June 27, 1997




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, 1997
       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/ Veronica Curioso
Veronica Curioso
Assistant Controller

QH110K-K.96


<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, 1997                                                   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, 1997



<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, 1997

                                  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 8    Financial Statements and Supplementary Data    K-18
       Item 9    Changes in and Disagreements with Accountants
                    on Accounting and Financial Disclosure      K-18

PART III

       Item 10   Directors and Executive Officers
                    of the Registrant                           K-19
       Item 11   Management Remuneration                        K-20
       Item 12   Security Ownership of Certain Beneficial
                    Owners and Management                       K-21
       Item 13   Certain Relationships and Related
                    Transactions                                K-21

PART IV

       Item 14   Exhibits, Financial Statement Schedule
                  and Reports on Form 8-K                       K-23


SIGNATURES                                                      K-24


<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


Properties owned by                                             Date
Local Limited                                                   Interest
Partnerships                          Location                  Acquired
------------------------         ---------------------         -------------

Barrington Manor                        Fargo, ND                     12/31/87
Bingham                                 Bingham, ME                   12/30/87
Birmingham                              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
Heritage Court                          Dundalk, MD                   01/20/89
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
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

*     The  Partnership's  interest in profits  and losses of each Local  Limited
      Partnership  arising from normal  operations is 99%, with the exception of
      Logan  Plaza in which the  Partnership  has a 98%  interest.  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, 1997, 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 year ended  March 31,  1997,  the  Partnership  advanced
approximately  $375,000 to four 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 the Combined Entity,  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, 1997,  the following  Local Limited  Partnerships  have a common
Local General Partner or affiliated group of Local General  Partners  accounting
for the  specified  percentage  of the  original  investment  in  Local  Limited
Partnerships: (i) Rolling Green, Sierra Vista, Terrace, Windsor and Sierra Point
Limited  Partnerships,  representing 29.74%, have Phillip Abrams Ventures,  Inc.
and PDW, Inc. as Local General Partners;  (ii) Graver Inn, Barrington Manor, 600
Dakota and Duluth Limited Partnerships,  representing 3.31%, have Jerry L. Meide
and RRABB, Inc. as Local General Partners; (iii) New Medford and Oregon Landmark
Limited Partnerships,  representing 6.65%, 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 12.4%, have Cruz Development Corporation as the Local
General Partner; and (vii) Willowpeg Village, Pine Village,  Glennville,  Talbot
Village and Chestnut Lane Limited Partnerships, representing 2.73% 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.

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) the
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.  To economize  on direct and indirect  payroll
costs, 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 generally 99%,  except
for Logan Plaza, where the Partnership's ownership interest is 98%.

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>
<CAPTION>

                                                                             
<S>                           <C>                 <C>                     <C>              <C>                <C>       <C>
                                                        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             Apt. Units          March 31, 1997          March 31, 1997   Dec 31, 1996       Subsidy*      1997
----------------------------- -------------       --------------------    ---------------- ------------------ ---------   -------

Barrington Manor
   Limited Partnership
Barrington Manor
Fargo, ND                          18             $     175,200            $    175,200   $    635,000        Section 8       78%

Bingham Family Housing
   Associates (A Limited
   Partnership)
Bingham
Bingham, ME                        24                   240,900                 240,900      1,166,209           FmHA         96%

Birmingham Housing Associates
   (A Limited Partnership)
Birmingham Village
Randolph, ME                       24                   236,520                 236,520      1,160,427           FmHA        100%

MB Bittersweet Associates Limited
   Partnership (a Massachusetts
   Limited Partnership)
Bittersweet
Randolph, MA                       35                   620,500                 620,500      2,468,567           None        100%

Boulevard Commons
   Limited Partnership
Boulevard Commons
Chicago, IL                       212                 4,527,850               4,527,850     10,483,899         Section 8      96%

Michael J. Dobens
   Limited Partnership I
Brentwood Manor II
Nashua, NH                         22                   300,000                 300,000        777,435         Section 8     100%

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


<S>                            <C>              <C>                     <C>                <C>              <C>        <C>
                                                  Capital Contributions
Local Limited Partnership                             Total                   Paid         Mtge. Loans                 Occupancy at
Propert                        Number of          Committed at              Through        Payable at       Type of    March 31,
Property Location              Apt.Units        March 31, 1997          March 31, 1997     Dec 31, 1996     Subsidy*      1997
-----------------------------  ------------     --------------------    -----------------  ---------------  ---------- ----------

Cass House Associates Limited
   Partnership (a Massachusetts
   Limited Partnership)
Cass House/Roxbury Hills
Boston, MA                        111                 2,141,090               2,141,090       8,103,267          None        97%

Chestnut Lane Limited
   Partnership (A Limited
   Partnership)
Chestnut Lane
Newnan, GA                         50                   282,510                 282,510       1,474,913          None        96%

Coronado Courts Limited
   Partnership
Coronado Courts
Douglas, AZ                       145                 1,800,000               1,800,000       3,763,016         Section 8   100%

Glennville Properties
   (A Limited Partnership)
Country Estates
Glennville, GA                     24                   121,910                 121,910         596,239           FmHA      100%

600 Dakota Properties
   Limited Partnership
600 Dakota
Wahpeton, ND                       28                   113,000                 113,000         660,000         Section 8    89%

Delmar Housing Associates
   Limited Partnership
Delmar
Gillette, WY                       16                   128,000                 128,000          420,216         Section 8   94%

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


<S>                            <C>             <C>                     <C>                 <C>              <C>       <C>
                                                 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              Apt.Units       March 31, 1997          March 31, 1997      Dec 31, 1996     Subsidy*     1997
----------------------------   -----------     --------------------    ------------------  --------------   --------- -----------

Duluth Limited Partnership
Duluth
Sioux Falls, SD                    11                   107,000                 107,000          259,509     Section 8    100%

Oregon Landmark-Three
   Limited Partnership
Elmore Hotel
Great Falls, MT                    60                 1,022,000               1,022,000        3,336,093     Section 8     90%

Graver Inn
   Limited Partnership
Graver Inn
Fargo, ND                          70                   819,500                 819,500        2,025,486     Section 8     81%

Hazel-Winthrop Apartments (An
   Illinois Limited Partnership)
Hazel-Winthrop
Chicago, IL                        30                   350,400                 350,400        2,124,303     Section 8    100%

Heritage Court
   Limited Partnership
Park Terrace
Dundalk, MD                        101                 2,048,750               2,048,750       3,558,155       None        97%

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

</TABLE>


<PAGE>
<TABLE>
<CAPTION>


<S>                           <C>              <C>                     <C>                 <C>              <C>         <C>
                                                 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             Apt.Units        March 31, 1997          March 31, 1997      Dec 31, 1996     Subsidy*      1997
---------------------------   ------------     --------------------    -----------------   --------------   ----------  -----------

Lakeview Heights Apartments,
   Ltd. (A Limited Partnership)
Lakeview Heights
Clearfield, UT                     83                   584,000                 584,000        2,820,290      Section 8        98%

Logan Plaza Associates
Logan Plaza
New York NY                       130                 2,240,000               2,240,000       11,169,407          None         98%

New Medford Hotel Associates
   Limited Partnership
New Medford Hotel
Medford, OR                        76                 1,417,765               1,417,765        3,226,176        Section 8      99%

New Sweden Housing Associates
   (A Limited Partnership)
Heritage View
New Sweden, ME                     24                   237,250                   237,250      1,165,406         FmHA          78%

2225 New York Avenue, Ltd.
   (A Limited Partnership)
Pebble Creek
Arlington, TX                     352                 2,512,941               2,512,941        7,945,275        Section 8      99%

Perryville Associates I, L.P.
   (A Limited Partnership)
Hillcrest III
Perryville, MO                     24                   128,115                 128,115          592,380          FmHA         95%

</TABLE>


<PAGE>
<TABLE>
<CAPTION>


<S>                            <C>             <C>                     <C>                  <C>            <C>        <C>
                                                 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              Apt.Units       March 31, 1997          March 31, 1997       Dec 31, 1996   Subsidy*      1997
----------------------------- ------------     --------------------    -------------------  ------------   ---------- ------------

Pine Village Limited Partnership
   (A Limited Partnership)
Pine Village
Pine Mountain, GA                  36                   188,340                 188,340        940,806          FmHA        94%

Rolling Green Housing Associates,
   Ltd. (a Limited Partnership)
Rolling Green
Edmond, OK                        166                 1,855,650               1,855,650      4,817,714        Section 8     92%

Sierra Vista Housing Associates,
   Ltd. (a Limited Partnership)
Sierra Pointe
Las Vegas, NV                     160                 3,016,008               3,016,008      7,187,317        Section 8     91%

Sundance Housing Associates,
   Ltd. (A Limited Partnership)
Sierra Vista
Aurora, CO                        209                 2,271,751               2,271,751      6,326,760        Section 8     96%

Talbot Village Limited Partnership
   (A Limited Partnership)
Talbot Village
Talbotton, GA                      24                   121,180                 121,180        602,587          FmHA       100%

Terrace Housing Associates,
   Ltd. (a Limited Partnership)
Terrace
Oklahoma City, OK                 206                 1,950,550               1,950,550      5,275,565        Section 8     87%

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


<S>                           <C>               <C>                     <C>               <C>             <C>         <C>
                                                  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             Apt.Units         March 31, 1997          March 31, 1997    Dec 31, 1996    Subsidy*        1997
----------------------------  -------------     --------------------    ---------------   --------------  ----------- -------------

Trenton Apartments, Ltd.
   (A Limited Partnership)
Trenton
Salt Lake City, UT                 37                   237,250                 237,250      843,537       Section 8         97%

Verdean Gardens Associates Limited
   Partnership (a Massachusetts
   limited partnership)
Verdean Gardens
New Bedford, MA                   110                2,409,000                 2,409,000   7,806,357           None          88%

Willowpeg Village Limited Partnership
   (A Limited Partnership)
Willowpeg Village
Rincon, GA                         57                   288,400                 288,400    1,480,195          FmHA          100%

Windsor Court Housing Associates,
   Ltd. (a Limited Partnership)
Windsor Court
Aurora, CO                        143                 1,815,500               1,815,500    4,520,523        Section 8        96%
                                ------               ----------              ----------   -----------
                                2,865                36,688,283              36,688,283  110,943,029
   Less:  Hughes Apartments                             379,453                 379,453    1,210,000
                                                     ----------              ----------  ------------  
                                                   $ 36,308,830            $ 36,308,830 $109,733,029
</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, Boulevard Commons, invested in by the Partnership
represents more than 10% of the total capital  contributions to be 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  March  31,  1997,  there  were  3,323  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, 1997, 1996 and 1995.



<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>
<CAPTION>

<S>                                    <C>            <C>              <C>           <C>            <C>
                                         March 31,       March 31,      March 31,       March 31,      March 31,
                                          1997           1996           1995            1994             1993

Revenue (C)                            $    435,791   $    191,229     $    77,348   $    204,552   $    176,681
Equity in losses of Local Limited
  Partnerships (C)                       (2,041,502)    (2,657,886)     (2,732,227)    (3,076,265)    (4,468,387)
Net loss                                 (2,048,112)    (2,278,003)     (3,142,627)    (3,048,198)    (4,532,734)
  Per Limited Partnership Unit               (40.55)        (45.10)        (62.22)         (60.35)        (89.75)
Cash, cash equivalents and
  marketable  securities (C)              2,376,296      2,676,948       2,374,552      2,324,577      2,299,837
Investment in Local Limited
  Partnerships, at original cost         41,458,860     41,458,860      41,422,507     41,422,507     41,422,507
Total assets (A)                          8,369,107     10,458,754      11,358,168     14,487,572     17,626,031
Cash distribution                                 -              -               -              -              -
  Per Limited Partnership Unit                    -              -               -              -              -
Other Data:
Passive loss (B)                         (7,537,782)    (6,502,105)     (6,757,956)    (7,213,910)    (7,195,871)
  Per Limited Partnership Unit (B)          (149.25)       (128.74)       (133.81)        (142.84)       (142.48)
Portfolio income (B)                        389,939        442,059         321,042        420,572        609,370
  Per Limited Partnership Unit (B)             7.72           8.75           6.36            8.33          12.07
Low-Income Housing
  Tax Credits (B)                         7,559,531      7,652,372       7,512,822      7,490,806      7,479,988
  Per Limited Partnership Unit (B)           149.47         151.31         148.55          148.11         147.89
Local Limited Partnership interests
  owned at end of period                         34             34              34             34             34
</TABLE>


(A)      Total assets include the net investment in Local Limited Partnerships.

(B)      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 1996,  1995,  1994,  1993 and 1992,
         represents the amount  distributed to individual  investors  based upon
         50,000  outstanding  Units.  Corporate  investors  received  Low-Income
         Housing Tax Credits of $159.39,  $161.23,  $158.40, $158.11 and $157.89
         per Unit in 1996, 1995, 1994, 1993 and 1992, respectively.

(C)      March 31, 1997 and 1996 revenue includes  $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, 1997 and 1996 equity in losses of Local Limited  Partnerships
         does not include  $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, 1997 and 1996 cash, cash equivalents and marketable  
         securities includes $2,544 and $26,084,  respectively,  of cash 
         equivalents from Hughes Apartments that has been combined with the 
         Partnership in the Balance Sheets.


<PAGE>


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

Liquidity and Capital Resources

At March 31, 1997, the Partnership has cash and cash  equivalents of $453,264 as
compared with $678,567 at March 31, 1996. The decrease is  attributable  to cash
used for  operations,  purchases of rental  property and  equipment and advances
made to Local Limited Partnerships. These decreases to cash and cash equivalents
are offset by cash  distributions  received from Local Limited  Partnerships and
proceeds from the sales and  maturities  of  marketable  securities in excess of
purchases of marketable securities.

At March 31,  1997,  approximately  $1,639,000  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, 1997, 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,  1997,  the  Partnership  advanced
approximately  $375,000 to four Local  Limited  Partnerships  to fund  operating
deficits and other various property issues.

Cash Distributions

No cash distributions to Limited Partners were made during the three years ended
March 31, 1997. 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

1997 versus 1996

The  Partnership's  results  of  operations  for the year ended  March 31,  1997
resulted in a net loss of $2,048,112 as compared to a net loss of $2,278,003 for
the  same  period  in  1996.   The  improved  net  loss  position  is  primarily
attributable to a decrease in equity in losses of Local Limited Partnerships and
an  increase  in  rental  revenue.  These  decreases  to net loss are  offset by
increases in rental operations,  interest and depreciation  expense items. Also,
the  adjustment  to  reserve  for  valuation  of  investments  in Local  Limited
Partnerships  was $(510,048) in 1996 and $(137,073) in 1995.  This change is due
to 1996  advances  made to three  Local  Limited  Partnerships  which were fully
reserved in 1996. As discussed in Note 4 to the combined financial statements in
Item 8 of this form  10-k,  the  decrease  in equity in losses of Local  Limited
Partnerships  is due to a change in  accounting  method  for two  Local  Limited
Partnerships. The increase in rental revenue and rental operations, interest and
depreciation  expenses is the result of the  financial  activity of Hughes being
combined for twelve months in 1997 and two months in 1996.

1996 versus 1995

The  Partnership's  results  of  operations  for the year ended  March 31,  1996
resulted in a net loss of $2,278,003 as compared to a net loss of $3,142,627 for
the  same  period  in  1995.   The  improved  net  loss  position  is  primarily
attributable to the Mod Rehab  Settlement,  which resulted in  reimbursement  of
legal  costs  incurred  by the  Partnership  on behalf of the Mod Rehab  Program
Properties,  as well as an increase in investment revenue due to improved market
conditions  and an  adjustment to the reserve for  valuation of  investments  in
Local Limited Partnerships.


Effect of recently issued Accounting Standard

The  Financial  Accounting  Standards  Board has issued  Statement of Accounting
Standards No. 121,  Accounting for the  Impairment of Long-Lived  Assets and for
Long-Lived  Assets to Be  Disposed  Of,  which is  effective  for  fiscal  years
beginning after December 15, 1995. This standard requires that long-lived assets
be reviewed for recoverability.  Impairment losses are recognized when events or
changes in  circumstances  indicate that the carrying amount of an asset may not
be  recoverable.  The  Partnership  adopted the new standard for its year ending
March 31, 1997,  however, it had no significant effect on its financial position
or results of operations.

Low-Income Housing Tax Credits

The 1996, 1995 and 1994 Low-Income  Housing Tax Credits per Unit for individuals
were  $149.47,  $151.31  and  $148.55,  respectively.  The  1996,  1995 and 1994
Low-Income  Housing Tax Credits per Unit for corporations were $159.39,  $161.23
and  $158.40,  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 are expected to remain  stable  through
1997 and then they are expected to decrease as certain  properties reach the end
of the ten-year credit period.

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 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.

The  Managing  General  Partner was  successful  in reaching a one year  workout
agreement with HUD on Pebble Creek,  located in Arlington,  Texas effective June
1, 1997.  The  property has been  experiencing  significant  operating  problems
primarily due to  considerable  resident  turnover and high security and capital
repair  costs.  The  problems  resulted  in a mortgage  default  and  subsequent
mortgage  assignment to HUD. The workout  includes  provisions  for  substantial
capital improvements to the property designed to stabilize operations.  Property
management continues to work with the Managing General Partner and HUD to ensure
that the capital  improvements  are completed on time and in accordance with the
workout.

As previously reported, Cass House and Verdean Gardens, Massachusetts properties
which share a common Local General Partner, continue to operate below break-even
in a slow rental market.  The SHARP subsidy  agreements for both properties were
renegotiated  in 1992 and  provided  additional  subsidies.  However,  since the
properties  continue  to  operate  at a deficit  and  Verdean  Gardens  requires
maintenance  work, the Local General Partner has applied for further  subsidies.
The  restructuring of the Cass House subsidy closed in June of 1996. The closing
for Verdean Gardens occurred in December of 1996. Both  restructurings  required
contributions from Partnership  reserves.  Under the existing subsidy agreement,
the Local General Partner has been supporting the properties' operations through
deferred management fees and guarantees or letters of credit. The carrying value
of the Partnership's  investment in these Local Limited  Partnerships is zero at
December 31, 1996.

Hughes  Apartments,  located in Mandan,  North  Dakota,  continues  to  generate
operating  deficits,  despite the fact that  construction  to repair the damaged
units is ongoing, and occupancy has reached 100%. As we previously reported, the
Managing  General  Partner  negotiated a forbearance  agreement  with the lender
which  included an infusion of additional  capital to cure the mortgage  default
and fund capital repairs.  A portion of the capital repairs is being funded from
Partnership Reserves. The Managing General Partner continues to monitor property
operations  closely and to work with the local General  Partner on a strategy to
stabilize property operations.

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, 1997, 1996 and 1995.


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

On November  10,  1995,  the firm of Arthur  Andersen  LLP was  dismissed as the
principal accountant to audit the registrant's financial statements.  The report
on the  financial  statements of the  registrant by Arthur  Andersen LLP for the
year ended March 31, 1995 did not contain an adverse  opinion or  disclaimer  of
opinion and was not  qualified  or modified  as to  uncertainty,  audit scope or
accounting  principles.  The decision to change  accountants was approved by the
Board of Directors of the General Partner of the registrant.

During the year ended  March 31,  1995 and for the  subsequent  interim  period,
April 1, 1995 through November 10, 1995, there were no disagreements with Arthur
Andersen LLP on any matter of  accounting  principles  or  practices,  financial
statement disclosure or auditing scope or procedure.

The firm of Coopers & Lybrand L.L.P. has been engaged as principal accountant to
audit the registrant's financial statements.




<PAGE>


                             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

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

Georgia Murray                         Managing Director, Treasurer
                                         and Chief Financial Officer
Fred N. Pratt, Jr.                     Managing Director
William E. Haynsworth                  Managing Director, Vice President and
                                         Chief Operating Officer
Paul F. Coughlan                       Vice President
Peter G. Fallon, Jr.                   Vice President
Randolph G. Hawthorne                  Vice President
A. Harold Howell                       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  Partners of Franklin  L.P. are Messrs.
Pratt, Hawthorne, Coughlan and Fallon.

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.

Georgia  Murray,  age 46, is a graduate  of Newton  College of the Sacred  Heart
(B.A.,  1972).  She joined Boston  Financial  Management  Company in 1973 and is
currently a Senior Vice President of Boston Financial. Ms. Murray is a member of
the  Senior  Leadership  Team and Board of  Directors,  and  leads the  Property
Management division.  Previously, she led the company's Institutional Tax Credit
Team and managed Boston Financial's  Investment Real Estate and Asset Management
divisions.  Ms. Murray currently serves as a director of Atlantic Bank and Trust
Company,  President of the Institute for Multi-Family  Housing,  Director of the
Investment Program Association and member of the Direct Investment  Committee of
the  Securities  Industry  Association.  Previously,  she served as the Industry
Advisor to the Management Policy Review Committee of the  Massachusetts  Housing
Finance Agency and as a commissioner of the Boston Public Facilities Department.

Fred  N. Pratt,  Jr.,  age 52,  graduated  from  Tufts  University and the Amos
Tuck School of Business  Administration at Dartmouth College.  Mr. Pratt was one
of the original  employees of Boston Financial when it was founded in late 1969.
He currently serves as Boston  Financial's  Chief Executive Officer and Chairman
of the Board of the General Partner of Boston Financial.

William E. Haynsworth,  age 57, graduated from Dartmouth College and Harvard Law
School.  Mr.  Haynsworth  was Acting  Executive  Director  of the  Massachusetts
Housing Finance Agency,  where he was also General Counsel,  prior to becoming a
Vice President of Boston  Financial in 1977 and a Senior Vice President in 1986.
He has also  served as  Director of  Non-Residential  Development  of the Boston
Redevelopment Authority and as an associate of the law firm of Goodwin,  Procter
& Hoar in Boston.  Mr.  Haynsworth is a member of the firm's  Senior  Leadership
Team and  participates  in the  structuring of real estate  investments  and the
development of new business opportunities.

Paul F. Coughlan,  age 53, is a graduate of Brown  University  (A.B.,  1965) and
served in the United  States Navy before  entering  the  securities  business in
1969. He was employed as an Account Executive by Bache & Company until 1972, and
then by Reynolds  Securities  Inc.  He joined  Boston  Financial  in 1975 and is
currently a Senior Vice President on the Institutional Tax Credit Team.

Peter G.  Fallon,  Jr.,  age 58,  graduated  from the  College of The Holy Cross
(B.S.,  1960) and Babson College  (M.B.A.,  1965). He joined Boston Financial in
1970, shortly after its formation,  and is currently a Senior Vice President and
a member of the  Investment  Real Estate  Division with  responsibility  for the
marketing of the firm's Institutional Tax Credit product.

Randolph G. Hawthorne,  age 47, is a graduate of the Massachusetts  Institute of
Technology (B.S., 1971) and Harvard Graduate School of Business (M.B.A.,  1973).
He joined  Boston  Financial in 1973 and has served as Treasurer and managed the
firm's Investment Real Estate division. He is a Senior Vice President serving on
the  Investment  Acquisitions  Team  with 22 years  of  experience  in  property
acquisitions.  Mr.  Hawthorne has primary  responsibility  for structuring  real
estate investments and developing new business opportunities.  He is a member of
the Investment Committee.  He is Chairman of the National Multi-Housing Council,
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.  A speaker at industry conferences,  he is also on the
Editorial Advisory Board of the Tax Credit Advisor.

A. Harold  Howell,  age 56,  graduated  from  Harvard  College and the Amos Tuck
School of Business  Administration at Dartmouth College. He has been employed by
Boston  Financial  since 1970.  For most of this time, he has been active in the
overall  administration of Boston Financial and its affiliates but has also been
involved in other areas of its business. Mr. Howell has served as head of Boston
Financial's Property Management Division and also as its Chief Financial Officer
and Chief Executive  Officer.  He currently is a Senior Vice President and is in
charge of a program being developed for properties  managed by Boston  Financial
whereby  heads-of-households who want to further their education can enroll in a
program on-site which teaches economic self  sufficiency,  computer and internet
skills,  problem  solving  skills and  related  real-world  skills.  Mr.  Howell
recently  spent a two  year  sabbatical  from  Boston  Financial  as a  Visiting
Professor  at the  Instituto  de Estudios  Superiores  de la  Empresa,  a highly
regarded  International  M.B.A.  Program in Barcelona,  Spain.  While there,  he
taught courses in business strategy and real estate finance.


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.



<PAGE>


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, 1997, 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 it 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, 1997 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, 1997.


<PAGE>



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  total 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, 1997.

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,  1997 are as
follows:
<TABLE>
<CAPTION>

       <S>                                            <C>               <C>              <C> 
                                                        1997              1996              1995
       Salaries and benefits expense
         reimbursements                               $  138,995        $  146,464       $   135,847
</TABLE>


Property management fees

Boston  Financial  Property  Management  ("BFPM"),  an affiliate of the Managing
General  Partner,  currently  manages four of the five  properties  owned by the
Colorado  Partnerships.  Fees  earned by BFPM in each of the three  years  ended
March 31, 1997 are as follows:
<TABLE>
<CAPTION>


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

       Property management fees                       $  194,057        $  181,269       $   189,800

</TABLE>


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, 1997.

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, 1997 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 quarter ended March
                         31, 1997.

       (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

                1.   Pebble Creek

(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/William E. Haynsworth                                 Date:
          William E. Haynsworth,
          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/William E. Haynsworth                                 Date:
          William E. Haynsworth,
          Managing Director, Vice President and
          Chief Operating Officer




     By:   /s/Fred N. Pratt, Jr.                                   Date:
           Fred N. Pratt, Jr.,
           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, 1997
                                        Index


                                                                        Page No.

Report of Independent Accountants
     For the Years Ended March 31, 1997 and 1996                          F-2
     For the Year Ended March 31, 1995                                    F-3

Combined Financial Statements

     Combined Balance Sheets - March 31, 1997 and 1996                    F-4

     Combined Statements of Operations - Years Ended
     March 31, 1997, 1996 and 1995                                        F-5

     Combined Statements of Changes in Partners' Equity (Deficiency)
      Years Ended March 31, 1997, 1996 and 1995                           F-6

     Combined Statements of Cash Flows - Years Ended
     March 31, 1997, 1996 and 1995                                        F-7

     Notes to Combined Financial Statements                               F-8

Financial Statement Schedule:

       Schedule III - Real Estate and Accumulated Depreciation            F-21

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:

We have audited the  accompanying  combined  balance sheets of Boston  Financial
Qualified  Housing Limited  Partnership (A Limited  Partnership) as of March 31,
1997 and 1996 and the related  combined  statements  of  operations,  changes in
partners'  equity  (deficiency)  and  cash  flows  and the  financial  statement
schedule  listed in Item 14(a) of this Report on Form 10-K,  for the years ended
March 31, 1997 and 1996.  These  financial  statements  and financial  statement
schedule are the responsibility of the Fund's management.  Our responsibility is
to express an opinion on these  financial  statements  and  financial  statement
schedule  based on our  audits.  As of March  31,  1997 and  1996,  27% and 38%,
respectively,  of total assets, and for the years ended March 31, 1997 and 1996,
100% of  equity  in  losses  of Local  Limited  Partnerships,  reflected  in the
financial  statements of the Partnership,  relate to Local Limited  Partnerships
for which we did not audit the financial statements. The financial statements of
these Local Limited  Partnerships  were audited by other  auditors whose reports
have been  furnished  to us,  and our  opinion,  insofar  as it relates to those
investments  in Local  Limited  Partnerships,  is based solely on the reports of
other auditors.

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

In our  opinion,  based on our audits and the  reports  of other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial   position  of  Boston   Financial   Qualified   Housing  Limited
Partnership,  as of March 31, 1997 and 1996,  and the results of its  operations
and its cash flows for the years ended March 31,  1997 and 1996,  in  conformity
with generally accepted accounting principles.  In addition, in our opinion, the
financial  statement  schedule referred to above, when considered in relation to
the  basic  financial  statements  taken as a  whole,  presents  fairly,  in all
material respects, the information required to be included therein.





/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
June 25, 1997


<PAGE>





                   REPORT OF INDEPENDENT ACCOUNTANTS



To the Partners
Boston Financial Qualified Housing Limited Partnership:

We have audited the accompanying  combined statements of operations,  changes in
partners'  equity(deficiency)  and cash  flows  of  Boston  Financial  Qualified
Housing Limited Partnership (A Limited Partnership) for the year ended March 31,
1995. These financial  statements are the  responsibility  of the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements  based  on our  audit.  We did not  audit  certain  of the  financial
statements of the Local Limited  Partnerships for the year ended March 31, 1995,
the investments in which are recorded using the equity method of accounting (see
Note 2).  The  equity  in losses of these  partnerships  represents  100% of the
equity in loss of the Local  Limited  Partnerships  for the year ended March 31,
1995.  Those  financial  statements were audited by other auditors whose reports
have been  furnished  to us,  and our  opinion,  insofar  as it relates to those
investments  in Local  Limited  Partnerships,  is based solely on the reports of
other auditors.

We conducted our 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  and the  reports  of  other  auditors,  provide  a
reasonable basis for our opinion.

In our  opinion,  based on our  audit and the  reports  of other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the results of operations and cash flows of Boston Financial  Qualified  Housing
Limited  Partnership  for the year ended  March 31,  1995,  in  conformity  with
generally accepted accounting principles.




/s/ Arthur Anderson LLP
Arthur Andersen LLP
Boston, Massachusetts
June 16, 1995



<PAGE>



                BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
                             (A Limited Partnership)

               

                                                      
                  COMBINED BALANCE SHEETS - March 31, 1997 and 1996
<TABLE>
<CAPTION>


<S>                                                                   <C>                   <C> 
                                                                         1997                   1996
Assets

Cash and cash equivalents                                             $    453,264          $    678,567
Tenant security deposits                                                     4,709                 4,067
Marketable securities, at fair value (Notes 1 and 3)                     1,923,032             1,998,381
Mortgagee escrow deposits                                                   10,230                     -
Replacement reserve escrow                                                   6,092                 5,816
Bond trusts (Note 7)                                                        86,209                70,140
Investments in Local Limited Partnerships,
   net of reserve for valuation of
   $328,803 and $787,526 in
   1997 and 1996, respectively (Note 4)                                  4,645,508             6,447,339
Deferred charges, net of accumulated
   amortization of $32,245 and $29,021
    in 1997 and 1996, respectively                                          48,369                51,593
Rental property, at cost, net of
   accumulated depreciation (Note 6)                                     1,158,106             1,135,368
Other assets                                                                33,588                67,483
                                                                           -------             ---------
     Total Assets                                                     $  8,369,107          $ 10,458,754

Liabilities and Partners' Equity

Accounts payable to affiliate (Note 5)                                $     34,790          $     16,763
Accounts payable and accrued expenses                                       46,346                94,274
Accrued interest (Note 7)                                                   68,819                68,819
Tenant security deposits payable                                             4,617                 2,936
Bonds payable (Note 7)                                                   1,210,000             1,210,000
                                                                         --------              ---------
     Total Liabilities                                                   1,364,572             1,392,792

Minority interest in Local Limited Partnership                              58,847                59,219


General, Initial and Investor Limited Partners' Equity                   6,958,668             9,006,780
Net unrealized losses on marketable securities                             (12,980)                  (37)
     Total Partners' Equity                                              6,945,688             9,006,743
                                                                           -------             ---------                
     Total Liabilities and Partners' Equity                           $  8,369,107          $ 10,458,754
</TABLE>

 The  accompanying  notes are an integral part of these  combined
financial statements.
<PAGE>
               BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
                             (A Limited Partnership)


                      COMBINED  STATEMENTS OF OPERATIONS  For
                   the Years Ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>

<S>                                                <C>                  <C>                 <C> 
                                                        1997                1996                1995
                                                      (Note 2)            (Note 2)
Revenue:
   Rental                                          $     227,492        $      22,721       $          -
   Investment, net (Note 3)                              151,516              130,960             54,550
   Other                                                  56,783               37,548             22,798
                                                           -----                -----               ----
       Total Revenue                                     435,791              191,229             77,348

Expenses:
   General and administrative, includes
   reimbursements to an affiliate of $138,995,
   $146,464 and $135,847 (Note 5)                        207,292              173,259            321,980
   Rental operations, exclusive of depreciation          111,221                8,495                  -
   Interest (Note 7)                                     118,095               19,685                  -
   Depreciation (Note 6)                                  42,547               13,575                  -
   Amortization (Note 2)                                 100,691              106,515            109,621
   Adjustment to reserve for valuation of
     investments in Local
     Limited Partnerships (Note 4)                      (137,073)            (510,048)            56,147
                                                         -------              -------            -------
       Total Expenses                                    442,773             (188,519)           487,748

Income (loss) before equity in losses
   of Local Limited Partnerships                          (6,982)             379,748           (410,400)

Minority interest in loss of
    Local Limited Partnership                                372                  135                  -

Equity in losses of Local Limited
   Partnerships, including income
   of $822,529 for prior year
   adjustments (Note 4)                               (2,041,502)          (2,657,886)       (2,732,227)
                                                       ---------           ----------          --------
Net Loss                                           $  (2,048,112)       $  (2,278,003)      $(3,142,627)

Net Loss allocated
   To General Partners                             $     (20,481)       $     (22,780)      $    (31,426)
   To Limited Partners                                (2,027,631)          (2,255,223)        (3,111,201)
                                                       ---------           ----------          ---------
                                                   $  (2,048,112)       $  (2,278,003)      $(3,142,627)

Net Loss per Limited Partnership Unit
(50,000 Units)                                     $      (40.55)       $     (45.10)       $    (62.22)
</TABLE>

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

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


                  COMBINED  STATEMENTS  OF CHANGES IN  PARTNERS'  EQUITY
                       (DEFICIENCY)  For the  Years  Ended  March  31,
                              1997, 1996 and 1995
<TABLE>
<CAPTION>

<S>                              <C>               <C>         <C>               <C>           <C>   
                                                                                     Net
                                                    Initial      Investor        Unrealized
                                    General         Limited       Limited           Gains
                                    Partners       Partners      Partners         (Losses)         Total

Balance at March 31, 1994        $   (290,223)     $  4,648    $ 14,712,985      $   (39,324)  $14,388,086

Net Loss                              (31,426)            -      (3,111,201)               -     (3,142,627)

Net change in net unrealized
   losses on marketable
   securities available
   for sale                                 -              -              -           10,906         10,906

Balance at March 31, 1995            (321,649)         4,648     11,601,784          (28,418)    11,256,365
                                        ------         -----     ---------           -------   ------------
Net Loss                              (22,780)             -     (2,255,223)               -     (2,278,003)

Net change in net unrealized
   losses on marketable
   securities available
   for sale (Note 3)                        -              -              -           28,381         28,381

Balance at March 31, 1996            (344,429)         4,648      9,346,561              (37)     9,006,743
                                        ------         -----     ---------                ---       -------
Net Loss                              (20,481)             -     (2,027,631)               -     (2,048,112)

Net change in net unrealized
   losses on marketable
   securities available
   for sale (Note 3)                        -              -              -          (12,943)       (12,943)
                                        ------         -----     ---------                ---        -----
Balance at March 31, 1997        $   (364,910)     $   4,648   $  7,318,930      $   (12,980)  $  6,945,688

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


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


                         COMBINED  STATEMENTS  OF CASH FLOWS For
                     the Years Ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>


<S>                                                       <C>             <C>               <C> 
                                                              1997             1996             1995
                                                            (Note 2)         (Note 2)
Cash flows from operating activities:
   Net Loss                                               $ (2,048,112)   $ (2,278,003)     $(3,142,627)
   Adjustments to reconcile net loss to net
    cash used for operating activities:
     Equity in losses of Local Limited Partnerships          2,041,502       2,657,886         2,732,227
     Adjustment to reserve for valuation of
      Investments in Local Limited Partnerships               (137,073)       (510,048)           56,147
     (Gain) loss on sale of marketable securities                3,072          (9,470)           46,361
     Distribution income included in cash distributions
      received from Local Limited Partnerships                 (41,631)         (5,000)           (5,225)
     Depreciation and amortization                             143,238         120,090           109,621
     Minority interest in losses of Local Limited Partnership     (372)           (135)                -
     Increase  (decrease)  in cash arising from changes
     in operating  assets and liabilities:
       Tenant security deposits                                   (642)              -                 -
       Mortgagee escrow deposits                               (10,230)              -                 -
       Replacement reserve escrow                                 (276)              -                 -
       Other assets                                             33,895         (39,052)             (366)
       Accounts payable to affiliate                            18,027           5,017                 -
       Accounts payable and accrued expenses                   (47,928)         (9,883)            2,317
       Tenant security deposits payable                          1,681               -                 -
                                                                 -----          -----          ---------
Net cash used for operating activities                         (44,849)        (68,598)         (201,545)

Cash flows from investing activities:
   Purchases of marketable securities                       (1,234,961)     (1,547,205)       (2,916,220)
   Proceeds from sales and maturities
     of marketable securities                                1,294,295       1,653,011         3,094,216
   Advances to Local Limited
     Partnerships                                             (321,650)              -                 -
   Cash distributions received from Local
     Limited Partnerships                                      163,216         343,431           286,975
   Purchase of rental property and equipment                   (65,285)              -                 -
   Bond trust deposits                                         (16,069)        (28,828)                -
   Cash received upon assumption of General Partner's
     interest in the Combined Entity                                 -          18,540                 -
                                                                 -----          ------              -----                          
Net cash provided by (used for) investing activities          (180,454)        438,949           464,971

Net increase (decrease) in cash and cash
     equivalents                                              (225,303)        370,351           263,426

Cash and cash equivalents, beginning                           678,567         308,216            44,790
                                                                 -----           -----              ----
Cash and cash equivalents, ending                         $    453,264    $    678,567      $    308,216

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

<PAGE>

               BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
                             (A Limited Partnership)


                                                      

                    NOTES TO THE COMBINED FINANCIAL STATEMENTS

1.   Organization

Boston Financial  Qualified Housing 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  own and  operate
apartment  complexes  benefiting  from  some  form of  federal,  state  or local
assistance program and each of which qualify 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, 1997, the Managing General Partner has designated  approximately  $1,639,000
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 of the major operating
and financial  policies of the Local Limited  Partnerships  in which it invests.
Under the equity  method,  the  investment is carried at cost,  adjusted for the
Partnership's  share  of  income  or  loss  of the  Local  Limited  Partnership,
additional  investments  and for  cash  distributions  from  the  Local  Limited
Partnerships.  Equity in income or loss of the  Local  Limited  Partnerships  is
included  currently in the  Partnership's  operations.  The  Partnership  has no
obligation  to fund  liabilities  of the Local  Limited  Partnership  beyond its
investment,  therefore,  a Limited Partnership's  investment will not be carried
below zero.  To the extent that equity  losses are incurred when a Local Limited
Partnership's  respective  investment  balance has been reduced to zero,  losses
will be suspended to be used against future income.  Also,  when a Local Limited
Partnership  with a carrying value of zero  distributes cash to the Partnership,
that  distribution is recorded as revenue on the books of the Partnership in the
accompanying financial statements.

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 LIMITED PARTNERSHIP
                             (A Limited Partnership)


               NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

2.   Significant Accounting Policies (continued)

Basis of Presentation and Combination (continued)

In connection  with the  Partnership's  fiscal year-end of March 31, the General
Partner has decided to report the results of the Local Limited Partnerships on a
90-day lag basis.  Accordingly,  the financial  information of the Local Limited
Partnerships that is included in the accompanying  Combined Financial Statements
is as of December 31, 1996, 1995 and 1994.

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,  these  combined  financial  statements  include
financial  activity  of Hughes for the year  ended  December  31,  1996 and from
November  1, 1995  through  December  31,  1995.  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, because the Local Limited Partnerships report their results on a calendar
year basis.  Accordingly,  the  financial  information  about the Local  Limited
Partnerships that is included in the accompanying  combined financial statements
is as of December 31, 1996, 1995 and 1994.

The Partnership  recognizes a decline in the carrying value of its investment in
Local Limited Partnerships when there is evidence of a non-temporary  decline in
the  recoverable  amount  of the  investment.  There is a  possibility  that the
estimates relating to reserves for non-temporary  declines in 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 90 days or less at  acquisition  and  approximate  fair
value.

Marketable Securities

The  Partnership's  investments  in securities  are classified as "Available for
Sale" securities and reported at fair value as reported by the brokerage firm at
which the  securities  are held.  Realized  gains 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.

<PAGE>


               BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
                             (A Limited Partnership)


                NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

2.   Significant Accounting Policies (continued)

Effect of recently issued Accounting Standard

The  Financial  Accounting  Standards  Board has issued  Statement  of Financial
Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of, which is effective for fiscal years
beginning after December 15, 1995. This standard requires that long-lived assets
be reviewed for recoverability.  Impairment losses are recognized when events or
changes in  circumstances  indicate that the carrying amount of an asset may not
be recoverable.  The Partnership has adopted the new standard for its year ended
March 31,  1997,  however,  it has not had a  significant  effect  on  financial
position or results of operations.

Deferred Charges

Bond financing costs incurred in connection  with financing the  construction of
Hughes has 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  is  carried  at cost,  net of
accumulated  depreciation.  Depreciation  is  computed  using the  straight-line
method over the estimated useful lives of the assets.

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 and 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  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 LIMITED PARTNERSHIP
                             (A Limited Partnership)


              NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

3.   Marketable Securities

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

<S>                                      <C>                 <C>             <C>               <C> 
                                                                Gross             Gross
                                                              Unrealized      Unrealized           Fair
                                              Cost              Gains            Losses            Value
Debt securities issued by the
   US Treasury and
   other US Government
   corporations and agencies             $  1,511,712        $     3,283      $   (13,174)     $   1,501,821

Mortgage backed securities                    405,200                498           (3,632)           402,066

Other debt securities                          19,100                 45                -             19,145

Marketable securities
   at March 31, 1997                     $  1,936,012        $     3,826      $   (16,806)     $   1,923,032

Debt securities issued by the
   US Treasury and
   other US Government
   corporations and agencies             $  1,394,653         $   2,050         $ (7,271)      $  1,389,432

Mortgage backed securities                    247,382             1,792             (164)           249,010

Other debt securities                         356,383             3,783             (227)           359,939

Marketable securities
   at March 31, 1996                     $  1,998,418         $   7,625         $ (7,662)      $  1,998,381
</TABLE>


The contractual maturities at March 31, 1997 are as follows:
<TABLE>
<CAPTION>
<S>                                                                          <C>             <C>
                                                                                                Fair
                                                                                Cost           Value

Due in one year or less                                                      $   296,833     $   299,767
Due in one year to five years                                                  1,233,979       1,221,199
Mortgage backed securities                                                       405,200         402,066
                                                                                --------       ---------
                                                                             $ 1,936,012     $ 1,923,032
</TABLE>

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  $1,294,000,  $1,653,000 and $3,094,000 for the
years ended March 31, 1997, 1996 and 1995, respectively.  Included in investment
income are gross gains of $4,492, $16,733 and $1,349 and gross losses of $7,564,
$7,263 and $47,710  which were  realized  on these sales  during the years ended
March 31, 1997, 1996 and 1995, respectively.


4.   Investments in Local Limited Partnerships

The   Partnership  has  acquired   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 generally
acquired a 99% interest in the profits,  losses, tax credits and cash flows from
operations of each of the Local Limited Partnerships. Upon dissolution, proceeds
will be distributed according to each respective partnership agreement.


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


                 NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

4.   Investments in Local Limited Partnerships (continued)

The following is a summary of Investments in Local Limited Partnerships at March
31, 1997, 1996 and 1995. The 1997 and 1996 summaries exclude Hughes.
<TABLE>
<CAPTION>

<S>                                                     <C>              <C>                <C> 
                                                             1997             1996              1995
Capital contributions and advances to Local Limited
   Partnerships and purchase price paid to
   withdrawing partners of Local Limited
   Partnerships                                         $  36,630,480    $ 36,308,830       $ 36,651,930

Cumulative equity in losses of Local
   Limited Partnerships (excluding cumulative
   unrecognized losses of $12,515,308)                    (33,461,841)    (31,456,648)       (29,228,172)

Cumulative cash distributions received
   from Local Limited Partnerships                         (1,572,433)     (1,414,539)        (1,071,108)

Investments in Local Limited Partnerships                   ---------      ---------           ---------
   before adjustment                                        1,596,206       3,437,643          6,352,650

Excess of investment cost over the underlying net assets acquired:

   Acquisition fees and expenses                            4,770,577       4,770,577          4,770,577

   Accumulated amortization of acquisition
     fees and expenses                                     (1,070,822)       (973,355)          (867,376)
                                                             --------           -----          ---------
Investments in Local Limited Partnerships                   5,295,961       7,234,865         10,255,851

Reserve for Valuation of Investments in
   Local Limited Partnerships                                (650,453)       (787,526)        (1,297,574)
                                                            ---------      ----------          ---------
                                                        $   4,645,508    $  6,447,339       $  8,958,277
</TABLE>

The 1996, 1995 and 1994 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 1996,  1995 and 1994 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  1996.  Equity in  losses  of Local  Limited
Partnerships  for the  years  ended  March  31,  1997,  1996 and  1995  includes
$449,345, $500,670 and $218,983, 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.

The  Partnership  has also provided a reserve for valuation for a portion of its
investment in one other Local Limited Partnership,  Graver Inn, because there is
evidence of a non-temporary decline in the recoverable amount of the investment.

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.
<PAGE>

               BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
                             (A Limited Partnership)


              NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

4.   Investments in Local Limited Partnerships (continued)

Summarized financial  information as of December 31, 1996, 1995 and 1994 (due to
the Partnership's policy of reporting financial information of its Local Limited
Partnership  interests on a 90 day lag basis) of the Local Limited Partnerships,
excluding  Hughes in 1996 and 1995, in which the  Partnership has invested as of
that date is as follows:

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

<S>                                                   <C>                    <C>                   <C> 
                                                            1996                   1995                 1994
Assets:
   Investment property, net                           $    104,825,788       $    108,942,454      $   113,394,758
   Current assets                                            2,686,076              2,801,351            2,337,205
   Other assets                                              9,247,079              9,921,430           10,375,151
     Total Assets                                     $    116,758,943       $    121,665,235      $   126,107,114

Liabilities and Partners' Deficit:
   Current liabilities (includes current portion
     of long-term debt)                               $     14,381,389       $      5,948,489      $     5,087,134
   Other debt                                               15,883,277             14,021,083           14,981,385
   Long-term debt                                          100,798,039            110,465,789          110,046,887
     Total Liabilities                                     131,062,705            130,435,361          130,115,406

Partners' Deficit:
   Partnership Deficit                                     (14,087,983)            (8,764,328)          (3,556,895)
   Other Partners' Deficit                                    (215,779)                (5,798)            (451,397)
     Total Partners' Deficit                               (14,303,762)            (8,770,126)          (4,008,292)
     Total Liabilities and Partners' Deficit          $    116,758,943       $    121,665,235      $   126,107,114

Summarized Income Statements - for
the years ended December 31,

                                                            1996                   1995                  1994

Rental and other revenue                             $      19,530,795       $    21,087,845       $    19,884,870

Expenses:
   Interest                                                  9,754,129            10,481,568            10,540,501
   Operating                                                10,860,840            10,544,604             9,480,068
   Depreciation and amortization                             4,717,555             5,269,753             5,100,823
     Total Expenses                                         25,332,524            26,295,925            25,121,392

Net loss                                             $      (5,801,729)      $    (5,208,080)      $    (5,236,522)

Partnership's share of net loss (including
     adjustments relating to prior year, 
     discussed above)                                $      (4,925,359)      $    (5,153,645)      $    (5,180,777)
Other Partners' share of net loss                    $        (110,302)      $       (54,435)      $       (55,745)
</TABLE>

For the years ended  March 31,  1997,  1996 and 1995,  the  Partnership  has not
recognized  $2,925,488,  $2,500,759 and $2,453,775,  respectively,  in equity in
losses relating to fourteen Local Limited  Partnerships  where cumulative equity
in losses and cumulative distributions exceeded its total investments.


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


                NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

4.   Investments in Local Limited Partnerships (continued)

The  Partnership's  deficit as reflected by the Local  Limited  Partnerships  of
$14,087,983  differs  from  the  Partnership's   Investments  in  Local  Limited
Partnerships  before  adjustment  of  $1,274,556  principally  because:  a)  the
Partnership has not recognized $12,515,308 of equity in losses relating to Local
Limited  Partnerships  whose  cumulative  equity in losses and  cumulative  cash
distributions  exceeded  their  total  investments;  b)  purchase  price paid to
original  Limited  Partners by the  Partnership  have not been  reflected in the
balance sheets of certain Local Limited  Partnerships and c) cash  distributions
paid to the  Partnership  during  the  quarter  ended  March  31,  1997  are not
reflected in the equity of certain  Local Limited  Partnerships  at December 31,
1996.


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, 1997, 1996 and 1995 is $138,995, $146,464
and $135,847,  respectively, that has been paid or is payable by the Partnership
as reimbursement for salaries and benefits.  At March 31, 1997 and 1996, $34,790
and $16,763,  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 Sierra Vista,  Windsor Court,  Rolling Green
and Terrace, four properties in which the Partnership has invested.  Included in
operating  expenses  in  the  summarized  income  statements  in  Note  4 to the
Financial  Statements is $194,057,  $181,269 and $189,800 of fees earned by BFPM
for the years ended December 31, 1996, 1995 and 1994, respectively.


6.   Rental Property

Real estate and personal property  belonging to Hughes are recorded at cost, the
components of which are as follows at December 31, 1996 and 1995:
<TABLE>
<CAPTION>
<S>                                                                    <C>                   <C> 
                                                                          1996                  1995
 
   Land                                                                $    29,008           $    29,008
   Building and improvements                                             1,490,659             1,425,374
   Equipment and furnishings                                                26,817                26,817
                                                                         1,546,484             1,481,199
   Less accumulated depreciation                                          (388,378)             (345,831)
                                                                         ---------             ---------
   Total                                                               $ 1,158,106            $1,135,368
</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.

The bond  financing  documents  require  that a portion of the bond  proceeds be
deposited in 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 has
withdrawn funds from this account in 1996, 1995 and 1994. The amounts  withdrawn
have not been  replaced,  and  consequently,  Hughes is in  default of its lease
agreement.
<PAGE>
               BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
                             (A Limited Partnership)

                   NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)

7.   Bonds Payable (continued)

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.

Effective October 27, 1995, an affiliate of the  Partnership's  Managing General
Partner  replaced  the Local  General  Partner  and  successfully  negotiated  a
Forbearance  Agreement with the trustee whereby the mortgage arrears and capital
repairs would be funded from Partnership and bond reserves.

Principal  payments  due  under  the  terms of the  financing  agreement  are as
follows:


                           1997                             $   117,975
                           1998                                 117,975
                           1999                                 117,975
                           2000                                 117,975
                           2001                                 117,975
                           Thereafter                           620,125
                                                                ------ 
                                                             $1,210,000



Based  on the  unique  terms of the  financing,  management  believes  it is not
practicable to estimate the fair value of this arrangement.

The balances in the Trust  accounts  required to be  maintained  pursuant to the
bond financing documents, at December 31, 1996 and 1995 are as follows:

                                     1996                   1995

Bond reserve trust             $    75,571           $     42,618
Bond trust                          10,638                 27,522
                                   -------                 ------ 
                               $    86,209           $     70,140

The Bond reserve trust account  consists of investments in U.S.  Treasury notes,
which are  considered  held to maturity and are due in January 1999.  Investment
cost as of December 31, 1996 and 1995 is $75,571 and $42,618, respectively. Fair
value as of December  31, 1996 and 1995 is $76,725  and  $46,378,  respectively.
Unrealized gains of $1,154 and $3,760 in 1996 and 1995,  respectively,  have not
been recognized as the notes will be held to maturity.



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


                Notes to the Combined Financial Statements (continued)

8.   Federal Income Taxes

A reconciliation  of the loss reported in the Combined  Statements of Operations
for the fiscal  years ended March 31, 1997,  1996 and 1995 to the loss  reported
for federal income tax purposes for the years ended December 31, 1996, 1995, and
1994 are as follows:
<TABLE>
<CAPTION>


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

Net Loss per Statements of Operations                       $ (2,048,112)   $ (2,278,003)   $ (3,142,627)
   Adjustment to reflect March 31, fiscal
     year-end to December 31,
     taxable year-end                                            230,663          26,458         (16,932)
   Adjustment to reserve for valuation of
     Investments in Local Limited Partnerships
     not deductible (taxable) for tax purposes                  (458,723)       (510,048)         56,147
   Amortization of acquisition fees and
     expenses for tax purposes over
     amortization for financial
     reporting purposes                                          (94,149)        (67,497)        (63,855)
   Adjustment for equity in losses of Local
     Limited Partnerships for financial
     reporting purposes under
     equity in losses for tax purposes                        (1,829,071)       (700,632)       (815,872)
   Equity in losses of Local Limited
     Partnerships not recognized
     for financial reporting purposes                         (2,925,488)     (2,500,759)     (2,453,775)
   Other                                                         (22,963)        (29,565)              -
Net loss for federal income tax purposes                    $ (7,147,843)   $(6,060,046)    $ (6,436,914)
</TABLE>


The carrying value of the Partnership's Investment in Local Limited Partnerships
is approximately  $23,391,000  greater for financial reporting purposes than for
tax return  purposes  because (i) the  cumulative  equity in losses of the Local
Limited  Partnerships  is  approximately  $10,924,000  greater for tax  purposes
because of accelerated tax  depreciation  methods used; (ii) the Partnership has
not  recognized  approximately  $12,515,000  of  equity  in  losses of the Local
Limited Partnerships for financial reporting purposes; (iii) the Partnership has
provided a provision for valuation of approximately  $329,000 against two of its
investments in Local Limited Partnerships for financial reporting purposes; (iv)
the  cumulative  amortization  of  acquisition  fees  for tax  purposes  exceeds
financial  reporting purposes by approximately  $410,000;  and (v) approximately
$130,000 of cash  distributions  were received  from Local Limited  Partnerships
during the lag period January 1, 1997 to March 31, 1997. The carrying  values of
the  Partnership's  other  assets  and  liabilities  is the same  for  financial
reporting and tax return purposes.



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


                Notes to the Combined Financial Statements (continued)

9.   Supplemental Combining Schedules
<TABLE>

                                                  Balance Sheets
<CAPTION>

                                         Boston Financial
                                         Qualified Housing        Hughes
                                            Tax Credits         Apartments
                                             L.P. (A)             Ltd.(B)      Eliminations         Combined
<S>                                       <C>                 <C>                <C>             <C>
Assets
Cash and cash equivalents                 $    450,720        $      2,544       $      -        $     453,264
Tenant security deposits                             -               4,709              -                4,709
Marketable securities, at fair value         1,923,032                   -              -            1,923,032
Mortgagee escrow deposits                            -              10,230              -               10,230
Replacement reserve escrow                           -               6,092              -                6,092
Bond trusts                                          -              86,209              -               86,209
Investments in Local Limited
   Partnerships                              4,603,892                   -         41,616            4,645,508
Deferred charges, net                                -              48,369              -               48,369
Rental property at cost, net                         -           1,158,106              -            1,158,106
Other assets                                    30,924               2,664              -               33,588
     Total Assets                         $  7,008,568        $  1,318,923       $ 41,616        $   8,369,107

Liabilities and Partners' Equity
Accounts payable to affiliates            $     34,790        $     53,490       $(53,490)       $      34,790
Accounts payable and accrued
   expenses                                     28,090              18,256              -               46,346
Accrued interest                                     -              68,819              -               68,819
Tenant security deposits payable                     -               4,617              -                4,617
Bonds payable                                        -           1,210,000              -            1,210,000
     Total Liabilities                          62,880           1,355,182        (53,490)           1,364,572

Minority interest in Local Limited
   Partnership                                       -                   -         58,847               58,847

General, Initial and Investor
   Limited Partners' Equity                  6,958,668             (36,259)        36,259            6,958,668
Net unrealized losses                          (12,980)                  -              -              (12,980)
     Total Partners' Equity                  6,945,688             (36,259)        36,259            6,945,688
     Total Liabilities and
       Partners' Equity                   $  7,008,568        $  1,318,923       $ 41,616        $   8,369,107
</TABLE>

(A) As of March 31, 1997. 
(B) As of December 31, 1996.


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


                 Notes to the Combined Financial Statements (continued)

9.   Supplemental Combining Schedules (continued)
<TABLE>

                                             Statements of Operations
<CAPTION>

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

<S>                                      <C>                  <C>                <C>             <C>
Revenue:
   Rental                                $            -       $    227,492       $       -       $      227,492
   Investment                                   145,784              5,732               -              151,516
   Other                                         52,112              4,671               -               56,783
                                                  -----               -----          ------              -----
     Total Revenue                              197,896            237,895               -              435,791

Expenses:
   General and administrative                   207,292                  -               -              207,292
   Rental operations, exclusive
     of depreciation                                  -            111,221               -              111,221
   Interest                                           -            118,095               -              118,095
   Depreciation                                       -             42,547               -               42,547
   Amortization                                  97,467              3,224               -              100,691
   Adjustment to provision
     for valuation of
     investments in Local
     Limited Partnerships                      (137,073)                 -               -             (137,073)
                                                  -----          --------             ------             ------    
     Total Expenses                             167,686            275,087               -              442,773

Income (loss) before equity in
   losses of Local Limited
   Partnerships                                  30,210            (37,192)              -               (6,982)

Minority interest in loss of
   Local Limited Partnership                          -                  -             372                  372

Equity in losses of Local
   Limited Partnerships                      (2,078,322)                 -          36,820           (2,041,502)
                                             ---------           --------           ------               ------
Net Loss                                 $   (2,048,112)      $    (37,192)      $  37,192       $   (2,048,112)

</TABLE>

(A) For the year ended March 31, 1997.  
(B) For the year ended December 31, 1996 - see Note 2.


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


                 Notes to the Combined Financial Statements (continued)

9.   Supplemental Combining Schedules (continued)
<TABLE>

                                             Statements of Cash Flows
<CAPTION>

                                         Boston Financial
                                         Qualified Housing        Hughes
                                            Tax Credits         Apartments
                                             L.P. (A)             Ltd.(B)      Eliminations          Combined
<S>                                        <C>                <C>               <C>              <C>
Cash flows from operating activities:
   Net Loss                                $ (2,048,112)      $    (37,192)     $   37,192       $   (2,048,112)
   Adjustments to reconcile net loss to
     net cash provided by (used for)
     operating activities:
   Equity in losses of Local Limited
     Partnerships                             2,078,322                  -         (36,820)           2,041,502
   Adjustment to reserve for valuation
      of investments in Local
     Limited Partnerships                      (137,073)                 -               -             (137,073)
   Loss on sale of marketable securities          3,072                  -               -                3,072
   Distribution income included in
     cash distributions received from
     Local Limited Partnerships                 (41,631)                 -               -              (41,631)
   Depreciation and amortization                 97,467             45,771               -              143,238
   Minority interest in loss of Local
     Limited Partnership                              -                  -            (372)                (372)
   Increase (decrease) in cash arising
   from changes in operating assets
   and liabilities:
     Tenant security deposits                         -               (642)              -                 (642)
     Mortgagee escrow deposits                        -            (10,230)              -              (10,230)
     Replacement reserve escrow                       -               (276)              -                 (276)
     Other assets                                33,467                428               -               33,895
     Accounts payable to affiliates              18,027             53,490         (53,490)              18,027
     Accounts payable and accrued
       expenses                                 (52,712)             4,784               -              (47,928)
     Tenant security deposits payable                 -              1,681               -                1,681
                                                  -----               ----            ----               ------
Net cash provided by (used for)
   operating activities                         (49,173)            57,814         (53,490)             (44,849)

Cash flows from investing activities:
   Purchases of marketable securities        (1,234,961)                 -               -           (1,234,961)
   Proceeds from sales and maturities
     of marketable securities                 1,294,295                  -               -            1,294,295
   Advances to Local Limited
     Partnerships                              (375,140)                 -          53,490             (321,650)
   Cash distributions received from
     Local Limited Partnerships                 163,216                  -               -              163,216
   Purchase of rental property and
     equipment                                        -            (65,285)              -              (65,285)
   Bond trust deposits                                -            (16,069)              -              (16,069)
                                                  ------              ----            ----               ------
   Net cash used for investing activities      (152,590)           (81,354)         53,490             (180,454)
</TABLE>


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


                 Notes to the Combined Financial Statements (continued)

9.   Supplemental Combining Schedules (continued)
<TABLE>

                                             Statements of Cash Flows
<CAPTION>

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

<S>                                        <C>                <C>               <C>              <C>   
Net decrease in cash and cash equivalents      (201,763)           (23,540)              -             (225,303)

Cash and cash equivalents, beginning            652,483             26,084               -              678,567
                                                  -----               -----          -----               -----
Cash and cash equivalents, ending          $    450,720       $      2,544      $        -       $      453,264
</TABLE>

(A) For the year ended March 31, 1997.  
(B) For the year ended December 31, 1996
- See Note 2.





<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, 1997
<TABLE>


                                         COST OF INTEREST AT AQUISITION DATE
                                        ------------------------------------
<CAPTION>
                                                                                                   NET
                                                                                              IMPROVEMENTS
                                NUMBER        TOTAL                           BUILDINGS /      CAPITALIZED
                                  OF          ENCUM-                           IMPROVEMENTS   SUBSEQUENT TO
DESCRIPTION                      UNITS      BRANCES *            LAND          & EQUIPMENT     ACQUISITION

<S>                                   <C>        <C>                 <C>           <C>              <C>
Low and Moderate
Income Apartment Complexes

Barrington Manor                      18         $635,000            $30,000       $555,638         $242,106
  Fargo, ND
Bingham Housing                       24        1,166,209             48,934        362,172        1,031,234
Associates
  Bingham, ME
Birmingham Village                    24        1,160,427             61,900        190,424        1,165,087
  Randolph, ME
Bittersweet Lane                      35        2,468,567             69,300      2,884,207          374,582
  Randolph , MA
Coronodo Courts                      145        3,763,016            452,331      4,995,460           50,092
  Douglas, AZ
Elmore Hotel                          60        3,336,093             12,500      2,976,388          515,543
  Great Falls, MT
Graver Inn                            70        2,025,486             30,000      2,208,960          843,462
  Fargo, ND
Hazel Winthrop Apartments             30        2,124,303             45,000      2,548,540        (118,658)
  Chicago, IL
Hughes Apartments                     47        1,210,000             28,000      1,260,066          258,418
  Mandan, ND
Lakeview Heights                      83        2,820,290            217,588      2,896,224          149,322
  Clearfield, UT
Medford Hotel                         76        3,226,176             12,500      2,747,997        1,863,079
  Medford, OR
Heritage View                         24        1,165,406             64,800        690,736          686,775
  New Sweden, ME
Rolling Green Apartments             166        4,817,714            286,350      6,254,575          115,452
  Edmond, OK
Sierra Pointe Apartments             209        7,187,317            382,000      8,001,390        1,008,159
 Aurora, CO
Terrace Apartments                   206        5,275,565            350,000      6,470,754        (275,333)
  Oklahoma City, OK
Trenton Apartments                    37          843,537            154,000        899,293          100,993
  Salt Lake City, UT
Windsor Court Apartments             143        4,520,523            280,000      5,579,636        (256,052)
  Aurora, CO
Sierra Vista                         160        6,326,760            434,866      8,056,238           16,785
  Las Vegas, NV
Willow Peg Village                    57        1,480,195            125,000      1,741,799            2,980
  Ricon, GA
Pebble Creek                         352        7,945,275            794,000      9,563,687          137,529
  Arlington, TX
</TABLE>

<PAGE>










<TABLE>



                                           COST OF INTEREST AT AQUISITION DATE
                                          ------------------------------------
<CAPTION>
                                                                                                   NET
                                                                                               IMPROVEMENTS

                                NUMBER        TOTAL                           BUILDINGS /      CAPITALIZED
                                  OF          ENCUM-                           IMPROVEMENTS   SUBSEQUENT TO
DESCRIPTION                      UNITS      BRANCES *            LAND          & EQUIPMENT     ACQUISITION

Low and Moderate
Income Apartment Complexes

<S>                                   <C>         <C>                 <C>           <C>              <C>    
Pine Village                          36          940,806             40,000        960,000          189,698
  Pine Mountain, GA
Talbot Village                        24          602,587             21,775        545,547          244,531
  Talbolton, GA
Logan Plaza                          130       11,169,407            969,289     13,287,069          341,349
  New York, NY
Cass House                           111        8,103,267            222,000     11,423,209           47,910
  Boston, MA
Verdean Gardens                      110        7,806,357            214,992      8,891,168        2,042,800
  New Bedford, MA
Country Estates                       24          596,239             22,500        734,409                0
  Glenville, GA
Boulevard Commons                    212       10,483,899            318,000      3,580,316       10,878,475
  Chicago, IL
Chestnut Lane                         50        1,474,913             93,484        848,922          886,378
  Newman, GA
600 Dakota Properties                 28          660,000             64,353        769,608           36,538
  Wahpeton,  ND
Duluth                                11          259,509             24,000        363,810           13,214
  Souix Falls, SD
Delmar                                16          420,216             75,000        495,203           23,220
  Gillette, WY
Park Terrace                         101        3,558,155            393,713      4,781,404          161,042
  Dundalk, MD
Brentwood Manor II                    22          777,435             44,980      1,118,947            9,218
  Nashua, NH
Hillcrest Apts 3                      24          592,380             17,000        727,587           10,252
  Perryville, MO

                               ------------------------------------------------------------------------------
                                   2,865     $110,943,029         $6,400,155   $119,411,383      $22,796,180
                               ==============================================================================
</TABLE>



<PAGE>









<TABLE>


                       GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1996              
                     -------------------------------------------------------
<CAPTION>
                                                                                      LIFE ON 
                                   BUILDINGS                                            WHICH
                                     AND                      ACCUMULATED    DATE    DEPRECIATION  
                                                                                          IS
                       LAND AND                                                       COMPUTED      DATE
DESCRIPTION          IMPROVEMENTS IMPROVEMENTS      TOTAL     DEPRECIATION    BUILT    (YEARS)    ACQUIRED

Low and Moderate
Income Apartment Complexes

<S>                     <C>             <C>          <C>           <C>        <C>      <C>         <C>
Barrington              $32,011         $795,733     $827,744      $201,956   1927     various     12/31/87
Manor
  Fargo, ND
Bingham Housing          48,934        1,393,406    1,442,340       295,247   1988     various     12/30/87
Associates
  Bingham, ME
Birmingham               61,900        1,355,511    1,417,411       287,472   1988     various     12/30/87
Village
  Randolph, ME
Bittersweet              69,300        3,258,789    3,328,089     1,049,353   1988     various     10/27/87
Lane
  Randolph , MA
Coronodo Courts         452,331        5,045,552    5,497,883     1,643,651   1945     various     12/18/87
  Douglas, AZ
Elmore Hotel             12,500        3,491,931    3,504,431     1,156,586   1917     various     12/22/87
  Great Falls, MT
Graver Inn               40,914        3,041,508    3,082,422       787,552   1917     various     12/31/87
  Fargo, ND
Hazel Winthrop           45,000        2,429,882    2,474,882       605,153   1910     various     12/30/87
Apartments
  Chicago, IL
Hughes                   29,008        1,517,476    1,546,484       388,378   1926     various     12/31/87
Apartments
  Mandan, ND
Lakeview Heights        217,588        3,045,546    3,263,134       912,147   1972     various     12/30/87
  Clearfield, UT
Medford Hotel            12,500        4,611,076    4,623,576     1,185,528   1915     various     12/22/87
  Medford, OR
Heritage View            64,800        1,377,511    1,442,311       295,988   1988     various     12/30/87
  New Sweden, ME
Rolling Green           286,350        6,370,027    6,656,377     2,282,081   1974     various     09/30/87
Apartments
  Edmond, OK
Sierra Pointe           336,087        9,055,462    9,391,549     3,386,514   1973     various     09/30/87
Apartments
 Aurora, CO
Terrace Apartments      350,000        6,195,421    6,545,421     2,323,000   1970     various     11/20/87
  Oklahoma City, OK
Trenton Apartments      154,000        1,000,286    1,154,286       289,259   1925     various     12/30/87
  Salt Lake City, UT
Windsor Court           280,000        5,323,584    5,603,584     1,979,771   1974     various     12/30/87
Apartments
  Aurora, CO
Sierra Vista            434,866        8,073,023    8,507,889     3,023,674   1963     various     09/01/87
  Las Vegas, NV
Willow Peg              125,000        1,744,779    1,869,779       585,144   1989     various     03/01/88
Village
  Ricon, GA
Pebble Creek            734,800        9,760,416   10,495,216     2,269,210  1977/81   various     06/20/88
  Arlington, TX
</TABLE>

<PAGE>
<TABLE>


                       GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1996              
                     -------------------------------------------------------           
<CAPTION>


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

Low and Moderate
Income Apartment Complexes

<S>                      <C>           <C>          <C>             <C>       <C>      <C>         <C>
Pine Village             40,000        1,149,698    1,189,698       373,763   1988     various     03/01/88
  Pine Mountain, GA
Talbot Village           21,120          790,733      811,853       203,225   1988     various     03/01/88
  Talbolton, GA
Logan Plaza             969,289       13,628,418   14,597,707     3,106,024   1988     various     05/10/88
  New York, NY
Cass House              222,000       11,471,119   11,693,119     3,356,680   1988     various     06/08/88
  Boston, MA
Verdean Gardens         214,992       10,933,968   11,148,960     3,022,801   1989     various     05/31/88
  New Bedford, MA
Country Estates          22,500          734,409      756,909       262,366   1988     various     03/01/88
  Glenville, GA
Boulevard               318,000       14,458,791   14,776,791     4,243,111   1920     various     07/14/88
Commons
  Chicago, IL
Chestnut Lane            93,322        1,735,462    1,828,784       540,885   1989     various     08/01/88
  Newman, GA
600 Dakota               63,670          806,829      870,499       186,336   1988     various     10/01/88
Properties
  Wahpeton,  ND
Duluth                   24,000          377,024      401,024        92,310   1989     various     10/01/88
  Souix Falls, SD
Delmar                   75,000          518,423      593,423       165,797   1988     various     10/01/88
  Gillette, WY
Park Terrace            393,713        4,942,446    5,336,159     1,479,509   1989     various     01/20/89
  Dundalk, MD
Brentwood Manor II       44,980        1,128,165    1,173,145       438,101   1971     various     01/20/89
  Nashua, NH
Hillcrest Apts           17,000          737,839      754,839       205,252   1989     various     03/31/89
3
  Perryville, MO

                     -------------------------------------------------------
                     $6,307,475     $142,300,243 $148,607,718   $42,623,824
                     =======================================================
</TABLE>

(1) The  aggregate  cost for  Federal  Income Tax  purposes is  approximately  $
148,608,000.

                             * 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>

<TABLE>
<CAPTION>


Summary of property owned and accumulated depreciation:

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


Property Owned December 31, 1995                              Accumulated Depreciation December 31, 1995
---------------------------------------------------------     --------------------------------------------
Balance at beginning of period              $147,713,079      Balance at beginning of         $34,318,321
                                                              period
  Additions during period:                                      Additions during period:
     Other                            8,571                        Depreciation                 3,710,573
acquisitions
                                                                                        ------------------
     Improvements                   659,703                   Balance at close of             $38,028,894
etc.                                                          period
                                ------------                                            ==================
                                                 668,274
  Deductions during period:
     Cost of real estate and      (274,637)
fixed assets sold
     Reclassification to                  0
intangible assets
                                ------------
                                               (274,637)
                                            -------------
Balance at close of period                  $148,106,716
                                            =============


Property Owned December 31, 1994                              Accumulated Depreciation December 31, 1994
---------------------------------------------------------     --------------------------------------------
Balance at beginning of period              $148,207,928      Balance at beginning of         $29,420,795
                                                              period
  Additions during period:                                      Additions during period:
     Other                           27,064                        Depreciation                 4,897,526
acquisitions
                                                                                        ------------------
     Improvements                   228,450                   Balance at close of             $34,318,321
etc.                                                          period
                                ------------                                            ==================
                                                 255,514
  Deductions during period:
     Cost of real estate and      (750,363)
fixed assets sold
     Reclassification to                  0
intangible assets
                                ------------
                                               (750,363)
                                            -------------
Balance at close of period                  $147,713,079
                                            =============

</TABLE>
<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>
[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, 1995 and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
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, 1995,  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  19,  1996 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 19, 1996
<PAGE>

[Letterhead]

[LOGO]
Haran & Associates Ltd
Certified Public Accountants
Business Consultants

                         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, 1994 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.

As  more  fully  described  in  the  notes  to  the  financial  statements,  the
Partnership  has  expensed  construction  period  interest and real estate taxes
associated with the building.  In our opinion,  construction period interest and
taxes should be  capitalized  and  depreciated  over the life of the building to
conform with generally accepted accounting principles.  In addition, the Project
recognized  depreciation  for the building over a shorter useful life than would
be allowable under generally accepted accounting principles.  The effects on the
financial statements of the preceding practices are not reasonably determinable.

In our opinion, except for the effects of the matters discussed in the preceding
paragraph,  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, 1994, 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 supporting data included in this
report  (shown on pages 15 through 19) 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 25, 1995

<PAGE>

[Letterhead]

                                                             GELFOND HOCHSTADT
                                                                PANGBURN & CO.
                           A Professional Corporation
                          Certified Public Accountants
                            and Business Consultants
                                   Suite 2500
                                                                 1600 Broadway
                              Denver, CO 80202-4925
                       (303) 831-5000/Fax: (303) 831-5032
                                             A member of Horwath International
                                                                [Logo] HORWATH

                         INDEPENDENT AUDITORS' REPORT

To the Partners of
Sundance Housing Associates, Ltd.
Denver, Colorado

We have audited the accompanying  balance sheet of Sundance Housing  Associates,
Ltd., a limited partnership (the "Partnership"),  HUD Project No. 101-36614,  as
of December 31, 1995, and the related  statements of profit and loss, changes in
partners'  equity  (deficiency)  and cash  flow for the year then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Sundance Housing  Associates,
Ltd., HUD Project No.  101-36614 as of December 31, 1995, and the results of its
operations  and the changes in its  partners'  equity 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  issued by the U.S.  Department of Housing and
Urban  Development,  we have also issued a report dated  January 22, 1996 on our
consideration of the Partnership's  internal control structure and reports dated
January 22, 1996 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  pupose of  forming  an  opinion  on the basic
financial   statements  taken  as  a  whole.   The  accompanying   supplementary
information required by HUD shown on pages 13 to 18 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,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.


/s/ Gelfond Hochstadt Pangburn & Co.

Gelfond Hochstadt Pangburn & Co.
January 22, 1996

<PAGE>
[Letterhead]

                                                             GELFOND HOCHSTADT
                                                                PANGBURN & CO.
                           A Professional Corporation
                          Certified Public Accountants
                            and Business Consultants
                                   Suite 2500
                                                                 1600 Broadway
                              Denver, CO 80202-4925
                       (303) 831-5000/Fax: (303) 831-5032
                                             A member of Horwath International
                                                                [Logo] HORWATH

                         INDEPENDENT AUDITORS' REPORT

To the Partners of
Sundance Housing Associates, Ltd.
Denver, Colorado

We have audited the accompanying  balance sheet of Sundance Housing  Associates,
Ltd., a limited partnership (the "Partnership"),  HUD Project No. 101-36614,  as
of December 31, 1994, and the related  statements of profit and loss, changes in
partners'  equity  (deficiency)  and cash  flow for the year then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Sundance Housing  Associates,
Ltd., HUD Project No.  101-36614 as of December 31, 1994, and the results of its
operations  and the changes in its  partners'  equity and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

/s/ Gelfond Hochstadt Pangburn & Co.

Gelfond Hochstadt Pangburn & Co.
January 20, 1995


<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  parargraph,  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>
[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 22033

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, 1995,  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 present 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, 1995, and
the  results  of its  operations  and its cash  flows for the year then ended in
conformity with generally accepted accounting principles.

The accompany  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 6 to the financial statements,
the Partnership has incurred  substantial  losses from operations,  had negative
working  capital at  December  31,  1995,  and was three  months  delinquent  on
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 6. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.

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

/s/ Aronson, Fetridge & Weigle
<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 22033

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, 1994,  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 present 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, 1994, and
the  results  of its  operations  and its cash  flows for the year then ended in
conformity with generally accepted accounting principles.

The accompany  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 6 to the financial statements,
the Partnership has incurred  substantial  losses from operations,  had negative
working  capital at  December  31,  1994,  and was three  months  delinquent  on
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 6. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ Aronson, Fetridge & Weigle

<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.

January 27, 1997

<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, 1995,  and the related  statements of
changes in partners' equity  (deficit),  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, 1995, and the results of its operations, its cash
flows and  changes  in  partners'  equity  (deficit)  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  financial  statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

                            /s/ Ziner & Company, P.C.

January 23, 1996

<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, 1994,  and the related  statements of
changes in  partners'  deficit,  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, 1994, and the results of its operations, its cash
flows and changes in  partners'  deficit  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 I 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  financial  statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

                            /s/ Ziner & Company, P.C.

January 23, 1995

<PAGE>
[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, 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.

January 27, 1997


<PAGE>
[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, 1995,  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 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 Verdean  Gardens  Associates
Limited  Partnership as of December 31, 1995, 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.

January 26, 1996


<PAGE>
[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, 1994,  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 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 Verdean  Gardens  Associates
Limited  Partnership as of December 31, 1994, and the results of its operations,
its cash flows and its changes in  partners'  deficit for the year then ended in
conformity with generally accepted accounting principles.

                            /s/ Ziner & Company, P.C.

January 27, 1995
<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 Janaury 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>

 [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,  1995  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  with  generally  accepted  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, 1995 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 February 15, 1996 on my consideration of Medford Hotel Associates  Limited
Partnership's internal control structure and a report dated February 15, 1996 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
February 15, 1996


<PAGE>
[Letterhead]

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

Partners                                             HUD Field Office Director
Medford Hotel Associates Limited Partnership                  Portland, Oregon

   I have  audited  the  balance  sheet  of  Medford  Hotel  Associates  Limited
Partnership  (an Oregon  limited  partnership)  as of December  31, 1994 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 with  generally  accepted  government  auditing  standards for financial and
compliance audits 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, 1994 and the results of its operations and
its cash flows for the year then ended,  in conformity  with generally  accepted
accounting principles.

                              /s/ Robert Stephenson

Manhattan Beach, California
February 13, 1995
EIN 95-3497150

<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>
[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,  1995  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 with  generally  accepted  government  auditing  standards for financial and
compliance audits 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, 1995 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 February 15, 1996 on my  consideration  of Oregon  Landmark-Three  Limited
Partnership's internal control structure and a report dated February 15, 1996 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
February 15, 1996


<PAGE>
[Letterhead]

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

Partners                                             HUD Field Office Director
Oregon Landmark-Three Limited Partnership                     Denver, Colorado

   I have audited the balance sheet of Oregon Landmark-Three Limited Partnership
(an  Oregon  limited  partnership)  as of  December  31,  1994  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 with  generally  accepted  government  auditing  standards for financial and
compliance audits 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, 1994 and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted  accounting
principles.

                              /s/ Robert Stephenson

Manhattan Beach, California
February 15, 1995
EIN 95-3497150

<PAGE>
[Letterhead]
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>
[Letterhead]
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, 1995 and the
related  statements  of profit and loss,  changes in  partners'  equity and cash
flows for the year then ended. These financial statements are the responsibility
of the  Project's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
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, 1995, 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, 1996, on our
consideration of Trenton Apartments,  Ltd. (a limited  partnership) (HUD Project
No. 105-94006) internal control structure and reports dated January 16, 1996, 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 20)  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, 1996


<PAGE>
[Letterhead]

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, 1994 and the
related  statements  of profit and loss,  changes in  partners'  equity and cash
flows for the year then ended. These financial statements are the responsibility
of the  Project's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
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, 1994, 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.

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  13 to 19)  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 24, 1995

<PAGE>
[Letterhead]

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 complience 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>
[Letterhead]

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, 1995
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 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,
1995, 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 25, 1996, on our
consideration of Lakeview Heights Apartments,  Ltd. (a limited partnership) (HUD
Project No. 105-94007)  internal control structure and reports dated January 25,
1996,  on its  complience  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 21)  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 25, 1996

<PAGE>
[Letterhead]
                        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, 1994
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 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,
1994, 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.

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  13 to 19)  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 24, 1995

<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. (a Limited  Partnership)  as of  December  31,  1995,  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. (a Limited  Partnership)  as of  December  31,  1995,  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 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,  we have also issued reports
dated  February  21,  1996,  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
February 21, 1996                             Identification Number:
                                                          52-1088612

Audit Principal: Phillip A. Weitzel
<PAGE>
[Letterhead]

[Logo]
Coopers                                               Coopers & Lybrand L.L.P.
&Lybrand                                          a professional services firm

                      REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Windsor Court Housing Associates, Ltd.
(a Limited Partnership):

We have  audited  the  accompanying  balance  sheet  of  Windsor  Court  Housing
Associates,  Ltd. (a Limited  Partnership),  HUD Project  No.  101-36615,  as of
December  31,  1994 and the  related  statements  of profit and loss,  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  Windsor  Court  Housing
Associates,  Ltd. (a Limited  Partnership),  HUD Project  No.  101-36615,  as of
December 31, 1994 and the results of its  operations  and its cash flows for the
year then ended in conformity with generally accepted accounting principles.

As discussed in Note 5 to the financial statements,  in connection with the 1993
Section 8 Moderate  Rehabilitation  Program  audit,  HUD has  asserted  that the
Partnership  violated  certain  requirements  related  to the  displacement  and
relocation of tenants while the project was undergoing renovation. HUD estimates
that it is entitled to recoup approximately  $1,959,000 in past subsidy payments
and to reduce  future  subsidy  payments by  approximately  $4,442,000  over the
remainder of the HAP contract.  Without these subsidies, the Partnership may not
be able to continue to operate as a going concern.  HUD has not yet attempted to
enforce its position, but should HUD do so, the Partnership has asserted that it
intends  to  vigorously  contest  the  matter.  The  ultimate  outcome  of  this
threatened litigation cannot presently be determined.  Accordingly, no provision
for potential loss regarding this matter has been reflected in the  accompanying
financial statements.

                          /s/ Coopers & Lybrand L.L.P.

Boston, Massachusetts
February 1, 1995

<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, 1995, 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, 1995, 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 21 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 the 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,  we have also issued reports
dated February 23, 1996, 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
February 21, 1996                             Identification Number:
                                                          52-1088612

Audit Principal: Phillip A. Weitzel

<PAGE>
[Letterhead]

[Logo]
Coopers                                               Coopers & Lybrand L.L.P.
&Lybrand                                          a professional services firm

                      REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Terrace Housing Associates, Ltd.
(a Limited Partnership):

We have audited the  accompanying  balance sheet of Terrace Housing  Associates,
Ltd. (a Limited  Partnership),  HUD Project No.  117-36608,  as of December  31,
1994,  and  the  related  statements  of  profit  and  loss,   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 Terrace Housing  Associates,
Ltd. (a Limited Partnership), HUD Project No. 117-36608 as of December 31, 1994,
and the results of its operations and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.

                          /s/ Coopers & Lybrand L.L.P.

Boston, Massachusetts
February 1, 1995

<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, 1995, 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, 1995, 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 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,  we have also issued reports
dated  February  13,  1996,  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
February 13, 1996                             Identification Number:
                                                          52-1088612

Audit Principal: Phillip A. Weitzel


<PAGE>
[Letterhead]

[Logo]
Coopers                                               Coopers & Lybrand L.L.P.
&Lybrand                                          a professional services firm

                      REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Rolling Green Housing Associates, Ltd.
(a Limited Partnership):

We have  audited  the  accompanying  balance  sheet  of  Rolling  Green  Housing
Associates,  Ltd. (a Limited  Partnership),  HUD Project  No.  117-36603,  as of
December  31,  1994 and the  related  statements  of profit and loss,  partners'
equity  (deficiency),  and cash flows for the year then ended.  These  financial
statements are the  responsibility  of the General  Partners of the Partnership.
Our responsibility is to express an opinion on these financial  statements based
on our audit.

We conducted our audit in accordance with generally  accepted auditing standards
and Government  Auditing  Standards,  issued by the  Comptroller  General of the
United  States.  Those  standards  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by the  General  Partners of the  Partnership,  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. (a Limited  Partnership),  HUD Project  No.  117-36603,  as of
December 31, 1994 and the results of its  operations  and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

                          /s/ Coopers & Lybrand L.L.P.

Boston, Massachusetts
February 1, 1995

<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, 1995, 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, 1995, 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 21 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 the 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,  we have also issued reports
dated  February  23,  1996,  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
February 23, 1996                             Identification Number:
                                                          52-1088612

Audit Principal: Phillip A. Weitzel

<PAGE>
[Letterhead]

[Logo]
Coopers                                               Coopers & Lybrand L.L.P.
&Lybrand                                          a professional services firm

                      REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Sierra Vista Housing Associates, Ltd.
(a Limited Partnership):

We  have  audited  the  accompanying  balance  sheet  of  Sierra  Vista  Housing
Associates,  Ltd. (a Limited  Partnership),  HUD Project  No.  125-94004,  as of
December  31, 1994,  and the related  statements  of profit and loss,  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  Sierra  Vista  Housing
Associates,  Ltd. (a Limited  Partnership),  HUD Project  No.  125-94004,  as of
December 31, 1994, and the results of its operations and cash flows for the year
then ended, in conformity with generally accepted accounting principles.

As discussed in Note 5 to the financial statements,  in connection with the 1993
Section 8 Moderate  Rehabilitation  Program  audit,  HUD has  asserted  that the
Partnership  violated  certain  requirements  related  to the  displacement  and
relocation of tenants while the project was undergoing renovation. HUD estimates
that it is entitled to recoup approximately  $4,143,000 in past subsidy payments
and to reduce  future  subsidy  payments by  approximately  $9,516,000  over the
remainder of the HAP contract.  Without these subsidies, the Partnership may not
be able to continue to operate as a going concern.  HUD has not yet attempted to
enforce its position, but should HUD do so, the Partnership has asserted that it
intends  to  vigorously  contest  the  matter.  The  ultimate  outcome  of  this
threatened litigation cannot presently be determined.  Accordingly, no provision
for potential  loss  regarding  this matter has been  reflected in the financial
statements.

                          /s/ Coopers & Lybrand L.L.P.

Boston, Massachusetts
February 1, 1995

<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,  HUD Project No. 123- 36605,  as of December 31, 1996 and 1995, 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, 1996 and 1995, 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 also issued a report dated February 4, 1997, on our
consideration of the Partnership's  internal control structure and reports, also
dated February 4, 1997, on its compliance with specific requirements  applicable
to major HUD programs and specific  requirements  applicable to Affirmative Fair
Housing.

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 4, 1997

Other Auditor information:
Lead Auditor - Donald R. Smith
Federal I.D. Number - 42-1104473

<PAGE>
[Letterhead]

[Logo]        VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
              Certified Public Accountants and Business Advisors

                         INDEPENDENT AUDITOR'S REPORT

To the Partners
Coronado Courts Limited Partnership

We have  audited the  accompanying  balance  sheets of Coronado  Courts  Limited
Partnership,  HUD Project No. 123- 36605,  as of December 31, 1995 and 1994, and
the related statements of profit and loss,  partners' capital and cash flows for
the years then ended.  These financial  statements are the responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
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, 1995 and 1994, 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 February 1, 1996, on our
consideration of the Partnership's  internal control structure and reports dated
February 1, 1996, on its  complience  with specific  requirements  applicable to
major HUD programs,  and specific  requirements  applicable to Affirmative  Fair
Housing.

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 1, 1996

Other Auditor Information:
Lead Auditor - Michael W. McNichols
Federal I.D. Number - 42-1104473

<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.

February 12, 1996

<PAGE>

[Letterhead]

[LOGO] Freedberg, Derba & Tardiff, P.C.
Certified Public Accountants

                         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, 1995, 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, 1995, 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  13,  1996 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.

February 13, 1996

<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, 1994, 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, 1994, 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.

/s/ Freedberg, Derba & Tardiff, P.C.

February 14, 1995

<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, 1996 and 1995,  and the related  statements  of
operations,  partners' equity (deficit) and cash flows for the years then ended.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Hughes  Apartments  Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

The  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 was unable to pay all of the required bond
payments  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 18, 1997

<PAGE>
[Letterhead]

                                    [LOGO]
                      Charles Bailly & Company P.L.L.P.
                  Certified Public Accountants * Consultants

                         INDEPENDENT AUDITOR'S REPORT

The Partners
Hughes Apartments Limited Partnership
Wahpeton, North Dakota

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

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

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

The  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 was unable to pay all of the required bond
payments  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 19, 1996
<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, 1996 and 1995,  and the related  statements  of
operations,  partners'  equity and cash flows for the years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of 600 Dakota Properties Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/ Charles Bailly & Company P.L.L.P.

Fargo, North Dakota
January 18, 1997

<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, 1995 and 1994,  and the related  statements  of
operations,  partners'  equity and cash flows for the years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of 600 Dakota Properties Limited
Partnership  as of December 31, 1995 and 1994, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/ Charles Bailly & Company P.L.L.P.

Fargo, North Dakota
January 22, 1996

<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>
 [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,  1995,  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, 1995,  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 22, 1996, on our
consideration of Duluth Limited  Partnership's  internal  control  structure and
reports  dated January 22, 1996, 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 22, 1996

<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,  1994,  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, 1994,  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  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, 1995

<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, 1996 and 1995,  and the related  statements  of
operations,  partners'  equity and cash flows for the years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of  Barrington  Manor  Limited
Partnership  as of December 31, 1996 and 1995, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

/s/ Charles Bailly & Company P.L.L.P.

Fargo, North Dakota
January 18, 1997
<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, 1995 and 1994,  and the related  statements  of
operations,  partners'  equity and cash flows for the years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

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

/s/ Charles Bailly & Company P.L.L.P.

Fargo, North Dakota
January 17, 1996

<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, 1996 and 1995,  and the related  statements  of
operations,  partners'  equity and cash flows for the years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Graver Inn Limited Partnership
as of December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted  accounting
principles.

/s/ Charles Bailly & Company P.L.L.P.

Fargo, North Dakota
January 18, 1997
<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, 1995 and 1994,  and the related  statements  of
operations,  partners'  equity and cash flows for the years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

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

/s/ Charles Bailly & Company P.L.L.P.

Fargo, North Dakota
January 17, 1996


<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
February 28, 1997
<PAGE>
[Letterhead]

David C. Moja, C.P.A., P.C.
P.O. Box 14212
5 Oglethorpe Professional Blvd.
Savannah, Georgia 31416
(912)354-4141

                         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, 1995 and December
31, 1994, 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
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, 1995 and December
31,  1994,  and the results of its  operations  and its cash flows for the years
then ended in conformity with generally accepted accounting principles.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The additional  information listed in the
table of contents is presented for purposes of additional  analysis and is not a
required part of the basic financial  statements.  Such information,  except for
the  portion  marked  "unaudited",  on which we  express  no  opinion,  has been
subjected  to the  procedures  applied  in the  audits  of the  basic  financial
statements and, in our opinion,  is fairly presented in all material respects in
relation to the basic financial statements taken as a whole.

/s/ David C. Moja

David C. Moja, C.P.A., P.C.

March 12, 1996
Savannah, Georgia

<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


February 28, 1997
<PAGE>
[Letterhead]

David C. Moja, C.P.A., P.C.
P.O. Box 14212
5 Oglethorpe Professional Blvd.
Savannah, Georgia 31416
(912)354-4141

                         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, 1995 and December 31, 1994, 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  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  Glennville  Properties  (a
Georgia Limited  Partnership) as of December 31, 1995 and December 31, 1994, and
the  results  of its  operations  and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The additional  information listed in the
table of contents is presented for purposes of additional  analysis and is not a
required part of the basic financial  statements.  Such information,  except for
the  portion  marked  "unaudited",  on which we  express  no  opinion,  has been
subjected  to the  procedures  applied  in the  audits  of the  basic  financial
statements and, in our opinion,  is fairly presented in all material respects in
relation to the basic financial statements taken as a whole.

/s/ David C. Moja

David C. Moja, C.P.A., P.C.

March 11, 1996
Savannah, Georgia


<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, 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 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


February 28, 1997

<PAGE>
[Letterhead]

David C. Moja, C.P.A., P.C.
P.O. Box 14212
Savannah, Georgia 31416
(912)354-4141

                         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, 1995 and December
31, 1994, 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
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, 1995 and December
31,  1994,  and the results of its  operations  and its cash flows for the years
then ended in conformity with generally accepted accounting principles.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The additional  information listed in the
table of contents is presented for purposes of additional  analysis and is not a
required part of the basic financial  statements.  Such information,  except for
the  portion  marked  "unaudited",  on which we  express  no  opinion,  has been
subjected  to the  procedures  applied  in the  audits  of the  basic  financial
statements and, in our opinion,  is fairly presented in all material respects in
relation to the basic financial statements taken as a whole.

/s/ David C. Moja

David C. Moja, C.P.A., P.C.

March 12, 1996
Savannah, Georgia

<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, 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 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

February 28, 1997

<PAGE>
[Letterhead]

David C. Moja, C.P.A., P.C.
P.O. Box 14212
Savannah, Georgia 31416
(912)354-4141

                         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, 1995 and December
31, 1994, 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  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  Talbot  Village  Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1995 and December
31,  1994,  and the results of its  operations  and its cash flows for the years
then ended in conformity with generally accepted accounting principles.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The additional  information listed in the
table of contents is presented for purposes of additional  analysis and is not a
required part of the basic financial  statements.  Such information,  except for
the  portion  marked  "unaudited",  on which we  express  no  opinion,  has been
subjected  to the  procedures  applied  in the  audits  of the  basic  financial
statements and, in our opinion,  is fairly presented in all material respects in
relation to the basic financial statements taken as a whole.

/s/ David C. Moja

David C. Moja, C.P.A., P.C.

March 11, 1996
Savannah, Georgia



<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

February 28, 1997

<PAGE>
[Letterhead]

David C. Moja, C.P.A., P.C.
P.O. Box 14212
Savannah, Georgia 31416
(912)354-4141

                         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, 1995 and December
31, 1994, 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
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, 1995 and December
31,  1994,  and the results of its  operations  and its cash flows for the years
then ended in conformity with generally accepted accounting principles.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The additional  information listed in the
table of contents is presented for purposes of additional  analysis and is not a
required part of the basic financial  statements.  Such information,  except for
the  portion  marked  "unaudited",  on which we  express  no  opinion,  has been
subjected  to the  procedures  applied  in the  audits  of the  basic  financial
statements and, in our opinion,  is fairly presented in all material respects in
relation to the basic financial statements taken as a whole.

/s/ David C. Moja

David C. Moja, C.P.A., P.C.

March 12, 1996
Savannah, Georgia



<PAGE>
[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

                                February 4, 1997
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,  1996,  and the related
statements of profit and loss, changes in partners' capital,  and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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, 1996,  and the results of its  operations  and its
cash  flows  for the year  then  ended in  conformity  with  generally  accepted
accouting principles.

                            /s/ Macdonald Page & Co.

                          Certified Public Accountants


<PAGE>
[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

                                                             February 14, 1996
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,  1995,  and the related
statements of profit and loss,  changes in partners'  capital and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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, 1995,  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.

                          Certified Public Accountants


<PAGE>
[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

                                                             February 10, 1995
Bingham Family Housing Associates
224 Maine Avenue
Gardiner, Maine

We have audited the accompanying statement of assets,  liabilities and partners'
capital--income  tax basis of  Bingham  Family  Housing  Associates  (a  limited
partnership) as of December 31, 1994, and the related  statements of revenue and
expenses--income tax basis, changes in partners'  capital--income tax basis, and
cash flows--income tax basis for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

As described in Note 1, these financial statements were prepared on the basis of
accounting  the   Partnership   uses  for  income  tax  purposes,   which  is  a
comprehensive  basis of  accounting  other than  generally  accepted  accounting
principles.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the assets,  liabilities and partners' capital of Bingham
Family Housing Associates as of December 31, 1994, and its revenue and expenses,
changes  in  partners'  capital,  and cash  flows for the year then ended on the
basis of accounting described in Note 1.

                            /s/ Macdonald Page & Co.

                          Certified Public Accountants


<PAGE>
[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

                                February 4, 1997
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, 1996, and the related  statements of
profit and loss,  changes in partners'  capital and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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, 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.

                          Certified Public Accountants
<PAGE>
[Letterhead]

                             [Logo] macdonaldpage
Independent Auditors' Report

                                                             February 14, 1996
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, 1995, and the related  statements of
profit and loss,  changes in partners'  capital and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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, 1995,  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.

                          Certified Public Accountants
<PAGE>
[Letterhead]

                             [Logo] macdonaldpage
                         Certified Public Accountants
        30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701
              P.O. Box 2389 Augusta, Maine 04338 (207) 621-0330

Independent Auditors' Report

                                                             February 10, 1995
Birmingham Housing Associates
 (a Limited Partnership)
224 Maine Avenue
Gardiner, Maine

We have audited the accompanying statement of assets,  liabilities and partners'
capital--income   tax  basis  of  Birmingham   Housing   Associates  (a  limited
partnership) as of December 31, 1994, and the related  statements of revenue and
expenses--income tax basis, changes in partners'  capital--income tax basis, and
cash flows--income tax basis for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

As described in Note 1, these financial statements were prepared on the basis of
accounting  the   Partnership   uses  for  income  tax  purposes,   which  is  a
comprehensive  basis of  accounting  other than  generally  accepted  accounting
principles.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  assets,  liabilities  and  partners'  capital  of
Birmingham Housing  Associates (a Limited  Partnership) as of December 31, 1994,
and its revenue and expenses,  changes in partners' capital,  and cash flows for
the year then ended on the basis of accounting described in Note 1.

                            /s/ Macdonald Page & Co.

                          Certified Public Accountants

<PAGE>
[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

                                February 4, 1997
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, 1996, and the related  statements of
profit and loss,  changes in partners'  capital and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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, 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.

                          Certified Public Accountants

<PAGE>
[Letterhead]

                             [Logo] macdonaldpage

Independent Auditors' Report

                                                             February 14, 1996
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, 1995, and the related  statements of
profit and loss,  changes in partners'  capital and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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, 1995,  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.

                          Certified Public Accountants


<PAGE>
[Letterhead]

Independent Auditors' Report

                                                             February 10, 1995
New Sweden Housing Associates
224 Maine Avenue
Gardiner, Maine

We have audited the accompanying statement of assets,  liabilities and partners'
capital--income   tax  basis  of  New  Sweden  Housing   Associates  (a  limited
partnership) as of December 31, 1994, and the related  statements of revenue and
expenses--income tax basis, changes in partners'  capital--income tax basis, and
cash flows--income tax basis for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

As described in Note 1, these financial statements were prepared on the basis of
accounting  the   Partnership   uses  for  income  tax  purposes,   which  is  a
comprehensive  basis of  accounting  other than  generally  accepted  accounting
principles.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the assets,  liabilities  and partners'  capital of New
Sweden Housing Associates as of December 31, 1994, and its revenue and expenses,
changes  in  partners'  capital,  and cash  flows for the year then ended on the
basis of accounting described in Note 1.

                            /s/ Macdonald Page & Co.

                          Certified Public Accountants

<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, 1996 and 1995,  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,  1996 and 1995,  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  February  5, 1997,  on our  consideration  of  HAZEL-WINTHROP  APARTMENTS
internal control structure and reports dated February 5, 1997, 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, 1997
<PAGE>
[Letterhead]

                                    [LOGO]
                            Haran & Associates Ltd
                         Certified Public Accountants


                         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, 1995 and 1994,  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, 1995 and 1994,  and its profit and 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 26,  1996,  on our  consideration  of  HAZEL-WINTHROP  APARTMENTS
internal control structure and reports dated January 26, 1996, on its complience
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 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 26, 1996

<PAGE>
[Letterhead]

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, 1996 and 1995,  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,  1996  and  1995,  and  the  results  of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ Billie J. Burnett

Billie J. Burnett
January 8, 1997
<PAGE>
[Letterhead]

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, 1995 and 1994,  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,  1995  and  1994,  and  the  results  of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ Billie J. Burnett

Billie J. Burnett
February 7, 1996



<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, 1996 and 1995, 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,  1996 and 1995,  and the  results of its  opertaions,  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  21,  1997 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 Affirmative Fair Housing.


Our  audit  was  made 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 23 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

January 21, 1997
<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,  1995 and  1994,  and the  related  statements  of  income,
partners'  capital,  and cash flows for the years then  ended.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our 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.

As discussed in Note 3 to financial statements, 1995 the Partnership changed its
method of computing  depreciation to conform with generally accepted  accounting
principals.

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
a report  dated  January 24, 1996,  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 Affirmative Fair Housing.


Our audit was made for the purpose of forming an opinion on the basic  financial
statements taken as a whole. The accompanying  information  shown on pages 14 to
23 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

January 24, 1996
<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>
 [Letterhead]

Michael Sczekan & Co., P.C.

                         INDEPENDENT AUDITOR'S REPORT

To the Owners of                                          Chief-Loan Management
Delmar Housing Associates Limited Partnership   Continental Wingate Associates
Denver, Colorado                                         Boston, Massachusetts

We have audited the  accompanying  Balance  Sheet of Delmar  Housing  Associates
Limited Partnership,  FHA Project Number 109-94004 REF, as of December 31, 1995,
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, 1995 and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

In accordance with Government Auditing  Standards,  we have also issued a report
dated  February 23, 1996,  on our  consideration  of Delmar  Housing  Associates
Limited Partnership's internal control structure and a report dated February 23,
1996, 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 23, 1996


<PAGE>
[Letterhead]

Michael Sczekan & Co., P.C.

                         INDEPENDENT AUDITOR'S REPORT

To the Owner of                                          Chief-Loan Management
Delmar Housing Associates Limited Partnership   Continental Wingate Associates
Denver, Colorado                                         Boston, Massachusetts

We have audited the  accompanying  Balance  Sheet of Delmar  Housing  Associates
Limited Partnership,  FHA Project Number 109-94004 REF, as of December 31, 1994,
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, and the Consolidated Audit Guide,  issued by the U.S.  Department
of Housing and Urban  Development,  Office of Inspector  General in July,  1993.
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, 1994 and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

Our audit was 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 22 are 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 2, 1995

<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>
[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, 1995,  and the related  statements of profit and
loss (on HUD Form No. 92410),  partners' equity and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

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

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 29
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,  we have also issued a report
dated  January  16,  1996,  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 16, 1996                                        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, 1994,  and the related  statements of profit and
loss (on HUD Form No. 92410),  partners' equity and cash flows for the year then
ended.  These financial  statements are the  responsibility of the Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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, 1994, and the results of its operations,  changes
in partners'  equity and cash flows for the year then ended,  in conformity with
generally accepted accounting principles.

<PAGE>
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 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.

                                                /s/ Reznick Fedder & Silverman

Baltimore, Maryland
January 9, 1995

<PAGE>
[Letterhead]

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, 1996, and the related  statements of
operations,  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.
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 1996 financial statements referred to above present fairly,
in all material respects,  the financial position of Perryville  Associates,  I,
L.P. as of December  31,  1996,  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.

The 1995 financial  statements were compiled by us and our report theron,  dated
February  9,  1996,  stated  that we did not  audit or  review  those  financial
statements and, accordingly,  expressed no opinion or other form of assurance on
them.

/s/Mueller,  Walla & Albertson, P.C.

Mueller,  Walla & Albertson, P.C.
Certified Public Accountants

January 21, 1997                                          1
              MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
              MISSOURI SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>

[Letterhead]
MUELLER,  WALLA & ALBERTSON, P.C.

                         ACCOUNTANTS' COMPILATION 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, 1995, 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 Certificate Public Accounts.

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
an opinion or any other form of assurance on them.

The financial  statements for the year ended December 31, 1994,  were audited by
us, and we expressed an unqualified opinion on them in our report dated February
6, 1995, but we have not performed any auditing procedures since that date.

/s/Mueller,  Walla & Albertson, P.C.

Mueller,  Walla & Albertson, P.C.
Certified Public Accountants

February 9, 1996
<PAGE>
[Letterhead]

                            MUELLER,  WALLA & ALBERTSON, P.C.

                         INDEPENDENT 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, 1994, and the related  statements of
operations,  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.
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 1994 financial statements referred to above present fairly,
in all material  respects,  the financial  position of Perryville  Associates I,
L.P. as of December  31,  1994,  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.

The 1993 financial statements were compiled by us and our report thereon,  dated
January  19,  1994,  stated  that we did not  audit or  review  those  financial
statements and, accordingly,  expressed no opinion or other form of assurance on
them.

/s/ Mueller,  Walla & Albertson, P.C.

Mueller,  Walla & Albertson, P.C.
Certified Public Accountants

February 6, 1995
<PAGE>

                                            2225 NEW YORK AVENUE, LTD.

                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607

                                           AUDITED FINANCIAL STATEMENTS
                                          AND OTHER FINANCIAL INFORMATION

                                                 DECEMBER 31, 1996


                        LEAD AUDITOR:         Gerald R. Aronson, CPA
                                              Aronson, Fetridge & Weigle
                                              6116 Executive Blvd., Fifth Floor
                                              Rockville, Maryland  20852
                                              (301) 231-6200
                                              Federal I.D.# 52-0987391


<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                                 TABLE OF CONTENTS


                  TITLE                                                PAGE

INDEPENDENT AUDITOR'S REPORT...........................................1 - 2

AUDITED FINANCIAL STATEMENTS

   BALANCE SHEET ...........................................           3 - 4

   STATEMENT OF PROFIT AND LOSS................... ....................5 - 6

   STATEMENT OF PARTNERS' CAPITAL .....................................7

   STATEMENT OF CASH FLOWS.............................................8

   NOTES TO FINANCIAL STATEMENTS.......................................9 - 12

OTHER FINANCIAL INFORMATION
   SUPPORTING DATA REQUIRED BY HUD....................................13 - 21

   REPORT ON INTERNAL CONTROL STRUCTURE...............................22 - 23

   REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS
      APPLICABLE TO MAJOR HUD PROGRAMS................................24

   REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS
      APPLICABLE TO AFFIRMATIVE FAIR HOUSING..........................25

   SCHEDULE OF FINDINGS AND QUESTIONED COSTS..........................26

   AUDITOR'S COMMENTS ON AUDIT RESOLUTION MATTERS
      RELATING TO HUD PROGRAMS........................................27

   CERTIFICATE OF PARTNERS............................................28

   MANAGEMENT AGENT CERTIFICATION.....................................29


<PAGE>






                        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
Fairfax, Virginia                                 Fort Worth, Texas  76113-2905


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  present  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.





<PAGE>



                     Independent Auditor's Report (Continued)



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 factor raise substantial doubt about the Partnership's
ability to continue as a going  concern.  Management's  plans in regard to these
matters are also  described in Note 6. 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
are 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/Arnson, Fetridge & Weigle

Rockville, Maryland
January 12, 1997


<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                                   BALANCE SHEET
                                                 DECEMBER 31, 1996

                                                      ASSETS
<TABLE>
<CAPTION>

<S>                                                    <C>          <C>
CURRENT ASSETS
            Petty cash                                 $        300                         
            Cash in bank                                     40,136                         
            Other accounts receivable (Note 2)              143,134                         
            Prepaid property and liability insurance         11,707                         
                                                            -------
                           Total current assets            $        195,277

DEPOSITS HELD IN TRUST-FUNDED
       Tenant security deposits (contra)                             35,535
                                                                                            
RESTRICTED DEPOSITS AND FUNDED RESERVES
       Mortgage escrow deposits (Note 3)                    303,469
       Reserve for replacement                               45,370
                                                            -------
           Total restricted deposits and funded reserves             348,839

FIXED ASSETS (NOTES 1 AND 4)
        Land                                                734,800
        Buildings and equipment                           9,760,416
                                                          --------- 
                  Total fixed assets                     10,495,216
        Less:  Accumulated depreciation                  (2,269,210)
                                                          ---------
                                        Net fixed assets           8,226,006
OTHER ASSETS
1900   Deferred financing costs, net of accumulated amortization
      of $91,251 
(Note 1)                                                             379,710
                                                                   ---------
                                            TOTAL ASSETS     $     9,185,367
</TABLE>

The  accompanying  Notes to Financial  Statements  are an integral part of these
financial statements.


<PAGE>









                        LIABILITIES AND PARTNERS' CAPITAL
<TABLE>
<CAPTION>

<S>                                            <C>      <C>   
CURRENT LIABILITIES
Accounts payable and accrued expenses          $127,611
Accrued real estate taxes                       139,251                                   
Accrued interest payable(Note 4)                765,391                                                                          
Mortgage payable-current portion (Note 4)     7,945,275                            
Prepaid rents                                     1,051           
                                           --------                                              
                    Total current liabilities     $     8,978,579
                                                                         
DEPOSIT LIABILITIES                                                                                            
Tenant security deposits (contra)                          23,312                                                             
                                                                                             
LONG-TERM LIABILITIES
Due to general partner (Note 5)                 280,406
Due to affiliates (Note 5)                      114,361                                                                       
Due to limited partner (Note 5)                  10,000
                                                -------
                    Total long-term liabilities           404,767
                                                        ---------
                            Total liabilities           9,406,658

PARTNERS'CAPITAL                                         (221,291)                                                                  
                                                       ----------

TOTAL LIABILITIES AND PARTNERS' CAPITAL           $     9,185,367
                                                       ==========
</TABLE>
     


                                                          


<PAGE>


                U.S. Department of Housing and Urban Development
                 Office of Housing Federal Housing Commissioner
                          STATEMENT OF PROFIT AND LOSS
                      For the Year Ended December 31, 1996

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                                   2225 New York Avenue
January 1, 1996 December 31, 1996     113-36607              T/A Pebble Creek
<TABLE>
<CAPTION>

<S>                                                              <C>                    <C>
Rental Income

Apartment or Member Carrying Charges (Coops)                     $         371,200
Tenant Assistance Payments                                               1,855,520
Total Rent Revenue Potential at 100% Occupancy                                          2,226,720

Vacancies

Apartments                                                                (159,142)
Total Vacancies                                                                          (159,142)
                                                                                          -------
Net Rental Revenue Less Vacancies                                                       2,067,578
Interest Income - Project Operations                                         1,235
Income from investments - Reserves for Replacements                            555
Total Financial Revenue                                                                     1,790
Other Revenue
Laundry and Vending                                                          7,348
NSF and Late Charges                                                         1,310
Damages and Cleaning Fees                                                   20,510
Forfeited Tenant Security Deposits                                           2,100
Other Revenue (specify) pay telephone, misellaneous                          7,562
Total Other Revenue                                                                        38,830
                                                                                          -------
Total Revenue                                                                           2,108,198

Administrative Expenses
Advertising                                                                  3,462
Other Administrative Expense                                                 9,961
Office Salaries                                                             67,079
Office Supplies                                                             13,697
Management                                                                  84,030
Manager or Superintendent Salaries                                          35,822
Legal Expenses (Project)                                                     2,654
Bookeeping Fees / Accounting Service                                         8,500
Telephone and Answering Service                                              8,972
Miscellaneous Administrative Expenses (specify)                             12,899
Total Administrative Expenses                                                             247,077
Electricity (Light and Misc. Power)                                         50,040
Water                                                                      171,387
Gas                                                                         28,348
Total Utilities Expense                                                                   249,775
</TABLE>

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

<PAGE>

Limited Partnership                                          113-36607
<TABLE>
<CAPTION>

<S>                                                                        <C>          <C>
Janitor and Cleaning Supplies                                                  106
Janitor and Cleaning Contract                                                9,626
Exterminating Payroll/ Contract                                              8,725
Garbage and Trash Removal                                                   18,517
Security Payroll/ Contract                                                  68,385
Grounds Payroll                                                             17,697
Grounds Contract                                                            24,656
Repairs Payroll                                                             95,170
Repairs Material                                                           328,673
Repairs Contract                                                            39,338
Elevator Maintenance / Contract                                              6,486
Heating/ Cooling Repairs and Maintenance                                    22,019
Swimming Pool Maintenance/ Contract                                          8,316
Decorating Payroll/ Contract                                                15,031
Total Operating and Maintenance Expenses                                                  662,745

Real Estate Taxes                                                          139,251
Miscellaneous Taxes, Licenses and Permits                                   17,508
Property and Liability Insurance (Hazard)                                   63,212
Health Insurance and Other Employee Benefits                                40,074
Other Insurance (specify)                                                       80
Total Taxes and Insurance                                                                 260,124

Interest on Mortgage Payable                                               852,610
Mortgage Insurance Premium /Service Charge                                  39,752
Miscellaneous Financial Expenses                                            11,776
Total Financial Expenses                                                                  904,138
               
Total Cost of Operations Before Depreciation                                            2,323,859
Profit (Loss) before Depreciation                                                        (215,661)
Depreciation (Total)                                                                      238,223
Operating Profit or (Loss)                                                               (453,884)
Net Profit or (Loss)                                                                     (453,884)
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                                                26,312
2. Replacement Reserve deposits required by the Regulatory
Agreement or Amendments thereto, even if payments may be
temporarily suspended or waived                                                            32,520
</TABLE>

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


<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                          STATEMENT OF PARTNERS' CAPITAL
                                       FOR THE YEAR ENDED DECEMBER 31, 1996


                                                           
<TABLE>
<CAPTION>
<S>                                                                  <C>              <C>               <C>  
                                                                                          Limited             
                                                                                          Partner
                                                                                          Boston
                                                                                         Financial
                                                                        General          Qualified
                                                                        Partner         Investment
                                                                      GCJM, Inc.           L.P.             Total

BALANCE,BEGINNING OF YEAR                                            $ (23,017)       $    255,610      $  232,593

NET LOSS                                                                (4,539)           (449,345)       (453,884)
                                                                      --------            ---------      ---------
BALANCE                                                              $ (27,556)       $    (193,735)  $   (221,291)
</TABLE>

The  accompanying  Notes to Financial  Statements  are an integral part of these
financial statements.


<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                              STATEMENT OF CASH FLOWS
                                       FOR THE YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>

<S>                                                           <C>     <C>       
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                      $       (453,884)
Adjustments to reconcile net loss to net cash 
provided by operating activities
Depreciation and Amortization                                  249,998
Interest earned and maintained in replacement reserve             (555)
Decrease in tenant accounts receivable                           6,588
Increase in other receivables                                 (141,839)                                       
Decrease in prepaid property and liability insurance            16,526
Decrease in prepaid mortgage insurance                           9,939   
Increase in mortgage escrow deposits                          (138,376)
Decrease in insurance proceeds                                  39,696
Decrease in accounts payable and accrued expenses              (46,542)
Increase in accrued interest payable                           480,575
Decrease in prepaid rents                                       (2,594)
Decrease in accrued real estate taxes                          (13,837)
Increase in security deposit escrow (net)                       (8,464)
                                                                -------
     Net cash used by operating activities                              (2,769)

CASH FLOWS FROM INVESTING ACTIVITIES
Transfer from replacement reserve                                5,420
Purchase of fixed assets                                        (3,438)
                                                                 -----
     Net cash flows provided by investing activities                     1,982

CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on mortgage payable                           (6,150)
Advances from limited partner                                    10,000
                                                                 ------
      Net cash flow provided by financing activities                     3,850
                                                                         -----
NET INCREASE IN CASH                                                     3,063

CASH, BEGINNING OF YEAR                                                 37,373
                                                                        ------
CASH, END OF YEAR                                             $         40,436

SUPPLEMENTAL CASH  FLOW INFORMATION                                                             
                                                                        
Actual cash payments for:                                                                     
                                                                        
 Interest                                                     $        372,035  
</TABLE>
                                                                        
                                                                        
                                                                             

The  accompanying  Notes to Financial  Statements  are an integral part of these
financial statements.


<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                           NOTES TO FINANCIAL STATEMENTS
                                                 DECEMBER 31, 1996


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

          (A)   Organization

                The  Partnership  was  organized  as a  limited  partnership  in
          December 1987 to acquire an interest in real  property  located in the
          State of Texas and to  construct  and  operate  thereon  an  apartment
          complex of 352 units,  under Section 221(D)(4) of the National Housing
          Act.  Such  projects  are  regulated  by HUD as to  rent  charges  and
          operating   methods.    The   Regulatory   Agreement   limits   annual
          distributions of net operating receipts to "surplus cash" available at
          the end of each year.

                Ninety-five  percent of the units are subsidized under Section 8
          of the National Housing Act of 1937. This act provides that assistance
          be made available to low income  persons,  including,  but not limited
          to, the elderly,  handicapped  and disabled.  Assisted  tenants pay no
          less than 10% of their  adjusted  annual gross income and no more than
          30% of their  adjusted  monthly  income  as  rental  payments  and the
          Department of Housing and Urban Development (HUD) contracts to pay the
          difference.

          (B)   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 the  reported  amounts  of
          revenues and expenses  during the  reporting  period.  Actual  results
          could differ from those estimates.

          (C)   Fixed assets

                The land,  buildings and equipment are recorded at original cost
          to the  Partnership,  which  includes  all costs of the  purchase  and
          renovation of the project and construction  period interest and taxes.
          Depreciation  is  provided  using the  straight-line  method  over the
          estimated  useful lives of the assets of 40 years for the building and
          five years for the equipment.

                For  income  tax  reporting  purposes,  fixed  assets  are being
          depreciated  using the  Modified  ACRS method  allowed by the Internal
          Revenue Code, over the predetermined lives of 7 to 27.5 years.



<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                           NOTES TO FINANCIAL STATEMENTS
                                                 DECEMBER 31, 1996


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          (D)   Deferred financing costs

                In 1988,  the  Partnership  paid $470,961 in financing  costs to
          obtain an FHA-insured  mortgage loan.  These financing costs have been
          deferred and are being amortized on the straight-line  method over the
          life of the mortgage loan which is 40 years.

          (E)   Income taxes

                For Federal and state income tax purposes,  the Partners  report
          on their separate  income tax returns their  respective  shares of the
          Partnership  income or loss for each accounting  period.  Accordingly,
          accruals for income taxes have not been reflected in the  accompanying
          financial  statements.  Income or loss of the Partnership is allocated
          1% to the General Partner and 99% to the Limited Partner.


NOTE 2 - OTHER ACCOUNTS RECEIVABLE

          This amount  represents  the  October  1996  subsidy  payment due from
Arlington Housing  Authority,  the administrator for HUD under the HAP contract.
The payment was withheld until required  repairs on Pebble Creek Apartments were
performed.  The repairs  were  completed in January  1997.  It is the opinion of
management that all repairs were  satisfactorily  performed and the payment will
be forthcoming.


NOTE 3 - MORTGAGE ESCROW DEPOSITS

          The  Partnership  has the  following  escrow  balances at December 31,
1996:
<TABLE>
<CAPTION>

                 <S>                            <C>     
                 Real estate taxes              $       185,308
                 Flood insurance                          5,031
                 Unapplied escrows                       91,503
                 FHA mortgage insurance premium          21,627
                                                         ------
                            Total               $       303,469
</TABLE>




<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                           NOTES TO FINANCIAL STATEMENTS
                                                 DECEMBER 31, 1996


NOTE 4 - MORTGAGE PAYABLE

          The 10.75%  mortgage  note payable is insured by HUD and is payable in
monthly  installments of $73,263  including  interest through March 1, 2029. The
land and  buildings of the apartment  project are pledged as collateral  for the
note. In addition, the note agreement requires that escrows for taxes, insurance
and  replacement of project assets be maintained and funded monthly as a part of
the note payment.

          The mortgage is currently delinquent and is in default. The delinquent
interest  due on the loan is  approximately  $765,391 and  delinquent  principal
approximately  $26,312.  The Partners are attempting to restructure the existing
loan under more  favorable  terms that will  enable  them to bring the loan to a
current basis (See Note 7).

          The current monthly payment requirement is as follows:
<TABLE>
<CAPTION>

                      <S>                          <C>            
                      Principal and interest       $        73,590
                      Cash replacement reserve               2,710
                      Insurance escrow                       2,942
                      Real estate tax escrow                13,395
                      Service charge                         3,302
                                                            ------
                                 Total             $        95,939
</TABLE>

          The  aggregate  amount  of  annual  maturities  of the  mortgage  note
assuming the loan is brought current, are as follows:
<TABLE>
<CAPTION>

                   <S>                             <C>  
                   Year Ending
                   December 31                              Amount

                     1997                          $        55,596
                     1998                                   32,592
                     1999                                   36,274
                     2000                                   40,371
                     2001                                   44,931
                   Thereafter                            7,735,511
                                                         ---------
                           Total                   $     7,945,275
</TABLE>




<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                           NOTES TO FINANCIAL STATEMENTS
                                                 DECEMBER 31, 1996


NOTE 5 - RELATED PARTY TRANSACTIONS

          The general partner and/or its stockholders  have advanced $280,406 to
the Partnership  from time to time to cover working  capital needs.  The limited
partner advanced $10,000 in 1996 to cover operating shortfalls.
These advances are noninterest-bearing and have no fixed repayment terms.

          Affiliates of the  Partnership  have also advanced  funds and provided
services to the Partnership.  A summary of amounts due to affiliates at December
31, 1996 is as follows:
<TABLE>
<CAPTION>

                         <S>                      <C>    
                         Due to affiliates
                         Loan                     $         2,200
                         Note                              14,000
                         Accrued interest                   9,126
                         Accounting services               89,035
                                                          -------
                                        Total     $       114,361
</TABLE>


NOTE 6 - HOUSING ASSISTANCE PAYMENT CONTRACT AGREEMENT

          The  Federal  Housing  Administration  (FHA) has  contracted  with the
Partnership,  under  Section  8  of  Title  II  of  The  Housing  and  Community
Development Act of 1974, to make housing assistance  payments to the Partnership
on behalf  of  qualified  tenants.  The  Partnership  earned  rental  assistance
payments  from HUD in the  amount of  approximately  $1,855,000  during the year
ended December 31, 1996.


NOTE 7 - PARTNERSHIP STATUS AND MANAGEMENT'S PLAN

          At December 31, 1996, the Partnership's  current liabilities  exceeded
its current  assets and mortgage  escrow  deposits  available for the payment of
current liabilities by approximately  $600,000 and the Partnership is delinquent
in its mortgage payments.  Additionally,  the Partnership experienced a net loss
of $453,884 for the year ended  December  31, 1996.  As discussed in Note 4, the
Partnership  has  filed a work out plan  dated  January  1, 1997 with HUD and is
attempting to refinance  the existing HUD loan to 8.5%, a rate which  management
believes  the property can  support,  and to obtain  relief on the  arrearage in
payments.


<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                          SUPPORTING DATA REQUIRED BY HUD
                                                 DECEMBER 31, 1996


SUPPLEMENTAL INFORMATION FOR STATEMENT OF PROFIT AND LOSS HUD FORM 92410

Miscellaneous Administrative expenses - Account 6390
<TABLE>
<CAPTION>

<S>                                           <C>   
Source                                                Amount

Postage                                       $          281
Travel                                                   294
Employee training                                        653
Other administrative expenses                         11,671
                                                      ------
                  Tota1                       $       12,899

</TABLE>

Refer to Independent Auditor's Report.


<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                          SUPPORTING DATA REQUIRED BY HUD
                                                 DECEMBER 31, 1996


ACCOUNTS AND NOTES RECEIVABLE (OTHER THAN FROM REGULAR TENANTS):
<TABLE>
<CAPTION>

<S>                    <C>                   <C>       <C>             <C>   
Name of Borrower       Original                        Original        Balance
                         Date                Terms      Amount          Due

Arlington Housing 
Authority               10/96                None      $143,134       $143,134                       

</TABLE>

MORTGAGE ESCROW DEPOSITS:
<TABLE>
<CAPTION>

             <S>                                              <C>     
             Estimated amount required for future payment of:
             City, state and county taxes                     $ 139,251
             Property insurance                                  35,121
             Mortgage insurance                                  69,566
                                                                 ------
                                            Total               243,938
             Excess on deposit to cover estimated requirements   59,531
             Total per mortgagor's books (not reconciled         ------
               to confirmation from HUD)                      $ 303,469

</TABLE>

TENANT SECURITY DEPOSITS:

Tenant security  deposits are held in a separate bank account in the name of the
project.

Refer to Independent Auditor's Report.


<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                          SUPPORTING DATA REQUIRED BY HUD
                                                 DECEMBER 31, 1996


CASH REPLACEMENT RESERVES:

In accordance with the provisions of the Regulatory  Agreement,  restricted cash
is to be used for replacement of property with the approval of HUD as follows:
<TABLE>
<CAPTION>

                                                           Amount
          <S>                                     <C> 
          Balance, January 1, 1996                $        50,235
          Monthly deposits                                   -
          Interest earned                                     555
          Transfers to other escrow accounts               (5,420)
                                                            -----
          Balance, December 31, 1996, 
                    confirmed by mortgagee        $        45,370

</TABLE>

Refer to Independent Auditor's Report.


<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                          SUPPORTING DATA REQUIRED BY HUD
                                                 DECEMBER 31, 1996


ACCOUNTS PAYABLE (OTHER THAN TRADE CREDITORS):

None.


ACCRUED TAXES (ACCOUNT 2150):

Tarrant County, Texas              Due 1/31/97            $139,251


COMPENSATION TO PARTNERS:

No compensation was paid to the Partners for the year ended December 31, 1996.


UNAUTHORIZED DISTRIBUTION OF PROJECT REVENUE:

None.


IDENTITY OF INTEREST:

The general partner and/or its  stockholders  and affiliates have advanced money
to the  partnership  from time to time to cover  working  capital  needs.  These
advances total  $280,406 and $114,361 at December 31, 1996. The limited  partner
advanced  $10,000 in 1996 to cover  working  capital  needs.  There are no fixed
repayment terms.

Refer to Independent Auditor's Report.


<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                          SUPPORTING DATA REQUIRED BY HUD
                                      STATEMENT OF RECEIPTS AND DISBURSEMENTS
                                       FOR THE YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>

<S>                                                <C>        <C>  
SOURCE OF FUNDS
    Operations
        Revenue
          Rental                                   1,969,426
          Interest income                              1,790
          Other income                                38,830  $     2,010,046

        Expenses
          Administrative expen                        60,146
          Management fees                             84,030
          Operating and maintenance expenses         504,280
          Operating and maintenance payrolls         307,906
          Utilities                                  249,775
          Taxes - real estate                        153,088
          Taxes - other                               17,508
          Insura                                      86,839
          Interest on building                       372,035
          Mortgage insurance                          29,813        1,865,420
                                                                   ----------
     Cash provided by operations before amortization                  144,626
       Amortization of mortgage principal                             (6,150)
                                                                   ----------
   Cash provided by operations after amortization                     138,476             
  Other sources:        
     Decrease in replacement reserve account           4,865
        Increase in mortgage escrows                (138,376)
    Increase in security deposit escrows              (8,464)
   Advances from limited partners                     10,000         (131,975)
                                                                   ----------
    Total sources of funds                                              6,501

  APPLICATION OF FUNDS
  Purchase of fixed assets                                             (3,438)
                                                                   ----------
      INCREASE IN CASH                                                 3,063

   CASH AT BEGINNING OF YEAR                                          37,373
                                                                   ----------
    CASH AT END OF YEAR                                       $        40,436
</TABLE>

Refer to Independent Auditor's Report.


<PAGE>


                                         2225 NEW YORK AVENUE, LTD.
                                           (A Limited Partnership)
                                         T/A PEBBLE CREEK APARTMENTS
                                          FHA PROJECT NO. 113-36607
                                       SUPPORTING DATA REQUIRED BY HUD
                             STATEMENT OF RECEIPTS AND DISBURSEMENTS (CONTINUED)
                                              DECEMBER 31, 1996


(1)    Detail of other income
<TABLE>
<CAPTION>

      <S>                                              <C>    
      Source                                                    Amount

      NSF and late charges                             $         1,310
      Laundry and vending income                                 7,348
      Tenant damage payment                                     20,510
      Pay telephone income                                       4,698
      Forfeited deposits                                         2,100
      Miscellaneous                                              2,864
                                                                ------
                        Total                          $        38,830
</TABLE>

(2)    Cash and temporary cash investments at year end consisted of:
<TABLE>
<CAPTION>

<S>                                         <C>         <C>   
Bank/Account                                Type of
  Name                                      Account          Amount

N/A                                         Petty/cash  $           300
NationsBank, 2225 NY Avenue, Ltd            Checking             39,302 
Riggs Bank, 2225 NY Avenue, Ltd             Checking                834

                                                        $        40,436
</TABLE>

Refer to Independent Auditor's Report.


<PAGE>



                                            2225 NEW YORK AVENUE, LTD.

                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                          SUPPORTING DATA REQUIRED BY HUD
                                                 DECEMBER 31, 1996


SCHEDULE OF CHANGES IN FIXED ASSETS FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>


<S>              <C>             <C>        <C>         <C>            <C>            <C>        <C>         <C>         <C>
                                            Assets                                    Accumulated Depreciation           Net
                        Balance                              Balance,      Balance,                          Balance,    Book Value
                        January                              December      January    Current    Deductions  December    December
                        1, 1996   Additions  Deductions      31, 1996      31, 1996   Provisions             31, 1996 

Land             $      734,800  $       -  $       -   $    734,800   $           -   $      -  $      -    $      -    $  734,800

Building and
equipment             9,756,978      3,438          -      9,760,416       2,030,987    238,233         -     2,269,210   7,491,206
                                                                                                     
                    -----------     -------    -------      --------      --------     --------    --------  ---------    --------
   Total         $   10,491,778  $   3,438 $        -   $ 10,495,216   $   2,030,987  $ 238,233 $       -   $ 2,269,210  $8,226,006
                                             
</TABLE>

 


Refer to Independent Auditor's Report


<PAGE>



Computation of Surplus Cash,                        U.S. Department of Housing
Distributions and Residual                          and Urban Development
Receipts                                            Office of Housing
                                                    Federal Housing Commissioner

Project Name                  Fiscal Period Ended                Project Number
2225 New York Avenue
T/A Pebble Creek Apts         December 31, 1996                    113-36607
<TABLE>
<CAPTION>

<S>                                                                     <C>    <C>   
Cash                                                                     75,971
   (a) Total Cash                                                                75,971

Accrued mortgage interest payable                                       765,391
Delinquent mortgage principal payments                                   26,312
Delinquent deposits to reserve for replacements                          40,650
Accounts payable (due within 30days)                                    127,611
Prepaid rents                                                             1,051
Tenant security deposits liability                                       23,312
   (b) Less Total Current Obligations                                           984,327
   (c) Surplus Cash (Deficiency) (Line (a)minus Line (b))                      (908,356)

</TABLE>





<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                          SUPPORTING DATA REQUIRED BY HUD
                                                 DECEMBER 31, 1996


SCHEDULE OF FUNDS IN FINANCIAL INSTITUTIONS AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>

<S>                                                     <C>  
A. Funds Held by Mortgagor, Regular Operating Account:
     1.Riggs National Bank, (checking)1                     834
     2.NationsBank,checking)2                            39,302                                                            
     3.Imprest petty cash fund                              300
                                                         ------                                                               
               Operating Account, Sub-Total              40,436

B. Funds Held by Mortgagor in trust,Tenant 
          Security Deposit:
     1.NationsBank, (money market)2                      35,535                                        
                                                         ------                          
                Funds Held by Mortgagor, total           75,971
                                                   
C.Funds Held by Mortgagee,(in trust)                                                                                          
     1.Tax, Insurance and MIP escrow,(checking)4        303,469      
     2.Reserve Fund for replacements                     45,370     
                                                        -------
                Funds Held by Mortgagee, total          348,839
                                                       --------
      TOTAL FUNDS IN FINANCIAL INSTITUTIONS            $424,810
                                                       ========
</TABLE>

1 Balance confirmed by Riggs National Bank,  January 7, 1997 
2 Balance confirmed by  NationsBank,  January 29, 1997 
3 Balances  confirmed by Data  Prompt,  Inc., January 18, 1997 
4 The balance confirmed by Data Prompt,  Inc., January 18, 1997 was
   $200,928, which does not agree with the Partnership's records which reflects
   a balance of $303,469.



<PAGE>


                                     2225 NEW YORK AVENUE, LTD.
                                       (A Limited Partnership)
                                     T/A PEBBLE CREEK APARTMENTS
                                      FHA PROJECT NO. 113-36607
                     INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL STRUCTURE
                                          DECEMBER 31, 1996

                   Independent Auditor's Report on Internal Control Structure


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


We have audited the financial statements of 2225 NEW YORK AVENUE, LTD. as of and
for the year ended  December 31, 1996,  and have issued our report thereon dated
January 12, 1997. We have also audited 2225 NEW YORK AVENUE,  LTD.'s  compliance
with  requirements  applicable  to  HUD-assisted  programs  and have  issued our
reports thereon dated January 12, 1997.

We conducted our audits 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,  in July 1993.  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
2225 NEW YORK AVENUE,  LTD.  complied with laws and  regulations,  noncompliance
with which would be material to a HUD-assisted program.

The management of 2225 NEW YORK AVENUE, LTD. is responsible for establishing and
maintaining an internal control  structure.  In fulfilling this  responsibility,
estimates  and  judgments  by  management  are  required to assess the  expected
benefits  and  related  costs  of  internal  control   structure   policies  and
procedures.  The  objectives  of an internal  control  structure  are to provide
management  with  reasonable,  but  not  absolute,  assurance  that  assets  are
safeguarded   against  loss  from  unauthorized  use  or  disposition  and  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   structure,   errors,
irregularities or instances of noncompliance  may nevertheless  occur and not be
detected.  Also, projection of any evaluation of the structure 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 policies
and procedures may deteriorate.


<PAGE>

         Independent Auditor's Report on Internal Control Structure (Continued)


In planning  and  performing  our audits,  we obtained an  understanding  of the
design of relevant  internal  control  structure  policies  and  procedures  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 2225 NEW YORK AVENUE,  LTD. and on
its compliance with specific  requirements  applicable to its major HUD-assisted
programs and to report on the internal control  structure in accordance with the
provisions of the Guide and not to provide any assurance on the internal control
structure.

We  performed  tests of  controls,  as  required by the Guide,  to evaluate  the
effectiveness of the design and operation of internal control structure policies
and procedures that we considered  relevant to preventing or detecting  material
noncompliance  with  specific  requirements  applicable to 2225 NEW YORK AVENUE,
LTD.'s major HUD-assisted programs. Our procedures were less in scope than would
be  necessary  to render an opinion on  internal  control  structure  policy and
procedures. Accordingly, we do not express such an opinion.

Our  consideration  of the  internal  control  structure  would not  necessarily
disclose all matters in the internal  control  structure  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  structure  elements  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  being
audited 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 the internal  control  structure and its operation that we consider to
be material weaknesses as defined above.

This report is intended for the information of the partners, management, and the
Department of Housing and Urban Development. However, this report is a matter of
public record and its distribution is not limited.



/s/Arnson,Fetridge & Weigle

Rockville, Maryland
January 12, 1997


<PAGE>


                              2225 NEW YORK AVENUE, LTD.
                                  (A Limited Partnership)
                              T/A PEBBLE CREEK APARTMENTS
                                FHA PROJECT NO. 113-36607
           INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENT
                        APPLICABLE TO MAJOR HUD PROGRAMS
                                   DECEMBER 31, 1996

                   Independent Auditor's Report on Compliance with Specific
                      Requirements Applicable to Major HUD Programs

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


We have audited the financial statements of 2225 NEW YORK AVENUE, LTD. as of and
for the year ended  December 31, 1996,  and have issued our report thereon dated
January 12, 1997.

We have also audited 2225 NEW YORK AVENUE,  LTD.'s  compliance with the specific
program  requirements  governing  management,   maintenance,  federal  financial
reports, mortgage status, the replacement reserve, the residual receipts, tenant
applications,  tenant  eligibility,  tenant  recertification,   tenant  security
deposits, cash receipts and disbursements,  and distributions to owners that are
applicable  to each of its  major  HUD-assisted  programs  for  the  year  ended
December 31, 1996. The  management of 2225 NEW YORK AVENUE,  LTD. 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 in accordance with generally accepted auditing standards,
Government Auditing  Standards,  issued by the Comptroller General of the United
States,  and the  Consolidated  Audit  Guide  for  Audits of HUD  Programs  (the
"Guide"), issued by the U.S. Department of Housing and Urban Development, Office
of Inspector  General,  in July 1993. Those standards and the Guide require that
we plan and  perform  the audit to obtain  reasonable  assurance  about  whether
material  noncompliance  with the  requirements  referred to above occurred.  An
audit includes examining,  on a test basis, evidence about 2225 NEW YORK AVENUE,
LTD.'s compliance with those requirements.  We believe that our audit provides a
reasonable basis for our opinion.

In our opinion,  2225 NEW YORK AVENUE, LTD. complied,  in all material respects,
with  the  requirements  described  above  that  are  applicable  to each of its
HUD-assisted programs for the year ended December 31, 1996.

This report is intended for the information of the partners, management, and the
Department of Housing and Urban Development. However, this report is a matter of
public record and its distribution is not limited.

/s/Arnson, Fetridge & Weigle

Rockville, Maryland
January 12, 1997


<PAGE>


                             2225 NEW YORK AVENUE, LTD.
                              (A Limited Partnership)
                             T/A PEBBLE CREEK APARTMENTS
                              FHA PROJECT NO. 113-36607
                   OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS
                           APPLICABLE TO AFFIRMATIVE FAIR HOUSING
                                    DECEMBER 31, 1996

                Independent Auditor's Report on Compliance with Specific
                 Requirements Applicable to Affirmative Fair Housing


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

We have audited the financial statements of 2225 NEW YORK AVENUE, LTD. as of and
for the year ended  December 31, 1996,  and have issued our report thereon dated
January 12, 1997.

We have applied procedures to test 2225 NEW YORK AVENUE,  LTD.'s compliance with
the  Affirmative  Fair  Housing  requirements  applicable  to  its  HUD-assisted
programs for the year ended December 31, 1996.

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,  in July 1993. Our procedures were  substantially less in scope than an
audit,  the objective of which would be the expression of an opinion on 2225 NEW
YORK AVENUE,  LTD.'s compliance with the Affirmative Fair Housing  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 under the Guide.

This report is intended for the information of the partners, management, and the
Department of Housing and Urban Development. However, this report is a matter of
public record and its distribution is not limited.


/s/Arnson Fetridge & Weigle

Rockville, Maryland
January 12, 1997


<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                     SCHEDULE OF FINDINGS AND QUESTIONED COSTS
                                                 DECEMBER 31, 1996

  Independent Auditor's Comments on Schedule of Findings and Questioned Costs

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

None



<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                           FHA PROJECT NO. 113-36607
                                RESOLUTION MATTERS RELATING TO THE HUD PROGRAMS
                                              SUPPLEMENTARY DATA
                                                 DECEMBER 31, 1996

                             Independent Auditor's Comments on Audit Resolution
                                    Matters Relating to the HUD Programs


The Project took  corrective  action on findings  from the prior audit report of
2225 NEW YORK AVENUE, LTD. (A Limited  Partnership) T/A PEBBLE CREEK APARTMENTS,
FHA Project No. 113-36607 as follows:

Finding  1 - The  management  company  does not  have  fidelity  bond  insurance
coverage equal to two months gross rent potential.

Status - The management  company increased its fidelity bond coverage during the
year and is in compliance.



<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                                 DECEMBER 31, 1996

                                              CERTIFICATE OF PARTNERS


We hereby certify that we have examined the  accompanying  financial  statements
and supplementary data of 2225 NEW YORK AVENUE, LTD. (A Limited Partnership) T/A
PEBBLE  CREEK  APARTMENTS,  FHA  Project No.  113-36607  and, to the best of our
knowledge and belief, the same is complete and accurate.



                                          2225 NEW YORK AVENUE, LTD.
                                          Federal Employer ID No. 52-1544472




                    Joshua A. Muss, President of GCJM, Inc.,
                    General Partner






<PAGE>


                                            2225 NEW YORK AVENUE, LTD.
                                              (A Limited Partnership)
                                            T/A PEBBLE CREEK APARTMENTS
                                             FHA PROJECT NO. 113-36607
                                                 DECEMBER 31, 1996

                                          MANAGEMENT AGENT CERTIFICATION


We hereby certify that we have examined the  accompanying  financial  statements
and  supplemental  data of 2225 NEW YORK  AVENUE,  LTD.  and, to the best of our
knowledge and belief, the same is accurate and complete.





                                              (Signature of Management Agent's
                                               Representative)



                                                Title





                                                     Lincoln Property Company



                                                     Date





<PAGE>