash
flows  expected  to be  derived  from the asset and,  if there is a  significant
impairment  in value,  a provision to write down the asset to fair value will be
charged against income.

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.

Rental Income

Rental  income,  principally  from  short term  leases on  apartment  units,  is
recognized as income as rentals become due.

Fair Value of Financial Instruments

Statements  of  Financial   Accounting  Standards  No.  107  ("SFAS  No.  107"),
Disclosures About Fair Value of Financial  Instruments,  requires disclosure for
the fair value of most on- and off-balance sheet financial instruments for which
it is  practicable  to estimate  that value.  The scope of SFAS No. 107 excludes
certain financial  instruments,  such as trade receivables and payables when the
carrying value approximates the fair value,  investments accounted for under the
equity method and all nonfinancial assets such as real property. The fair values
of  the  Partnership's   assets  and  liabilities  which  qualify  as  financial
instruments under SFAS No. 107, except the bond trusts (see Note 7), approximate
their carrying amounts in the accompanying balance sheets.

Income Taxes

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

Reclassifications

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




<PAGE>


BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
<TABLE>


3.   Marketable Securities

A summary of marketable securities is as follows:

                                                                Gross             Gross
                                                              Unrealized      Unrealized           Fair
                                               Cost             Gains            Losses            Value

<S>                                       <C>               <C>              <C>               <C>
Debt securities issued by the
   US Treasury and
   other US government
   corporations and agencies              $   1,793,226     $      11,447    $      (1,861)    $   1,802,812

Mortgage backed securities                      130,323             2,856                -           133,179
                                          -------------     -------------    -------------     -------------

Marketable securities
   at March 31, 1999                      $   1,923,549     $      14,303    $      (1,861)    $   1,935,991
                                          =============     =============    =============     =============

Debt securities issued by the
   US Treasury and
   other US government
   corporations and agencies              $   1,836,517     $       6,426    $      (3,884)    $   1,839,059

Mortgage backed securities                      183,661             2,516                -           186,177
                                          -------------     -------------    -------------     -------------

Marketable securities
   at March 31, 1998                      $   2,020,178     $       8,942    $      (3,884)    $   2,025,236
                                          =============     =============    =============     =============
</TABLE>


The contractual maturities at March 31, 1999 are as follows:

                                                                       Fair
                                                        Cost           Value

Due in less than one year                        $ 1,393,880     $ 1,403,296
Due in one year to five years                        399,346         399,516
Mortgage backed securities                           130,323         133,179
                                                 ------------    -----------
                                                   $1,923,549    $ 1,935,991


Actual maturities may differ from contractual  maturities because some borrowers
have the right to call or prepay obligations. Proceeds from sales and maturities
of securities were  approximately  $302,000,  $1,652,000 and $804,000 during the
fiscal years ended March 31, 1999,  1998 and 1997,  respectively.  Proceeds from
the maturities of marketable securities were approximately $1,394,000,  $558,000
and  $490,000  during the fiscal  years  ended  March 31,  1999,  1998 and 1997,
respectively.  Included in investment  income are gross gains of $7,440,  $7,098
and $4,492 and gross losses of $2,450,  $5,387 and $7,564 that were  realized on
these sales during the years ended March 31, 1999, 1998 and 1997, respectively.





<PAGE>

BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


4.   Investments in Local Limited Partnerships

The Partnership has acquired limited partnership interests in thirty-three Local
Limited  Partnerships,  excluding  Hughes,  which own and  operate  multi-family
housing complexes,  all of which are  government-assisted.  The Partnership,  as
Investor  Limited  Partner  pursuant to the various  Local  Limited  Partnership
Agreements which contain certain  operating and distribution  restrictions,  has
acquired a 99% interest in the profits,  losses, tax credits and cash flows from
operations  of each of the Local  Limited  Partnerships,  with the  exception of
Barrington  Manor,  Graver  Inn,  600 Dakota and  Duluth  which are 49.5%.  Upon
dissolution,   proceeds  will  be  distributed   according  to  each  respective
partnership agreement.

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

                                                              1999               1998              1997
                                                          -------------     -------------      --------

<S>                                                       <C>               <C>                <C>
  Capital contributions to Local Limited
   Partnerships and purchase price paid to
   withdrawing partners of Local Limited
   Partnerships                                           $  36,256,165     $  36,256,165      $  36,256,165

Cumulative equity in losses of Local
   Limited Partnerships (excluding cumulative
   unrecognized losses of $27,730,385, $22,515,719
   and $12,515,308 in 1999, 1998 and
   1997, respectively)                                      (35,977,227)      (35,762,306)       (33,461,841)

Cumulative cash distributions received
   from Local Limited Partnerships                           (1,731,926)       (1,602,549)        (1,572,433)
                                                          -------------     -------------      -------------

Investments in Local Limited Partnerships
   before adjustment                                         (1,452,988)       (1,108,690)         1,221,891

Excess investment costs over the
   underlying net assets acquired:

   Acquisition fees and expenses                              4,725,764         4,725,764          4,725,764

   Accumulated amortization of acquisition
     fees and expenses                                       (1,150,898)       (1,122,776)        (1,060,464)
                                                          -------------     --------------     -------------

Investments in Local Limited Partnerships                     2,121,878         2,494,298          4,887,191

Reserve for valuation of investments in
   Local Limited Partnerships                                  (685,201)         (685,201)          (328,803)
                                                          -------------     -------------      -------------
                                                          $   1,436,677     $   1,809,097      $   4,558,388
                                                          =============     =============      =============
</TABLE>


The 1998, 1997 and 1995 financial statements of 2225 New York Avenue, LTD ("2225
New  York  Avenue"),  a Local  Limited  Partnership  in  which  the  Partnership
invested,  were  prepared  assuming that 2225 New York Avenue will continue as a
going  concern.  2225 New York  Avenue,  which owns Pebble  Creek in  Arlington,
Texas,  incurred  significant  net losses in 1998,  1997 and 1996 and has severe
liquidity  problems and recurring  cash deficits.  These factors,  among others,
raise  substantial  doubt as to 2225 New York Avenue's  ability to continue as a
going  concern.  As such,  the  Partnership  provided a reserve for valuation of
$1,885,841  against its  investment  in 2225 New York Avenue at March 31,  1992.
This  reserve  has been  adjusted  in the  financial  statements  to reflect the
Partnership's  share of the net  losses  of 2225 New York  Avenue  for the years
ended  December  31,  1993  through  1998.  Equity in  losses  of Local  Limited
Partnerships  for the  years  ended  March  31,  1998,  1997 and  1996  includes
$725,997, $55,803 and $449,345, respectively,  related to 2225 New York Ave. The
reserve for  valuation of  investments  in Local Limited  Partnerships  has been
reduced  by these  amounts.  As a  result,  these  losses  have no effect on the
Partnership's Net Loss.


<PAGE>
BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


4.   Investments in Local Limited Partnerships (continued)

The  Partnership has also provided a reserve for valuation for its investment in
five Local Limited  Partnerships,  Graver Inn, Sierra Pointe,  Barrington Manor,
600 Dakota and Duluth,  because there is evidence of a non-temporary  decline in
the recoverable amount of these investments.

Included in   cumulative  equity  in  losses of  Local  Limited  Partnerships is
$822,529 of income  recognized during the year ended  March 31, 1997 as a result
of a change in accounting method of two Local Limited Partnerships.

Summarized financial  information as of December 31, 1998, 1997 and 1996 (due to
the Partnership's policy of reporting financial information of its Local Limited
Partnership  interests  on  a 90  day  lag  basis)  of  all  the  Local  Limited
Partnerships, excluding Hughes, in which the Partnership has invested as of that
date is as follows:

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

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

<S>                                                   <C>                    <C>                   <C>
Assets:
   Investment property, net                           $     92,363,668       $     94,727,330      $   104,825,788
   Current assets                                            2,212,892              2,033,143            2,686,076
   Other assets                                              7,300,351              9,048,810            9,247,079
                                                      ----------------        ---------------           ----------
     Total Assets                                     $    101,876,911       $    105,809,283      $   116,758,943
                                                      ================       ================      ===============

Liabilities and Partners' Deficit:
   Current liabilities (includes current portion
     of long-term debt)                               $     18,064,685       $     17,747,512      $    14,381,389
   Other debt                                                6,392,766              4,551,240           15,883,277
   Long-term debt                                          109,959,470            110,449,979          100,798,039
                                                      ----------------       ----------------      ---------------
     Total Liabilities                                     134,416,921            132,748,731          131,062,705
                                                      ----------------       ----------------      ---------------

Partners' Deficit:
   Partnership's Deficit                                   (32,151,518)           (26,663,482)         (14,087,983)
   Other Partners' Deficit                                    (388,492)              (275,966)            (215,779)
                                                      ----------------       ----------------      ---------------
     Total Partners' Deficit                               (32,540,010)           (26,939,448)         (14,303,762)
                                                      ----------------       ----------------      ---------------
     Total Liabilities and Partners' Deficit          $    101,876,911       $    105,809,283      $   116,758,943
                                                      ================       ================      ===============

Summarized Income Statements - for
the years ended December 31,
                                                            1998                        1997                  1996
                                                     -----------------       ----------------------        -------

Rental and other revenue                             $      20,444,984       $    19,707,452       $    19,530,795
                                                     -----------------       ---------------       ---------------

Expenses:
   Interest                                                  9,686,187             9,720,959             9,754,129
   Operating                                                11,869,008            17,741,869            10,860,840
   Depreciation and amortization                             4,374,717             4,671,464             4,717,555
                                                     -----------------       ---------------       ---------------
     Total Expenses                                         25,929,912            32,134,292            25,332,524
                                                     -----------------       ---------------       ---------------

Net Loss                                             $      (5,484,928)      $   (12,426,840)      $    (5,801,729)
                                                     =================       ===============       ===============

Partnership's share of Net Loss (1996 includes
   an adjustment relating to prior
    year as discussed above)                         $      (5,429,527)      $   (12,300,877)      $    (4,925,359)
                                                     =================       ===============       ===============
Other partners' share of Net Loss                    $         (55,401)      $      (125,963)      $      (110,302)
                                                     =================       ===============       ===============

</TABLE>

<PAGE>
BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


4.   Investments in Local Limited Partnerships (continued)

For the years ended  March 31,  1999,  1998 and 1997,  the  Partnership  has not
recognized $5,214,666,  $10,000,411 and $2,925,488,  respectively,  in equity in
losses relating to twenty Local Limited  Partnerships where cumulative equity in
losses and cumulative distributions exceeded its total investments.

The  Partnership's  deficit as reflected by the Local  Limited  Partnerships  of
$32,151,518  differs  from  the  Partnership's   Investments  in  Local  Limited
Partnerships  before  adjustment  of  $1,452,988  principally  because:  a)  the
Partnership has not recognized $27,730,385 of equity in losses relating to Local
Limited  Partnerships  whose  cumulative  equity in losses and  cumulative  cash
distributions exceeded their total investments and b) the purchase price paid to
the original  Limited  Partners by the Partnership has not been reflected in the
balance sheets of certain Local Limited Partnerships.

5.   Transactions with Affiliates

An affiliate of the Managing  General  Partner is reimbursed for the actual cost
of the Partnership's operating expenses.  Included in general and administrative
expenses for the years ended March 31, 1999, 1998 and 1997 is $133,092, $162,548
and $138,995,  respectively, that has been paid or is payable by the Partnership
as reimbursement for salaries and benefits.  At March 31, 1999 and 1998, $25,799
and $22,773,  respectively,  is payable to an affiliate of the Managing  General
Partner.

Boston  Financial  Property  Management  ("BFPM"),  an affiliate of the Managing
General  Partner,  currently  manages Windsor Court,  Rolling Green and Terrace,
three  properties  in which the  Partnership  has  invested.  (In the year ended
December  31,  1996,  BFPM also  managed  Sierra  Vista.)  Included in operating
expenses  in the  summarized  income  statements  in  Note  4 to  the  Financial
Statements  is  $128,246,  $136,095  and $194,057 of fees earned by BFPM for the
years ended December 31, 1998, 1997 and 1996, respectively.

6.   Rental Property

Real estate and personal property  belonging to Hughes are recorded at cost, the
components of which,  excluding certain acquisition costs of $31,895 and $33,175
as of December 31, 1998 and 1997, respectively, are as follows at December 31:
<TABLE>

                                                                                  1998                  1997
                                                                             ------------          ---------

<S>                                                                          <C>                   <C>
   Land                                                                      $     29,008          $     29,008
   Building and improvements                                                    1,490,659             1,490,659
   Equipment and furnishings                                                       26,817                26,817
                                                                             ------------          ------------
                                                                                1,546,484             1,546,484
   Less: accumulated depreciation                                                (478,519)             (433,837)
                                                                             ------------          ------------
     Total                                                                   $  1,067,965          $  1,112,647
                                                                             ============          ============
</TABLE>


7.   Bonds Payable

Hughes  financed  the  construction  of the project  through the sale of 25 year
Industrial  Development Revenue Bonds (the "Bonds") by the city of Mandan, North
Dakota and leased the property  from the city for rental equal to the sum of the
annual  principal  payment and semiannual  interest  payments on the Bonds.  The
Bonds bear  interest  at 9.75%.  The leased  property is included as an asset of
Hughes and the bonds have been recorded as a direct obligation of Hughes.



<PAGE>
BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


7.   Bonds Payable (continued)

The bond  financing  documents  require  that a portion of the bond  proceeds be
deposited into a bond reserve trust account and that only interest income on the
account can be used for operations.  The funds can be withdrawn only by the bond
trustee in the event that there is insufficient  cash in the bond account to pay
the annual bond  payments.  If the bond  trustee  does draw on the bond  reserve
trust  account,  the  amount  withdrawn  must  be  replaced  or  Hughes  will be
considered  in default on the  remaining  outstanding  bonds.  The bond  trustee
withdrew  funds from this account in 1996.  The amounts  withdrawn have not been
replaced, and consequently, Hughes is in default of its lease agreement.

The bond trust account is used to receive deposits from Hughes for principal and
interest  payments on the bonds.  The trustee  makes all  principal and interest
payments on the bonds from this trust account.  Principal payments are currently
not being made.

Effective October 27, 1995, an affiliate of the  Partnership's  Managing General
Partner replaced the Local General Partner of Hughes and successfully negotiated
a  Forbearance  Agreement  with the  trustee  whereby the  mortgage  arrears and
capital  repairs  would  be  funded  from  Partnership  and bond  reserves.  The
agreement  calls for  interest  payments  on June 1 and  December  1,  annually,
through  2005 of  $58,987.50  at each  payment  date.  On December 1, 2005,  all
arrears are due and payable.

Based on the unique terms of the financing and lack of available market data for
agreements  with  similar   characteristics,   management  believes  it  is  not
practicable to estimate the fair value of this arrangement.

The balances in the bond trust  accounts  required to be maintained  pursuant to
the bond financing documents at December 31, 1998 and 1997 are as follows:

                                                1998                    1997
                                              -----------            --------

             Bond reserve trust               $    84,075          $   79,358
             Bond trust                            38,018              28,214
                                              -----------          ----------
                                              $   122,093          $  107,572
                                              ===========          ===========

The Bond reserve trust account  consists of  investments  in US Treasury  notes,
which are  considered  held to maturity and are due in January 1999.  Investment
cost as of December 31, 1998 and 1997 is $84,075 and $79,358, respectively. Fair
value as of December  31, 1998 and 1997 is $84,835  and  $80,413,  respectively.
Unrealized  gains of $760 and  $1,055 in 1998 and 1997,  respectively,  have not
been recognized, as the notes will be held to maturity.

8.  Transfer of Interests in Local Limited Partnerships

On November  10, 1997,  the  Managing  General  Partner  transferred  50% of its
interest in capital and profits of Barrington Manor,  Graver Inn, 600 Dakota and
Duluth to the local general partner.  Included in this transfer is a put option.
The put  option  grants  the  Managing  General  Partner  the  right  to put the
Partnership's  remaining interest to the local general partner anytime after one
year has elapsed. For financial reporting purposes,  the Partnership has written
down the carrying value of these  investments in Local Limited  Partnerships  to
zero,  because  it is  unknown as to  whether  the  Partnership  will be able to
recover its remaining  invested  balances.  The Partnership will retain its full
share of tax  credits  until such time as the  remaining  interest is put to the
local general partner.

As previously  reported,  Boulevard Commons,  located in Chicago,  Illinois,  is
experiencing  operating  deficits  due to  expenses  increasing  because of high
turnover at the property, security issues and increasing maintenance and capital
needs.  As a result  of these  issues,  Boulevard  Common's  mortgage  went into
default.  In October 1998,  affiliates of the Managing  General Partner replaced
the Local General  Partners and a new  unaffiliated  non profit general partner.
The interest of the original  Local General  Partners was converted to a special
limited  partner  interest with no right to participate in the management of the
Local Limited Partnership. Further, the Managing General Partner

<PAGE>
BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


8.  Transfer of Interests in Local Limited Partnerships (continued)

consummated the transfer of 48% of the Partnership's  capital and profits in the
properties to the new Local General  Partner.  The Managing  General Partner has
the right to  transfer  the  Partnership's  remaining  interest to the New Local
General  Partner any time after one year has  elapsed.  Occupancy as of December
31, 1999 was 82%.

 9.   Subsequent Events

On April 9, 1999, due to concerns over the financial viability of 600 Dakota and
Graver  Inn  and to  avoid  the  potential  risk  of  recapture  of tax  credits
associated with the properties, the Managing General Partner exercised its right
to transfer the Partnership's remaining interest in 600 Dakota and Graver Inn to
the Local General Partner.  This transfer will not trigger a recapture event for
the Partnership nor have any impact on the Partnership's  financial  statements.
However, for tax purposes,  this event will result in both Section 1231 gain and
cancellation of indebtedness income for the 1999-tax year.

10.  Federal Income Taxes

A reconciliation  of the loss reported in the Combined  Statements of Operations
for the fiscal  years ended March 31, 1999,  1998 and 1997 to the loss  reported
for federal income tax purposes for the years ended December 31, 1998,  1997 and
1996 is as follows:
<TABLE>

                                                                       1999             1998            1997
                                                                  --------------    ------------   ---------

<S>                                                               <C>               <C>            <C>
Net Loss per Statements of Operations                             $     (542,258)   $ (2,927,278)  $ (2,048,112)
   Adjustment to reflect March 31, fiscal
     year-end to December 31,
     taxable year-end                                                    (38,297)       (291,494)       230,663
   Provision for valuation of investments in
     Local Limited Partnerships not deductible
     for tax purposes                                                          -         356,398       (458,723)
   Amortization of acquisition fees and
     expenses for tax purposes over
     amortization for financial
     reporting purposes                                                 (144,074)       (109,884)       (94,149)
   Adjustment for equity in losses of Local
     Limited Partnerships for financial
     reporting purposes over (under)
     equity in losses for tax purposes                                (1,252,301)      5,611,504     (1,829,071)
   Equity in losses of Local Limited
     Partnerships not recognized
     for financial reporting purposes                                 (5,214,666)    (10,000,411)    (2,925,488)
   Other                                                                 (24,263)        353,134        (22,963)
                                                                  --------------    ------------   ------------
Net Loss for federal income tax purposes                          $   (7,215,859)   $ (7,008,031)  $(7,147,843)
                                                                  ==============    ============   ===========
</TABLE>

The  differences in the assets and  liabilities of the Partnership for financial
reporting purposes and tax purposes as of March 31, 1999 are as follows:
<TABLE>

                                                      Financial                  Tax
                                                      Reporting               Reporting
                                                      Purposes                Purposes          Differences

<S>                                                <C>                     <C>                 <C>
Investments in Local Limited Partnerships          $   1,436,677           $ (33,064,295)      $ (34,500,972)
                                                   =============           =============       =============
Other assets                                       $   3,476,828           $   8,805,232       $  (5,328,404)
                                                   =============           =============       =============
Liabilities                                        $   1,353,610           $      35,076       $   1,318,534
                                                   =============           =============       =============
</TABLE>

<PAGE>
BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


10.   Federal Income Taxes (continued)

The  differences  in assets and  liabilities  of the  Partnership  for financial
reporting  purposes  are  primarily  attributable  to  the  following:  (i)  for
financial reporting purposes,  the Partnership combines the financial statements
of one  Local  Limited  Partnership  with  its  financial  statements;  for  tax
reporting  purposes,  this  entity is  carried on the  equity  method;  (ii) the
cumulative  equity in losses  from Local  Limited  Partnerships,  including  the
Combined Entity, for tax reporting purposes is approximately  $6,683,000 greater
than for financial reporting purposes,  including  approximately  $27,730,000 of
losses the  Partnership  has not  recognized  relating to twenty  Local  Limited
Partnerships  whose cumulative  equity in losses exceeded its total  investment;
(iii) the  amortization of acquisition  fees for tax reporting  purposes exceeds
financial  reporting  purposes by  approximately  $664,000;  (iv)  approximately
$7,000 of cash distributions received from Local Limited Partnerships during the
quarter ended March 31, 1999 are not included in the  Partnership's  Investments
in Local Limited  Partnerships for tax reporting  purposes at December 31, 1998;
and (v) organizational and offering costs of approximately  $6,165,000 that have
been  capitalized  for tax reporting  purposes are charged to Limited  Partners'
equity for financial reporting purposes.

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

                                                      Financial                  Tax
                                                      Reporting               Reporting
                                                      Purposes                Purposes          Differences

<S>                                                <C>                     <C>                 <C>
Investments in Local Limited Partnerships          $   1,809,097           $ (25,958,295)      $ (27,767,392)
                                                   =============           =============       =============
Other assets                                       $   3,619,840           $   8,908,049       $  (5,288,209)
                                                   =============           =============       =============
Liabilities                                        $   1,333,900           $      28,034       $   1,305,866
                                                   =============           =============       =============
</TABLE>


The  differences  in assets and  liabilities  of the  Partnership  for financial
reporting  purposes  are  primarily  attributable  to  the  following:  (i)  for
financial reporting purposes,  the Partnership combines the financial statements
of one  Local  Limited  Partnership  with  its  financial  statements;  for  tax
reporting  purposes,  this  entity is  carried on the  equity  method;  (ii) the
cumulative  equity in losses  from Local  Limited  Partnerships,  including  the
Combined Entity, for tax reporting purposes is approximately  $5,334,000 greater
than for financial reporting purposes,  including  approximately  $22,516,000 of
losses the  Partnership  has not  recognized  relating to twenty  Local  Limited
Partnerships  whose cumulative  equity in losses exceeded its total  investment;
(iii) the  amortization of acquisition  fees for tax reporting  purposes exceeds
financial  reporting  purposes by  approximately  $520,000;  (iv)  approximately
$7,000 of cash distributions received from Local Limited Partnerships during the
quarter ended March 31, 1998 are not included in the  Partnership's  Investments
in Local Limited  Partnerships for tax reporting  purposes at December 31, 1997;
and (v) organizational and offering costs of approximately  $6,165,000 that have
been  capitalized  for tax reporting  purposes are charged to Limited  Partners'
equity for financial reporting purposes.


<PAGE>


BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

11.   Supplemental Combining Schedules

Balance Sheets
<TABLE>

                                           Boston Financial
                                           Qualified Housing         Hughes
                                              Tax Credits          Apartments
                                              L.P. (A)               Ltd.(B)      Eliminations     Combined (A)
     Assets

<S>                                        <C>                  <C>               <C>               <C>
Cash and cash equivalents                  $        221,758     $        4,064    $           -     $    225,822
Tenant security deposits                                  -              4,040                -            4,040
Accounts receivable, net                             56,490                  -          (53,889)           2,601
Marketable securities, at fair value              1,935,991                  -                -        1,935,991
Mortgagee escrow deposits                                 -              9,543                -            9,543
Replacement reserve escrow                                -              6,719                -            6,719
Bond trusts                                               -            122,093                -          122,093
Investments in Local Limited
    Partnerships, net                             1,321,369                  -          115,308        1,436,677
Deferred charges, net                                     -             41,921                -           41,921
Rental property, at cost, net of
    accumulated depreciation                              -          1,067,965           31,895        1,099,860
Other assets                                         21,920              6,318                -           28,238
                                           ----------------     --------------    -------------     ------------
       Total Assets                        $      3,557,528     $    1,262,663    $      93,314     $  4,913,505
                                           ================     ==============    =============     ============

     Liabilities and Partners' Equity

Accounts payable to affiliates             $         25,799     $       53,889    $     (53,889)    $     25,799
Accounts payable and accrued
    expenses                                         30,155             13,705                -           43,860
Accrued interest                                          -             68,819                -           68,819
Tenant security deposits payable                          -              5,132                -            5,132
Bonds payable                                             -          1,210,000                -        1,210,000
                                           ----------------     --------------    -------------     ------------
Total Liabilities                                    55,954          1,351,545          (53,889        1,353,610
                                                     ------        -----------  ---------------    -------------

Minority interest in Local Limited
    Partnership                                           -                  -           58,321           58,321
                                           ----------------     --------------    -------------     ------------

General, Initial and Investor
    Limited Partners' Equity                      3,489,132            (88,882)          88,882        3,489,132
Net unrealized gains on marketable
    securities                                       12,442                  -                -           12,442
                                           ----------------     --------------    -------------     ------------
       Total Partners' Equity                     3,501,574            (88,882)          88,882        3,501,574
                                           ----------------     --------------    -------------     ------------
       Total Liabilities and
       Partners' Equity                    $      3,557,528     $    1,262,663    $      93,314     $  4,913,505
                                           ================     ==============    =============     ============
</TABLE>

(A) As of March 31, 1999.
(B) As of December 31, 1998 - See Note 2.


<PAGE>
BOSTON FINANCIAL  QUALIFIED  HOUSING TAX CREDITS LIMITED  PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

11.  Supplemental Combining Schedules (continued)

Statements of Operations
<TABLE>

                                           Boston Financial
                                           Qualified Housing         Hughes
                                              Tax Credits          Apartments
                                              L.P. (A)               Ltd.(B)      Eliminations     Combined (A)


Revenue:
<S>                                        <C>                  <C>               <C>              <C>
   Rental                                  $              -     $     224,199     $          -     $       224,199
   Investment                                       121,754             8,006                -             129,760
   Other                                            104,880             6,944                -             111,824
                                           ----------------     -------------     ------------     ---------------
       Total Revenue                                226,634           239,149                -             465,783
                                           ----------------     -------------     ------------     ---------------

Expenses:
   General and administrative                       400,926                 -                -             400,926
   Rental operations, exclusive
     of depreciation                                      -            99,894                -              99,894
   Interest                                               -           118,185                -             118,185
   Depreciation                                           -            44,682                -              44,682
   Amortization                                      29,402             3,224                -              32,626
                                           ----------------     -------------     ------------     ---------------
       Total Expenses                               430,328           265,985                -             696,313
                                           ----------------     -------------     ------------     ---------------

Loss before equity in losses
   of Local Limited Partnerships
   and minority interest                           (203,694)          (26,836)               -            (230,530)

Equity in losses of Local
   Limited Partnerships                            (338,564)                -           26,568            (311,996)

Minority interest in losses of
   Local Limited Partnership                              -                 -              268                 268
                                           ----------------     -------------     ------------     ---------------

Net Loss                                   $       (542,258)    $     (26,836)    $     26,836     $      (542,258)
                                           ================     =============     ============     ===============
</TABLE>


(A) For the year ended March 31, 1999.  (B) For the year ended December 31, 1998
- See Note 2.


<PAGE>


BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


11.  Supplemental Combining Schedules (continued)

Statements of Cash Flows
<TABLE>

                                         Boston Financial
                                         Qualified Housing        Hughes
                                            Tax Credits         Apartments
                                             L.P. (A)             Ltd.(B)      Eliminations        Combined (A)

<S>                                        <C>                <C>               <C>              <C>
 Cash flows from operating activities:
   Net Loss                                $   (542,258)      $    (26,836)     $   26,836       $     (542,258)
   Adjustments to reconcile net loss to
     net cash provided by (used for)
     operating activities:
   Equity in losses of Local Limited
     Partnerships                               338,564                  -         (26,568)             311,996
   Gain on sale of marketable securities         (4,990)                 -                       -       (4,990)
   Cash distribution income included in
     cash distributions from
     Local Limited Partnerships                 (97,075)                 -                       -      (97,075)
   Depreciation and amortization                 29,402             47,906                       -       77,308
   Minority interest in losses of Local
     Limited Partnership                              -                  -                    (268)        (268)
   Increase (decrease) in cash arising
   from changes in operating assets
   and liabilities:
     Tenant security deposits                         -                691                       -          691
     Mortgagee escrow deposits                        -             (3,523)                      -       (3,523)
     Replacement reserve escrow                       -               (321)                      -         (321)
     Other assets                                 3,859                 96                       -        3,955
     Accounts payable to affiliates               3,026                  -                       -        3,026
     Accounts payable and accrued
       expenses                                  18,975             (2,293)                      -       16,682
     Tenant security deposits payable                 -                401                       -          401
                                           ------------       ------------      ------------------      -------
Net cash provided by (used for)
   operating activities                        (250,497)            16,121                       -     (234,376)
                                           ------------       ------------      ------------------   ----------

Cash flows from investing activities:
   Purchases of marketable securities        (1,594,531)                 -                       -   (1,594,531)
   Proceeds from sales and maturities
     of marketable securities                 1,696,150                  -                       -    1,696,150
   Cash distributions received from
     Local Limited Partnerships                 129,377                  -                       -      129,377
   Bond trust deposits                                -            (14,521)                      -      (14,521)
                                           ------------       ------------      ------------------  -----------
Net cash provided by (used for)
   investing activities                         230,996            (14,521)                      -      216,475
                                           ------------       ------------      ------------------  -----------
</TABLE>


<PAGE>


BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)


11.  Supplemental Combining Schedules (continued)

Statements of Cash Flows (continued)

<TABLE>

                                         Boston Financial
                                         Qualified Housing        Hughes
                                            Tax Credits         Apartments
                                             L.P. (A)             Ltd.(B)      Eliminations        Combined (A)


<S>                                             <C>                  <C>       <C>                     <C>
 Net increase (decrease) in cash and
    cash equivalents                            (19,501)             1,600               -              (17,901)

Cash and cash equivalents, beginning            241,259              2,464               -              243,723
                                           ------------       ------------     -----------          -----------

Cash and cash equivalents, ending          $    221,758       $      4,064      $        -       $      225,822
                                           ============       ============      ==========       ==============

(A) For the year ended March 31, 1999.  (B) For the year ended December 31, 1998
- See Note 2.

</TABLE>


<PAGE>


Boston Financial Qualified Housing Limited Partnership
Schedule III - Real Estate and  Accumulated  Depreciation  of Property  owned by
Local Limited Partnerships in which Registrant has invested at March 31, 1999
<TABLE>

                                                                                                      GROSS AMOUNT AT
                                                                                                       WHICH CARRIED
                                                                                                      AT DECEMBER 31,
                                                             COST OF INTEREST AT                            1998
                                                               AQUISITION DATE
                                                         ----------------------------                 -----------------
                                                                                     NET IMPROVEMENTS
                                NUMBER        TOTAL                    BUILDINGS /     CAPITALIZED
                                  OF         ENCUM-                   IMPROVEMENTS    SUBSEQUENT TO       LAND AND
DESCRIPTION                      UNITS      BRANCES *       LAND       & EQUIPMENT     ACQUISITION      IMPROVEMENTS
-----------                      -----      ---------       ----       -----------     -----------      ------------
<S>                                   <C>      <C>           <C>            <C>             <C>                <C>
Low and Moderate
Income Apartment Complexes
Barrington Manor                      18        $595,000     $30,000        $555,638         $242,106          $32,011
  Fargo, ND
Bingham Housing                       24       1,160,527      48,934         362,172        1,048,144           65,754
Associates
  Bingham, ME
Birmingham Village                    24       1,155,244      61,900         190,424        1,166,788           61,900
  Randolph, ME
Bittersweet Lane                      35       2,383,518      69,300       2,884,207          379,824           74,542
  Randolph , MA
Coronodo Courts                      145       3,696,251     452,331       4,995,460            (386)          452,331
  Douglas, AZ
Elmore Hotel                          60       3,186,932      12,500       2,976,388          515,543           12,500
  Great Falls, MT
Graver Inn                            70       1,911,129      30,000       2,208,960          843,461           40,914
  Fargo, ND
Hazel Winthrop Apartments             30       2,110,234      45,000       2,548,540        (113,453)           45,000
  Chicago, IL
Hughes Apartments                     47       1,210,000      28,000       1,260,066          258,418           29,008
  Mandan, ND
Lakeview Heights                      83       2,765,967     217,588       2,896,224          333,289          217,588
  Clearfield, UT
Medford Hotel                         76       3,146,176      12,500       2,747,997        1,853,845           12,500
  Medford, OR
Heritage View                         24       1,158,762      64,800         690,736          682,131           64,800
  New Sweden, ME
Rolling Green Apartments             166       4,756,724     286,350       6,254,575          156,122          286,350
  Edmond, OK
Sierra Pointe Apartments             209       7,401,300     382,000       8,001,390        1,069,030          336,087
 Aurora, CO
Terrace Apartments                   206       5,221,404     350,000       6,470,754        (263,733)          350,000
  Oklahoma City, OK
Trenton Apartments                    37         821,747     154,000         899,293          105,261          154,000
  Salt Lake City, UT
Windsor Court Apartments             143       4,474,113     280,000       5,579,636        (178,309)          280,000
  Aurora, CO
Sierra Vista                         160       6,246,475     434,866       8,056,238          173,973          434,866
  Las Vegas, NV
Willow Peg Village                    57       1,472,966     125,000       1,741,799            4,166          125,000
  Ricon, GA
Pebble Creek                         352       7,955,434     794,000       9,563,687          270,453          734,800
  Arlington, TX
Pine Village                          36         936,427      40,000         960,000          189,698           40,000
  Pine Mountain, GA


</TABLE>

<PAGE>



Boston  Financial  Qualified  Housing  Limited  Partnership  Schedule III - Real
Estate  and  Accumulated   Depreciation  of  Property  owned  by  Local  Limited
Partnerships in which Registrant has invested at March 31, 1999


<TABLE>

                                                                                                       GROSS AMOUNT
                                                                                                         AT WHICH
                                                                                                        CARRIED AT
                                                           COST OF INTEREST AT                         DECEMBER 31,
                                                             AQUISITION DATE                               1998
                                                      ------------------------------                  ----------------
                                                                                    NET IMPROVEMENTS
                                NUMBER      TOTAL                     BUILDINGS /      CAPITALIZED
                                  OF        ENCUM-                   IMPROVEMENTS     SUBSEQUENT TO      LAND AND
DESCRIPTION                      UNITS    BRANCES *       LAND        & EQUIPMENT      ACQUISITION     IMPROVEMENTS
-----------                      -----    ---------       ----        -----------      -----------     ------------
<S>                                 <C>    <C>             <C>          <C>              <C>                 <C>
Low and Moderate
Income Apartment Complexes
Talbot Village                        24      599,804        21,775         545,547           192,054          20,000
  Talbolton, GA
Logan Plaza                          130   10,784,320       969,289      13,287,069           366,468         969,289
  New York, NY
Cass House                           111   12,685,999       222,000      11,423,209            84,178         222,000
  Boston, MA
Verdean Gardens   (A)                110   14,189,091       214,992       8,891,168       (3,764,800)         214,992
  New Bedford, MA
Country Estates                       24      593,661        22,500         734,409                 0          22,500
  Glenville, GA
Boulevard Commons                    212   10,684,574       318,000       3,580,316        11,265,504         412,010
  Chicago, IL
Chestnut Lane                         50    1,468,129        93,484         848,922           888,481          93,322
  Newman, GA
600 Dakota Properties                 28      620,000        64,353         769,608            36,538          63,670
  Wahpeton,  ND
Duluth                                11      255,179        24,000         363,810            13,214          24,000
  Souix Falls, SD
Delmar                                16      413,205        75,000         495,203            25,015          75,000
  Gillette, WY
Park Terrace                         101    3,536,511       393,713       4,781,404           214,005         393,713
  Dundalk, MD
Brentwood Manor II                    22      760,183        44,980       1,118,947            20,991          44,980
  Nashua, NH
Hillcrest Apts 3                      24      638,634        17,000         727,587            13,579          17,000
  Perryville, MO

                               ---------------------------------------------------------------------------------------
Subtotal                           2,865  120,995,620     6,400,155     119,411,383        18,091,598       6,422,427

Less Combined Entity                  47    1,210,000        28,000       1,260,066           258,418          29,008

                               =======================================================================================
Total                              2,818 $119,785,620    $6,372,155    $118,151,317       $17,833,180      $6,393,419
                               =======================================================================================

</TABLE>

(1) The  aggregate  cost  for  Federal  Income  Tax  purposes  is  approximately
$149,753,000.

                             * 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 9.75%
                               to 12%. The Partnership has not guaranteed any of
                               these mortgage notes payable.



<PAGE>



Boston  Financial  Qualified  Housing  Limited  Partnership  Schedule III - Real
Estate  and  Accumulated   Depreciation  of  Property  owned  by  Local  Limited
Partnerships in which Registrant has invested at March 31, 1999

                                 GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,
                                                     1998
                               -------------------------------------------------
<TABLE>

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

Low and Moderate
Income Apartment Complexes
Barrington Manor                      $795,733       $827,744           $246,606   1927        various         12/31/87
  Fargo, ND
Bingham Housing                      1,393,496      1,459,250            363,744   1988        various         12/30/87
Associates
  Bingham, ME
Birmingham Village                   1,357,212      1,419,112            352,665   1988        various         12/30/87
  Randolph, ME
Bittersweet Lane                     3,258,789      3,333,331          1,262,475   1988        various         10/27/87
  Randolph , MA
Coronodo Courts                      4,995,074      5,447,405          1,854,373   1945        various         12/18/87
  Douglas, AZ
Elmore Hotel                         3,491,931      3,504,431          1,397,247   1917        various         12/22/87
  Great Falls, MT
Graver Inn                           3,041,507      3,082,421            958,960   1917        various         12/31/87
  Fargo, ND
Hazel Winthrop Apartments            2,435,087      2,480,087            735,714   1910        various         12/30/87
  Chicago, IL
Hughes Apartments                    1,517,476      1,546,484            478,519   1926        various         12/31/87
  Mandan, ND
Lakeview Heights                     3,229,513      3,447,101          1,108,642   1972        various         12/30/87
  Clearfield, UT
Medford Hotel                        4,601,842      4,614,342          1,526,882   1915        various         12/22/87
  Medford, OR
Heritage View                        1,372,867      1,437,667            359,986   1988        various         12/30/87
  New Sweden, ME
Rolling Green Apartments             6,410,697      6,697,047          2,748,487   1974        various         09/30/87
  Edmond, OK
Sierra Pointe Apartments             9,116,333      9,452,420          4,039,146   1973        various         09/30/87
 Aurora, CO
Terrace Apartments                   6,207,021      6,557,021          2,754,089   1970        various         11/20/87
  Oklahoma City, OK
Trenton Apartments                   1,004,554      1,158,554            348,629   1925        various         12/30/87
  Salt Lake City, UT
Windsor Court Apartments             5,401,327      5,681,327          2,362,117   1974        various         12/30/87
  Aurora, CO
Sierra Vista                         8,230,211      8,665,077          3,629,848   1963        various         09/01/87
  Las Vegas, NV
Willow Peg Village                   1,745,965      1,870,965            707,004   1989        various         03/01/88
  Ricon, GA
Pebble Creek                         9,893,340     10,628,140          2,750,594 1977/81       various         06/20/88
  Arlington, TX
Pine Village                         1,149,698      1,189,698            453,167   1988        various         03/01/88
  Pine Mountain, GA

</TABLE>


<PAGE>



Boston  Financial  Qualified  Housing  Limited  Partnership  Schedule III - Real
Estate  and  Accumulated   Depreciation  of  Property  owned  by  Local  Limited
Partnerships in which Registrant has invested at March 31, 1999

                                 GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,
                                                     1998
                               -------------------------------------------------
<TABLE>

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

Low and Moderate
Income Apartment Complexes
Talbot Village                         739,376        759,376            284,427   1988        various         03/01/88
  Talbolton, GA
Logan Plaza                         13,653,537     14,622,826          3,808,493   1988        various         05/10/88
  New York, NY
Cass House                          11,507,387     11,729,387          4,106,089   1988        various         06/08/88
  Boston, MA
Verdean Gardens   (A)                5,126,368      5,341,360          3,468,167   1989        various         05/31/88
  New Bedford, MA
Country Estates                        734,409        756,909            313,056   1988        various         03/01/88
  Glenville, GA
Boulevard Commons                   14,751,810     15,163,820          5,281,643   1920        various         07/14/88
  Chicago, IL
Chestnut Lane                        1,737,565      1,830,887            663,584   1989        various         08/01/88
  Newman, GA
600 Dakota Properties                  806,829        870,499            225,740   1988        various         10/01/88
  Wahpeton,  ND
Duluth                                 377,024        401,024            113,406   1989        various         10/01/88
  Souix Falls, SD
Delmar                                 520,218        595,218            205,868   1988        various         10/01/88
  Gillette, WY
Park Terrace                         4,995,409      5,389,122          1,765,691   1989        various         01/20/89
  Dundalk, MD
Brentwood Manor II                   1,139,938      1,184,918            518,246   1971        various         01/20/89
  Nashua, NH
Hillcrest Apts 3                       741,166        758,166            259,562   1989        various         03/31/89
  Perryville, MO

                               --------------------------------------------------
Subtotal                           137,480,709    143,903,136         51,452,866

Less Combined Entity                 1,517,476      1,546,484            478,519

                               ==================================================
Total                             $135,963,233   $142,356,652        $50,974,347
                               ==================================================

</TABLE>


<PAGE>


<TABLE>

Summary of property owned and accumulated depreciation:

Property Owned December 31, 1998                                        Accumulated Depreciation December 31, 1998
--------------------------------------------------------------------    -----------------------------------------------
<S>                                       <C>          <C>              <C>                             <C>

Balance at beginning of period                         $143,058,700     Balance at beginning of period     $46,784,886
  Additions during period:                                                Additions during period:
     Less current year Hughes             (1,546,484)                        Less current year Hughes        (478,519)
Apartments                                                              Apt.
     Other acquisitions                       405,477                                                        4,667,980
                                                                        Depreciation
                                                                                                        ---------------
     Improvements etc.                        463,184                   Balance at close of period         $50,974,347
                                        --------------                                                  ===============
                                                          (677,823)
  Deductions during period:
     Cost of real estate and fixed           (24,225)
assets sold
     Write down of fixed assets
------------------------------------------------------
                                                           (24,225)
                                                      --------------
Balance at close of period                             $142,356,652
                                                      ==============





Property Owned December 31, 1997                                        Accumulated Depreciation December 31, 1997
--------------------------------------------------------------------    -----------------------------------------------
Balance at beginning of period                         $148,607,718     Balance at beginning of period     $42,623,824
  Additions during period:                                                Additions during period:
     Less current year Hughes             (1,546,484)                        Less current year Hughes        (433,837)
Apartments                                                              Apt.
     Other acquisitions                        75,769                                                        4,594,899
                                                                        Depreciation
                                                                                                        ---------------
     Improvements etc.                        525,109                   Balance at close of period         $46,784,886
                                        --------------                                                  ===============
                                                          (945,606)
  Deductions during period:
     Cost of real estate and fixed          (149,896)
assets sold
     Write down of fixed assets           (6,000,000)
                                        --------------
                                                        (6,149,896)
                                                      --------------
Balance at close of period                             $141,512,216
                                                      ==============


Property Owned December 31, 1996                                        Accumulated Depreciation December 31, 1996
--------------------------------------------------------------------    -----------------------------------------------
Balance at beginning of period                         $148,106,716     Balance at beginning of period     $38,028,894
  Additions during period:                                                Additions during period:
     Other acquisitions                        18,812                                                        4,594,930
                                                                        Depreciation
                                                                                                        ---------------
     Improvements etc.                        512,563                   Balance at close of period         $42,623,824
                                        --------------                                                  ===============
                                                            531,375
  Deductions during period:
     Cost of real estate and fixed           (30,373)
assets sold
     Reclassification to intangible                 0
assets
                                        --------------
                                                           (30,373)
                                                      --------------
Balance at close of period                             $148,607,718
                                                      ==============


</TABLE>

<PAGE>
[Letterhead]

[LOGO]
Haran & Associates LTD
Certified Public Accountants


                       INDEPENDENT AUDITOR'S REPORT

To the Partners                                      HUD Field Office Director
BOULEVARD COMMONS LIMITED PARTNERSHIP                        Chicago, Illinois
Chicago, Illinois

We have audited the  accompanying  balance  sheet of BOULEVARD  COMMONS  LIMITED
PARTNERSHIP,  Project No.  071-35592,  as of  December  31, 1998 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
and  generally  accepted   Government   Auditing  Standards  for  financial  and
compliance audits issued by the Comptroller General of the United States.  These
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 audit provided a reasonable basis for our opinion.

In our  opinion the  financial  statements  referred  to in the first  paragraph
present fairly, in all material  respects,  the financial  position of BOULEVARD
COMMONS  LIMITED  PARTNERSHIP  as of December 31, 1998,  and its profit or loss,
changes  in  partners'  equity,  and its cash  flows for the year then  ended in
conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will continue as a going concern.  As discussed in the notes to the
financial statements,  the Partnership is several months delinquent on its first
mortgage which raises substantial doubt about its ability to continue as a going
concern.  The  financial  statements do not include any  adjustments  that might
result from the outcome of this uncertainty.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January  25,  1999 on our  consideration  of  BOULEVARD  COMMONS  LIMITED
PARTNERSHIP's  internal control  structure and reports dated January 25, 1999 on
its compliance with specific  requirements  applicable to Major HUD Programs and
specific requirements applicable to Affirmative Fair Housing.

The  accompanying  supplementary  information  included in this report (shown on
pages 15 through 19) 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 same  auditing  procedures  applied  in the audit of the basic
financial  statements and, in our opinion,  are presented fairly in all material
respects in relation to the basic financial statements taken as a whole.

/s/ HARAN & ASSOCIATES LTD

HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Identification No. 36-3097692
Audit Partner: James E. Haran (847) 853-2580
January 25, 1999
<PAGE>
[Letterhead]

[LOGO]
Haran & Associates LTD
Certified Public Accountants


                       INDEPENDENT AUDITOR'S REPORT

To the Partners                                      HUD Field Office Director
BOULEVARD COMMONS LIMITED PARTNERSHIP                        Chicago, Illinois
Chicago, Illinois

We have audited the  accompanying  balance  sheet of BOULEVARD  COMMONS  LIMITED
PARTNERSHIP,  Project No.  071-35592,  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
and  generally  accepted   Government   Auditing  Standards  for  financial  and
compliance audits issued by the Comptroller General of the United States.  These
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 audit provided a reasonable basis for our opinion.

In our  opinion the  financial  statements  referred  to in the first  paragraph
present fairly, in all material  respects,  the financial  position of BOULEVARD
COMMONS  LIMITED  PARTNERSHIP  as of December 31, 1997,  and its profit or loss,
changes  in  partners'  equity,  and its cash  flows for the year then  ended in
conformity with generally accepted accounting principles.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January  23,  1998 on our  consideration  of  BOULEVARD  COMMONS  LIMITED
PARTNERSHIP's  internal control  structure and reports dated January 23, 1998 on
its compliance with specific  requirements  applicable to Major HUD Programs and
specific requirements applicable to Affirmative Fair Housing.

The  accompanying  supplementary  information  included in this report (shown on
pages 14 through 17) 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 same  auditing  procedures  applied  in the audit of the basic
financial  statements and, in our opinion,  are presented fairly in all material
respects in relation to the basic financial statements taken as a whole.

/s/ HARAN & ASSOCIATES LTD

HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Identification No. 36-3097692
Audit Partner: James E. Haran (847) 853-2580
January 23, 1998
<PAGE>


             BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
                           (A Limited Partnership)

                          Annual Report on form 10-K
                      For The Year Ended March 31, 1996
                       Reports of Independent Auditors
<PAGE>
[Letterhead]

[LOGO]
Haran & Associates Ltd
Certified Public Accountants


                       INDEPENDENT AUDITOR'S REPORT

To the Partners                                      HUD Field Office Director
BOULEVARD COMMONS LIMITED PARTNERSHIP                        Chicago, Illinois
Chicago, Illinois

We have audited the  accompanying  balance  sheet of BOULEVARD  COMMONS  LIMITED
PARTNERSHIP,  Project No.  071-35592,  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
and  generally  accepted   Government   Auditing  Standards  for  financial  and
compliance audits issued by the Comptroller General of the United States.  These
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 audit provided a reasonable basis for our opinion.

In our  opinion the  financial  statements  referred  to in the first  paragraph
present fairly, in all material  respects,  the financial  position of BOULEVARD
COMMONS  LIMITED  PARTNERSHIP  as of December 31, 1996,  and its profit or loss,
changes  in  partners'  equity,  and its cash  flows for the year then  ended in
conformity with generally accepted accounting principles.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January  17,  1997 on our  consideration  of  BOULEVARD  COMMONS  LIMITED
PARTNERSHIP's  internal control  structure and reports dated January 19, 1996 on
its compliance with specific  requirements  applicable to Major HUD Programs and
specific requirements applicable to Affirmative Fair Housing.

The  accompanying  supplementary  information  included in this report (shown on
pages 16 through 20) 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 same  auditing  procedures  applied  in the audit of the basic
financial  statements and, in our opinion,  are presented fairly in all material
respects in relation to the basic financial statements taken as a whole.

/s/ HARAN & ASSOCIATES LTD

HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Identification No. 36-3097692
Audit Partner: James E. Haran (708) 853-2580
January 17, 1997

<PAGE>












SUNDANCE HOUSING ASSOCIATES

[LETTERHEAD]
Michael Sczekan & Co., P.C.
Certified Public Accountants
7936 East Arapahoe Court, Suite 2800
Englewood, CO  80112
Telephone (303) 770-3356
Fax (303) 770-3357

INDEPENDENT AUDITORS' REPORT

To the Partners of                                   HUD Field Office
Sundance Housing Associates, Ltd.                    Denver, CO
Denver, Colorado

We have audited the accompanying  Balance Sheet of Sundance Housing  Associates,
Ltd., FHA Project Number 101-44154-SR-PR,as of December 31, 1998,and the related
statements of profit and loss, changes in project equity and cash flows for the
year then  ended.  These financial statements are the responsibility of the
Project's  management. Our responsibility is to express an opinion on these
financial  statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Sundance Housing  Associates,
Ltd., as of December 31, 1998,  and the results of its  operations  and its cash
flows for the year then ended in conformity with generally  accepted  accounting
principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for  Audits  and HUD  Programs  and,  we have also  issued a report  dated
February 23, 1999, on our consideration of Sundance Housing  Associates,  Ltd.'s
internal control structure and reports dated February 23, 1999 on its compliance
with laws and  regulations and compliance with laws and requlations and specific
requirements   applicable  to  major  HUD  programs  and  specific  requirements
applicable to Fair Housing and Non-discrimination.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements taken as a whole. The supporting data included in the report on pages
12 through 15 is  presented  for  purposes of  additional  analysis and is not a
required part of the basic financial statements of the Americana  Redevelopment.
Such information has been subjected to the same auditing  procedures  applied in
the examination of basic financial statements and, in our opinion, are presented
fairly in all material  respects in relation to the basic  financial  statements
taken as a whole.

/s/Michael Sczkan
Michael Sczekan  Co., P.C.
Certified Public Accountants
Englewood,  CO
February 23, 1999
[LETTERHEAD]
Michael Sczekan & Co., P.C.
Certified Public Accountants
7936 East Arapahoe Court, Suite 2800
Englewood, CO  80112
Telephone (303) 770-3356
Fax (303) 770-3357

INDEPENDENT AUDITORS' REPORT

To the Partners of                                   HUD Field Office
Sundance Housing Associates, Ltd.                    Denver, CO
Denver, Colorado

We have audited the accompanying  Balance Sheet of Sundance Housing  Associates,
Ltd.,  FHA Project  Number  101-44154-SR-PR,  as of December 31,  1997,  and the
related  statements of profit and loss, changes in project equity and cash flows
for the year then ended.  These financial  statements are the  responsibility of
the Project's  management.  Our responsibility is to express an opinion on these
financial  statements  based on our audit.  We conducted our audit in accordance
with generally  accepted auditing standards and Government  Auditing  Standards,
issued by the Comptroller General of the United States.  Those standards require
that we plan and perform the audit to obtain reasonable  assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Sundance Housing  Associates,
Ltd., as of December 31, 1997,  and the results of its  operations  and its cash
flows for the year then ended in conformity with generally  accepted  accounting
principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for  Audits  and HUD  Programs  and,  we have also  issued a report  dated
February 5, 1998, on our  consideration of Sundance Housing  Associates,  Ltd.'s
internal control  structure and reports dated February 5, 1998 on its compliance
with laws and  regulations and compliance with laws and requlations and specific
requirements   applicable  to  major  HUD  programs  and  specific  requirements
applicable to Fair Housing and Non-discrimination.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements taken as a whole. The supporting data included in the report on pages
12 through 18 is  presented  for  purposes of  additional  analysis and is not a
required part of the basic financial statements of the Americana  Redevelopment.
Such information has been subjected to the same auditing  procedures  applied in
the examination of basic financial statements and, in our opinion, are presented
fairly in all material  respects in relation to the basic  financial  statements
taken as a whole.

/s/Michael Sczkan
Michael Sczekan  Co., P.C.
Certified Public Accountants
Englewood,  CO
February 5, 1998
<PAGE>
Reznick Fedder & Silverman
Certified Public Accountants
Business Consultants
745 Atlantic Avenue, Suite 800
Boston, MA  02111-2735, Phone (617) 423-5855
FAX (617) 423-6651
                         INDEPENDENT AUDITORS' REPORT
To the Partners
Sundance  Housing Associates, Ltd.

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

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

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

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 20 through 26
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,  except for that portion marked  "unaudited" on which we express
no opinion,  is fairly stated in all material  respects in relation to the basic
financial statements taken as a whole.

In accordance with Government  Auditing  Standards,  and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 27,
1997, on our  consideration  of Sundance  Housing  Associates,  Ltd.'s  internal
control structure and on its compliance with specific requirements applicable to
major  HUD  programs,   affirmative  fair  housing,  and  laws  and  regulations
applicable to the financial statements.

 /s/ Reznick Fedder & Silverman
Boston, Massachusetts                     Federal Employer
January 27, 1997                            Identification Number:    52-1088612
Audit Principal: Phillip A. Weitzel
PEBBLE CREEK APARTMENTS
<PAGE>
[Letterhead]

[Pyramid logo]

ARONSON, FETRIDGE & WEIGLE
A Professional Corporation
Certified Public Accountants
and Management Consultants

                         Independent Auditor's Report

The Partners                                        HUD Field Office Director
2225 NEW YORK AVENUE, LTD.                                   1600 Thockmorton
T/A PEBBLE CREEK APARTMENTS                                     P.O. Box 2905
11781 Lee Jackson Highway, #320                  Fort Worth, Texas 76113-2905
Fairfax, Virginia

We have  audited  the  Balance  Sheet of 2225 NEW YORK  AVENUE,  LTD. (A Limited
Partnership)  T/A PEBBLE  CREEK  APARTMENTS,  FHA  Project No.  113-36607  as of
December  31, 1998,  and the related  Statements  of Profit and Loss,  Partners'
Capital and Cash Flows for the year then ended.  These financial  statements are
the  responsibility of the Partnership's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion,  the financial statements referred to above presently fairly, in
all material respects,  the financial position of 2225 NEW YORK AVENUE, LTD. T/A
PEBBLE CREEK APARTMENTS,  FHA Project No. 113-36607 as of December 31, 1998, and
the  results  of its  operations  and its cash  flows for the year then ended in
conformity with generally accepted accounting principles.

The accompanying  financial statements have been prepared assuming that 2225 NEW
YORK AVENUE,  LTD. T/A PEBBLE CREEK  APARTMENTS,  FHA Project No. 113-36607 will
continue as a going concern. As discussed in Note 5 to the financial statements,
the Partnership has incurred substantial losses from operations, had negative
working  capital at  December  31,  1998 and is under a workout  agreement  with
Department of HUD on it's mortgage.  These factors raise substantial doubt about
the  Partnership's  ability  to  continue  as a  going  concern.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements  taken as a whole.  The  supporting  data  required by HUD
presented on pages 13 - 17 are presented for purposes of additional analysis and
is not a required part of the basic financial  statements.  Such information has
been  subjected  to the  auditing  procedures  applied in the audit of the basic
financial  statements  and, in our  opinion,  is fairly  stated in all  material
respects in relation to the basic financial statements taken as a whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 22, 1999 on our  consideration  of 225 NEW YORK  AVENUE,  LTD T/A
PEBBLE CREEK APARTMENTS;  internal control and reports dated January 22, 1998 on
its compliance with laws and regulations.

/s/ Aronson, Fetridge & Weigle
Rockville, Maryland
January 22, 1999

<PAGE>
[Letterhead]

[Pyramid logo]

ARONSON, FETRIDGE & WEIGLE
A Professional Corporation
Certified Public Accountants
and Management Consultants

                         Independent Auditor's Report

The Partners                                        HUD Field Office Director
2225 NEW YORK AVENUE, LTD.                                   1600 Thockmorton
T/A PEBBLE CREEK APARTMENTS                                     P.O. Box 2905
11781 Lee Jackson Highway, #320                  Fort Worth, Texas 76113-2905
Fairfax, Virginia

We have  audited  the  Balance  Sheet of 2225 NEW YORK  AVENUE,  LTD. (A Limited
Partnership)  T/A PEBBLE  CREEK  APARTMENTS,  FHA  Project No.  113-36607  as of
December  31, 1997,  and the related  Statements  of Profit and Loss,  Partners'
Capital and Cash Flows for the year then ended.  These financial  statements are
the  responsibility of the Partnership's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion,  the financial statements referred to above presently fairly, in
all material respects,  the financial position of 2225 NEW YORK AVENUE, LTD. T/A
PEBBLE CREEK APARTMENTS,  FHA Project No. 113-36607 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  financial statements have been prepared assuming that 2225 NEW
YORK AVENUE,  LTD. T/A PEBBLE CREEK  APARTMENTS,  FHA Project No. 113-36607 will
continue as a going concern. As discussed in Note 5 to the financial statements,
the Partnership has incurred substantial losses from operations, had negative
working  capital at  December  31,  1997 and is under a workout  agreement  with
Department of HUD on it's mortgage.  These factors raise substantial doubt about
the  Partnership's  ability  to  continue  as a  going  concern.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements  taken as a whole.  The  supporting  data  required by HUD
presented on pages 13 - 21 are presented for purposes of additional analysis and
is not a required part of the basic financial  statements.  Such information has
been  subjected  to the  auditing  procedures  applied in the audit of the basic
financial  statements  and, in our  opinion,  is fairly  stated in all  material
respects in relation to the basic financial statements taken as a whole.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 22, 1998 on our  consideration  of 225 NEW YORK  AVENUE,  LTD T/A
PEBBLE CREEK APARTMENTS;  internal control and reports dated January 22, 1998 on
its compliance with laws and regulations.

/s/ Aronson, Fetridge & Weigle
Rockville, Maryland
January 22, 1998
<PAGE>
 [Letterhead]

[Pyramid logo]

ARONSON, FETRIDGE & WEIGLE
A Professional Corporation
Certified Public Accountants
and Management Consultants

                         Independent Auditor's Report

The Partners                                        HUD Field Office Director
2225 NEW YORK AVENUE, LTD.                                   1600 Thockmorton
T/A PEBBLE CREEK APARTMENTS                                     P.O. Box 2905
11781 Lee Jackson Highway, #320                  Fort Worth, Texas 76113-2905
Fairfax, Virginia

We have  audited  the  Balance  Sheet of 2225 NEW YORK  AVENUE,  LTD. (A Limited
Partnership)  T/A PEBBLE  CREEK  APARTMENTS,  FHA  Project No.  113-36607  as of
December  31, 1996,  and the related  Statements  of Profit and Loss,  Partners'
Capital and Cash Flows for the year then ended.  These financial  statements are
the  responsibility of the Partnership's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audit.

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

We were unable to reconcile the confirmation received from HUD of the balance of
the mortgage,  escrows,  and mortgage  interest paid as reflected on the balance
sheet and income  statement as of and for the year ended  December 31, 1996.  We
were unable to obtain satisfactory  corroborating information from other sources
or through alternative procedures.

In our  opinion,  except for the effects of such  adjustments,  if any, as might
have  been  determined  to be  necessary  had we been  able to  corroborate  the
recorded balance of the mortgage payable, mortgage escrows and mortgage interest
paid  as  referred  to in the  preceding  paragraph,  the  financial  statements
referred to above  presently  fairly,  in all material  respects,  the financial
position of 2225 NEW YORK AVENUE, LTD. T/A PEBBLE CREEK APARTMENTS,  FHA Project
No. 113-36607 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  financial statements have been prepared assuming that 2225 NEW
YORK AVENUE,  LTD. T/A PEBBLE CREEK  APARTMENTS,  FHA Project No. 113-36607 will
continue as a going concern. As discussed in Note 7 to the financial statements,
the Partnership has incurred  substantial  losses from operations,  had negative
working  capital at December 31, 1996, and was several months  delinquent on its
mortgage payments. These factors raise substantial doubt about the Partnership's
ability to continue  as a going  concern.  Management's  plan in regard to these
matters are also  described in Note 7. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements  taken as a whole.  The  supporting  data  required by HUD
presented on pages 13 - 21 are 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/ Aronson, Fetridge & Weigle
Rockville, Maryland
January 12, 1997
<PAGE>














CASS HOUSE
[Letterhead]

                                    [LOGO]
                            ZINER & COMPANY, P.C.
                         CERTIFIED PUBLIC ACCOUNTANTS

                         INDEPENDENT AUDITORS' REPORT

To the Partners of
Cass House Associates Limited
Partnership

   We have audited the accompanying  balance sheet (MHFA Forms F.C.-3A & -3B) of
Cass House Associates Limited Partnership (a Massachusetts  limited partnership)
(Project No. 84-057-S) as of December 31, 1998, and the related statements of
changes in partners' equity  (deficiency)  (MHFA Form F.C. -2A) operations (MHFA
Form  F.C.-2A) and cash flows (MHFA Forms F.C. -4A, -4B & -4C) for the year then
ended.  These  financial  statements  are  the  responsibility  of  the  general
partners.  Our  responsibility  is to  express  an  opinion  on these  financial
statements based on our audit.

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

   In our opinion, the financial statements referred to above present fairly, in
all material  respects,  the financial position of Cass House Associates Limited
Partnership as of December 31, 1998, and the results of its operations, its cash
flows and changes in partners'  equity  (deficiency)  for the year then ended in
conformity with generally accepted accounting principles.

  The  accompanying  financial  statements have been prepared  assuming that the
Partnership  will  continue as a going  concern.  As  discussed in Note H to the
financial  statements,  the  Partnership  has  suffered  recurring  losses  from
operations and has a net working capital  deficiency,  which raises  substantial
doubt about its ability to continue in existence.  The general  partners'  plans
regarding  these matters are also discussed in Note H. The financial  statements
do not  include  any  adjustments  that might  result  form the  outcome of this
uncertainty.

/s/ Ziner & Company, P.C.
Boston, MA
January 21, 1999
<PAGE>
[Letterhead]

                                    [LOGO]
                            ZINER & COMPANY, P.C.
                         CERTIFIED PUBLIC ACCOUNTANTS

                         INDEPENDENT AUDITORS' REPORT

To the Partners of
Cass House Associates Limited
Partnership

   We have audited the accompanying  balance sheet (MHFA Forms F.C.-3A & -3B) of
Cass House Associates Limited Partnership (a Massachusetts  limited partnership)
(Project No. 84-057-S) as of December 31, 1997, and the related statements of
changes in partners' equity  (deficiency)  (MHFA Form F.C. -2A) operations (MHFA
Form  F.C.-2A) and cash flows (MHFA Forms F.C. -4A, -4B & -4C) for the year then
ended.  These  financial  statements  are  the  responsibility  of  the  general
partners.  Our  responsibility  is to  express  an  opinion  on these  financial
statements based on our audit.

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

   In our opinion, the financial statements referred to above present fairly, in
all material  respects,  the financial position of Cass House Associates Limited
Partnership as of December 31, 1997, and the results of its operations, its cash
flows and changes in partners'  equity  (deficiency)  for the year then ended in
conformity with generally accepted accounting principles.

  The  accompanying  financial  statements have been prepared  assuming that the
Partnership  will  continue as a going  concern.  As  discussed in Note H to the
financial  statements,  the  Partnership  has  suffered  recurring  losses  from
operations and has a net working capital  deficiency,  which raises  substantial
doubt about its ability to continue in existence.  The general  partners'  plans
regarding  these matters are also discussed in Note H. The financial  statements
do not  include  any  adjustments  that might  result  form the  outcome of this
uncertainty.

/s/ Ziner & Company, P.C.
Boston, MA
January 27, 1998
<PAGE>
 [Letterhead]

                                    [LOGO]
                            ZINER & COMPANY, P.C.
                         CERTIFIED PUBLIC ACCOUNTANTS

                         INDEPENDENT AUDITORS' REPORT

To the Partners of
Cass House Associates Limited
Partnership

   We have audited the accompanying  balance sheet (MHFA Forms F.C.-3A & -3B) of
Cass House Associates Limited Partnership (a Massachusetts  limited partnership)
(Project No. 84-057-S) as of December 31, 1996, and the related statements of
changes in partners' equity  (deficiency) (MHFA Forms F.C. -2A) operations (MHFA
Form  F.C.-2A) and cash flows (MHFA Forms F.C. -4A, -4B & -4C) for the year then
ended.  These  financial  statements  are  the  responsibility  of  the  general
partners.  Our  responsibility  is to  express  an  opinion  on these  financial
statements based on our audit.

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

   In our opinion, the financial statements referred to above present fairly, in
all material  respects,  the financial position of Cass House Associates Limited
Partnership as of December 31, 1996, and the results of its operations, its cash
flows and changes in partners'  equity  (deficiency)  for the year then ended in
conformity with generally accepted accounting principles.

/s/ Ziner & Company, P.C.
Boston, MA
January 27, 1997
<PAGE>


VERDEAN GARDENS APARTMENTS

[Letterhead]
[LOGO]
                            ZINER & COMPANY, P.C.
                         CERTIFIED PUBLIC ACCOUNTANTS

                         INDEPENDENT AUDITORS' REPORT

To the Partners of
Verdean Gardens Associates
 Limited Partnership

   We have audited the accompanying  balance sheet (MHFA Forms F.C.-3A & -3B) of
Verdean  Gardens  Associates  Limited   Partnership  (a  Massachusetts   limited
partnership)  (Project No.  84-082-S)  as of December 31, 1998,  and the related
statements  of changes in  partners'  equity  (deficiency)  (MHFA Form  F.C.-3C)
operations  (MHFA Form F.C.-2A) and cash flows (MHFA Forms  F.C.-4A,  -4B & -4C)
for the year then ended.  These financial  statements are the  responsibility of
the  general  partners.  Our  responsibility  is to  express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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 Verdean  Gardens  Associates
Limited  Partnership as of December 31, 1998, and the results of its operations,
its cash flows and its changes in  partners'  equity  (deficiency)  for the year
then ended in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue as a going  concern.  As  discussed in Note G to the
financial  statements,  the  Partnership  has  suffered  recurring  losses  from
operations and has a net working capital  deficiency,  which raises  substantial
doubt about its ability to continue in existence.  The general  partners'  plans
regarding  these matters are also discussed in Note G. The financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.

/s/ Ziner & Company, P.C.
Boston, MA
January 28, 1999

[Letterhead]
[LOGO]
<PAGE>

                            ZINER & COMPANY, P.C.
                         CERTIFIED PUBLIC ACCOUNTANTS

                         INDEPENDENT AUDITORS' REPORT

To the Partners of
Verdean Gardens Associates
 Limited Partnership

   We have audited the accompanying  balance sheet (MHFA Forms F.C.-3A & -3B) of
Verdean  Gardens  Associates  Limited   Partnership  (a  Massachusetts   limited
partnership)  (Project No.  84-082-S)  as of December 31, 1997,  and the related
statements  of changes in  partners'  equity  (deficiency)  (MHFA Form  F.C.-3C)
operations  (MHFA Form F.C.-2A) and cash flows (MHFA Forms  F.C.-4A,  -4B & -4C)
for the year then ended.  These financial  statements are the  responsibility of
the  general  partners.  Our  responsibility  is to  express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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 Verdean  Gardens  Associates
Limited  Partnership as of December 31, 1997, and the results of its operations,
its cash flows and its changes in  partners'  equity  (deficiency)  for the year
then ended in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue as a going  concern.  As  discussed in Note G to the
financial  statements,  the  Partnership  has  suffered  recurring  losses  from
operations and has a net working capital  deficiency,  which raises  substantial
doubt about its ability to continue in existence.  The general  partners'  plans
regarding  these matters are also discussed in Note G. The financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.

/s/ Ziner & Company, P.C.
Boston, MA
January 28, 1998
<PAGE>
[[LOGO]
                            ZINER & COMPANY, P.C.
                         CERTIFIED PUBLIC ACCOUNTANTS

                         INDEPENDENT AUDITORS' REPORT

To the Partners of
Verdean Gardens Associates
 Limited Partnership

   We have audited the accompanying  balance sheet (MHFA Forms F.C.-3A & -3B) of
Verdean  Gardens  Associates  Limited   Partnership  (a  Massachusetts   limited
partnership)  (Project No.  84-082-S)  as of December 31, 1996,  and the related
statements  of changes in  partners'  equity  (deficiency)  (MHFA Form  F.C.-3C)
operations  (MHFA Form F.C.-2A) and cash flows (MHFA Forms  F.C.-4A,  -4B & -4C)
for the year then ended.  These financial  statements are the  responsibility of
the  general  partners.  Our  responsibility  is to  express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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 Verdean  Gardens  Associates
Limited  Partnership as of December 31, 1996, and the results of its operations,
its cash flows and its changes in  partners'  equity  (deficiency)  for the year
then ended in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue as a going  concern.  As  discussed in Note H to the
financial  statements,  the  Partnership  has  suffered  recurring  losses  from
operations and has a net working capital  deficiency,  which raises  substantial
doubt about its ability to continue in existence.  The general  partners'  plans
regarding  these matters are also discussed in Note H. The financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.


/s/ Ziner & Company, P.C.
Boston, MA
January 27, 1997
<PAGE>

medford hotel
[Letterhead]

                              ROBERT STEPHENSON
                          An Accountancy Corporation
                       515 N. Sepulveda Blvd., Suite A
                      Manhattan Beach, California 90266
                                (310) 318-1592

Partners
Medford Hotel Associates Limited Partnership

I have audited the balance sheet of Medford Hotel Associates Limited Partnership
(an  Oregon  limited  partnership)  as of  December  31,  1998  and the  related
statements of operations,  partnership capital, and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  My  responsibility  is to express  an  opinion  on these  financial
statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the financial  position of Medford Hotel Associates Limited
Partnership  at December 31, 1998 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted  accounting
principles.

In accordance with Government  Auditing  Standards,  I have also issued a report
dated January 19, 1999 on my consideration  of Medford Hotel Associates  Limited
Partnership's  internal control structure and a report dated January 19, 1999 on
its compliance with laws and regulations.

The  accompanying  supplementary  information  (shown  on  pages  14 and  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 my
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.


/s/ Robert Stephenson
Manhattan Beach, California
January 19, 1999
 [Letterhead]

                              ROBERT STEPHENSON
                          An Accountancy Corporation
                       515 N. Sepulveda Blvd., Suite A
                      Manhattan Beach, California 90266
                                (310) 318-1592

Partners
Medford Hotel Associates Limited Partnership

I have audited the balance sheet of Medford Hotel Associates Limited Partnership
(an  Oregon  limited  partnership)  as of  December  31,  1997  and the  related
statements of operations,  partnership capital, and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  My  responsibility  is to express  an  opinion  on these  financial
statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the financial  position of Medford Hotel Associates Limited
Partnership  at 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.

In accordance with Government  Auditing  Standards,  I have also issued a report
dated January 19, 1998 on my consideration  of Medford Hotel Associates  Limited
Partnership's  internal control structure and a report dated January 19, 1998 on
its compliance with laws and regulations.

The  accompanying  supplementary  information  (shown  on  pages  14 and  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 my
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.

/s/ Robert Stephenson
Manhattan Beach, California
January 19, 1998

<PAGE>

 [Letterhead]

                              ROBERT STEPHENSON
                          An Accountancy Corporation
                       515 N. Sepulveda Blvd., Suite A
                      Manhattan Beach, California 90266
                                (310) 318-1592

Partners
Medford Hotel Associates Limited Partnership

I have audited the balance sheet of Medford Hotel Associates Limited Partnership
(an  Oregon  limited  partnership)  as of  December  31,  1996  and the  related
statements of operations,  partnership capital, and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  My  responsibility  is to express  an  opinion  on these  financial
statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the financial  position of Medford Hotel Associates Limited
Partnership  at 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.

In accordance with Government  Auditing  Standards,  I have also issued a report
dated January 22, 1997 on my consideration  of Medford Hotel Associates  Limited
Partnership's  internal control structure and a report dated January 22, 1997 on
its compliance with laws and regulations.

The  accompanying  supplementary  information  (shown  on  pages  14 and  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 my
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.

/s/ Robert Stephenson
Manhattan Beach, California
January 22, 1997
<PAGE>


OREGON LANDMARK
[Letterhead]

                              ROBERT STEPHENSON
                          An Accountancy Corporation
                       515 N. Sepulveda Blvd., Suite A
                      Manhattan Beach, California 90266
                                (310) 318-1592

Partners
Oregon Landmark-Three Limited Partnership

I have audited the balance sheet of Oregon  Landmark-Three  Limited  Partnership
(an  Oregon  limited  partnership)  as of  December  31,  1998  and the  related
statements of operations, deficit in partnership capital, and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  My  responsibility is to express an opinion on these
financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the  financial  position of Oregon  Landmark-Three  Limited
Partnership  at December 31, 1998 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted  accounting
principles.

In accordance with Government  Auditing  Standards,  I have also issued a report
dated  January 19, 1999 on my  consideration  of Oregon  Landmark-Three  Limited
Partnership's  internal control structure and a report dated January 19, 1999 on
its compliance with laws and regulations.

The  accompanying  supplementary  information  (shown  on  pages  14 and  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 my
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.

 /s/ Robert Stephenson
Manhattan Beach, California
January 19, 1999
<PAGE>

 [Letterhead]

                              ROBERT STEPHENSON
                          An Accountancy Corporation
                       515 N. Sepulveda Blvd., Suite A
                      Manhattan Beach, California 90266
                                (310) 318-1592

Partners
Oregon Landmark-Three Limited Partnership

I have audited the balance sheet of Oregon  Landmark-Three  Limited  Partnership
(an  Oregon  limited  partnership)  as of  December  31,  1997  and the  related
statements of operations, deficit in partnership capital, and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  My  responsibility is to express an opinion on these
financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the  financial  position of Oregon  Landmark-Three  Limited
Partnership  at 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.

In accordance with Government  Auditing  Standards,  I have also issued a report
dated  January 20, 1998 on my  consideration  of Oregon  Landmark-Three  Limited
Partnership's  internal control structure and a report dated January 20, 1998 on
its compliance with laws and regulations.

The  accompanying  supplementary  information  (shown  on  pages  14 and  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 my
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.

 /s/ Robert Stephenson
Manhattan Beach, California
January 20, 1998
<PAGE>
[Letterhead]

                              ROBERT STEPHENSON
                          An Accountancy Corporation
                       515 N. Sepulveda Blvd., Suite A
                      Manhattan Beach, California 90266
                                (310) 318-1592

Partners
Oregon Landmark-Three Limited Partnership

   I have audited the balance sheet of Oregon Landmark-Three Limited Partnership
(an  Oregon  limited  partnership)  as of  December  31,  1996  and the  related
statements of operations, deficit in partnership capital, and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  My  responsibility is to express an opinion on these
financial statements based on my audit.

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

   In my opinion,  the financial statements referred to above present fairly, in
all material respects,  the financial position of Oregon Landmark-Three  Limited
Partnership  at 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.

In accordance with Government  Auditing  Standards,  I have also issued a report
dated  January 22, 1997 on my  consideration  of Oregon  Landmark-Three  Limited
Partnership's  internal control structure and a report dated January 22, 1997 on
its compliance with laws and regulations.

The  accompanying  supplementary  information  (shown  on  pages  14 and  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 my
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.



/s/ Robert Stephenson
Manhattan Beach, California
January 22, 1997
<PAGE>

TRENTON APARTMENTS
INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
Trenton Apartments, Ltd.

We have audited the accompanying  balance sheet of Trenton  Apartments,  Ltd. (a
limited partnership) (HUD Project No. 105-94006) as of December 31, 1998 and the
related  statements  of profit and loss,  changes in  partners'  equity and cash
flows for the year then ended. These financial statements are the responsibility
of the  Project's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Trenton  Apartments,  Ltd. (a
limited  partnership)  (HUD Project No.  105-94006) as of December 31, 1998, and
the results of its operations and changes in partners' equity and cash flows for
the  year  then  ended,  in  conformity  with  generally   accepted   accounting
principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued a report dated January 19, 1998, on our
consideration of Trenton Apartments,  Ltd. (a limited  partnership) (HUD Project
No. 105-94006) internal control structure and reports dated January 19, 1999, on
its compliance with specific requirements  applicable to major HUD programs, and
specific requirements applicable to Affirmative Fair Housing.



/s/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 19, 1999
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
Trenton Apartments, Ltd.

We have audited the accompanying  balance sheet of Trenton  Apartments,  Ltd. (a
limited partnership) (HUD Project No. 105-94006) as of December 31, 1997 and the
related  statements  of profit and loss,  changes in  partners'  equity and cash
flows for the year then ended. These financial statements are the responsibility
of the  Project's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Trenton  Apartments,  Ltd. (a
limited  partnership)  (HUD Project No.  105-94006) as of December 31, 1997, and
the results of its operations and changes in partners' equity and cash flows for
the  year  then  ended,  in  conformity  with  generally   accepted   accounting
principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued a report dated January 22, 1998, on our
consideration of Trenton Apartments,  Ltd. (a limited  partnership) (HUD Project
No. 105-94006) internal control structure and reports dated January 22, 1998, on
its compliance with specific requirements  applicable to major HUD programs, and
specific requirements applicable to Affirmative Fair Housing.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The supporting  information  included in
the  report  (shown  on  pages  14 to 23)  are  presented  for the  purposes  of
additional  analysis  and are not a  required  part of the  basic  statement  of
Trenton  Apartments,  Ltd. (a limited  partnership) (HUD Project No. 105-94006).
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/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 22, 1998
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
Trenton Apartments, Ltd.

We have audited the accompanying  balance sheet of Trenton  Apartments,  Ltd. (a
limited partnership) (HUD Project No. 105-94006) as of December 31, 1996 and the
related  statements  of profit and loss,  changes in  partners'  equity and cash
flows for the year then ended. These financial statements are the responsibility
of the  Project's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Trenton  Apartments,  Ltd. (a
limited  partnership)  (HUD Project No.  105-94006) as of December 31, 1996, and
the results of its operations and changes in partners' equity and cash flows for
the  year  then  ended,  in  conformity  with  generally   accepted   accounting
principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued a report dated January 16, 1997, on our
consideration of Trenton Apartments,  Ltd. (a limited  partnership) (HUD Project
No. 105-94006) internal control structure and reports dated January 16, 1997, on
its compliance with specific requirements  applicable to major HUD programs, and
specific requirements applicable to Affirmative Fair Housing.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The supporting  information  included in
the  report  (shown  on  pages  15 to 22)  are  presented  for the  purposes  of
additional  analysis  and are not a  required  part of the  basic  statement  of
Trenton  Apartments,  Ltd. (a limited  partnership) (HUD Project No. 105-94006).
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/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 16, 1997


<PAGE>

Lakeview Heights

INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
Lakeview Heights Apartments, Ltd.

We have audited the accompanying  balance sheet of Lakeview Heights  Apartments,
Ltd. (a limited partnership) (HUD Project No. 105-94007) as of December 31, 1998
and the related  statements of profit and loss,  changes in partners' equity and
cash  flows  for  the  year  then  ended.  These  financial  statements  are the
responsibility of the Project's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Lakeview Heights  Apartments,
Ltd. (a limited  partnership)  (HUD  Project No.  105-94007)  as of December 31,
1998, and the results of its operations and changes in partners' equity and cash
flows for the year then ended, in conformity with generally accepted  accounting
principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued a report dated January 21, 1999, on our
consideration of Lakeview  Heights  Apartments,  Ltd's. (a limited  partnership)
(HUD Project No. 105-94007) internal control structure and reports dated January
21, 1999, on its compliance with specific  requirements  applicable to major HUD
programs and specific requirements applicable to Affirmative Fair Housing.


/s/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 22, 1999
<PAGE>

INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
 Lakeview Heights Apartments, Ltd.

We have audited the accompanying  balance sheet of Lakeview Heights  Apartments,
Ltd. (a limited partnership) (HUD Project No. 105-94007) as of December 31, 1997
and the related  statements of profit and loss,  changes in partners' equity and
cash  flows  for  the  year  then  ended.  These  financial  statements  are the
responsibility of the Project's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Lakeview Heights  Apartments,
Ltd. (a limited  partnership)  (HUD  Project No.  105-94007)  as of December 31,
1997, and the results of its operations and changes in partners' equity and cash
flows for the year then ended, in conformity with generally accepted  accounting
principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued a report dated January 21, 1998, on our
consideration of Lakeview  Heights  Apartments,  Ltd's. (a limited  partnership)
(HUD Project No. 105-94007) internal control structure and reports dated January
21, 1998, on its compliance with specific  requirements  applicable to major HUD
programs and specific requirements applicable to Affirmative Fair Housing.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The supporting  information  included in
the  report  (shown  on  pages  14 to 23)  are  presented  for the  purposes  of
additional  analysis  and are not a  required  part of the basic  statements  of
Lakeview  Heights  Apartments,  Ltd. (a limited  partnership)  (HUD  Project No.
105-94007).  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/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 21, 1998

<PAGE>

INDEPENDENT ACCOUNTANTS' REPORT

To the Partners of
 Lakeview Heights Apartments, Ltd.

We have audited the accompanying  balance sheet of Lakeview Heights  Apartments,
Ltd. (a limited partnership) (HUD Project No. 105-94007) as of December 31, 1996
and the related  statements of profit and loss,  changes in partners' equity and
cash  flows  for  the  year  then  ended.  These  financial  statements  are the
responsibility of the Project's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Lakeview Heights  Apartments,
Ltd. (a limited  partnership)  (HUD  Project No.  105-94007)  as of December 31,
1996, and the results of its operations and changes in partners' equity and cash
flows for the year then ended, in conformity with generally accepted  accounting
principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued a report dated January 23, 1997, on our
consideration of Lakeview  Heights  Apartments,  Ltd's. (a limited  partnership)
(HUD Project No. 105-94007) internal control structure and reports dated January
23, 1997, on its compliance with specific  requirements  applicable to major HUD
programs and specific requirements applicable to Affirmative Fair Housing.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements taken as a whole. The supporting  information  included in
the  report  (shown  on  pages  15 to 22)  are  presented  for the  purposes  of
additional  analysis  and are not a  required  part of the basic  statements  of
Lakeview  Heights  Apartments,  Ltd. (a limited  partnership)  (HUD  Project No.
105-94007).  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/ Lake, Hill & Company
Lake, Hill & Company
Salt Lake City, Utah
January 23, 1997


<PAGE>

WINDSOR COURT
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * A Professional Corporation

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Windsor Court Housing Associates, Ltd.

We have  audited  the  accompanying  balance  sheet  of  Windsor  Court  Housing
Associates,  Ltd. as of December 31, 1998, and the related  statements of profit
and loss (on HUD Form No. 92410),  partners' deficit and cash flows for the year
then
ended.  These financial statements  are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  financial  position  of  Windsor  Court  Housing
Associates, Ltd. as of December 31, 1998, and the results of its operations, the
changes in partners'  (deficit) and it's cash flows for the year then ended,  in
conformity with generally accepted accounting principles.




 /s/ Reznick Fedder & Silverman
Boston, Massachusetts                     Federal Employer
February 9, 1999                             Identification Number:
                                                          52-1088612

Audit Principal: Phillip A. Weitzel

<PAGE>

[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * A Professional Corporation

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Windsor Court Housing Associates, Ltd.

We have  audited  the  accompanying  balance  sheet  of  Windsor  Court  Housing
Associates,  Ltd. as of December 31, 1997, and the related  statements of profit
and loss (on HUD Form No. 92410),  partners' deficit and cash flows for the year
then
ended.  These financial statements  are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  financial  position  of  Windsor  Court  Housing
Associates, Ltd. as of December 31, 1997, and the results of its operations, the
changes in  partners'  deficit and it's cash flows for the year then  ended,  in
conformity with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 20 through 25
is presented for 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 and the  "Consolidated  Audit
Guide for Audits of HUD Programs,  we have also issued reports dated January 26,
1998 on our consideration of Windsor Court Housing  Associates,  Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major  HUD  programs,  fair  housing  and   non-discrimination,   and  laws  and
regulations applicable to the financial statements.


 /s/ Reznick Fedder & Silverman
Boston, Massachusetts                     Federal Employer
January 26, 1998                             Identification Number:
                                                          52-1088612

Audit Principal: Phillip A. Weitzel

<PAGE>

[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Windsor Court Housing Associates, Ltd.

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

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

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

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 20 through 26
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 reports
dated  January  30,  1997,  on  our   consideration  of  Windsor  Court  Housing
Associates,  Ltd.'s  internal  control  structure  and  on its  compliance  with
specific  requirements  applicable  to  major  HUD  programs,  affirmative  fair
housing, and laws and regulations applicable to the financial statements.


 /s/ Reznick Fedder & Silverman
Boston, Massachusetts                     Federal Employer
January 30, 1997                             Identification Number:
                                                          52-1088612

Audit Principal: Phillip A. Weitzel





<PAGE>
TERRACE HOUSING
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * A Professional Corporation

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Terrace Housing Associates, Ltd.

We have audited the  accompanying  balance sheet of Terrace Housing  Associates,
Ltd. as of December 31, 1998, and the related  statements of profit and loss (on
HUD Form No. 92410),  partners'  deficit and cash flows for the year then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Terrace Housing  Associates,
Ltd. as of December  31,  1998,  and the results of its  operations,  changes in
partners'  deficit and cash flows for the year then ended,  in  conformity  with
generally accepted accounting principles.



 /s/ Reznick Fedder & Silverman
Boston, Massachusetts                     Federal Employer
February 4, 1999                             Identification Number:  52-1088612

Audit Principal: Phillip A. Weitzel


<PAGE>
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * A Professional Corporation

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Terrace Housing Associates, Ltd.

We have audited the  accompanying  balance sheet of Terrace Housing  Associates,
Ltd. as of December 31, 1997, and the related  statements of profit and loss (on
HUD Form No. 92410),  partners'  deficit and cash flows for the year then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Terrace Housing  Associates,
Ltd. as of December  31,  1997,  and the results of its  operations,  changes in
partners'  deficit and cash flows for the year then ended,  in  conformity  with
generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 21 through 25
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 and the  "Consolidated  Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 21,
1998,  on our  consideration  of Terrace  Housing  Associates,  Ltd.'s  internal
control structure and on its compliance with specific requirements applicable to
major HUD programs,  affirmative fair housing and  non-discrimination,  and laws
and regulations applicable to the financial statements.

 /s/ Reznick Fedder & Silverman
Boston, Massachusetts                     Federal Employer
January 21, 1998                             Identification Number:
                                                          52-1088612

Audit Principal: Phillip A. Weitzel

<PAGE>

[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Terrace Housing Associates, Ltd.

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

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

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

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 20 through 26
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 and the  "Consolidated  Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 27,
1997,  on our  consideration  of Terrace  Housing  Associates,  Ltd.'s  internal
control structure and on its compliance with specific requirements applicable to
major  HUD  programs,   affirmative  fair  housing,  and  laws  and  regulations
applicable to the financial statements.


 /s/ Reznick Fedder & Silverman
Boston, Massachusetts                     Federal Employer
January 27, 1997                             Identification Number:
                                                          52-1088612

Audit Principal: Phillip A. Weitzel

<PAGE>

Rolling Green

[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Rolling Green  Housing Associates, Ltd.

We have  audited  the  accompanying  balance  sheet  of  Rolling  Green  Housing
Associates,  Ltd. as of December 31, 1998, and the related  statements of profit
and loss (on HUD Form No. 92410),  partners' deficit and cash flows for the year
then  ended.   These  financial   statements  are  the   responsibility  of  the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  financial  position  of  Rolling  Green  Housing
Associates,  Ltd. as of December  31, 1998,  and the results of its  operations,
changes  in  partners'  deficit  and cash  flows  for the year  then  ended,  in
conformity with generally accepted accounting principles.




 /s/ Reznick Fedder & Silverman
Boston, Massachusetts                     Federal Employer
February 4, 1999                             Identification Number:
                                                          52-1088612
Audit Principal: Phillip A. Weitzel

<PAGE>

[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Rolling Green  Housing Associates, Ltd.

We have  audited  the  accompanying  balance  sheet  of  Rolling  Green  Housing
Associates,  Ltd. as of December 31, 1997, and the related  statements of profit
and loss (on HUD Form No. 92410),  partners' deficit and cash flows for the year
then  ended.   These  financial   statements  are  the   responsibility  of  the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  financial  position  of  Rolling  Green  Housing
Associates,  Ltd. as of December  31, 1997,  and the results of its  operations,
changes  in  partners'  deficit  and cash  flows  for the year  then  ended,  in
conformity with generally accepted accounting principles.

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

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 19,
1998, on our consideration of Rolling Green Housing Associates,  Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major  HUD  programs,  fair  housing  and   non-discrimination,   and  laws  and
regulations applicable to the financial statements.

 /s/ Reznick Fedder & Silverman
Boston, Massachusetts                     Federal Employer
January 19, 1998                             Identification Number:
                                                          52-1088612

Audit Principal: Phillip A. Weitzel
<PAGE>
[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Rolling Green Housing Associates, Ltd.

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

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

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

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 20 through 27
is presented for the 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
auditing procedures applied in the audit of the basic financial  statements and,
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 27,
1997, on our consideration of Rolling Green Housing Associates,  Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major  HUD  programs,   affirmative  fair  housing,  and  laws  and  regulations
applicable to the financial statements.

/s/ Reznick Fedder & Silverman
Boston, Massachusetts                     Federal Employer
January 27, 1997                             Identification Number:
                                                          52-1088612

Audit Principal: Phillip A. Weitzel

<PAGE>

SIERRA VISTA
[LETTERHEAD]
Michael Sczekan & Co., P.C.
Certified Public Accountants
7936 East Arapahoe Court, Suite 2800
Englewood, CO  80112
Telephone (303) 770-3356
Fax (303) 770-3357

INDEPENDENT AUDITORS' REPORT

To the Partners of                                            HUD Field Office
Sierra Vista Housing Associates, Ltd.                         Denver, CO
Aurora, Colorado

We have audited the accompanying BalanceSheet of Siera Vista Housing Associates,
Ltd.,  FHA Project  Number  125-94004,  as of December 31, 1998, and the related
statements of profit and loss,  changes in project equity and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Project's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Sierra Vista Housing, Ltd., as
of December 31, 1998,  and the results of its  operations and its cash flows for
the  year  then  ended,  in  conformity  with  generally   accepted   accounting
principles.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements taken as a whole. The supporting data included in the report on pages
21 through 24 is  presented  for purposes of  additional  analysis and are not a
required  part  of the  basic  financial  statements  of  Sierra  Vista  Housing
Associates,  Ltd..  Such  information  has been  subjected to the same  auditing
procedures applied in the examination of basic financial  statements and, in our
opinion,  are presented fairly in all material respects in relation to the basic
financial statements taken as a whole.

In accordance  with Government  Auditing  Standards and the Consolidated  Audit
Guide for Audits of HUD Programs, we have also issued a report dated February 5,
1999, on our  consideration of Sierra Vista Housing  Associates,  Ltd's internal
control  structure and a report dated February 5, 1999, on its  compliance  with
laws and  regulations and compliance  with specific  requirements  applicable to
major HUD  programs  and specific  requirements  applicable  to Fair Housing and
Non-discrimination.

Respectfully submitted,
/s/Michael Sczkan
Michael Sczekan  Co., P.C.
Certified Public Accountants
Englewood,  CO
February 5, 1999

<PAGE>

[LETTERHEAD]
Michael Sczekan & Co., P.C.
Certified Public Accountants
7936 East Arapahoe Court, Suite 2800
Englewood, CO  80112
Telephone (303) 770-3356
Fax (303) 770-3357

INDEPENDENT AUDITORS' REPORT

To the Partners of                                            HUD Field Office
Sierra Vista Housing Associates, Ltd.                         Denver, CO
Aurora, Colorado

We have audited the accompanying BalanceSheet of Siera Vista Housing Associates,
Ltd.,  FHA Project  Number  125-94004,  as of December 31, 1997, and the related
statements of profit and loss,  changes in project equity and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Project's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Sierra Vista Housing, Ltd., as
of December 31, 1997,  and the results of its  operations and its cash flows for
the  year  then  ended,  in  conformity  with  generally   accepted   accounting
principles.

In accordance  with Government  Auditing  Standards and the Consolidated  Audit
Guide for Audits of HUD Programs, we have also issued a report dated February 5,
1998, on our  consideration of Sierra Vista Housing  Associates,  Ltd's internal
control  structure and a report dated February 5, 1998, on its  compliance  with
laws and  regulations and compliance  with specific  requirements  applicable to
major HUD  programs  and specific  requirements  applicable  to Fair Housing and
Non-discrimination.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue  as a  going  concern.  As  noted  in  Note 2 to the
financial  statements,  the  Partnership  is in  monetary  default  of  mortgage
agreement.  Continued operation is contingent on reducing vacancies or obtaining
a additional financing.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements taken as a whole. The supporting data included in the report on pages
14 through 19 is  presented  for purposes of  additional  analysis and are not a
required  part  of the  basic  financial  statements  of  Sierra  Vista  Housing
Associates,  Ltd..  Such  information  has been  subjected to the same  auditing
procedures applied in the examination of basic financial  statements and, in our
opinion,  are presented fairly in all material respects in relation to the basic
financial statements taken as a whole.

Respectfully submitted,
/s/Michael Sczkan
Michael Sczekan  Co., P.C.
Certified Public Accountants
Englewood,  CO
February 5, 1998

<PAGE>

[LETTERHEAD]
[Logo]
Reznick Fedder & Silverman
Certified Public Accountants * Business Consultants

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Sierra Vista Housing Associates, Ltd.

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

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

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

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 21 through 28
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,  except for that portion marked  "unaudited" on which we express
no opinion,  is fairly stated in all material  respects in relation to the basic
financial statements taken as a whole.

In accordance with Government  Auditing  Standards and the  "Consolidated  Audit
Guide for Audits of HUD Programs," we have also issued reports dated January 27,
1997, on our consideration of Sierra Vista Housing  Associates,  Ltd.'s internal
control structure and on its compliance with specific requirements applicable to
major  HUD  programs,   affirmative  fair  housing,  and  laws  and  regulations
applicable to the financial statements.


 /s/ Reznick Fedder & Silverman
Boston, Massachusetts                     Federal Employer
January 27, 1997                             Identification Number:
                                                          52-1088612
Audit Principal: Phillip A. Weitzel

<PAGE>
CORONADO
[Letterhead]

[Logo]        Lutz &  Company, PC
             Accountants and Consultants
             11837 Miracle Hills Drive, Suite 100
                  Omaha, Nebraska  68154-4404

                         INDEPENDENT AUDITOR'S REPORT

Partners
Coronado Courts Limited Partnership
Omaha, Nebraska

We have  audited the  accompanying  balance  sheets of Coronado  Courts  Limited
Partnership,  HUD Project No. 123-36605, an Arizona partnership,  as of December
31, 1998 and the related statements of operations,  changes in partners' capital
and cash  flows for the year then  ended.  These  financial  statements  are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these  financial  statements  based on our  audit.  The  financial
statements of Coronado Courts Limited  Partnership as of December 31, 1997, were
audited by other  auditors,  whose report dated  February 3, 1998,  expressed an
unqualified opinion on those statements.

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

Government Accounting Standards Board Technical Bulletin 98-1, Disclosures about
Year 2000 Issues,  Requires  disclosures of certain  matters  regarding the year
2000 issue. Coronado Courts Limited Partnership has included such disclosures in
Note 7. Because of the unprecedented  nature of the year 2000 issue, its effects
and  the  success  of  the  related   remediation  efforts  will  not  be  fully
determinable until the year 2000 and thereafter. Accordingly, insufficient audit
evidence exists to support Coronado Courts Limited  Partnership  disclosure with
respect  to the year 2000  issues  made in Note 7.  Further,  we do not  provide
assurance  that Coronado  Courts  Limited  Partnership is or will be 2000 ready,
that Coronado Courts Limited Partnership's year 2000 remediation efforts will be
successful  in whole or in part,  or that  parties  with which  Coronado  Courts
Limited Partnership does business will be year 2000 ready.

In our opinion,  except for effects of such  adjustments,  if any, as might have
been determined To be necessary had we been able to examine  evidence  regarding
year 2000  disclosures,  the  financial  statements  referred  to above  present
fairly,  in all material  respects,  the financial  position of Coronado  Courts
Limited  Partnership as of December 31, 1998, and the results of its operations,
changes  in  partners'  capital  and cash  flows  for the  years  then  ended in
conformity with generally accepted accounting principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban Development, we have
also  issued a report  dated  January  25,  1999,  on our  consideration  of the
Coronado Courts Limited Partnership's internal control and reports dated January
25, 1999, on its compliance with specific  requirements  applicable to major HUD
programs,    specific    requirements    applicable    to   Fair   Housing   and
Non-discrimination, and specific requirements applicable to nonmajor HUD program
transactions.

Our  audit was conducted for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental  information included in
the report (shown on pages 14-17) are presented for the purposes of additional
analysis and are not a required  part  of the  basic  financial  statements  of
the  Partnership.  Such information has been subjected to the auditing
procedures  applied in 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/ Lutz & Company, P.C.
January  25, 1999



<PAGE>

[Letterhead]

[Logo]        VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.

                         INDEPENDENT AUDITOR'S REPORT

To the Partners
Coronado Courts Limited Partnership

We have  audited the  accompanying  balance  sheets of Coronado  Courts  Limited
Partnership,  as of December 31, 1997 and 1996,  and the related  statements  of
profit and loss,  partners'  capital (deficit) and cash flows for the years then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Coronado  Courts  Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations,
changes in partners'  capital  (deficit) and cash flows for the years then ended
in conformity with generally accepted accounting principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have  issued a report  dated  February  3, 1998,  on our
consideration of the Partnership's  internal control structure and reports, also
dated February 3, 1998, on its compliance with specific requirements  applicable
to
major HUD programs, compliance with laws, regulations, contracts and grants, and
specific    requirements    applicable   to   Affirmative   Fair   Housing   and
Non-Discrimination.

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

/s/ Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
February 3, 1998

Other Auditor information:
Lead Auditor - Donald R. Smith
Federal I.D. Number


<PAGE>
BITTERSWEET
[Letterhead]

[LOGO] Freedberg, Derba & Tardiff, P.C.

                         INDEPENDENT AUDITORS' REPORT

To the Partners of
MB Bittersweet Associates Limited Partnership
(a Massachusetts Limited Partnership)
Boston, Massachusetts

We have audited the  accompanying  balance  sheet of MB  Bittersweet  Associates
Limited Partnership, MHFA Project No. 84-051-S, as of December 31, 1998, and the
related statements of operations,  partners' equity  (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.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of MB  Bittersweet  Associates
Limited  Partnership as of December 31, 1998, and the results of its operations,
changes in partners'  equity  (deficiency)  and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue as a going  concern.  As  discussed in Note 8 to the
financial  statements,  the  Partnership  has  suffered  recurring  losses  from
operations,  working capital requirements exceed the estimated cash flows, which
raise substantial  doubt about the Partnership's  ability to continue as a going
concern. Management's plan regarding those matters also are described in Note 8.
The financial  statements do not include any adjustments  that might result from
the outcome of this uncertainly.



/s/ Freedberg , Derba & Tardiff, P.C.
Wellesley, MA
February 18, 1998


<PAGE>
[Letterhead]

[LOGO] Freedberg, Derba & Tardiff, P.C.

                         INDEPENDENT AUDITORS' REPORT

To the Partners of
MB Bittersweet Associates Limited Partnership
(a Massachusetts Limited Partnership)
Boston, Massachusetts

We have audited the  accompanying  balance  sheet of MB  Bittersweet  Associates
Limited Partnership, MHFA Project No. 84-051-S, as of December 31, 1997, and the
related statements of operations,  partners' equity  (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.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of MB  Bittersweet  Associates
Limited  Partnership as of December 31, 1997, and the results of its operations,
changes in partners'  equity  (deficiency)  and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue as a going  concern.  As  discussed in Note 8 to the
financial  statements,  the  Partnership  has  suffered  recurring  losses  from
operations,  working capital requirements exceed the estimated cash flows, which
raise substantial  doubt about the Partnership's  ability to continue as a going
concern. Management's plan regarding those matters also are described in Note 8.
The financial  statements do not include any adjustments  that might result from
the outcome of this uncertainly.

In accordance with Government  Auditing  Standards.  we have also issued reports
dated  February  12,  1998 on our  consideration  of MB  Bittersweet  Associates
Limited Partnership's internal control structure and on its compliance with laws
and regulations.

/s/ Freedberg , Derba & Tardiff, P.C.
Wellesley, MA
February 12, 1998


<PAGE>

 [Letterhead]

[LOGO] Freedberg, Derba & Tardiff, P.C.

                         INDEPENDENT AUDITORS' REPORT

To the Partners of
MB Bittersweet Associates Limited Partnership
(a Massachusetts Limited Partnership)
Boston, Massachusetts

We have audited the  accompanying  balance  sheet of MB  Bittersweet  Associates
Limited Partnership, MHFA Project No. 84-051-S, as of December 31, 1996, and the
related statements of operations,  partners' equity  (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.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of MB  Bittersweet  Associates
Limited  Partnership as of December 31, 1996, and the results of its operations,
changes in partners'  equity  (deficiency)  and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

In accordance with Government  Auditing  Standards.  we have also issued reports
dated  February  12,  1997 on our  consideration  of MB  Bittersweet  Associates
Limited Partnership's internal control structure and on its compliance with laws
and regulations.

/s/ Freedberg , Derba & Tardiff, P.C.
Wellesley, MA
February 12, 1997

<PAGE>

HUGES
[Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.

                         INDEPENDENT AUDITOR'S REPORT

The Partners
Hughes Apartments Limited Partnership
Boston, Massachusetts

We have audited the  accompanying  balance sheets of Hughes  Apartments  Limited
Partnership  as of December  31, 1998 and 1997,  and the related  statements  of
operations,  partners' equity (deficit) and cash flows for the years then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Hughes  Apartments  Limited
Partnership  as of December 31, 1998 and 1997, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership will continue as a going concern. As discussed in Note 10 to the
financial  statements,  the Partnership has entered into a forbearance agreement
with its bond holders as a result of cash flow problems which raises substantial
doubt  about the  Partnership's  ability to  continue  as a going  concern.  The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
February 23, 1999

<PAGE>

[Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.

                         INDEPENDENT AUDITOR'S REPORT

The Partners
Hughes Apartments Limited Partnership
Boston, Massachusetts

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

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Hughes  Apartments  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.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership will continue as a going concern. As discussed in Note 10 to the
financial  statements,  the Partnership has entered into a forbearance agreement
with its bond holders as a result of cash flow problems which raises substantial
doubt  about the  Partnership's  ability to  continue  as a going  concern.  The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
February 2, 1998

<PAGE>
600 DAKOTA
[Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.

                         INDEPENDENT AUDITOR'S REPORT

The Partners
600 Dakota Properties Limited Partnership
Wahpeton, North Dakota

We have audited the accompanying balance sheets of 600 Dakota Properties Limited
Partnership  as of December  31, 1998 and 1997,  and the related  statements  of
operations,  partners'  equity and cash flows for the years  then  ended.  These
financial statements are the responsibility of the 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 600 Dakota Properties Limited
Partnership  as of December 31, 1998 and 1997, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 19, 1999
<PAGE>


[Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.

                         INDEPENDENT AUDITOR'S REPORT

The Partners
600 Dakota Properties Limited Partnership
Wahpeton, North Dakota

We have audited the accompanying balance sheets of 600 Dakota Properties 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 600 Dakota Properties 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/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998

<PAGE>
DULUTH
[Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.

                         INDEPENDENT AUDITOR'S REPORT

The Partners
Duluth Limited Partnership
Wahpeton, North Dakota

We have audited the  accompanying  balance sheet of Duluth Limited  Partnership,
FHA Project  Number  091-10505  REF, as of December  31,  1998,  and the related
statements of profit and loss, partners' equity and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Duluth Limited Partnership, FHA
Project  Number  091-10505  REF, as of December 31, 1998, and the results of its
operations  and its cash  flows  for the year  then  ended  in  conformity  with
generally accepted accounting principles.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 27, 1998 on our  consideration  of Duluth  Limited  Partnership's
internal  controls and a report dated January 27, 1999, on its  compliance  laws
and regulations.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements  taken  as  a  whole.  The  supplementary  information  is
presented for the purposes of additional  analysis and is not a required part of
the basic  financial  statements.  Such  information  has been  subjected to the
auditing procedures applied in the 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/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 27, 1999
<PAGE>
 [Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.

                         INDEPENDENT AUDITOR'S REPORT

The Partners
Duluth Limited Partnership
Wahpeton, North Dakota

We have audited the  accompanying  balance sheet of Duluth Limited  Partnership,
FHA Project  Number  091-10505  REF, as of December  31,  1997,  and the related
statements of profit and loss, partners' equity and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Duluth Limited Partnership, FHA
Project  Number  091-10505  REF, 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.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  January 21, 1998 on our  consideration  of Duluth  Limited  Partnership's
internal  controls and a report dated January 21, 1998, on its  compliance  laws
and regulations.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements  taken  as  a  whole.  The  supplementary  information  is
presented for the purposes of additional  analysis and is not a required part of
the basic  financial  statements.  Such  information  has been  subjected to the
auditing procedures applied in the 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/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998
<PAGE>
 [Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.

                         INDEPENDENT AUDITOR'S REPORT

The Partners
Duluth Limited Partnership
Wahpeton, North Dakota

We have audited the  accompanying  balance sheet of Duluth Limited  Partnership,
FHA Project  Number  091-10505  REF, as of December  31,  1996,  and the related
statements of profit and loss, partners' equity and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Duluth 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.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development,  we have also issued a report dated January 18, 1997; on our
consideration of Duluth Limited  Partnership's  internal  control  structure and
reports  dated January 18, 1997, on its  compliance  with specific  requirements
applicable  to  nonmajor  HUD program  transactions  and  specific  requirements
applicable to Affirmative Fair Housing.

Our audit was  conducted  for the  purpose  of  forming  an opinion on the basic
financial  statements  taken  as  a  whole.  The  supplementary  information  is
presented for the purposes of additional  analysis and is not a required part of
the basic  financial  statements.  Such  information  has been  subjected to the
auditing procedures applied in the 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/ Charles Bailly & Company P.L.L.P.

Fargo, North Dakota
January 18, 1997

<PAGE>
BARRINGTON
[Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.

                         INDEPENDENT AUDITOR'S REPORT

The Partners
Barrington Manor Limited Partnership
Wahpeton, North Dakota

We have audited the  accompanying  balance  sheets of  Barrington  Manor Limited
Partnership  as of December  31, 1998 and 1997,  and the related  statements  of
operations,  partners'  equity and cash flows for the years  then  ended.  These
financial statements are the responsibility of the 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  Barrington  Manor  Limited
Partnership  as of December 31, 1998 and 1997, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue as a going  concern.  As  discussed in Note 9 to the
financial statements,  the Partnership has suffered recurring vacancies and cash
deficiencies  the raise  substantial  doubt about the  Partnership's  ability to
continue as a going concern.  Management's plan regarding those matters are also
described in Note 9. The  financial  statements  do not include any  adjustments
that might result from the outcome of this uncertainly.

/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 13, 1999, except for Note 10,
as to which the date is January 25, 1999

<PAGE>

[Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.

                         INDEPENDENT AUDITOR'S REPORT

The Partners
Barrington Manor Limited Partnership
Wahpeton, North Dakota

We have audited the  accompanying  balance  sheets of  Barrington  Manor 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  Barrington  Manor  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.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue as a going  concern.  As  discussed in Note 9 to the
financial statements,  the Partnership has suffered recurring vacancies and cash
deficiencies  the raise  substantial  doubt about the  Partnership's  ability to
continue as a going concern.  Management's plan regarding those matters are also
described in Note 9. The  financial  statements  do not include any  adjustments
that might result from the outcome of this uncertainly.

/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998

<PAGE>
Graver
[Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.

INDEPENDENT AUDITOR'S REPORT

The Partners
Graver Inn Limited Partnership
Wahpeton, North Dakota

We  have  audited  the  accompanying   balance  sheets  of  Graver  Inn  Limited
Partnership  as of December  31, 1998 and 1997,  and the related  statements  of
operations,  partners'  equity and cash flows for the years  then  ended.  These
financial statements are the responsibility of the 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 Graver Inn Limited Partnership
as of December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted  accounting
principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue as a going  concern.  As discussed in Note 11 to the
financial statements,  the Partnership has suffered recurring vacancies and cash
deficiencies  the raise  substantial  doubt about the  Partnership's  ability to
continue as a going concern.  Management's plan regarding those matters are also
described in Note 11. The financial  statements  do not include any  adjustments
that might result from the outcome of this uncertainly.

/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 19, 1999
<PAGE>
[Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.

INDEPENDENT AUDITOR'S REPORT

The Partners
Graver Inn Limited Partnership
Wahpeton, North Dakota

We  have  audited  the  accompanying   balance  sheets  of  Graver  Inn  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 Graver Inn 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.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue as a going  concern.  As discussed in Note 11 to the
financial statements,  the Partnership has suffered recurring vacancies and cash
deficiencies  the raise  substantial  doubt about the  Partnership's  ability to
continue as a going concern.  Management's plan regarding those matters are also
described in Note 11. The financial  statements  do not include any  adjustments
that might result from the outcome of this uncertainly.

/s/ Charles Bailly & Company P.L.L.P.
Fargo, North Dakota
January 21, 1998
<PAGE>
Chestnut Lane LP
[Letterhead]

FLOYD & COMPANY
Certified Public Accountant
306 Commercial Drive, Suite 202    Post Office Box 14251
Savannah, Georgia 31406                Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Chestnut Lane Limited Partnership

We have  audited  the  accompanying  balance  sheets of  Chestnut  Lane  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1998 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
and Government  Auditing  Standards,  issued by the  Comptroller  General of the
United  States.  Those  standards  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes  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 Chestnut Lane Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1998 and the
results  of its  operations  and its  cash  flows  for the  year  then  ended in
conformity with generally accepted accounting principles.


Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1999

<PAGE>

[Letterhead]

FLOYD & COMPANY
Certified Public Accountant
306 Commercial Drive, Suite 202    Post Office Box 14251
Savannah, Georgia 31406                Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Chestnut Lane Limited Partnership

We have  audited  the  accompanying  balance  sheets of  Chestnut  Lane  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1997 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
and Government  Auditing  Standards,  issued by the  Comptroller  General of the
United  States.  Those  standards  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes  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 Chestnut Lane Limited
Partnership  (a Georgia  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.


Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1998

<PAGE>

[Letterhead]

FLOYD & COMPANY
Certified Public Accountant
306 Commercial Drive, Suite 202    Post Office Box 14251
Savannah, Georgia 31406                Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Chestnut Lane Limited Partnership

We have  audited  the  accompanying  balance  sheets of  Chestnut  Lane  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1996 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

The financial  statement  information  for the year ending December 31, 1995 was
audited by another  independent  certified  public  accountant who expressed and
unqualified opinion dated March 16, 1996.

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  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 Chestnut Lane Limited
Partnership  (a Georgia  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.


Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1997
<PAGE>

GLENNVILLE
[Letterhead]

FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Glennville Properties

We have audited the  accompanying  balance  sheets of  Glennville  Properties (a
Georgia Limited  Partnership) as of December 31, 1998 and the related statements
of  operations,  partners'  equity  (deficit)  and cash  flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our 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  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  Glennville  Properties  (a
Georgia  Limited  Partnership)  as of  December  31, 1998 and the results of its
operations  and its cash  flows  for the year  then  ended  in  conformity  with
generally accepted accounting principles.

Floyd & Company, CPA
Savannah, GA
/s/R. Doug Floyd
February 28, 1999
<PAGE>

[Letterhead]

FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Glennville Properties

We have audited the  accompanying  balance  sheets of  Glennville  Properties (a
Georgia Limited  Partnership) as of December 31, 1997 and the related statements
of  operations,  partners'  equity  (deficit)  and cash  flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our 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  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  Glennville  Properties  (a
Georgia  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.

Floyd & Company, CPA
Savannah, GA
/s/R. Doug Floyd
February 28, 1998

<PAGE>

[Letterhead]

FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Glennville Properties

We have audited the  accompanying  balance  sheets of  Glennville  Properties (a
Georgia Limited  Partnership) as of December 31, 1996 and the related statements
of  operations,  partners'  equity  (deficit)  and cash  flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

The financial  statement  information  for the year ending December 31, 1995 was
audited by another  independent  certified  public  accountant who expressed and
unqualified opinion dated March 16, 1996.

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  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  Glennville  Properties  (a
Georgia  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.

Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1997

<PAGE>

Pine Village
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Pine Village Limited Partnership

We  have  audited  the  accompanying  balance  sheets  of Pine  Village  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1998 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our 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  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 Pine Village Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1998 and the
results  of its  operations  and its  cash  flows  for the  year  then  ended in
conformity with generally accepted accounting principles.

Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1999

<PAGE>

[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Pine Village Limited Partnership

We  have  audited  the  accompanying  balance  sheets  of Pine  Village  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1997 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our 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  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 Pine Village Limited
Partnership  (a Georgia  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.

Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1998

<PAGE>

[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Pine Village Limited Partnership

We  have  audited  the  accompanying  balance  sheets  of Pine  Village  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1996 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

The financial  statement  information  for the year ending December 31, 1996 was
audited by another  independent  certified  public  accountant who expressed and
unqualified opinion dated March 16, 1996.

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  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 Pine Village Limited
Partnership  (a Georgia  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.

Floyd & Company, CPA
/s/R. Doug Floyd
Savannah, GA
February 28, 1997

<PAGE>

Talbot

[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Talbot Village Limited Partnership

We have  audited  the  accompanying  balance  sheets of Talbot  Village  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1998 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our 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  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 Talbot Village Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1998 and the
results  of its  operations  and its  cash  flows  for the  year  then  ended in
conformity with generally accepted accounting principles.

Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1999

<PAGE>

[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Talbot Village Limited Partnership

We have  audited  the  accompanying  balance  sheets of Talbot  Village  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1997 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our 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  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 Talbot Village Limited
Partnership  (a Georgia  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.

Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1998

<PAGE>

[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Talbot Village Limited Partnership

We have  audited  the  accompanying  balance  sheets of Talbot  Village  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1996 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

The financial  statement  information  for the year ending December 31, 1996 was
audited by another  independent  certified  public  accountant who expressed and
unqualified opinion dated March 16, 1996.

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  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 Talbot Village Limited
Partnership  (a Georgia  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.

Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1997

<PAGE>
Willowpeg
Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Willowpeg Village Limited Partnership

We have audited the  accompanying  balance sheets of Willowpeg  Village  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1998 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our 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  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 Willowpeg Village Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1998 and the
results  of its  operations  and its  cash  flows  for the  year  then  ended in
conformity with generally accepted accounting principles.

Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1999

<PAGE>
[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Willowpeg Village Limited Partnership

We have audited the  accompanying  balance sheets of Willowpeg  Village  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1997 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our 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  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 Willowpeg Village Limited
Partnership  (a Georgia  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.

Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1998

<PAGE>

[Letterhead]
FLOYD & COMPANY
306 Commercial Drive, Suite 202        Post Office Box 14251
Savannah, Georgia 31406                    Savannah, Georgia 31416
Phone: (912) 355-9969

                         INDEPENDENT AUDITORS' REPORT

To the General Partners of
Willowpeg Village Limited Partnership

We have audited the  accompanying  balance sheets of Willowpeg  Village  Limited
Partnership  (a Georgia  Limited  Partnership)  as of December  31, 1996 and the
related statements of operations,  partners' equity (deficit) and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

The financial  statement  information  for the year ending December 31, 1995 was
audited by another  independent  certified  public  accountant who expressed and
unqualified opinion dated March 16, 1996.

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  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 Willowpeg Village Limited
Partnership  (a Georgia  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.

Floyd & Company
/s/R. Doug Floyd
Savannah, GA
February 28, 1997

<PAGE>
BINGHAM
[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

                                February 5, 1999
Bingham Family Housing Associates
224 Maine Avenue
Gardiner, Maine

We have  audited  the  accompanying  balance  sheet of  Bingham  Family  Housing
Associates  (a limited  partnership)  as of December 31, 1998 and 1997,  and the
related statements of profit and loss,  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 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 Bingham Family Housing
Associates as of December 31, 1998 and 1997,  and the results of its  operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

 /s/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants

<PAGE>

[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

                                February 5, 1998
Bingham Family Housing Associates
224 Maine Avenue
Gardiner, Maine

We have  audited  the  accompanying  balance  sheet of  Bingham  Family  Housing
Associates  (a limited  partnership)  as of December 31, 1997 and 1996,  and the
related statements of profit and loss,  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 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 Bingham Family Housing
Associates 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/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants

<PAGE>



BIRMINGHAM
[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

                                February 5, 1999
Birmingham Housing Associates
224 Maine Avenue
Gardiner, Maine

We have audited the accompanying  balance sheet of Birmingham Housing Associates
(a limited  partnership)  as of  December  31,  1998 and 1997,  and the  related
statements of profit and loss,  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 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 Birmingham Housing Associates
as of December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted  accounting
principles.

/s/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants

<PAGE>
[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

                                February 5, 1998
Birmingham Housing Associates
224 Maine Avenue
Gardiner, Maine

We have audited the accompanying  balance sheet of Birmingham Housing Associates
(a limited  partnership)  as of  December  31,  1997 and 1996,  and the  related
statements of profit and loss,  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 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 Birmingham Housing Associates
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/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants

<PAGE>

NEW SWEDEN
[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

February  5, 1999
New Sweden Housing Associates
224 Maine Avenue
Gardiner, Maine

We have audited the accompanying  balance sheet of New Sweden Housing Associates
(a limited  partnership)  as of  December  31,  1998 and 1997,  and the  related
statements of profit and loss,  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 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 New Sweden Housing Associates
as of December 31, 1998 and 1997, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted  accounting
principles.

/s/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants

<PAGE>

[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

                                February 5, 1998
New Sweden Housing Associates
224 Maine Avenue
Gardiner, Maine

We have audited the accompanying  balance sheet of New Sweden Housing Associates
(a limited  partnership)  as of  December  31,  1997 and 1996,  and the  related
statements of profit and loss,  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 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 New Sweden Housing Associates
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/ Macdonald Page & Co.
Augusta, ME
Certified Public Accountants

<PAGE>





HAZEL-WINTHROP
[Letterhead]

                                    [LOGO]
                            Haran & Associates Ltd


                         INDEPENDENT AUDITOR'S REPORT

To the Partners                                      HUD Field Office Director
HAZEL-WINTHROP APARTMENTS                                    Chicago, Illinois
Chicago, Illinois

We have audited the accompanying  balance sheets of  HAZEL-WINTHROP  APARTMENTS,
Project  No.  071-35522-PM,  as of December  31, 1998 and 1997,  and the related
statements  of profit and loss,  changes in partners'  equity,  and statement of
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.  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  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 HAZEL-WINTHROP  APARTMENTS,  as
of December  31,  1998 and 1997,  and its profit or loss,  changes in  partners'
equity,  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 29,  1999,  on our  consideration  of  HAZEL-WINTHROP  APARTMENTS
internal control structure and reports dated January 29, 1999, on its compliance
with specific requirements  applicable to Affirmative Fair Housing, and specific
requirements applicable to Nonmajor HUD programs.

The  accompanying  supplementary  information  (shown  on  pages  15 to  21)  is
presented  for  purposes  of  additional  analysis  and is not part of the basic
financial  statements.  Such information has been subjected to the same 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
Federal Identification No. 36-3097692
Audit Partner: James E. Haran (847) 853-2580

January 29, 1999

<PAGE>

[Letterhead]
                                   [LOGO]
                            Haran & Associates Ltd

                         INDEPENDENT AUDITOR'S REPORT

To the Partners                                      HUD Field Office Director
HAZEL-WINTHROP APARTMENTS                                    Chicago, Illinois
Chicago, Illinois

We have audited the accompanying  balance sheets of  HAZEL-WINTHROP  APARTMENTS,
Project  No.  071-35522-PM,  as of December  31, 1997 and 1996,  and the related
statements  of profit and loss,  changes in partners'  equity,  and statement of
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.  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  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 HAZEL-WINTHROP  APARTMENTS,  as
of December  31,  1997 and 1996,  and its profit or loss,  changes in  partners'
equity,  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,  1998,  on our  consideration  of  HAZEL-WINTHROP  APARTMENTS
internal control structure and reports dated January 30, 1998, on its compliance
with specific requirements  applicable to Affirmative Fair Housing, and specific
requirements applicable to Nonmajor HUD programs.

The  accompanying  supplementary  information  (shown  on  pages  15 to  20)  is
presented  for  purposes  of  additional  analysis  and is not part of the basic
financial  statements.  Such information has been subjected to the same 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
Federal Identification No. 36-3097692
Audit Partner: James E. Haran (847) 853-2580
February 5, 1998

<PAGE>
MICHAEL DOBENS

[Letterhead]
[Logo]

Otis, Atwell & Timberlake
Certified Public Accountants

The Partners
Michael J. Dobens Limited Partnership I

We have audited the  accompanying  balance  sheets of Michael J. Dobens  Limited
Partnership  I as of December 31, 1998,  and the related  statements  of income,
partners'  equity  and cash  flows  for the  years  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.

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 my audits, provide a reasonable basis for my opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Michael J. Dobens  Limited
Partnership I as of December 31, 1998, and the results of its operations and its
cash  flows for the years  then  ended in  conformity  with  generally  accepted
accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Partnership  will  continue as a going  concern.  As  discussed in Note 2 to the
financial statements,  the Partnership's first mortgage note has matured and has
not yet been refinanced,  which raises substantial doubt about the Partnership's
ability to continue as a going concern. Management's plans regarding this matter
are described in Note 7. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

/s/ Otis, Atwell & Timberlake, P.A.
January 21, 1999
Portland, Maine

<PAGE>

BILLIE J. BURNETT, CPA
5 Benton Drive
Nashua, NH 03060
(603) 883-4230

To The Partners
Michael J. Dobens Limited Partnership I

I have  audited the  accompanying  balance  sheets of Michael J. Dobens  Limited
Partnership  I as of December 31, 1997 and 1996,  and the related  statements of
income,  partners' equity and cash flows for the years then ended. The financial
statements  are  the   responsibility  of  the  Partnership's   management.   My
responsibility  is to express an opinion on these financial  statements based on
my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material  respects,   the  financial  position  of  Michael  J.  Dobens  Limited
Partnership  I 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/ Billie J. Burnett
Nashua, NH
Billie J. Burnett
January 2, 1998


<PAGE>
LOGAN
[Letterhead]

                          Marks Shron & Company, LLP

             INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS

To the Partners of
Logan Plaza Associates

We have audited the accompanying balance sheets of Logan Plaza Associates,
as of December 31, 1998 and 1997, and the related statements of income,  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 audit.

We conducted our audit in accordance with generally  accepted auditing standards
and Government Auditing  Standards,  issued by the Comptroller General of the U.
S.  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 Logan Plaza Associates at December
31,  1998 and 1997,  and the  results of its  operations,  changes in  partners'
capital  and cash flows for the years then ended in  conformity  with  generally
accepted accounting principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban Development , Office of Inspector General, we have also issued
 reports  dated  January  15,  1999 on our  consideration  of the  Partnership's
internal  control  structure,  on  its  compliance  with  specific  requirements
applicable  to  major  HUD  programs  and  on  its   compliance   with  specific
requirements applicable to Fair Housing and Non-Discrimination.

Our audit was conducted for the purpose of forming an opinion on the basic
financial  statements taken as a whole. The  accompanying supplementary
information  shown on pages 13 to 17 is  presented  for purposes of  additional
analysis and is not a required  part  of the  basic  financial  statements  of
the  Partnership.  Such information has been subjected to the auditing
procedures  applied in the audit of the basic financial statements and, in our
opinion, except for the effects of the item discussed  above, the additional
information is fairly stated, in all material respects, in relation to the basic
financial  statements  taken as a whole.

/s/ Marks Shron & Company
New York, NY
January 27, 1998

<PAGE>

[Letterhead]

                          Marks Shron & Company, LLP

             INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS

To the Partners of
Logan Plaza Associates

We have audited the accompanying balance sheets of Logan Plaza Associates,
as of December 31, 1997 and 1996, and the related statements of income,  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 audit.

We conducted our audit in accordance with generally  accepted auditing standards
and Government Auditing  Standards,  issued by the Comptroller General of the U.
S.  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 Logan Plaza Associates at December
31,  1997 and 1996,  and the  results of its  operations,  changes in  partners'
capital  and cash flows for the years then ended in  conformity  with  generally
accepted accounting principles.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs  issued by the U.S.  Department  of Housing and
Urban  Development  , Office of  Inspector  General in July  1993,  we have also
issued
 reports  dated  January  15,  1998 on our  consideration  of the  Partnership's
internal  control  structure,  on  its  compliance  with  specific  requirements
applicable  to  major  HUD  programs  and  on  its   compliance   with  specific
requirements applicable to Fair Housing and Non-Discrimination.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.The accompanying supplementary information
shown on pages 14 to 21 is  presented  for purposes of  additional  analysis and
is not a required  part  of the  basic  financial statements of the Partnership.
Such information has been subjected to the auditing  procedures  applied in the
audit of the basic financial statements and, in our opinion, except for the
effects of the item discussed  above, the additional  information is fairly
stated,  in all material respects, in relation to the basic financial statements
taken as a whole.

/s/ Marks Shron & Company
New York, NY
January 15, 1998

<PAGE>
[Letterhead]

                          Marks Shron & Company, LLP



                         INDEPENDENT AUDITOR'S REPORT

To the Owners of                                          HUD Field Office
Delmar Housing Associates Limited Partnership   Denver, Colorado
Yuma, Arizona

We have audited the  accompanying  Balance  Sheet of Delmar  Housing  Associates
Limited Partnership,  FHA Project Number 109-94004 REF, as of December 31, 1998,
and the related  statements  of profit and loss,  changes in project  equity and
cash  flows  for  the  year  then  ended.  These  financial  statements  are the
responsibility of the Project's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
and  Government  Auditing  Standards  issued by the  Comptroller  General of the
United  States.  Those  standards  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our 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 Delmar  Housing  Associates
Limited  Partnership,  as of December 31, 1998 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 26,  1998,  on our  consideration  of Delmar  Housing  Associates
Limited Partnership's  internal control structure and a report dated January 26,
1998, on its compliance with laws and regulations.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements taken as a whole. The supporting data included in the report on pages
14 through 16 is presented for the purposes of additional analysis and are not a
required part of the financial  statements of Delmar Housing  Associates Limited
Partnership. Such information has been subjected to the same auditing procedures
applied  in the  examination  of the  basic  financial  statements  and,  in our
opinion,  are  presented  fairly in all  material  respects  in  relation to the
financial statements taken as a whole.

Respectfully submitted,

/s/ Michael Sczekan & Co.
Michael Sczekan & Co., P.C.
Certified Public Accountants
Englewood, Colorado
January 26, 1999

<PAGE>

 [Letteread]

Michael Sczekan & Co., P.C.

                         INDEPENDENT AUDITOR'S REPORT

To the Owners of                                          HUD Field Office
Delmar Housing Associates Limited Partnership   Denver, Colorado
Yuma, Arizona

We have audited the  accompanying  Balance  Sheet of Delmar  Housing  Associates
Limited Partnership,  FHA Project Number 109-94004 REF, as of December 31, 1997,
and the related  statements  of profit and loss,  changes in project  equity and
cash  flows  for  the  year  then  ended.  These  financial  statements  are the
responsibility of the Project's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
and  Government  Auditing  Standards  issued by the  Comptroller  General of the
United  States.  Those  standards  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our 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 Delmar  Housing  Associates
Limited  Partnership,  as of December 31, 1997 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  February 10, 1998,  on our  consideration  of Delmar  Housing  Associates
Limited Partnership's internal control structure and a report dated February 10,
1998, on its compliance with laws and regulations.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements taken as a whole. The supporting data included in the report on pages
15 through 21 is presented for the purposes of additional analysis and are not a
required part of the financial  statements of Delmar Housing  Associates Limited
Partnership. Such information has been subjected to the same auditing procedures
applied  in the  examination  of the  basic  financial  statements  and,  in our
opinion,  are  presented  fairly in all  material  respects  in  relation to the
financial statements taken as a whole.

Respectfully submitted,

/s/ Michael Sczekan & Co.
Michael Sczekan & Co., P.C.
Certified Public Accountants
Englewood, Colorado
February 10, 1998

<PAGE>

 [Letterhead]

Michael Sczekan & Co., P.C.

                         INDEPENDENT AUDITOR'S REPORT

To the Owners of                                          HUD Field Office
Delmar Housing Associates Limited Partnership   Denver, Colorado
Yuma, Arizona

We have audited the  accompanying  Balance  Sheet of Delmar  Housing  Associates
Limited Partnership,  FHA Project Number 109-94004 REF, as of December 31, 1996,
and the related  statements  of profit and loss,  changes in project  equity and
cash  flows  for  the  year  then  ended.  These  financial  statements  are the
responsibility of the Project's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
and  Government  Auditing  Standards  issued by the  Comptroller  General of the
United  States.  Those  standards  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our 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 Delmar  Housing  Associates
Limited  Partnership,  as of December 31, 1996 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  February 14, 1997,  on our  consideration  of Delmar  Housing  Associates
Limited Partnership's internal control structure and a report dated February 14,
1997, on its compliance with laws and regulations.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements taken as a whole. The supporting data included in the report on pages
16 through 23 is presented for the purposes of additional analysis and are not a
required part of the financial  statements of Delmar Housing  Associates Limited
Partnership. Such information has been subjected to the same auditing procedures
applied  in the  examination  of the  basic  financial  statements  and,  in our
opinion,  are  presented  fairly in all  material  respects  in  relation to the
financial statements taken as a whole.

Respectfully submitted,

/s/ Michael Sczekan & Co.

Michael Sczekan & Co., P.C.
Certified Public Accountants

Englewood, Colorado
February 14, 1997

<PAGE>
HERITAGE
[Letterhead]

                      [Logo] Reznick Fedder & Silverman

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Heritage Court Limited Partnership

We have  audited  the  accompanying  balance  sheet of  Heritage  Court  Limited
Partnership  as of December 31, 1998,  and the related  statements of profit and
loss (on HUD Form No. 92410),  partners' equity (deficit) and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Heritage  Court  Limited
Partnership as of December 31, 1998, and the results of its operations,  changes
in partners'  (deficit)  and cash flows for the year then ended,  in  conformity
with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 21 through 26
is presented for the 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
auditing procedures applied in the audit of the basic financial  statements and,
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.

In accordance  with Government  Auditing  Standards and the  Consolidated  Audit
Guide for Audits of HUD Programs,  we have also issued a report dated January 5,
1999, on our  consideration  of Heritage  Court Limited  Partnership's  internal
control structure and on its compliance with specific requirements applicable to
CDA  programs,  fair housing and  non-discrimination,  and laws and  regulations
applicable to the financial statements.


 /s/ Reznick Fedder & Silverman
Baltimore, Maryland                               Federal Employer
January 5, 1999                                        Identification Number:
                                                                   52-1088612
Audit Principal:        William T. Riley, Jr.

<PAGE>
 [Letterhead]

                      [Logo] Reznick Fedder & Silverman

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Heritage Court Limited Partnership

We have  audited  the  accompanying  balance  sheet of  Heritage  Court  Limited
Partnership  as of December 31, 1997,  and the related  statements of profit and
loss (on HUD Form No. 92410),  partners' equity (deficit) and cash flows for the
year then  ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Heritage  Court  Limited
Partnership as of December 31, 1997, and the results of its operations,  changes
in partners'  (deficit)  and cash flows for the year then ended,  in  conformity
with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 21 through 33
is presented for the 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
auditing procedures applied in the audit of the basic financial  statements and,
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.
<PAGE>
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs,  we have also issued a report dated January
6,  1998,  on  our  consideration  of  Heritage  Court  Limited Partnership's
internal  control  structure and on its compliance  with specific requirements
applicable to CDA programs,  fair housing and non-discrimination, and laws and
regulations applicable to the financial statements.


 /s/ Reznick Fedder & Silverman
Baltimore, Maryland                               Federal Employer
January 6, 1998                                        Identification Number:
                                                                   52-1088612
Audit Principal:        William T. Riley, Jr.

<PAGE>
[Letterhead]

                      [Logo] Reznick Fedder & Silverman

                         INDEPENDENT AUDITORS' REPORT

To the Partners
Heritage Court Limited Partnership

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

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

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

Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The supplemental information on pages 19 through 33
is presented for the 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
auditing procedures applied in the audit of the basic financial  statements and,
in our opinion,  is fairly  stated in all  material  respects in relation to the
basic financial statements taken as a whole.
<PAGE>
In accordance with Government Auditing  Standards and the Consolidated Audit
Guide for Audits of HUD Programs,  we have also issued a report dated  January
6,  1997,  on  our  consideration  of  Heritage  Court  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
Baltimore, Maryland                               Federal Employer
January 6, 1997                                        Identification Number:
                                                                   52-1088612
Audit Principal:        William T. Riley, Jr.

<PAGE>
MUELLER, WALLA & ALBERTSON, P.C.

                         INDEPENDENTS AUDITORS' REPORT

The Partners
Perryville Associates I, L.P.
St. Louis, Missouri

We have compiled the accompanying balance sheet of Perryville Associates I, L.P.
(a limited  partnership) as of December 31, 1998, and the related  statements of
operations,  partners'  capital,  and cash  flows  for the year then  ended,  in
accordance  with  Statements on Standards  for  Accounting  and Review  Services
issued by the American Institute of Certified Public Accountants.

A  compilation  is limited to  presenting  in the form of  financial  statements
information  that is the  representation  of management.  We have not audited or
reviewed the accompanying financial statements and, accordingly,  do not express
and opinion or any other form of assurance on them.

The financial  statements for the year ended December 31, 1997,  were audited by
us, and we expressed an unqualified opinion on them in our report dated February
9, 1998, but we have not performed any auditing procedures since that date.

/s/Mueller,  Walla & Albertson, P.C.
Kirkwood, Missouri
Mueller,  Walla & Albertson, P.C.
Certified Public Accountants
February 10, 1999

              MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
              MISSOURI SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>

MUELLER, WALLA & ALBERTSON, P.C.

                         INDEPENDENTS AUDITORS' REPORT

The Partners
Perryville Associates I, L.P.
St. Louis, Missouri

We have audited the accompanying balance sheet of Perryville  Associates I, 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 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 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 Perryville Associates,  I, L.P.
as of December 31, 1997 and 1996, and the results of its operations,  changes in
partners'  capital  and cash flows for the years then ended in  conformity  with
generally accepted accounting principles.

/s/Mueller,  Walla & Albertson, P.C.
Kirkwood, Missouri
Mueller,  Walla & Albertson, P.C.
Certified Public Accountants
February 9, 1998

              MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
              MISSOURI SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>



CORONADO COURTS LIMITED PARTNERSHIP

FINANCIAL STATEMENTS AND
INDEPENDENT AUDITOR'S REPORTS

DECEMBER 31, 1997 AND 1996

Project No. 123-36605

Project Name - Coronado Courts

<PAGE>

                                                 C O N T E N T S



                                                                           Page

SECTION I - BASIC FINANCIAL STATEMENTS

Independent Auditor's Report                                                  1
Financial Statements:
         Balance Sheets                                                       2
         Statement of Profit and Loss (HUD Form No. 92410) - 1997             3
         Statement of Profit and Loss (HUD Form No. 92410) - 1996             5
         Statements of Partners' Capital (Deficit)                            7
         Statements of Cash Flows                                             8
         Notes to Financial Statements                                        9

SECTION II - SUPPLEMENTAL INFORMATION REQUIRED BY
         THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

SECTION III - OTHER REQUIRED INDEPENDENT AUDITOR REPORTS

SECTION IV - PARTNERS' AND MANAGEMENT AGENT'S CERTIFICATIONS






<PAGE>


INDEPENDENT AUDITOR'S REPORT

To the Partners
Coronado Courts Limited Partnership

We have audited the accompanying balance sheets of Coronado Courts Limited
Partnership, as of December 31, 1997 and 1996, and the related statements of
profit and loss, partners' capital (deficit) and cash flows for the years then
ended.  These financial statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Coronado Courts Limited
Partnership as of December 31, 1997 and 1996, and the results of its
operations, changes in partners' capital (deficit) and cash flows for the years
then ended in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have issued a report dated February 3, 1998 on our
consideration of the Partnership's internal control and reports, also dated
February 3, 1998, on its compliance with specific requirements applicable to
major HUD programs, compliance with laws, regulations, contracts and grants,
and specific requirements applicable to Fair Housing and Non-Discrimination.

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


/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
February 3, 1998
<PAGE>


                                        CORONADO COURTS LIMITED PARTNERSHIP
                                                  BALANCE SHEETS
                                            DECEMBER 31, 1997 AND 1996
                                                      ASSETS
                                                1997                 1996
                                        ------------------   ------------------
 CURRENT ASSETS
        1110   Petty cash                  $        59,222      $        75,937

        1120   Cash                                    500                  500

        1130   Accounts receivable - tenants           371                  342

        1140   Accounts receivable - government      1,054                  398

        1140   Accounts receivable - other              50                  117

        1240   Prepaid property insurance           12,690               12,499

        1250   Prepaid mortgage insurance            3,219                3,235


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

               Total current assets                107,745              120,762

 FUNDED DEPOSITS HELD IN TRUST
        1191   Tenant security deposits             15,236               14,879

        1320   Reserve for replacements             90,957              116,758
                                        ------------------   ------------------

               Total funded deposits held in trust 106,193              131,637

 PROPERTY AND EQUIPMENT
        1410   Land                                200,000              200,000
        1411   Land improvements                   252,331              252,331
        1420   Buildings                         4,792,782            4,792,782
        1430   Building equipment - fixed           81,154              124,157

        1450   Furniture - for project
               and tenant use                       20,477               14,541

        1465   Automobiles                          15,000               15,000

        1470   Maintenance equipment                   572                  572

        1490   Furnishings                          52,027               98,500

                                        ------------------   ------------------
                                                 5,414,343            5,497,883
       Less accumulated depreciation             1,675,292            1,643,651
                                        ------------------   ------------------

               Net property and equipment        3,739,051            3,854,232

 OTHER ASSETS
        1900   Deferred loan fees, net of
               $55,492 and $50,078 accumulated
               amortization                        161,058              166,472
                                        ------------------   ------------------

               TOTAL ASSETS                 $    4,114,047       $    4,273,103
                                        ==================   ==================

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



<PAGE>

                                        LIABILITIES AND PARTNERS' CAPITAL
                                                 1997                 1996
                                        ------------------   ------------------
 CURRENT LIABILITIES
        2110   Accounts payable                  $   5,913         $      7,611

        2111   Accrued incentive management fee     45,490               27,054

        2130   Accrued interest payable             30,316               30,575

        2150   Accrued property taxes               14,215               15,356

        2210   Prepaid rental income                    -                    27

        2320   Mortgage note payable -
               current portion                      35,002               31,763

               Total current liabilities           130,936              112,386

 DEPOSIT LIABILITIES
        2191   Tenant security deposits
                                                    15,236               14,879

 LONG-TERM LIABILITIES
        2320   Mortgage note payable             3,731,253            3,763,016
       Less current portion
                                                    35,002               31,763
                                        ------------------   ------------------

               Net long-term debt                3,696,251            3,731,253
                                        ------------------   ------------------

               TOTAL LIABILITIES                 3,842,423            3,858,518

 PARTNERS' CAPITAL
        3120   Partners' contributions           1,800,000            1,800,000
        3121   Less distributions                 (502,435)            (472,435)
        3240   Accumulated loss                 (1,025,941)            (912,980)
                                        ------------------   ------------------

               TOTAL PARTNERS' CAPITAL             271,624              414,585
                                        ------------------   ------------------








               TOTAL LIABILITIES AND
                PARTNERS' CAPITAL           $    4,114,047       $    4,273,103
                                        ==================   ==================
The accompanying notes are an integral part of these financial statements.
<PAGE>



Statement of Profit                                 U.S. Department of Housing
And Loss                                            and Urban Development
Office of Housing
Federal Housing Commissioner
OMB Approval 2502-0052 (Exp. 1/31/95)
Public Reporting Burden for this collection of information is estimated to
average 1.0 hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed,
and completing and reviewing the collection of information.  Send comments
regarding this  burden estimate or any other aspect of this collection of
information, including suggestions for reducing this burden, to the Reports
Management Officer, Office of Information Policies and Systems, U.S. Department
of Housing and Urban Development, Washington, D.C. 20410-3600 and to the Office
of Management and Budget, Paperwork Reduction Project (2502-0052), Washington,
D.C. 20503.  Do not send this completed form to either of these addressees.
For Month/Period           Project Number:            project Name:
   Beginning:                  Ending:
January 1, 1997           December 31, 1997           123-36605 Coronado Courts
<TABLE>

 <S>                    <C>                                                   <C>         <C>
 Part I                         Description of Account                         Acct. No.  Amount*
                        Apartment or Member Carrying Charges (Coops)           5120       $119,820
                        Tenant Assistance Payments                             5121       $725,280
           Rental       Furniture and Equipment                                5130       $
           Income       Stores and Commercial                                  5140       $
           5100         Garage and Parking Spaces                              5170       $
                        Flexible Subsidy Income                                5180       $
                        Miscellaneous (specify)                                5190       $
                        Total Rent Revenue Potential at 100% Occupancy                    $845,100
                        Apartments                                             5220       $(2,943)
                        Furniture and Equipment                                5230       $
           Vacancies    Stores and Commercial                                  5240       $
           5200         Garage and Parking Spaces                              5270       $
                        Miscellaneous (specify)                                5290       $
                        Total Vacancies                                                   (2,943)
                        Net Rental Revenue Rent Revenue Less Vacancies                    $842,157
                        Elderly & Congregate Services Income - 5300
                        Total Services Income ( Schedule Attached )            5300       $
                        Interest Income  - Project Operations                  5410       $119
          Financial     Income from investments -  Residual Receipts           5430
          Revenue       Income from investments -  Reserve for Replacement     5440       $2,460
          5400          Income from investments -  Miscellaneous               5490       $
                        Total Financial Revenue                                           $2,579
                        Laundry and Vending                                    5910       $14,205
                        NSF and Late Charges                                   5920       $829
          Other         Damages and Cleaning Fees                              5930       $3,770
          Revenue       Forfeited Tenant Security Deposits                     5940       $
          5900          Other Revenue (specify)  - Appliance sales             5990       $3,053
                        Total Other Revenue                                               $21,857
                        Total Revenue                                                     $866,593
                        Advertising                                            6210       $
                        Other Administrative Expense                           6250       $
                        Office Salaries                                        6310       $1,263
                        Office Supplies                                        6311       $1,649
                        Office or Model Apartment Rent                         6312
          Administrative         Management                                    6320       $60,229
          Expenses      Manager or Superintendent Salaries                     6330       $30,688
          6200/6300     Manager or Superintendent Rent Free Unit               6331       $
                        Legal Expenses (Project)                               6340       $163
                        Auditing Expenses (Project)                            6350       $4,600
                        Bookkeeping Fees/Accounting Services                   6351       $11,152
                        Telephone and Answering Service                        6360       $2,399
                        Bad Debts                                              6370       $161
                        Miscellaneous Administrative Expenses (specify)        6390       $3,079
                        Total Administrative Expenses                                     $115,383
                        Fuel Oil/Coal                                          6420       $
         Utilities      Electricity (Light and Misc. Power)                    6450       $6,757
         Expense        Water                                                  6451       $22,465
         6400           Gas                                                    6452       $3,280
                        Sewer                                                  6453       $
                        Total Utilities Expense                                           $32,502
</TABLE>

         *All amounts must be rounded to the nearest dollar; $.50 and over,
          round up--$.49 and below, round down.
         Page 1 of 2                                       form HUD-92410 (7/91)

                                                     ref Handbook 4370.2
      The accompanying notes are an integral part of these financial statements
<TABLE>

<PAGE>

         <S>                                                                           <C>             <C>
         Coronado Courts                               123-36605
                        Janitor and Cleaning Payroll                                    6510            $    12,458
                        Janitor and Cleaning Supplies                                   6515            $       336
                        Janitor and Cleaning Contract                                   6517            $
                        Exterminating Payroll/Contract                                  6519            $       648
                        Exterminating Supplies                                          6520            $     5,720
                        Garbage and Trash Removal                                       6525            $    12,457
                        Security Payroll/Contract                                       6530            $
                        Grounds Payroll                                                 6535            $    12,243
                        Grounds Supplies                                                6536            $       991
         Operating and  Grounds Contract                                                6537            $    19,122
         Maintenance    Repairs Payroll                                                 6540            $    49,849
         Expenses       Repairs Material                                                6541            $    18,424
         6500           Repairs Contract                                                6542            $     6,264
                        Elevator Maintenance/Contract                                   6545            $
                        Heating/Cooling Repairs and Maintenance                         6546            $        90
                        Swimming Pool Maintenance/Contract                              6547            $
                        Snow Removal                                                    6548            $
                        Decorating Payroll/Contract                                     6560            $
                        Decorating Supplies                                             6561            $    16,044
                        Other                                                           6570            $    12,204
                        Miscellaneous Operating and Maintenance Expenses                6590            $
                        Total Operating & Maintenance Expenses                                          $   166,850
                        Real Estate Taxes                                               6710            $    28,420
                        Payroll Taxes (FICA)                                            6711            $    10,012
                        Miscellaneous Taxes, Licenses and Permits                       6719            $    20,546
         Taxes          Property and Liability Insurance (Hazard)                       6720            $    15,037
         and            Fidelity Bond Insurance                                         6721            $
         Insurance      Workmen's Compensation                                          6722            $
         6700           Health Insurance and Other Employee Benefits                    6723            $
                        Other Insurance (specify)                                       6729            $
                        Total Taxes and Insurance                                                       $    74,015
                        Interest on Bonds Payable                                       6810            $
         Financial      Interest on Mortgage Payable                                    6820            $   365,241
         Expenses       Interest on Notes Payable (Long-Term)                           6830            $
         6800           Interest on Notes Payable (Short-Term)                          6840            $
                        Mortgage Insurance Premium/Service Charge                       6850            $    19,330
                        Miscellaneous Financial Expenses                                6890            $     5,414
                        Total Financial Expenses                                                        $   389,985
         Elderly &      Total Service Expenses-Schedule Attached                        6900            $
         Congregate     Total Cost of Operations Before Depreciation                                    $   778,735
         Service        Profit (Loss) before Depreciation
$     87,858
         Expenses       Depreciation (Total) - 6600 Specify                             6600            $   173,761
         6900           Operating Profit or (Loss)                                                      $   (85,903)
         Corporate or   Drug Elimination grant income (Note E)                                          $  (161,388)
         Mortgagor      Drug Elimination grant expenditures (Note E)                                    $   161,388
         Entity         Taxes (Federal-State-Entity)                                    7130-32         $
         Expenses       Other Expenses (Entity) - Incentive Management Fee              7190            $  27,058
         7100           Total Corporate Expenses                                                        $  27,058
                        Net Profit or (Loss)                                                            $  (112,961)
</TABLE>

      Warning: HUD will prosecute false claims and statements.  Conviction may
      result in criminal and or civil penalties. (18 U.S.C 1001, 1010, 1012;
      31 U.S.C. 3729, 3802)  Miscellaneous or other Income and Expense Sub-
      account Groups.  If miscellaneous or other income and/or expense
      subaccounts (5190,5290,5490,5990,6390,6590,6729, 6890 and 7190) exceed
      the Account Groupings by 10% or more, attach a separate schedule
      describing or explaining the miscellaneous income or expenses.
         Part II
      1.  Total principal payments required under the mortgage, even
          if payments under a Workout Agreement are less or more than
          those required under the mortgage.                          $  31,763
      2.  Replacement Reserve deposits required by the Regulatory
          Agreement or Amendments thereto, even if payments may be
          temporarily suspended or waived.                            $  15,963
      3.  Replacement or Painting Reserve releases which are included
          as expense items on this Profit and Loss statement.            $  821
      4.  Project Improvement Reserve Releases under the Flexible
          Subsidy Program that are included as expense items on this
          Profit and Loss Statement.                                       $  0
                                                              Page 2 of 2
form HUD-92410

    The accompanying notes are an integral part of these financial statements

 <PAGE>
Statement of Profit                                  U.S. Department of Housing
and Loss                                               and Urban Development
Office of Housing
                               Federal Housing Commissioner
                            OMB Approval 2502-0052 (Exp. 1/31/95)
     Public Reporting Burden for this collection of information is estimated to
average 1.0 hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information. Send comments regarding
this burden estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to the Reports Management
Officer, Officeof Information Policies and Systems, U.S. Department of Housing
and Urban Development, Washington, D.C. 20410-3600 and to the Office of
Management and Budget, Paperwork Reduction Project (2502-0052), Washington,
D.C. 20503.  Do not send this completed form to either of these addressees.
For Month/Period
              Project Number: 123-36605       Project Name: Coronado Courts
Beginning:                         Ending:
January 1, 1996                   December 31, 1996
<TABLE>

         <S>        <C>                                                  <C>         <C>
         Part I                 Description of Account                   Acct. No.    Amount*
                    Apartment or Member Carrying Charges (Coops)           5120        $    102,913
                    Tenant Assistance Payments                             5121        $    734,207
         Rental     Furniture and Equipment                                5130        $
         Income     Stores and Commercial                                  5140        $
         5100       Garage and Parking Spaces                              5170        $
                    Flexible Subsidy Income                                5180        $
                    Miscellaneous (specify)                                5190        $
                    Total Rent Revenue Potential at 100% Occupancy                     $    837,120
                    Apartments                                             5220        $     (1,089)
                    Furniture and Equipment                                5230        $
         Vacancies  Stores and Commercial                                  5240        $
         5200       Garage and Parking Spaces                              5270        $
                    Miscellaneous (specify)                                5290        $
                    Total Vacancies                                                          (1,089)
                    Net Rental Revenue Rent Revenue Less Vacancies                     $    836,031
                    Elderly & Congregate Services Income - 5300
                    Total Services Income ( Schedule Attached )            5300        $
                    Interest Income  - Project Operations                  5410        $        316
         Financial  Income from investments -  Residual Receipts           5430        $
         Revenue    Income from investments -  Reserve for Replacement     5440        $      3,624
         5400       Income from investments -  Miscellaneous               5490        $
                    Total Financial Revenue                                            $      3,940
                    Laundry and Vending                                    5910        $     14,923
                    NSF and Late Charges                                   5920        $        705
         Other      Damages and Cleaning Fees                              5930        $      2,883
         Revenue    Forfeited Tenant Security Deposits                     5940        $
         5900       Other Revenue (specify) - Appliance sales              5990        $      2,457
                    Total Other Revenue                                                $     20,968
                    Total Revenue                                                      $    860,939
                    Advertising                                            6210        $
                    Other Administrative Expense                           6250        $
                    Office Salaries                                        6310        $      1,354
                    Office Supplies                                        6311        $      2,710
                    Office or Model Apartment Rent                         6312        $
         Administrative           Management                               6320        $     59,805
         Expenses   Manager or Superintendent Salaries                     6330        $     28,486
         6200/6300  Manager or Superintendent Rent Free Unit               6331        $
                    Legal Expenses (Project)                               6340        $         76
                    Auditing Expenses (Project)                            6350        $      4,500
                    Bookkeeping Fees/Accounting Services                   6351        $      9,698
                    Telephone and Answering Service                        6360        $      2,528
                    Bad Debts                                              6370        $        147
                    Miscellaneous Administrative Expenses (specify)        6390        $      3,182
                    Total Administrative Expenses                                      $    112,486
                    Fuel Oil/Coal                                          6420        $
         Utilities  Electricity (Light and Misc. Power)                    6450        $      6,127
         Expense    Water                                                  6451        $     24,834
         6400       Gas                                                    6452        $      2,533
                    Sewer                                                  6453        $
                    Total Utilities Expense                                            $     33,494
</TABLE>

         *All amounts must be rounded to the nearest dollar; $.50 and over,
          round up--$.49 and below, round down.
         Page 1 of 2                                      form HUD-92410 (7/91)
                                                          ref Handbook 4370.2
     The accompanying notes are an integral part of these financial statements
<PAGE>

                        Coronado Courts                 123-36605

<TABLE>


         <S>            <C>                                                <C>         <C>
                        Janitor and Cleaning Payroll                       6510         $    10,717
                        Janitor and Cleaning Supplies                      6515         $       343
                        Janitor and Cleaning Contract                      6517         $
                        Exterminating Payroll/Contract                     6519         $       600
                        Exterminating Supplies                             6520         $     5,783
                        Garbage and Trash Removal                          6525         $    13,214
                        Security Payroll/Contract                          6530         $
                        Grounds Payroll                                    6535         $    13,961
                        Grounds Supplies                                   6536         $       625
         Operating and  Grounds Contract                                   6537         $    18,139
         Maintenance    Repairs Payroll                                    6540         $    45,713
         Expenses       Repairs Material                                   6541         $    11,404
         6500           Repairs Contract                                   6542         $     5,919
                        Elevator Maintenance/Contract                      6545         $
                        Heating/Cooling Repairs and Maintenance            6546         $     1,659
                        Swimming Pool Maintenance/Contract                 6547         $
                        Snow Removal                                       6548         $
                        Decorating Payroll/Contract                        6560         $
                        Decorating Supplies                                6561         $    14,977
                        Other                                              6570         $    11,364
                        Miscellaneous Operating and Maintenance
                                   Expenses                                6590         $        50
                        Total Operating & Maintenance Expenses                          $   154,468
                        Real Estate Taxes                                  6710         $    30,713
                        Payroll Taxes (FICA)                               6711         $     8,191
                        Miscellaneous Taxes, Licenses and Permits          6719         $    20,366
                        Taxes     Property and Liability Insurance (Hazard)6720         $    14,209
         and            Fidelity Bond Insurance                            6721         $
         Insurance      Workmen's Compensation                             6722         $
         6700           Health Insurance and Other Employee Benefits       6723         $
                        Other Insurance (specify)                          6729         $     3,959
                        Total Taxes and Insurance                                       $    77,438
                        Interest on Bonds Payable                          6810         $
         Financial      Interest on Mortgage Payable                       6820         $   368,205
         Expenses       Interest on Notes Payable (Long-Term)              6830         $
         6800           Interest on Notes Payable (Short-Term)             6840         $
                        Mortgage Insurance Premium/Service Charge          6850         $    19,427
                        Miscellaneous Financial Expenses                   6890         $     5,414
                        Total Financial Expenses                                        $   393,046
         Elderly &      Total Service Expenses-Schedule Attached           6900         $
         Congregate     Total Cost of Operations Before Depreciation                    $   770,932
         Service        Profit (Loss) before Depreciation                               $    90,007
         Expenses       Depreciation (Total) - 6600 Specify                6600         $   164,845
         6900           Operating Profit or (Loss)                                      $   (74,838)
         Corporate or   Drug Elimination grant proceeds (Note E)                        $   (88,612)
         Mortgagor      Drug Elimination grant expenditures (Note E)                    $    88,612
         Entity         Taxes (Federal-State-Entity)                       7130-32      $
         Expenses       Other Expenses (Entity) - Incentive
                                  Management Fee                           7190         $    26,487
         7100           Total Corporate Expenses                                        $    26,487
                        Net Profit or (Loss)                                            $  (101,325)
</TABLE>

         Warning: HUD will prosecute false claims and statements.  Conviction
         may result in criminal and or civil penalties. (18 U.S.C. 1001, 1010,
         1012; 31 U.S.C. 3729, 3802) Miscellaneous or other Income and Expense
         Sub-account Groups.  If miscellaneous or other income and/or expense
         subaccounts (5190,5290,5490,5990,6390,6590,6729, 6890 and 7190) exceed
         the Account Groupings by 10% or more, attach a separate schedule
         describing or explaining the miscellaneous income or expenses.
         Part II
      1. Total principal payments required under the mortgage, even if
         payments under a Workout Agreement are less or more than those
         required under the mortgage.                               $    28,823
      2.  Replacement Reserve deposits required by the Regulatory
          Agreement or Amendments thereto, even if payments may be
          temporarily suspended or waived.                          $    15,963
      3.  Replacement or Painting Reserve releases which are
          included as expense items on this Profit and Loss
          statement.                                                $     1,400
      3.  Project Improvement Reserve Releases under the Flexible
          Subsidy Program that are included as expense items on
          this Profit and Loss Statement.                           $         0
                                                  Page 2 of 2
form HUD-92410


     The accompanying notes are an integral part of these financial statements

<PAGE>

                                    CORONADO COURTS LIMITED PARTNERSHIP
                                       STATEMENTS OF PARTNERS' CAPITAL
                                   YEARS ENDED DECEMBER 31, 1997 AND 1996



                                 LIMITED            GENERAL
 YEAR ENDED DECEMBER 31, 1996    PARTNERS          PARTNERS           TOTAL
-------------------------------------------------------------------------------
   Balance, January 1, 1996     $ 765,845        $ (219,935)         $ 545,910

   Distribution to partners       (29,700)             (300)           (30,000)


   Loss for the year             (100,312)           (1,013)          (101,325)

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

   Balance, December 31, 1996  $  635,833        $ (221,248)         $ 414,585
                              =================================================


 YEAR ENDED DECEMBER 31, 1997
------------------------------------------------
   Balance, January 1, 1997      $  635,833       $ (221,248)        $ 414,585

   Distribution to partners         (29,700)            (300)          (30,000)

   Loss for the year               (111,831)          (1,130)         (112,961)

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

   Balance, December 31, 1997   $   494,302    $    (222,678)       $  271,624
                               ===============================================

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

<PAGE>

                            CORONADO COURTS LIMITED PARTNERSHIP
                                        STATEMENTS OF CASH FLOWS
                                 YEARS ENDED DECEMBER 31, 1997 AND 1996

                                                 1997                1996
                                         ------------------   -----------------
 CASH FLOWS FROM OPERATING ACTIVITIES
       Cash receipts from operations
            Rental of apartments            $       841,445      $      836,308


           Interest                                   2,579               3,940
            Drug Elimination grant proceeds         161,388              88,612

            Laundry receipts and other revenue       21,857              20,968

                                         ------------------   -----------------
                 Total                            1,027,269             949,828

       Cash disbursed for operations                 24,780              26,717
            Administrative expense

            Management fees                          59,804              59,581


           Utilities                                 32,106              33,468
            Payroll                                 115,250             108,422

            Operating and maintenance expense        93,271              83,396

            Property taxes                           29,561              32,189

            Taxes - other                            20,539              20,231

            Property insurance                       15,228              15,714

            Mortgage insurance premiums              19,314              19,412

            Mortgage interest                       365,500             368,439

            Drug Elimination grant expenditures     161,388              88,612

            Incentive management fee                  8,622              24,969

                                         ------------------   -----------------
                 Total                              945,363             881,150

                                         ------------------   -----------------
       Net cash provided by operating activities     81,906              68,678


 CASH FLOWS FROM INVESTING ACTIVITIES
       Purchase of equipment                        (59,754)            (51,820)

       Tenant security deposits funded                 (357)                178

       Net change in escrow deposit accounts         (2,905)             (9,479)

       Deposits to reserve for replacements         (18,423)            (19,587)

       Withdrawals from reserve for replacements     44,224              47,929

                                         ------------------   -----------------
       Net cash used by investing activities        (37,215)            (32,779)


 CASH FLOWS FROM FINANCING ACTIVITIES
       Tenant security deposits received                357                (178)

       Payment of long-term debt                    (31,763)            (28,823)

       Withdrawals by partners                      (30,000)            (30,000)

                                         ------------------   -----------------
       Net cash used by financing activities        (61,406)            (59,001)

                                         ------------------   -----------------
            Net decrease in cash                    (16,715)            (23,102)
 CASH BALANCE, BEGINNING OF YEAR                     76,437              99,539

                                         ------------------   -----------------
       CASH BALANCE, END OF YEAR              $      59,722        $     76,437

                                         ==================   =================

 CASH FLOWS FROM OPERATING ACTIVITIES
       Net                                    $    (112,961)       $   (101,325)
      loss
       Adjustments to reconcile net loss to net cash
       provided by operating activities:
            Depreciation and amortization           179,175             170,259

            Changes in:
                 Accounts receivable                   (618)                133

                 Prepaid expenses                      (175)             (1,490)

                 Accounts payable and accrued
                 expenses                            (1,951)               (417)

                 Accrued incentive management fee    18,436               1,518

                                         ------------------   -----------------
       Net cash provided by operating
          activities                         $       81,906          $   68,678

                                         ==================   =================



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

                                    CORONADO COURTS LIMITED PARTNERSHIP
                                          NOTES TO FINANCIAL STATEMENTS


NOTE A - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

         BUSINESS - Coronado Courts Limited Partnership, rehabilitated and
operates a 145 unit rental housing project in conjunction with the U.S.
Department of Housing and Urban Development Section 8 Housing Assistance
Payments Program administered through the City of Douglas Housing Authority.
The Partnership's housing assistance contract expires in four stages during
2002. The project's name is Coronado Courts and is located in Douglas, Arizona.

         Apartments are initially leased for a period of one year.  After the
initial term, the leases continue on a month-to-month basis.  The U.S.
Department of Housing and Urban Development (HUD) regulates the rental rates
and pays a portion of the rental.  In addition, HUD continues to pay a portion
of the rental for a period of sixty days, if a vacancy occurs.  The apartment
rents range from $380 to $620 per month.

The apartment project is the principal asset of the Partnership and therefore,
the Partnership's operations are concentrated in the multifamily real estate
market.  The Partnership operates in a heavily regulated environment.  The
operations of the Partnership are subject to the administrative directives,
rules and regulations of federal, state and local regulatory agencies,
including, but not limited to, HUD.  Such administrative directives, rules and
regulations are subject to change by an act of congress or administrative
changes mandated by HUD.  Such changes may occur with little notice or
inadequate funding to pay for the related cost, including the additional
administrative burden, to comply with a change.

         NATURE OF PARTNERSHIPS - In accordance with the generally accepted
method of presenting partnership financial statements, the financial statements
do not include the personal assets and liabilities of the partners.  The
Partnership's income or loss is reportable by the partners on their individual
income tax returns.

         CASH AND CASH EQUIVALENTS - Cash and cash equivalents, for statement
of cash flow purposes, consist of unrestricted cash deposits in federally
insured financial institutions.  Funded deposits held in trust are not
considered to be cash and cash equivalents for statement of cash flow purposes.

         RESTRICTED DEPOSITS AND FUNDED RESERVES - Mortgage escrow deposits
and the reserve for asset replacement are held on deposit by the mortgage
servicing corporation.

         PROPERTY AND EQUIPMENT - Property and equipment are generally
presented at cost, less accumulated depreciation.  Depreciation is provided
using accelerated methods over the estimate useful lives of the assets.  The
Partnership has, however, adopted Statement of Financial Accounting Standard
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of.  This Statement requires that long-lived assets be
presented at fair value where information indicates that the Partnership might
be unable to recover, through operations or sale, the carrying amount of long-
lived assets.

DEFERRED LOAN FEES - Deferred loan fees are amortized by straight-line method
 over the forty-year term of the related mortgage note.


<PAGE>
          CORONADO COURTS LIMITED PARTNERSHIP

              NOTES TO FINANCIAL STATEMENTS

NOTE A - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Continued

ESTIMATES -  The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.

         REGULATORY AGREEMENT - A Regulatory Agreement with the Federal Housing
Administration sets forth the following requirements, among others:

The Partnership is required to make monthly deposits for the funding of
property insurance, mortgage and real estate taxes.

                  The Partnership is required to establish and maintain a
reserve fund for asset replacements through monthly deposits to the reserve.
These funds may not be withdrawn without the prior consent of HUD.

                  The Partnership is prohibited from making any distribution of
 assets or income, except from surplus cash and only after the end of a semi-
 annual or annual fiscal period.

ADVERTISING - Advertising costs are expensed as incurred.

NOTE B - MORTGAGE NOTE PAYABLE

         The mortgage note payable is collateralized by an insured mortgage on
the project's land and buildings.  Terms of the note require monthly payments
of $33,105, including principal and interest at 9.75%, with final maturity June
2023.

         In connection with this mortgage note, the Partnership has entered
into a regulatory agreement with the Secretary of Housing and Urban Development
which contains, among other things, restrictions on the conveyance, transfer,
or encumbrance of any of the project property, the assumption of additional
indebtedness, and the assignment of rights to manage or receive the rents and
profits of the property.

         Maturities of long-term debt for the next five years are as follows:

                             1998   $35,002
                             1999   $38,571
                             2000   $42,505
                             2001   $46,839
                             2002   $51,616

 <PAGE>
NOTE C - ALLOCATION OF NET INCOME OR LOSS AND DISTRIBUTION PREFERENCES

         Net income or loss is allocated one-percent (1%) to the general
partners and ninety-nine percent (99%) to the limited partners.  Annual cash
distributions to partners can only be paid from surplus cash of the Partnership
as defined by the Department of Housing and Urban Development.  Such
distributions are allocable between the limited partners and the general
partner as follows:

         First    - $29,700 to the limited partners and $300 to the general
                    partner on a cumulative basis.

         Second   - Repay any project expense loans.

         Third    - Payment of the incentive management fee.

         Balance  - 99% to the limited partners and 1% to the general partner.

         Cash distributions resulting from a sale or refinancing of the project
         will be allocated using methods described in the
         partnership's agreement.

NOTE D - IDENTITY OF INTEREST

         Essex Corporation, a general partner in Coronado Courts Limited
Partnership, also manages Coronado Courts.  The management agreement with Essex
Corporation currently provides for a management fee equal to 7% of rental and
service income.  Management fees paid or accrued to Essex Corporation for the
years ended December 31, 1997 and 1996 were $60,229 and $59,805, respectively.
Data processing fees paid to Essex for the years ended December 31, 1997 and
1996 were $11,152 and $9,698, respectively.  Essex Corporation also is
entitled to an incentive management fee which is to be paid from surplus cash.
Incentive management fees totaled $27,058 for 1997 and $26,487 for 1996.

NOTE E - GRANT INCOME AND EXPENSE

         The project has been awarded Drug Elimination grants through the U.S.
Department of Housing and Urban Renewal. Grant income and expense for the years
ended December 31, 1997 and 1996 is summarized below:
                                             1997                  1996
                                   --------------------- ---------------------
          Grant income                         $ 161,388              $ 88,612
                                   ===================== =====================

          Grant expenses:
               Educational services              $25,972               $28,048
               Transportation                      5,147                27,522
               Facility improvements               2,212                 8,955
               Payroll                            83,480                 1,795
               Counseling                         12,560                10,848
               Other expenses                     32,017                11,444
                                   --------------------- ---------------------
               Total grant expenses             $161,388               $88,612
                                   ===================== =====================


<PAGE>
Section II
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
SUPPLEMENTAL INFORMATION REQUIRED BY
YEAR ENDED DECEMBER 31, 1997 AND 1998





Non-Income Producing Apartments
 None

 Accounts Receivable - Tenants

      Days                       Number of Tenants                Amount
----------------           --------------------------       -----------------
 0-30                                   -                                   -

 31-60                                  2                                $ 209

 61-90                                  -                                    -

 over 90                                1                                $ 162

                           ==========================        =================

     Total                              3                                $ 371
                           ==========================        =================

 Accounts and Notes Receivable - Other Than From Regular Tenants
 Accounts receivable - government - tenant assistance payments         $ 1,054

                                                             =================
                                                             =================
 Accounts receivable - miscellaneous                                     $  50

                                                             =================
 Mortgage Escrow Deposits
 Estimated amount required for future payment of:
      City, state and county taxes                                    $  7,102

      Property insurance                                                 2,294

      Mortgage insurance                                                16,095

                                                             -----------------
         Total                                                          25,491

 Total confirmed by mortgagee                                           30,639

                                                             -----------------
 Amount on deposit in excess of estimated requirements                $  5,148

                                                             =================

 Tenant Security Deposits


 Reserve for Replacements



      Balance, beginning of year                                 $      116,758

         Deposits                                                        15,963

         Interest earnings, net of any investment fees                    2,460

         Authorized withdrawals (carpet, ranges, refrigerators,
         and blinds)                                                    (44,224)
                                                              -----------------
      Balance, end of year - confirmed by mortgagee              $       90,957
                                                              =================
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP
SUPPLEMENTAL INFORMATION REQUIRED BY
YEAR ENDED DECEMBER 31, 1997 AND 1998

 Accounts Payable - Other Than Trade Creditors
 Essex Corporation incentive management fee -
 payable from surplus cash                                       $       45,490
                                                              =================

 Accrued Property Taxes
 Basis of Accrual         Period Covered        Due Date        Accrued
                                                              -----------------

 Property tax statement  7/1/97 to 12/31/97     May 1998         $       14,215
                                                              =================

 Monthly installments are paid into a mortgage escrow for the payment of
 property taxes.

 Notes Payable (Other than Insured Mortgage)
 None

 Compensation Paid to Partners
 None

 Distributions Paid to Partners                                        $ 38,622
 Surplus cash available at December 31, 1996
 Less amount distributed for incentive management fee                    (8,622)
(February 1997)
                                                              -----------------

      Amount distributed to partners (during February 1997)      $       30,000
                                                              =================

 Unauthorized Distributions
 None

 Changes in Partnership Interests
                                                                  Ownership
                                                               % Addition or
 Name                                                            (Deletion)
-----------------------------------------------               -----------------
 None                                                                        0%
                                                                             0%
                                                              -----------------
                                                              =================
                                      Net change                             0%
                                                              =================

Identity of Interest
Management fees paid to Essex Corporation                        $       60,229
                                                              =================
Bookkeeping fees paid to Essex Corporation                       $       11,152
                                                              =================
Incentive management fee accrued to Essex Corporation            $       27,058
                                                              =================

 Comments on Balance Sheet Items
 None
<PAGE>
                              CORONADO COURTS LIMITED PARTNERSHIP
                         SCHEDULE OF CHANGES IN PROPERTY AND EQUIPMENT
                                  YEAR ENDED DECEMBER 31, 1997


                                                                      COST
<TABLE>

<S>                                           <C>                <C>           <C>            <C>
                                            ---------------------------------------------------------------
                                                  Balance,                                      Balance,
                                                  Beginning                                      End of
                                                  of Year        Additions     Reductions        Year
                                            ---------------------------------------------------------------

 Land                                         $      200,000              $             $          200,000
                                                                          -             -
 Land improvements                                   252,331                                       252,331
                                                                          -             -
 Buildings                                         4,792,782                                     4,792,782
                                                                          -             -
 Building equipment - fixed                          124,157         20,777        63,780           81,154
 Furniture - for project and tenant use
                                                      14,541          5,936             -           20,477
 Automobiles
                                                      15,000              -             -           15,000
 Maintenance equipment
                                                         572              -             -              572
 Furnishings                                                         31,867
                                                      98,500                       78,340           52,027
                                            ---------------------------------------------------------------

                                               $   5,497,883    $    58,580    $  142,120    $   5,414,343
                                            ===============================================================

</TABLE>
<TABLE>


                                                               ACCUMULATED DEPRECIATION
                                            ---------------------------------------------------------------
<S>                                            <C>              <C>          <C>              <C>               <C>
                                                Balance,                                      Balance,            Net Book
                                                Beginning                                      End of            Value, End
                                                 of Year        Additions     Reductions        Year               Of Year
                                            ---------------------------------------------------------------   -----------------

 Land                                                      $              $             $                $      $      200,000
                                                           -              -             -                -
 Land improvements                                   170,394         14,898                        185,292
                                                                                        -                               67,039
 Buildings                                         1,300,776        137,077                      1,437,853           3,354,929
                                                                                        -
 Building equipment - fixed
                                                      81,425          9,634        63,780           27,279              53,875
 Furniture - for project and tenant use
                                                       7,622          2,075             -            9,697              10,780
 Automobiles
                                                       3,000          4,800             -            7,800               7,200
 Maintenance equipment
                                                         114            115             -              229                 343
 Furnishings
                                                      80,320          5,162        78,340            7,142              44,885
                                            ---------------------------------------------------------------   -----------------

                                               $   1,643,651    $   173,761    $  142,120    $   1,675,292       $   3,739,051
                                            ===============================================================   =================


</TABLE>


<PAGE>
-------------------------------------------------------------------------------
                             U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
                                 HOUSING - FEDERAL HOUSING COMMISSIONER
                        OFFICE OF MULTIFAMILY HOUSING MANAGEMENT AND OCCUPANCY
                             COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND
                                          RESIDUAL RECEIPTS
-------------------------------------------------------------------------------
PROJECT                                           PROJECT NUMBER   123-36605
NAME
FISCAL PERIOD ENDED:
       Coronado Courts                                           12/31/97
       ---------------------------------------------------------------------
-------------------------------------------------------------------------------
                                                  PART A - COMPUTE SURPLUS CASH
-------------------------------------------------------------------------------
<TABLE>

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

                                                                            ------------------------------
       1. Cash (Accounts 1110, 1120,1191,1192)
                                                                                                   74,958
                                                                            ------------------------------
       ---------------------------------------------------------------------------------------------------
       2. Tenant subsidiary vouchers due for period
       covered                               by financial statements                                1,054
       ---------------------------------------------------------------------------------------------------
                                                                            ------------------------------
       3. Other (Describe)

                                                                                                        -
                                                                            ------------------------------
       ----------------------------------------------------------------------------------------------------------------------------
                                          (a) Total Cash (Add Lines 1, 2, and 3)
                                                                                                                            76,012
-----------------------------------------------------------------------------------------------------------------------------------
       ---------------------------------------------------------------------------------------------------
       4. Accrued mortgage interest payable
                                                                                                   30,316
       ---------------------------------------------------------------------------------------------------
       ---------------------------------------------------------------------
       5. Delinquent mortgage principal payments

                                                                                                        -
       ---------------------------------------------------------------------
       ---------------------------------------------------------------------------------------------------
       6. Delinquent deposits to reserve for replacements

                                                                                                        -
       ---------------------------------------------------------------------------------------------------
       7. Accounts payable (due within 30 days)
                                                                                                    5,913
       ---------------------------------------------------------------------------------------------------
       8. Loans and notes payable - - (due within 30 days)

                                                                                                        -
       ---------------------------------------------------------------------------------------------------
       ---------------------------------------------------------------------
       9. Deficient Tax, Insurance or MIP Deposits

                                                                                                        -
       ---------------------------------------------------------------------
                                                                            ------------------------------
       10. Accrued Expenses (not escrowed)

                                                                                                        -
                                                                            ------------------------------
       ---------------------------------------------------------------------
       11. Prepaid Rents(Account 2210)

                                                                                                        -
       ---------------------------------------------------------------------
                                                                            ------------------------------
       12. Tenant security deposits liability (Account 2191)
                                                                                                   15,236
       ---------------------------------------------------------------------------------------------------
       13. Other (Describe)

                                                                                                        -
       ---------------------------------------------------------------------
       ----------------------------------------------------------------------------------------------------------------------------
                                                           (b) Less Total Current Obligations (Add Lines
                                                 4 through 13)                                                              51,465
       ----------------------------------------------------------------------------------------------------------------------------
       ----------------------------------------------------------------------------------------------------------------------------
                                                 (c) Surplus Cash (Deficiency) (Line (a) minus Line (b))
                                                                                                                            24,547
-----------------------------------------------------------------------------------------------------------------------------------
                         PART B - COMPUTE DISTRIBUTIONS TO OWNERS AND REQUIRED DEPOSIT TO RESIDUAL RECEIPTS
-----------------------------------------------------------------------------------------------------------------------------------
1. Surplus Cash
                                                                                                                            24,547
-----------------------------------------------------------------------------------------------------------------------------------

       ---------------------------------------------------------------------------------------------------
       2a. Annual Distribution Earned During Fiscal
       Period Covered by the Statement                                                                   -
       ---------------------------------------------------------------------------------------------------
       ---------------------------------------------------------------------------------------------------
       2b. Distribution Accrued and Unpaid as of
       the
       end of the Prior Fiscal Period                                                                   -
       ---------------------------------------------------------------------------------------------------
       2c. Distributions Paid During Fiscal Period Covered By Statement

                                                                                                        -
       ---------------------------------------------------------------------------------------------------
       3. Amount to be carried on Balance Sheet as
       Distribution
       Earned but Unpaid (Line 2a plus 2b minus 2c)                                                     -
       ---------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
4. Amount Available for Distribution During Next Fiscal Period
                                                                                                                            24,547
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
5. Deposit Due Residual Receipts  (Must be deposited with Mortgagee within 60 days After Fiscal Period
Ends)
                                                                                                                                 -
-----------------------------------------------------------------------------------------------------------------------------------
                                PREPARED BY                                                        REVIEWED BY
-----------------------------------------------------------------------------------------------------------------------------------
LOAN TECHNICIAN                                                             LOAN SERVICER

-----------------------------------------------------------------------------------------------------------------------------------
DATE                                                                        DATE
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                   (See Reverse for              HUD-93486 (12-80)
       Instructions)

</TABLE>

<PAGE>
SECTION II
<PAGE>

INDEPENDENT AUDITOR'S REPORT ON
INTERNAL CONTROL


To the Partners
Coronado Courts Limited Partnership

We have audited the financial statements of Coronado Courts Limited Partnership
as of and for the year ended December 31, 1997, and have issued our report
thereon dated February 3, 1998.  We have also audited the Partnership's
compliance with requirements applicable to major HUD-assisted programs and have
issued our report thereon dated February 3, 1998.

We conducted our audits in accordance with generally accepted auditing
standards, Government Auditing Standards, issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide"), issued by the U.S. Department of Housing and Urban Development,
Office of the Inspector General.  Those standards and the Guide require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement and about whether the
Partnership complied with laws and regulations, noncompliance with which would
be material to a major HUD-assisted program.

The management of the Partnership is responsible for establishing and
maintaining internal control.  In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and
related costs of controls. The objectives of internal control are to provide
management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, that
transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of financial statements in
accordance with generally accepted accounting principles, and that HUD-assisted
programs are managed in compliance with applicable laws and regulations.
Because of inherent limitations in any internal control, errors, irregularities
or instances of noncompliance may nevertheless occur and not be detected.
Also, projection of any evaluation of internal control to future periods is
subject to the risk that procedures may become inadequate because of changes in
conditions or that the effectiveness of the design and operation of controls
may deteriorate.

In planning and performing our audits, we obtained an understanding of the
design of relevant controls and determined whether they had been placed in
operation, and we assessed control risk in order to determine our auditing
procedures for the purpose of expressing our opinions on the financial
statements of Coronado Courts Limited Partnership and on its compliance with
specific requirements applicable to its major HUD-assisted programs and to
report on internal control in accordance with the provisions of the Guide and
not to provide any assurance on internal control.

We performed tests of controls, as required by the Guide, to evaluate the
effectiveness of the design and operation of controls that we considered
relevant to preventing or detecting material noncompliance with specific
requirements applicable to the Partnership's major HUD-assisted programs.  Our
procedures were less in scope than would be necessary to render an opinion on
internal control. Accordingly, we do not express such an opinion.

Our consideration of internal control would not necessarily disclose all
matters in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants.  A
material weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low
level the risk that errors or irregularities in amounts that would be material
in relation to the financial statements or that noncompliance with laws and
regulations that would be material to a HUD-assisted program may occur and not
be detected within atimely period by employees in the normal course of
performing their assigned functions.  We noted no matters involving internal
control and its operations that we consider to be material weaknesses as
defined above.

This report is intended for the information of the Partners, the Partnership's
management, and the U.S. Department of Housing and Urban Development.  However,
this report is a matter of public record and its distribution is not limited.


/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
February 3, 1998


<PAGE>
INDEPENDENT AUDITOR'S REPORT ON
COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE
TO MAJOR HUD PROGRAMS


To the Partners
Coronado Courts Limited Partnership

We have audited the financial statements of Coronado Courts Limited
Partnership, as of and for the year ended December 31, 1997, and have issued
our report thereon dated February 3, 1998. We have also audited the
Partnership's compliance with the specific program requirements governing its
major HUD-assisted programs (HUD insured mortgage loan and housing assistance
payments) for the year ended December 31, 1997.  We tested the Partnership's
compliance with specific program requirements in the following areas:

- Mortgage status                                        - Cash receipts
- Replacement reserve                                    - Cash disbursements
- Distributions to owners                                - Management functions
- Tenant application                                     - Security deposits
- Federal financial reports
The management of the Partnership is responsible for compliance with those
requirements.  Our responsibility is to express an opinion on compliance with
those requirements based on our audit.

We conducted our audit of compliance with those requirements in accordance with
generally accepted auditing standards, Government Auditing Standards, issued
by the Comptroller General of the United States, and the Consolidated Audit
Guide for Audits of HUD Programs (the "Guide"), issued by the U.S. Department
of Housing and Urban Development, Office of Inspector General.  Those standards
and the Guide require that we plan and perform the audit to obtain reasonable
assurance about whether material noncompliance with the requirements referred
to above occurred.  An audit includes examining, on a test basis, evidence
about the Partnership's compliance with those requirements.  We believe that
our audit provides a reasonable basis for our opinion.

In our opinion, the Partnership complied, in all material respects, with the
requirements described above that are applicable to its major HUD-assisted
programs for the year ended December 31, 1997.

This report is intended for the information of the Partners, the Partnership's
management, and the U.S. Department of Housing andUrban Development.  However,
this report is a matter of public record and its distribution is not limited.

/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.


Des Moines, Iowa
February 3, 1998


<PAGE>
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH LAWS,
REGULATIONS, CONTRACTS AND GRANTS


To the Partners
Coronado Courts Limited Partnership

We have audited the financial statements of Coronado Courts Limited
Partnership, as of and for the year ended December 31, 1997 and have issued our
report thereon dated February 3, 1998.

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.

Compliance with laws, regulations, contracts and grants applicable to the
Partnership is the responsibility of the Partnership's management.  As part of
obtaining reasonable assurance about whether the financial statements are free
of material misstatement, we performed tests of the Partnership's compliance
with certain provisions of laws, regulations, contracts and grants.  However,
the objective of our audit of the financial statements was not to provide an
opinion on the overall compliance with such provisions.  Accordingly, we do not
express such an opinion.

The results of our tests disclosed no instances of noncompliance that are
required to be reported herein under Government Auditing Standards.

This report is intended for the information of the Partners, the Partnership's
management, and the U.S. Department of Housing and Urban Development.  However,
this report is a matter of public record and its distribution is not limited.


/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.

Des Moines, Iowa
February 3, 1998

<PAGE>
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH SPECIFIC
REQUIREMENTS APPLICABLE TO FAIR HOUSING AND NON-DISCRIMINATION


To the Partners
Coronado Courts Limited Partnership

We have audited the financial statements of Coronado Courts Limited
Partnership, as of and for the year ended December 31, 1997 and have issued our
report thereon dated February 3, 1998.

We have applied procedures to test the Partnership's compliance with the Fair
Housing and Non-Discrimination requirements applicable to its HUD-assisted
programs for the year ended December 31, 1997.

Our procedures were limited to the applicable compliance requirements described
in the Consolidated Audit Guide for Audits of HUD Programs (the "Guide"),
issued by the U.S. Department of Housing and Urban Development, Office of
Inspector General.  Our procedures were substantially less in scope than an
audit, the objective of which would be the expression of an opinion on the
Partnership's compliance with the Fair Housing and Non-Discrimination
requirements.  Accordingly, we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance that are
required to be reported herein under the Guide.

This report is intended for the information of the Partners, the Partnership's
management and the U.S. Department of Housing and Urban Development.  However,
this report is a matter of public record and its distribution is not limited.


/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.

Des Moines, Iowa
February 3, 1998

<PAGE>
         INDEPENDENT AUDITOR'S COMMENTS ON AUDIT RESOLUTION
         MATTERS RELATED TO HUD PROGRAMS


To the Partners
Coronado Courts Limited Partnership

We have audited the financial statements of Coronado Courts Limited
Partnership, as of and for the year ended December 31, 1997, and issued our
report thereon dated February 3, 1998.

During our audit, we noted no instances where the project had not undertaken
corrective action on findings from our prior auditor reports (there were no
findings as the result of our December 31, 1996 audit), physical inspection
reports, management review reports and similar reports.

/s/Vroman, McGowen, Hurst, Clark & Smith, P.C.


Des Moines, Iowa
February 3, 1998

<PAGE>
SECTION IV
<PAGE>

         CORONADO COURTS LIMITED PARTNERSHIP
         CERTIFICATE OF PARTNERS
         DECEMBER 31, 1997


"We hereby certify that we have examined the accompanying financial statements
and supplemental information of Coronado Courts Limited Partnership and, to the
best of our knowledge and belief, the same is complete and accurate."


For the Partners:


/S/Kent B. Braasch                          2/14/98
Essex Corporation, General Partner          Date
Kent B. Braasch, Executive Vice President


The Partnership's employer identification number is 06-1171352.




<PAGE>





         MANAGEMENT AGENT'S CERTIFICATION
         DECEMBER 31, 1997


"We hereby certify that we have examined the accompanying financial statements
and supplemental information of Coronado Courts Limited Partnership and, to the
best of our knowledge and belief, the same is complete and accurate."


Project manager - Kent Braasch, Executive Vice-President


For the Management Agent:


/S/Kent B. Braasch          2/14/98
Essex Corporation          Date
Kent B. Braasch, Executive Vice President







                          CORONADO COURTS LIMITED PARTNERSHIP

                           HUD PROJECT NO. 123-36605

                           FINANCIAL STATEMENTS AND
                           INDEPENDENT ACCOUNTANTS' AUDIT REPORT

                           DECEMBER 31, 1998 AND 1997







<PAGE>



INDEPENDENT ACCOUNTANTS' AUDIT REPORT


Partners
Coronado Courts Limited Partnership
Omaha, Nebraska


We have audited the accompanying balance sheet of Coronado Courts Limited
Partnership, HUD Project No. 123-36605, an Arizona partnership, as of December
31, 1998 and the related  statements  of  operations,  changes in partners'
capital and cash flows for the year then ended. These financial statements are
the  responsibility of the Partnership's  management.  Our responsibility is to
express an opinion on these financial statements  based on our audit.  The
financial  statements of Coronado  Courts  Limited  Partnership  as of December
31, 1997,  were audited by other auditors, whose report dated February 3, 1998,
expressed an unqualified opinion on those statements.

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

Governmental  Accounting Standards Board Technical Bulletin 98-1,  Disclosures
About Year 2000 Issues,  requires disclosures of certain matters regarding the
year 2000 issue.  Coronado  Courts Limited  Partnership  has included such
disclosures  in Note 7. Because of the  unprecedented nature of the year 2000
issue, its effects and the success of the related remediation  efforts will not
be fully  determinable  until the year 2000 and thereafter.  Accordingly,
insufficient audit evidence exists to support Coronado Courts Limited Partner-
ship  disclosure with respect to the year 2000 issues made in Note 7.  Further,
we do not provide assurance that Coronado Courts Limited Partnership is or will
be year 2000 ready, that Coronado Courts Limited Partnership's year 2000
remediation efforts will be successful in whole or in part, or that parties
with which Coronado Courts Limited Partnership does business will be year 2000
ready.

In our opinion, except for the effects of such adjustments, if any, as might
have been determined to be necessary had we been able to examine evidence
regarding year 2000 disclosures, the financial statements referred to above
present fairly, in all material respects, the financial position of Coronado
Courts Limited Partnership as of December 31, 1998 and the results of its
operations, changes in partners' capital and cash flows for the year then ended
in conformity with generally accepted accounting principles.


<PAGE>



Coronado Courts Limited Partnership
Page 2



In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 25, 1999, on our
consideration of Coronado Courts Limited Partnership's internal control and
reports dated January 25, 1999, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to Fair
Housing and Non-discrimination, and specific requirements applicable to
nonmajor HUD program transactions.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information included in
the report (shown on pages 14-17) are presented for the purposes of additional
analysis and are not a required part of the basic financial  statements of the
Partnership.  Such information has been subjected to the auditing  procedures
applied in 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/Lutz & Company, PC
January 25, 1999






<PAGE>



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

                                                                BALANCE SHEETS

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

CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

BALANCE SHEETS

DECEMBER 31, 1998 AND 1997
-------------------------------------------------------------------------------


                                 ASSETS

Acct. #  CURRENT ASSETS                                 1998             1997

1120       Cash Operations                       $     79,352      $     59,722
1130       Accounts Receivable, Tenants                   283               371
1135       Accounts Receivable, HUD                     2,427             1,054
1140       Accounts and Notes Receivable, Operations    1,530                50
1200       Miscellaneous Prepaid Expenses              18,693            15,909
-------------------------------------------------------------------------------
1100T         Total Current Assets                    102,285            77,106
-------------------------------------------------------------------------------

         RESTRICTED DEPOSITS AND FUNDED RESERVES (Note 2)
1191       Tenant Deposits Held in Trust               14,529            15,236
1310       Escrow Deposits                             30,958            30,639
1320       Replacement Reserve                         74,931            90,957
-------------------------------------------------------------------------------
1300T        Total Restricted Deposits and
             Funded Reserves                          120,418           136,832
-------------------------------------------------------------------------------

         PROPERTY AND EQUIPMENT (Note 3)
1410       Land                                       200,000           200,000
1411       Land Improvements                          252,331           252,331
1420       Buildings                                4,873,936         4,873,936
1450       Furniture and Fixtures                      38,973            20,477
1460       Furnishings                                 61,593            52,027
1470       Maintenance Equipment                          572               572
1480       Vehicles                                    20,000            15,000
-------------------------------------------------------------------------------
1400T        Total Cost                             5,447,405         5,414,343
1495       Less Accumulated Depreciation            1,854,373         1,675,292
-------------------------------------------------------------------------------
1400N        Net Book Value                         3,593,032         3,739,051
-------------------------------------------------------------------------------

         OTHER ASSETS
1520      Deferred Loan Fees, Net of Accumulated
          Amortization of $60,906 and $55,492,
          Respectively                                155,644           161,058
-------------------------------------------------------------------------------

===============================================================================
1000T      TOTAL ASSETS                            $3,971,379        $4,114,047
===============================================================================








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


See Notes to Financial Statements.




-------------------------------------------------------------------------------
<PAGE>

                               LIABILITIES

Acct. #  CURRENT LIABILITIES                             1998             1997

2110       Accounts Payable, Operations         $       9,742     $       5,913
2123       Accrued Incentive Management Fees           73,615            45,490
2131       Accrued Interest Payable, First Mortgage    30,032            30,316
2150       Accrued Property Taxes                      14,807            14,215
2170       Current Portion of Mortgage Payable (Note 3)38,571            35,002
-------------------------------------------------------------------------------
2122T        Total Current Liabilities                166,767           130,936
-------------------------------------------------------------------------------

         DEPOSIT LIABILITIES
2191       Tenant Security Deposits                    14,545            15,236
-------------------------------------------------------------------------------

         LONG-TERM LIABILITIES
2320       Mortgage Payable, Less Current Portion
          (Note 3)                                  3,657,680         3,696,251
-------------------------------------------------------------------------------
2000T        Total Liabilities                      3,838,992         3,842,423
-------------------------------------------------------------------------------

         CONTINGENCIES (Note 7)

                            PARTNERS' CAPITAL

3033T    PARTNERS' CAPITAL                            132,387           271,624
-------------------------------------------------------------------------------










===============================================================================
2033T      TOTAL LIABILITIES AND PARTNERS' CAPITAL $3,971,379        $4,114,047
===============================================================================







<PAGE>
-------------------------------------------------------------------------------




                                                                 3

CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
-------------------------------------------------------------------------------


Acct. # REVENUES                                        1998             1997
         Rental Revenue
5120       Apartments                               $ 124,555          $119,820
5121       Tenant Assistance Payments                 722,575           725,280
-------------------------------------------------------------------------------
5100T        Total Potential Rental Revenue           847,130           845,100
5220       Vacancies                                   (1,870)           (2,943)
-------------------------------------------------------------------------------
5152N        Total Net Rental Revenue                 845,260           842,157
-------------------------------------------------------------------------------
         Financial Revenue
5410       Interest                                       119               119
5440       Interest from Reserve for Replacements       1,736             2,460
-------------------------------------------------------------------------------
5400T         Total Financial Revenue                   1,855             2,579
-------------------------------------------------------------------------------
         Other Revenue
5910       Laundry and Vending                         12,184            14,205
5920       Tenant Charges                               6,226             4,599
5990       Miscellaneous                                                  3,053
-------------------------------------------------------------------------------
5900T         Total Other Revenues                     18,410            21,857
-------------------------------------------------------------------------------

5000T         Total Revenues                          865,525           866,593
-------------------------------------------------------------------------------

         EXPENSES
         Administrative Expenses
6210       Advertising                                     10
6310       Office Salaries                              1,020             1,263
6311       Office Expenses                              5,499             4,048
6320       Management Fees                             85,725            87,287
6330       Manager's Salary                            30,750            30,688
6340       Legal Expenses                               1,561               163
6350       Audit Expense                                2,304             4,600
6351       Bookkeeping Fees                            16,139            11,152
6370       Bad Debts                                      112               161
6390       Miscellaneous Administrative Expenses        3,555             3,079
-------------------------------------------------------------------------------
6263T         Total Administrative Expenses           146,675           142,441
-------------------------------------------------------------------------------
         Utilities Expense
6450       Electricity                                  6,292             6,757
6451       Water and Sewer                             21,220            22,465
6452       Gas                                          2,571             3,280
-------------------------------------------------------------------------------
6400T         Total Utilities Expenses                 30,083            32,502
-------------------------------------------------------------------------------

                                                      (Continued on next page)

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





See Notes to Financial Statements.
                                                                 4
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

STATEMENTS OF OPERATIONS - Continued

FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
-------------------------------------------------------------------------------


         EXPENSES - Continued                          1998             1997
         Operating and Maintenance Expenses
6510       Payroll                                  $  66,558         $  74,550
6515       Supplies                                    30,712            35,795
6520       Contracts                                   38,043            31,754
6525       Trash Removal                               13,427            12,457
6570       Vehicle and Maintenance Repairs             11,456            12,205
6590       Other Repairs                                  107                89
-------------------------------------------------------------------------------
6500T         Total Operating and Maintenance
              Expenses                                160,303           166,850
-------------------------------------------------------------------------------
         Taxes and Insurance Expenses
6710       Property Taxes                              29,602            28,420
6711       Payroll Taxes                                9,161            10,012
6720       Property and Liability Insurance            17,991            15,037
6790       Miscellaneous Taxes                         20,705            20,546
-------------------------------------------------------------------------------
6700T         Total Taxes and Insurance Expenses       77,459            74,015
-------------------------------------------------------------------------------
         Financial Expenses
6820       Mortgage Interest                          361,976           365,241
6850       Mortgage Insurance                          19,224            19,330
-------------------------------------------------------------------------------
6800T         Total Financial Expenses                381,200           384,571
-------------------------------------------------------------------------------
6000T           Total Expenses Before Depreciation
                and Amortization                      795,720           800,379
-------------------------------------------------------------------------------

5060T      Net Income Before Depreciation
           and Amortization                            69,805            66,214

6600       Depreciation                               179,081           173,761

6610       Amortization                                 5,414             5,414

===============================================================================
3250       NET LOSS                                 $(114,690)        $(112,961)
===============================================================================











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






See Notes to Financial Statements.
<PAGE>                                                                 5

CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
-------------------------------------------------------------------------------
                                    Limited           General
                                    Partners          Partners           Total
-------------------------------------------------------------------------------
BALANCES, December 31, 1996         $635,833        $(221,248)         $414,585
-------------------------------------------------------------------------------

  Net Loss                          (111,831)          (1,130)         (112,961)

  Distributions to Partners          (29,700)            (300)          (30,000)

-------------------------------------------------------------------------------
BALANCES, December 31, 1997          494,302         (222,678)          271,624
-------------------------------------------------------------------------------

  Net Loss                          (113,543)          (1,147)         (114,690)

  Distributions to Partners          (24,302)            (245)          (24,547)

===============================================================================
BALANCES, December 31, 1998         $356,457        $(224,070)         $132,387
===============================================================================























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







See Notes to Financial Statements.
                                                                 6
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
-------------------------------------------------------------------------------
                                                    INCREASE (DECREASE) IN CASH
                                                       1998             1997
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts
  Rental Receipts                                    $843,975          $841,445
  Interest Receipts                                     1,855             2,579
  Drug Elimination Grant Proceeds                     125,000           161,388
  Laundry Receipts and Other Revenue                   18,410            21,857
-------------------------------------------------------------------------------
    Total Receipts                                    989,240         1,027,269
-------------------------------------------------------------------------------

Expenditures
  Administrative Expenses                              30,200            24,466
  Management Fees                                      57,600            59,804
  Salaries and Wages                                   97,308           105,238
  Utilities Expenses                                   30,083            32,502
  Operating and Maintenance Expenses                   91,396            94,356
  Property Taxes                                       29,010            29,561
  Payroll Taxes                                         9,161            10,012
  Taxes-Other                                          20,705            20,546
  Property Insurance                                   20,793            15,228
  Mortgage Interest                                   362,260           365,500
  Mortgage Insurance                                   19,206            19,314
  Drug Elimination Grant Expenditures                 125,000           161,388
  Incentive Management Fee                                                8,622
-------------------------------------------------------------------------------
    Total Expenditures                                892,722           946,537
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
      Net Cash Provided by Operating Activities        96,518            80,732
-------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of Property and Equipment                  (33,062)          (58,580)
  Changes In:
    Tenant Security Deposits                               16
    Mortgage Escrow Deposits                             (319)           (2,905)
    Reserve for Replacements                           16,026            25,801
-------------------------------------------------------------------------------
    Net Cash Used in Investing Activities             (17,339)          (35,684)
-------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Repayment of Mortgage Payable                       (35,002)          (31,763)
  Distributions to Partners                           (24,547)          (30,000)
-------------------------------------------------------------------------------
    Net Cash Used in Financing Activities             (59,549)          (61,763)
-------------------------------------------------------------------------------

Net Increase (Decrease) in Cash                        19,630           (16,715)

Cash, Beginning of Year                                59,722            76,437

===============================================================================
Cash, End of Year                                   $  79,352         $  59,722
===============================================================================

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



See Notes to Financial Statements.
<PAGE>                                                                 7

CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

STATEMENTS OF CASH FLOWS - Continued

FOR THE YEARS ENDED DECEMBER 31,1998 AND 1997
-------------------------------------------------------------------------------
              RECONCILIATION OF NET LOSS TO NET CASH PROVIDED BY ACTIVITIES

                                                      1998             1997

Net Loss                                            $(114,690)        $(112,961)
Adjustments to Reconcile Net Loss to
  Net Cash Provided by Operating Activities
    Depreciation                                      179,081           173,761
    Amortization                                        5,414             5,414
    Changes in Current Assets and Liabilities
      Decrease (Increase) in Accounts Receivable, Tenants  88               (29)
      Increase in Accounts Receivable, HUD             (1,373)             (656)
      Decrease (Increase) in Accounts and
      Notes Receivable, Operations                     (1,480)               67
      Increase in Prepaid Miscellaneous
      Prepaid Expenses                                 (2,784)             (175)
      Increase (Decrease) in Accounts Payable,
      Operations                                        3,829            (1,698)
      Increase in Accrued Incentive Management Fees    28,125            18,436
      Decrease in Accrued Interest Payable,
      First Mortgage                                     (284)             (259)
      Increase (Decrease) in Accrued Property Taxes       592            (1,141)
      Decrease in Prepaid Rent                                              (27)

===============================================================================
        Net Cash Provided by Operating Activities  $   96,518        $   80,732
===============================================================================

























-------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>                                                                 8

CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1998 AND 1997
-------------------------------------------------------------------------------

1.   Summary of Significant Accounting Policies
-------------------------------------------------------------------------------

     A summary of the  significant  accounting  policies  consistently applied
     in the  preparation  of the  accompanying  financial
     statements is set forth below.

Nature of Organization
and Operations       Coronado  Courts Limited  Partnership is a partnership
                     organized for the purpose of rehabilitating and operating
                     a 145-unit apartment building project in Douglas, Arizona.
                     The project is operated under Section 202 of the  National
                     Housing Act and regulated by the U.S.Department of Housing
                     and Urban Development (HUD) with respect to rental charges
                     and operating methods.  The Project's major programs are
                     its Section 221 (d)(4) direct loan and Section 8 Housing
                     Assistance Payments Program administered through the City
                     of Douglas, Public Housing Authority.

                     The  apartment  project is the  principal  asset of the
                     Partnership and therefore, the Partnership's operations
                     are concentrated in the multifamily real estate market.
                     The Partnership operates in a heavily regulated
                     environment. The operations of the Partnership are subject
                     to the administrative directives, rules and regulations of
                     federal, state and local regulatory agencies, including,
                     but not limited to, HUD. Such  administrative  directives,
                     rules and regulations are subject to change by an act of
                     Congress or administrative changes mandated by HUD.  Such
                     changes may occur with little notice or inadequate funding
                     to pay for the related  cost,  including the  additional
                     administrative  burden,  to comply with a change.

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

Property and
Equipment            Property and equipment is stated at cost. Expenditures for
                     additions and betterments are capitalized; expenditures
                     for maintenance and repairs are expensed as incurred.  The
                     costs of assets disposed  and the  related  accumulated
                     depreciation are eliminated from the accounts in the year
                     of disposal.  Gains or losses from property disposals are
                     recognized in the year of disposals.




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


9
<PAGE>


CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1998 AND 1997
-------------------------------------------------------------------------------

1.   Summary of Significant Accounting Policies - Continued
-------------------------------------------------------------------------------
Property and
Equipment -
Continued     Depreciation  is computed  using both the  straight-line  and the
              accelerated  methods over the following useful lives:

                                                                         Years
                                    Land Improvements                      15
                                    Buildings                              35
                                    Furniture and Fixtures                 5-7
                                    Furnishings                            5-7
                                    Maintenance Equipment                  5
                                    Vehicles                               5

              The  Partnership  has adopted  SFAS 121,  Accounting  for the
              Impairment of Long-Lived Assets and for Long-Lived  Assets to be
              Disposed Of. This statement requires that long-lived assets be
              presented at fair  value  where  information  indicates  that the
              Partnership might be unable to recover, through operations or
              sale, the carrying value of long-lived assets.

Income Taxes  The entity has elected to be taxed as a partnership under the
              provisions of the Internal Revenue code.

              Accordingly, taxable income, deductions and credits flow through
              to the partners and are reported on their tax returns. Therefore,
              no provision or liability for income taxes has been included in
              the financial statements of the Partnership.

              The Partnership reports certain expenses differently for
              financial  reporting  purposes than for income tax purposes.  At
              December 31, 1998, there were accumulated  temporary  differences
              principally relating to depreciation of approximately $589,000
              which will increase income for income tax return purposes in the
              future as they reverse.

Deferred Loan
Fees          Deferred loan fees are amortized by the straight-line method over
              the forty-year term of the related mortgage note.

Distributions The Partnership's regulatory agreement with HUD limits partner
              distributions to "surplus cash" available at  year-end.
              Allocations of operations and distributions are performed  in
              accordance with the partnership agreement.

Reclassifications
of Prior Year
Balances      Certain reclassifications have been made to the 1997 financial
              statements  to  conform  to  the classifications used in the 1998
              financial statements.

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

                                                                 10
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1998 AND 1997
-------------------------------------------------------------------------------

2.   Restricted Deposits and Funded Reserves
-------------------------------------------------------------------------------
     Under the terms of the Regulatory Agreement, the Partnership is required
     to set aside specified amounts for the replacement of property and other
     project expenditures as approved by HUD.  Restricted  deposits are held in
     separate  accounts and generally are not available for operating purposes.

     In addition,  all tenant security deposits are deposited into a separate
     bank account at Bank One in Phoenix, Arizona and are held in trust for the
     tenants  until they vacate the property.  Any amounts not returned to the
     tenant due to lease  violations are transferred to the Partnership's
     general operating account.

3.   Mortgage Payable
-------------------------------------------------------------------------------

                                                          1998           1997
     The  mortgage is insured by HUD and is payable
     in monthly  installments  of $33,105
     which  includes  principal  and interest at 9.75%
     per annum. The final payment is due June 1, 2023.
     Property and equipment are pledged as collateral
     for the mortgage.                                $3,696,251     $3,731,253

     Less Current Portion                                 38,571         35,002

     Mortgage Payable, Less Current Portion           $3,657,680     $3,696,251

     The aggregate maturities of the mortgage for the years ending after
     December 31, 1998 are as follows:

           Year Ending December 31,
               1999                                        $     38,571
               2000                                              42,505
               2001                                              46,839
               2002                                              51,616
               2003                                              56,879
               Thereafter                                     3,459,841

                  Total                                      $3,696,251




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





                                                                 11
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1998 AND 1997
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
4.   Allocation of Net Income or Loss and Distribution Preferences

     Net income or loss is allocated one percent (1%) to the general partners
     and ninety-nine percent (99%) to the limited partners.  Annual cash
     distributions  to partners can only be paid from surplus cash of the
     Partnership as defined by the HUD agreement.  Such distributions are
     allocable between the limited partners and the general partner as follows:

     First      - $29,700 to the limited partners and $300 to the general
                  partners on a cumulative basis.

     Second     - Repay any project expense loans.

     Third      - Payment of the incentive management fee.

     Balance    - 99% to the limited partners and 1% to the general partners.

     Cash distributions resulting from a sale or refinancing of the project will
     be allocated  using  methods  described in the partnership's agreement.

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

5.   Identity of Interest

     Essex Corporation, a general partner in Coronado Courts Limited
     Partnership,  also manages Coronado Courts.  The management agreement with
     Essex Corporation  currently provides for a management fee equal to 7% of
     rental and service income.  Management fees  paid or  accrued  to Essex
     Corporation for the years ended December 31, 1998 and 1997 were $57,600 and
     $60,229, respectively.  Data processing fees paid to Essex Corporation for
     the years ended December 31, 1998 and 1997 were $16,139 and $11,152,
     respectively. Essex Corporation also is entitled to an incentive management
     fee which is to be paid from surplus cash.  Incentive management fees
     totaled $28,125 and $27,058 for the years ended December 31, 1998 and 1997,
     respectively.









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










                                                                 12
<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1998 AND 1997
-------------------------------------------------------------------------------

6.   Grant Income and Expenses
-------------------------------------------------------------------------------

     The project has been awarded Drug Elimination grants through the U.S.
     Department of Housing and Urban Renewal. Grant income and expenses for the
     years ended December 31, 1998 and 1997 are summarized below:

                                                      1998                1997
     Grant Income                                  $125,000            $161,388

     Grant expenses:
     Education Services                           $  26,780           $  25,972
     Transportation                                   1,437               5,147
     Facility Improvemets                                                 2,212
     Payroll                                         66,023              83,480
     Counseling                                      12,240              12,560
     Other Expenses                                  18,520              32,017
     Total Grant Expenses                          $125,000            $161,388

7.    Year 2000 Issues
-------------------------------------------------------------------------------
     The General  Partner has assessed the  Partnership's  exposure to date
     sensitive computer software programs that may not be operative  subsequent
     to 1999 and has implemented a requisite course of action to minimize  Year
     2000 risk and ensure that neither significant costs or disruption of normal
     business operations are encountered.  However, because there is no
     guarantee that all systems of outside vendors or other entities affecting
     the Partnership's operations will be 2000 compliant, the Partnership
     remains susceptible to consequences of the Year 2000 issue.






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














                                                         13










<PAGE>
-------------------------------------------------------------------------------
                                                      SUPPLEMENTAL INFORMATION

-------------------------------------------------------------------------------
CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

SUPPLEMENTAL DATA REQUIRED BY HUD

DECEMBER 31, 1998
-------------------------------------------------------------------------------

                                  CHANGES IN PROPERTY AND EQUIPMENT



--------------------------------------Property---------------------------------
                              Balance                                 Balance
                             January 1,                            December 31,
                               1998        Additions    Disposals      1998

Land                       $   200,000   $             $            $   200,000
Land Improvements              252,331                                  252,331
Buildings                    4,873,936                                4,873,936
Furniture and Fixtures          20,477    18,496                         38,973
Furnishings                     52,027     9,566                         61,593
Maintenance Equipment              572                                      572
Vehicles                        15,000     5,000                         20,000
===============================================================================
Totals                      $5,414,343   $33,062       $             $5,447,405
===============================================================================



During the year ended December 31, 1998, the Partnership purchased the
following:

            Refrigerators and Stoves                        $17,412
            Carpet                                           10,650
            Truck                                             5,000
              Total                                         $33,062




<PAGE>



















<TABLE>
<CAPTION>

--------------------------------------Accumulated Depreciation----------------------------------
                     Balance                                                           Balance
                    January 1,       Depreciation                  December 31,      December 31,
                     1998             Expense        Disposals       1998               1998

<S>                  <C>               <C>         <C>            <C>                <C>
Land                 $                 $           $              $                  $     200,000
Land Improvements      185,292         14,898                         200,190                52,141
Buildings            1,465,132        147,509                       1,612,641             3,261,295
Furniture and Fixtures   9,697          4,964                          14,661                24,312
Furnishings              7,142          8,049                          15,191                46,402
Maintenance Equipment      229            114                             343                   229
Vehicles                 7,800          3,547                          11,347                 8,653
===================================================================================================
Totals              $1,675,292        $179,081      $              $1,854,373         $   3,593,032
===================================================================================================
</TABLE>

<PAGE>




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



CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

SUPPLEMENTAL DATA REQUIRED BY HUD

DECEMBER 31, 1998
-------------------------------------------------------------------------------

RESERVE FOR REPLACEMENTS
   In accordance with the provisions of the Regulatory Agreement, restricted
   cash is held by the mortgagee to be used for replacement of property with the
   approval of HUD as follows:

       Balance, January 1, 1998                                         $90,957
       Monthly Deposits                                                  15,963
       Interest Earnings, Net of Any Investment Fees                      1,736
       Authorized Withdrawals                                           (33,725)
       Balance, December 31, 1998 Confirmed by Mortgagee                $74,931

  The reserve for replacement account is held in an interest-bearing account by
  GMAC Commercial Mortgage Corporation.

RESIDUAL RECEIPTS ACCOUNT
  None



15







<PAGE>

INDEPENDENT ACCOUNTANTS' AUDIT REPORT ON INTERNAL CONTROL



Partners
Coronado Courts Limited Partnership
Omaha, Nebraska


We have audited the financial statements of Coronado Courts Limited Partnership,
HUD Project No. 123-36605, as of and for the year ended December 31, 1998, and
have issued our report  thereon dated January 25, 1999. We have also audited
Coronado Courts Limited Partnership compliance with requirements  applicable to
its major  HUD-assisted  programs and have issued our report thereon dated
January 25, 1999.

We conducted our audit in accordance with generally accepted auditing standards
and Government  Auditing  Standards,  issued by the Comptroller  General of the
United States and the Consolidated  Audit Guide for Audits of HUD Programs (the
"Guide"),  issued by the U.S.  Department  of  Housing  and Urban  Development,
Office of the Inspector General. Those standards and the Guide require that we
plan and perform the audit to obtain  reasonable  assurance  about  whether the
financial statements are free of material misstatement and about whether
Coronado Courts Limited Partnership complied with laws and regulations,
noncompliance  with which would be material to a major HUD-assisted program.

The management of Coronado  Courts Limited  Partnership is  responsible  for
establishing  and  maintaining  internal  control.  In fulfilling  this
responsibility, estimates and judgments by management are required to assess the
expected benefits and relate costs of controls.  The objectives of internal
control are to provide management with reasonable, but not absolute, assurance
that assets are safeguarded against loss from unauthorized use or disposition,
that transactions are executed in accordance with management's  authorization
and recorded  properly to permit the  preparation of financial  statements in
accordance with generally accepted accounting  principles, and that HUD-assisted
programs are managed in compliance with applicable laws and regulations.
Because of inherent limitations in any internal control, errors, irregularities,
or instances of noncompliance may nevertheless occur and not be detected.  Also,
projection of any evaluation of internal control to future periods is subject to
the risk that procedures may become inadequate because of changes in conditions
or that the effectiveness of the design and operation of controls may
deteriorate.

In planning and performing our audit, we obtained an understanding of the
design of relevant controls and determined whether they had been placed in
operation, and we assessed control risk in order to determine our auditing
procedures for the purpose of expressing our opinion on Coronado Courts Limited
Partnership financial statements and on its compliance with specific
requirements applicable to its major HUD-assisted programs and to report on
internal control in accordance with the provisions of the Guide and not to
provide any assurance on internal control.


                                                                 18


<PAGE>







We performed  tests of controls,  as required by the Guide,  to evaluate the
effectiveness  of the design and operation of controls that we considered
relevant to preventing or detecting material noncompliance with specific
requirements  applicable to Coronado Courts Limited  Partnership's  major HUD-
assisted programs. Our procedures were less in scope than would be necessary to
render an opinion on internal control.  Accordingly, we do not express such an
opinion.

Our consideration of internal control would not necessarily disclose all matters
in internal  control  that might be material weaknesses  under  standards
established  by the American  Institute  of Certified  Public  Accountants.  A
material  weakness is a condition in which the design or operation of one or
more of the internal  control  components  does not reduce to a relatively  low
level the risk that errors or irregularities in amounts that would be material
in relation to the  financial  statements  or that noncompliance  with laws and
regulations that would be material to a HUD-assisted  program may occur and not
be detected  within a timely period by employees in the normal course of
performing their assigned functions.  We noted no matters  involving  internal
control and its operation that we consider to be material weaknesses as defined
above.

This report is intended for the information of the mortgagor, management, and
the U. S. Department of Housing and Urban Development.  However, this report is
a matter of public record and its distribution is not limited.







/S/Lutz & Company, P.C.
January 25, 1999


                                                                 19




<PAGE>



INDEPENDENT ACCOUNTANTS' AUDIT REPORT ON COMPLIANCE
WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS


Partners
Coronado Courts Limited Partnership
Omaha, Nebraska


We have audited the financial statements of Coronado Courts Limited Partnership,
HUD Project No. 123-36605 as of and for the year ended December 31, 1998, and
have issued our report thereon dated January 25, 1999.

We have also audited Coronado Courts Limited  Partnerships' compliance with the
specific program requirements governing mortgage status, replacement  reserve,
distributions to owners, tenant application, federal financial reports, cash
receipts, cash disbursements, management functions and security deposits that
are applicable to each of its major  HUD-assisted  programs for the year ended
December 31, 1998.  The management of Coronado Courts Limited Partnership  is
responsible  for compliance  with those requirements.  Our responsibility is to
express an opinion on compliance with those requirements based on our audit.

We conducted our audit of compliance with those requirements in accordance with
generally accepted auditing  standards,  Government Auditing  Standards, issued
by Comptroller General of the United States, and the Consolidated Audit Guide
for Audits of HUD Programs  (the  "Guide")  issued by the U.S.  Department  of
Housing and Urban Development, Office of Inspector General. Those standards and
the Guide require that we plan and perform the audit to obtain reasonable
assurance about whether material noncompliance with the requirements referred
to above occurred. An audit includes examining, on a test basis, evidence about
Coronado Courts Limited Partnership's compliance with those requirements.  We
believe that our audit provides a reasonable  basis for our opinion.

In our opinion,  Coronado Courts Limited Partnership complied, in all material
respects,  with the requirements described above that are applicable to its
major HUD-assisted programs for the year ended December 31, 1998.

This report is intended for the information of the mortgagor,  management, and
the U.S. Department of Housing and Urban Development.  However, this report is
a matter of public record and its distribution is not limited.




/S/Lutz & Company, P.C
January 25, 1999


                                                                 20

<PAGE>



INDEPENDENT ACCOUNTANTS' AUDIT REPORT ON COMPLIANCE
WITH SPECIFIC REQUIREMENTS APPLICABLE TO FAIR HOUSING AND NON-DISCRIMINATION


Partners
Coronado Courts Limited Partnership
Omaha, Nebraska


We have audited the financial statements of Coronado Courts Limited Partnership,
HUD Project No. 123-36605 as of and for the year ended December 31, 1998, and
have issued our report thereon dated January 25, 1999.

We have applied  procedures to test Coronado Courts Limited  Partnership's
compliance with the Fair Housing and Non-Discrimination requirements applicable
to its HUD-assisted programs for the year ended December 31, 1998.

Our procedures were limited to the applicable compliance requirement described
by the Consolidated Audit Guide for Audits of HUD Programs (the "Guide") issued
by the U.S. Department of Housing and Urban Development, Office of  Inspector
General.  Our procedures were substantially  less in scope than an audit,  the
objective of which is the  expression  of an opinion on Coronado Courts Limited
Partnership's compliance with the Fair Housing and Non-Discrimination
requirements.  Accordingly,  we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance that are
required to be reported herein under the Guide.

This report is intended for the information of the mortgagor, management and
the U.S. Department of Housing and Urban Development.  However, this report is
a matter of public record and its distribution is not limited.





/S/Lutz & Company, P.C


January 25, 1999

                                                                 21


<PAGE>


INDEPENDENT AUDITOR'S COMMENTS ON AUDIT RESOLUTION
MATTERS RELATED TO HUD PROGRAMS

Partners
Coronado Courts Limited Partnership
Omaha, Nebraska

We have audited the financial statements of Coronado Courts Limited Partnership,
as of and for the year ended December 31, 1998, and issued our report thereon
dated January 25, 1999.

During our audit, we noted no instances where the project had not undertaken
corrective action on findings from the prior auditor's reports.   There were no
findings as the result of our December 31, 1998 audit, physical inspection
reports, management review reports and similar reports.



/S/Lutz & Company, P.C
January 25, 1999


                                                          22


<PAGE>


ORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

CERTIFICATION OF PARTNER

DECEMBER 31, 1998
-------------------------------------------------------------------------------



I hereby  certify that I have examined the  accompanying  financial  statements
and  supplemental  information  of Coronado  Courts Limited  Partnership,  HUD
Project No. 123-36605  and, to the best of my knowledge and belief, the same are
complete and accurate. (Federal E.I.N. 06-1171352).




1/25/99                                           /S/Lutz & Company, P.C.
Date                                     Essex Corporation, General Partner
                                      Kent B. Braasch, Executive Vice President

                                                          23


<PAGE>
CORONADO COURTS LIMITED PARTNERSHIP

HUD PROJECT NO. 123-36605

CERTIFICATION OF MANAGEMENT AGENT

DECEMBER 31, 1998
-------------------------------------------------------------------------------



We hereby certify that we have examined the accompanying financial statements
and supplemental information of Coronado Courts Limited Partnership and, to the
best of our knowledge and belief, the same are complete and accurate.





 1/25/99                                   /S/Lutz & Company, P.C
Date                                    Essex Corporation, Management Agent
                                     Kent B. Braasch, Executive Vice President



                                                          24






<PAGE>