**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C.20549**

 

**FORM 10-Q**

 

**ý****    QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934**

 

**For the quarterly periodended March 31, 2004**

 

**Commission filenumber  33-18756**

 

**ASSISTED HOUSINGFUND L.P. I**

(Exact name of registrant asspecified in its charter)

 

| **Washington**                                                                                                                           |   | **91-1391150**                    |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|
| (State of organization)                                                                                                                  |   | (IRS Employer Identification No.) |
|                                                                                                                                     |   |                              |
| **1301 Fifth Avenue,  Suite 1330, Seattle, WA      98101**                                                 |
| (Address of principal executive  offices)              (Zip  code) |

 

Registrant’s telephone number,including area code: **(206) 377-1310**

 

Securities registered pursuant toSection 12(b) of the Act:  **None**

 

Securities registered pursuant toSection 12(g) of the Act:

 

**Units of Limited PartnershipInterest**

(Title of class)

 

Indicate by check mark whether theregistrant (1) has filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90days.  Yes ý  No  o

 

Indicate by check mark whether theregistrant is an accelerated filer (as defined in rule 12b-2 of the ExchangeAct.  Yes o  No ý

 

 

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**ASSISTED HOUSING FUND L.P. I**

 

**FORM 10-Q**

 

**For the Quarterly Period Ended March 31, 2004**

 

**Table of Contents**

 
| **PART I.  FINANCIAL INFORMATION** |   |
|------------------------------------|--------|
|                               |   |   |   |
| Item 1                             |   | Financial Statements: |   |
|                               |   | Consolidated  Balance Sheets |   |
|                               |   | Consolidated  Statements of Operations |   |
|                               |   | Consolidated Statements of  Cash Flows |   |
|                               |   | Notes to Consolidated Financial Statements |   |
| Item 2                             |   | Management’s Discussion and  Analysis of Financial Condition and Results of Operations |   |
| Item 3                             |   | Quantitative and Qualitative Disclosures About  Market Risk |   |
| Item 4                             |   | Controls and Procedures |   |
|                               |   |
| **PART II.  OTHER INFORMATION**    |   |
|                               |   |   |   |
| Item 1                             |   | Legal Proceedings |   |
| Item 6                             |   | Exhibits and Reports on Form 8-K |   |
| Signatures                         |   |   |   |

 

2

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**PART 1****. FINANCIALINFORMATION**

 

Item 1.Financial Statements

 

**ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS**

 
|                                              |   | **March 31,  2004** |       | **December 31,  2003** |   |
|---------------------------------------------------|--------|--------------------------|------------|-----------------------------|--------|
|                                              |   | **unaudited**            |       |                        |   |
| **ASSETS**                                        |   |                     |       |                        |   |
|                                              |   |                     |       |                        |   |
| Rental property and equipment, at cost:           |   |                     |       |                        |   |
| Buildings and equipment                           |   | $                        | 16,090,692 |                        | $      | 16,055,005 |   |
| Accumulated depreciation                          |   | (8,717,773               | )          | (8,565,223                  | )      |
|                                              |   | 7,372,919                |       | 7,489,782                   |   |
| Land                                              |   | 723,111                  |       | 723,111                     |   |
|                                              |   | 8,096,030                |       | 8,212,893                   |   |
| Cash:                                             |   |                     |       |                        |   |
| Rental operation (Note 5)                         |   | 159,760                  |       | 177,487                     |   |
| Partnership                                       |   | 4,851                    |       | 5,700                       |   |
|                                              |   | 164,611                  |       | 183,187                     |   |
| Restricted deposits:                              |   |                     |       |                        |   |
| Tenant trust - security deposits                  |   | 123,535                  |       | 122,048                     |   |
| Reserve accounts, partially pledged (Note  3)     |   | 570,298                  |       | 598,343                     |   |
|                                              |   | 693,833                  |       | 720,391                     |   |
| Other assets:                                     |   |                     |       |                        |   |
| Accounts receivable                               |   | 40,386                   |       | 32,068                      |   |
| Accounts receivable - DGP (Note 2)                |   | 24,079                   |       | 24,079                      |   |
| Prepaid expenses                                  |   | 32,075                   |       | 15,719                      |   |
|                                              |   | 96,540                   |       | 71,866                      |   |
| **TOTAL ASSETS**                                  |   | $                        | 9,051,014  |                        | $      | 9,188,337 |   |
|                                              |   |                     |       |                        |   |
| **LIABILITIES**                                   |   |                     |       |                        |   |
| Mortgage notes payable (Note 4)                   |   | $                        | 12,203,888 |                        | $      | 12,215,065 |   |
| Accounts payable                                  |   | 326,016                  |       | 266,284                     |   |
| Due to affiliates (Note 2)                        |   | 858,641                  |       | 798,510                     |   |
| Accrued liabilities                               |   | 154,125                  |       | 141,530                     |   |
| Security deposits payable                         |   | 116,787                  |       | 115,974                     |   |
| **TOTAL LIABILITIES**                             |   | 13,659,457               |       | 13,537,363                  |   |
|                                              |   |                     |       |                        |   |
| Commitments and contingencies (Note 6)            |   |                     |       |                        |   |
|                                              |   |                     |       |                        |   |
| Minority interests in property partnerships       |   | 354,061                  |       | 361,389                     |   |
|                                              |   |                     |       |                        |   |
| **PARTNERS’ EQUITY  (DEFICIT)**              |   |                     |       |                        |   |
| Limited partners                                  |   | (4,881,671               | )          | (4,632,104                  | )      |
| General partner                                   |   | (80,833                  | )          | (78,311                     | )      |
|                                              |   | (4,962,504               | )          | (4,710,415                  | )      |
| **TOTAL LIABILITIES  AND PARTNERS’ DEFICIT** |   | $                        | 9,051,014  |                        | $      | 9,188,337 |   |

 

See accompanying notes to consolidated financial statements

 

3

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**ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS**unaudited

 
|                                                           |   | **Quarters  ended March 31,** |     |
|----------------------------------------------------------------|--------|------------------------------------|----------|
|                                                           |   | **2004**                           |     | **2003** |   |
|                                                           |   |                               |     |   |   |
| **Revenue:**                                                   |   |                               |     |   |   |
| Rent                                                           |   | $                                  | 432,177  |   | $ | 448,953 |   |
| Miscellaneous                                                  |   | 11,946                             |     | 14,434 |   |
|                                                           |   | 444,123                            |     | 463,387 |   |
|                                                           |   |                               |     |   |   |
| **Rental operating  expenses:**                                |   |                               |     |   |   |
| Repairs and maintenance                                        |   | 85,108                             |     | 89,791 |   |
| Utilities                                                      |   | 91,977                             |     | 85,474 |   |
| General and operating                                          |   | 141,081                            |     | 128,089 |   |
| Taxes and insurance                                            |   | 99,846                             |     | 100,180 |   |
| Interest                                                       |   | 77,254                             |     | 76,294 |   |
| Depreciation                                                   |   | 152,550                            |     | 131,173 |   |
|                                                           |   | 647,816                            |     | 611,001 |   |
| **Loss from rental  operations**                               |   | (203,693                           | )        | (147,614 | ) |
|                                                           |   |                               |     |   |   |
| **Other income  (expense):**                                   |   |                               |     |   |   |
| Interest earned on partnership cash                            |   | 1                                  |     | 19 |   |
| Minority interest in operations                                |   | 7,328                              |     | 6,759 |   |
| General and administrative                                     |   | (55,725                            | )        | (54,908 | ) |
|                                                           |   | (48,396                            | )        | (48,130 | ) |
| **Net loss**                                                   |   | $                                  | (252,089 | ) | $ | (195,744 | ) |
|                                                           |   |                               |     |   |   |
| Net loss per unit of limited partnership  interest (703 units) |   | $                                  | (359     | ) | $ | (278 | ) |

 

See accompanying notes to consolidated financialstatements

 

4

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**ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS**unaudited

 
|                                                                         |   | **Quarters  ended March 31,** |     |
|------------------------------------------------------------------------------|--------|------------------------------------|----------|
|                                                                         |   | **2004**                           |     | **2003** |   |
|                                                                         |   |                               |     |   |   |
| **Cash flows from  operating activities:**                                   |   |                               |     |   |   |
| Net loss                                                                     |   | $                                  | (252,089 | ) | $ | (195,744 | ) |
| Adjustments to reconcile net loss to net  cash used in operating activities: |   |                               |     |   |   |
| Depreciation                                                                 |   | 152,550                            |     | 131,173 |   |
| Minority interests in operations                                             |   | (7,328                             | )        | (6,759 | ) |
| Changes in certain assets and liabilities:                                   |   |                               |     |   |   |
| Accounts receivable                                                          |   | (8,318                             | )        | (3,355 | ) |
| Prepaid expenses                                                             |   | (16,356                            | )        | (15,819 | ) |
| Accounts payable                                                             |   | 59,732                             |     | 49,319 |   |
| Due to affiliates                                                            |   | 60,131                             |     | 9,875 |   |
| Accrued liabilities                                                          |   | 12,595                             |     | 8,960 |   |
| Tenant security deposits                                                     |   | (674                               | )        | 1,129 |   |
|                                                                         |   |                               |     |   |   |
| Net cash provided (used) in operating  activities:                           |   | 243                                |     | (21,221 | ) |
|                                                                         |   |                               |     |   |   |
| **Cash flows from  investing activities:**                                   |   |                               |     |   |   |
| Purchase of depreciable property                                             |   | (35,687                            | )        | (19,400 | ) |
| Decrease in restricted deposits                                              |   | 28,045                             |     | 32,586 |   |
|                                                                         |   |                               |     |   |   |
| Net cash provided (used) in investing  activities:                           |   | (7,642                             | )        | 13,186 |   |
|                                                                         |   |                               |     |   |   |
| **Cash flows from  financing activities:**                                   |   |                               |     |   |   |
| Mortgage principal payments                                                  |   | (11,177                            | )        | (10,213 | ) |
|                                                                         |   |                               |     |   |   |
| Net cash used in financing activities:                                       |   | (11,177                            | )        | (10,213 | ) |
|                                                                         |   |                               |     |   |   |
| Net decrease in cash                                                         |   | (18,576                            | )        | (18,248 | ) |
|                                                                         |   |                               |     |   |   |
| Cash - beginning of year                                                     |   | 183,187                            |     | 166,278 |   |
|                                                                         |   |                               |     |   |   |
| Cash - end of year                                                           |   | $                                  | 164,611  |   | $ | 148,030 |   |
|                                                                         |   |                               |     |   |   |
| Supplemental disclosure of cash flow  information:                           |   |                               |     |   |   |
| Cash paid for interest                                                       |   | $                                  | 77,254   |   | $ | 76,294 |   |

 

See accompanying notes to consolidatedfinancial statements

 

5

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**ASSISTED HOUSING FUND L.P. I AND SUBSIDIARIES**

 

**NOTES****TO CONSOLIDATED FINANCIALSTATEMENTS**

 

**For the Quarter Ended March 31, 2004**

 

**(Unaudited)**

 

**NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

General

 

The unaudited financial statements presented herein have been preparedin accordance with the instructions to Form 10-Q and do not include all of theinformation and note disclosures required by accounting principles generallyaccepted in the United States of America. These statements should be read in conjunction with financial statementsand notes thereto included with the Assisted Housing Fund L.P. I’s (the InvestorPartnership) Form 10-K for the year ended December 31, 2003.  In the opinion of management, thesefinancial statements include all adjustments, consisting only of normalrecurring adjustments, necessary to present fairly the Investor Partnership’sfinancial position and results of operations. The results of operations for the periods may not be indicative of theresults to be expected for the year.

 

Nature of Business

 

Assisted Housing Fund L.P. I is a limited partnership which wasorganized November 2, 1987 under the laws of the state of Washington toacquire limited partnership interests in other partnerships (the PropertyPartnerships), each of which has been organized to develop or purchase a low-or moderate-income apartment project. The Investor Partnership’s General Partner is Murphey Favre Properties,Inc. (MFP), a wholly-owned subsidiary of Washington Mutual Bank (WMB), awholly-owned subsidiary of Washington Mutual, Inc.  At December 31, 2003, 336 partners held the 703 units oflimited partnership interests outstanding**.**

 

The Investor Partnership has invested as a limited partner in 11Property Partnerships.  The developer ofeach apartment project serves as the Developer General Partner (DGP) of therespective Property Partnership.  Theproperties owned by the Property Partnerships are located in Michigan,Wisconsin, Ohio, West Virginia and Washington. The apartment projects were financed and constructed underSection 515 of the National Housing Act, as amended (administered by U. S.Department of Agriculture Rural Development Agency, through its Rural HousingService (RHS)).  Under this program, theProperty Partnerships provide housing to low-and moderate-income tenants.  Lower rental charges to tenants arerecovered by the Property Partnerships through an interest reduction programwhich reduces the effective interest rate over the lives of the mortgages to 1percent and a rental assistance program whereby RHS pays the PropertyPartnerships for a portion of qualified tenant rents.  Construction of the apartment projects began betweenJune 1988 and May 1990 and rental operations began betweenApril 1989 and January 1991.

 

Additionally, in exchange for an allocation of federal low-incomehousing tax credits under Section 42 of the Internal Revenue Code, eachProperty Partnership has entered into an agreement with an agency of the statein which the apartment project is located, whereby the Property Partnership hasagreed to maintain all apartment units as both rent restricted and occupied bylow-income tenants for a minimum period of 15 years.

 

The investment objectives of the Investor Partnership include thefollowing:

 

•                  provide LimitedPartners with tax benefits from investing in the Investor Partnership in theform of low-income housing tax credits under Section 42 of the InternalReview Code of 1986, as amended (the Code),

•                  preserve andprotect the Investor Partnership capital, and

•                  realizelong-term capital appreciation in the value of the properties upon the sale orrefinancing of the properties or the Property Partnerships.

 

6

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During 2004, the properties will have completed the 15-year complianceperiod, thus eliminating the opportunity for an occurrence of a tax creditrecapture event which may occur when there is a failure to comply with therequirements of the Internal Revenue Service. As each property completes the compliance period, the InvestorPartnership may explore opportunities to sell or refinance the propertieswithin the guidelines allowed and permissions granted by the U.S. Department ofAgriculture Rural Development Agency, through its Rural Housing Service (RHS),under its mortgage note agreements.  Thesale of any properties will be determined individually on a case-by-case basis,and MFP cannot assure you that it will sell any of the properties, or if MFPdoes sell any of the properties, that the Investor Partnership will realize anymeaningful profit as a result of the sale.

 

Principles of Consolidation

 

The financial statements consolidate the financial statements of theInvestor Partnership and the following 11 Property Partnerships in which it hasinvested as a limited partner:

 

Fairview Apartments Company Limited Partnership (Fairview)

Ionia Limited Dividend Housing Association Limited Partnership (Ionia)

Logan Apartments Company Limited Partnership (Logan)

Rolling Brook II Limited Dividend Housing Association LimitedPartnership (Rolling Brook)

Wexford Manor Limited Dividend Housing Association Limited Partnership(Wexford)

Blue Heron Apartment Associates Limited Partnership (Blue Heron)

Glenwood Apartment Associates Limited Partnership (Glenwood)

Pacific Place Apartment Associates Limited Partnership (Pacific Place)

Cove Limited Dividend Housing Association Limited Partnership (Cove)

Washington Street Limited Dividend Housing Association LimitedPartnership (Washington)

Fayette Hills Limited Partnership (Fayette).

 

The financial statements are presented on a consolidated basis becausethe Investor Partnership holds approximately 99 percent of the profit and lossinterests and approximately 55 percent of the equity interests in each PropertyPartnership.  Through an affiliate, whois a Special Limited Partner in each of the 11 Property Partnerships, theInvestor Partnership controls certain fundamental decisions affecting theoperation of the Property Partnerships. These fundamental decisions include significant purchases of assets,material borrowings or creation of liens on the underlying properties, enteringinto material contracts, making tax elections and any act that would causetermination of the Property Partnership. All material inter-partnership transactions and balances have beeneliminated.  Net losses allocable to theminority partners for the three months ended March 31, 2004 and the twelvemonths ended December 31, 2003 were $7,328 and $26,980, respectively.

 

Method of Accounting

 

The accrual method of accounting is used forfinancial statement purposes.

 

Cost Overruns

 

The partnership agreements for the Property Partnerships required theDGPs to fund cost overruns on the development of the apartment projects.  Such cost overruns, totaling $589,462, havebeen recorded as minority interests in Property Partnerships and have beenincluded in the cost basis of the rental property.  All depreciation related thereto has been specially allocated tothe respective DGPs.

 

Depreciation

 

Depreciation is computed for financial statement purposes using thestraight-line method over the estimated useful lives of the related assets asfollows:

 

| Building shell and components |   | 27.5 |  years |
|-------------------------------|--------|------|-------------|
| Land improvements             |   | 15   |  years |
| Appliances                    |   | 5-10 |  years |
| Carpets and draperies         |   | 5-10 |  years |

 

7

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Income Taxes

 

No income tax provision has been included in the financial statements sinceincome or loss of the Investor Partnership is required to be reported by therespective partners on their income tax returns.

 

Cash Equivalents

 

For purpose of reporting cash flows, theInvestor Partnership considers all investment instruments purchased with amaturity of three months or less to be cash equivalents.  At March 31, 2004 and December 31,2003, there were no cash equivalents.

 

Concentration of Credit

 

The Property Partnerships maintain cash in bank deposit accounts which,at times, may exceed federally insured limits. The Property Partnerships have not experienced any losses in suchaccounts.  Management believes theProperty Partnerships are not exposed to any significant credit risk on cash insuch bank deposit accounts.

 

Estimates

 

The preparation of financial statements, in conformity with accountingprinciples generally accepted in the United States of America, requiresmanagement to make estimates and assumptions that affect certain reportedamounts and disclosures.

 

Adjustments

 

The unaudited interim financial statements include all adjustments thatare, in the opinion of management, necessary to fairly state the results forthe interim periods presented.  Theseadjustments are all of a normal recurring nature.

 

**NOTE - 2  TRANSACTIONS WITH AFFILIATES**

 

In connection with the acquisition and development of rental propertyand the management of both the rental property and the Investor Partnership,the Investor Partnership and Property Partnerships have paid or accrued thefollowing amounts to certain affiliates:

 
|                                                                       |   | **Quarter  Ended  March 31, 2004** |   | **Year Ended  December 31, 2003** |   |
|----------------------------------------------------------------------------|--------|-----------------------------------------|--------|----------------------------------------|--------|
| Murphey Favre Properties – partnership  service fees                  |   | $                                       | 1,875  |                                   | $      | 7,500 |   |
|                                                                       |   |                                    |   |                                   |   |
| Developer general partners and affiliates –  property management fees |   | $                                       | 25,292 |                                   | $      | 95,687 |   |

 

Property management fees are paid out of rental operations.  Partnership services fees are payable fromfuture sales of the properties, to the extent they are not paid fromdistributions of rental operation cash (see Note 5).

 

Under terms of the management service agreements, seven of the 11Property Partnerships have affiliates of the DGPs which provide managementservices for the rental properties. They receive compensation for such servicesin amounts approximating 8.8% of rental receipts.  Three of the Property Partnerships are co-managed by affiliatesof the DGPs and provide management services for the rental properties.  These affiliates receive compensation forthe services provided in amounts approximating 2.1% of rental receipts.

 

As of March 31, 2004 and December 31, 2003, related partypayables consisted of the following:

 

|                           |   | **Quarter  Ended  March 31, 2004** |    | **Year Ended  December 31, 2003** |   |
|--------------------------------|--------|-----------------------------------------|---------|----------------------------------------|--------|
| Advances from DGPs             |   | $                                       | 201,784 |                                   | $      | 201,784 |   |
| Program management fees        |   | 326,726                                 |    | 326,726                                |   |
| Partnership services fees      |   | 69,375                                  |    | 67,500                                 |   |
| Advances from MFP              |   | 259,781                                 |    | 201,525                                |   |
| Advances from affiliate of DGP |   | 975                                     |    | 975                                    |   |
|                           |   | $                                       | 858,641 |                                   | $      | 798,510 |   |

 

8

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Advances from DGPs amounted to $201,784 at March 31, 2004 andDecember 31, 2003. Terms of RHS Loan Agreements require each DGP toprovide interest-free advances of stipulated amounts as initial operatingcapital to the Property Partnerships. The balances at March 31, 2004 and December 31, 2003 includeDGP interest-free advances of $152,107. In addition, the balances include DGP advances of $35,468 for landimprovements and $14,209 to fund operating deficits. Advances from the DGPs mayonly be repaid from the proceeds of future sales of the respective properties.

 

Program management fees due to MFP amounted to $326,726 and representamounts accrued through December 31, 1996.  No accruals have been recorded since that date (see Note 6).  Partnership services fees are also payableto MFP and reflect accruals through March 31, 2004 and December 31,2003. Partnership fees are payable from future sales of the properties, to theextent they are not paid from distributions of rental operation cash (see Note5).

 

During the first quarter of 2004 and the full year 2003, MFP advanced$58,256 and $50,242, respectively, to the Investor Partnership foradministrative expenses.  These advancesbrought the balances due to MFP at March 31, 2004 and December 31,2003 to $259,781 and $201,525, respectively.

 

An affiliate of one of the DGPs advanced $975 to the PropertyPartnership of the DGP.  Advances madeto one of the DGPs during 2001 totaled $9,000. During 2000, advances to this same DGP totaled $15,079 (see Note 6).

 

The Investor Partnership maintains deposits with WMB in certainchecking and money market accounts which aggregated $4,851 and $5,700 atMarch 31, 2004 and December 31, 2003, respectively.  Interest earned on such deposits totaled $1and $57, for the quarter ended March 31, 2004 and the year endedDecember 31, 2003, respectively.

 

**NOTE 3 - CASH IN RESERVE ACCOUNTS**

 

The Loan Agreements between the Property Partnerships and RHS requirethe Property Partnerships to deposit into separate reserve accounts $127,196annually until the reserve accounts reach $1,271,277.  Subject to RHS approval, these funds may be used for specificpurposes. During the quarter ended March 31, 2004, RHS approved thewithdrawal of reserve funds at several of the Property Partnerships resultingin a net decrease of $28,045 in the restricted deposit reserve accounts.

 

As of December 31, 3002, reserve funds pledged by the Logan DGPtotaled $52,300 (see Note 6).

 

**NOTE 4 - MORTGAGE NOTES PAYABLE**

 

The mortgage notes are payable to RHS in monthly installments totaling$26,959.  In accordance with provisionsof Interest Credit Agreements, RHS provides monthly interest credits totaling$69,129 which reduce the interest rates stated in the mortgage notes toeffective rates of one (1) percent over the lives of the mortgages.  Amortization of principal is based on thestated rates of 8.75% to 10.75% under RHS’s Predetermined AmortizationSchedule System (PASS).  Themortgage notes mature May, 2039 through March, 2040.  Substantially all of the rental property and equipment is pledgedas collateral on the mortgages.  Nopartner is individually liable on the mortgage notes.

 

The mortgage notes are regulated by the U.S. Government; there is nopublic or private market for the mortgage notes. Accordingly, management hasdetermined that users of the financial statements would derive no benefit fromany estimate of fair value and performing such an analysis would not bepracticable.

 

Principal payments on the mortgage notes for the next 5 years are asfollows:

 

| **Year**                           |   | **Amount** |       |
|------------------------------------|--------|------------|------------|
| 2004 (for the  remaining 9 months) |   | $          | 35,020     |   |
| 2005                               |   | 50,535     |       |
| 2006                               |   | 55,281     |       |
| 2007                               |   | 59,803     |       |
| 2008                               |   | 66,159     |       |
| Thereafter                         |   | 11,937,090 |       |
|                               |   | $          | 12,203,888 |   |

 

9

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At December 31, 2003, Logan, Wexford, Rolling Brook II andFairview were in non-compliance with funding their annual reservedeposits.  Although Wexford, RollingBrook II and Fairview reserve balance totals are in compliance, the loancovenants states that annual deposits will be made.  At the time of this filing, no notice has been received from themortgage holder

 

Additionally, Logan received a Letter of Acceleration of the LoanAccount in 2001, although further proceedings were suspended in 2001 and havenot been resumed.  In addition, realestate taxes totaling $30,509 were delinquent at December 31, 2003 whichis a violation of the Loan Agreement. At the time of this filing, no notice of default has been receivedregarding the delinquent real estate taxes. The Logan mortgage note balance totaled $983,467 and $984,306 atMarch 31, 2004 and December 31, 2003, respectively.

 

**NOTE 5 - RENTAL OPERATION CASH**

 

RHS regulations limit the distribution of rental operation cash to amaximum of $38,090 annually.  Anydistribution to the Investor Partnership from rental operation cash is to bemade in accordance with the respective partnership agreements.  Whether or not a Property Partnership makesany limited distribution is based on the Property Partnership’s results ofoperations and is at the discretion of the DGP.

 

**NOTE 6 - CONTINGENCIES**

 

The Investor Partnership has ceased accrual of the annual programmanagement fee, payable in part to the general partner. Management hasdetermined that the source of payment, a future sale or refinance of one ormore of the Property Partnerships, may not be sufficient to pay fees accrued inexcess of the $544,540 payable at December 31, 1996.  As a consequence, management has elected totreat fees for years subsequent to 1996 as a contingent liability. AtMarch 31, 2004 and December 31, 2003, the contingent liability forprogram management fees totaled $540,248 and $521,619 , respectively.

 

As discussed in Note 2, the Logan DGP owes Logan $24,079 for advancesnot in compliance with RHS regulations. In addition, one of the Logan DGPs pledged Logan assets for his own use.  He later filed a petition in personalbankruptcy.  That Logan DGP is in theprocess of being replaced, with U.S. Bankruptcy Court approval of a transfer ofthat DGP’s ownership interest in Logan to a replacement DGP.  The replacement DGP is expected to restorethe advances and pledged accounts to Logan in the second quarter of 2004 whenthe transfer of the ownership interests of the DGP in bankruptcy is expected tooccur.  Accordingly, no adjustment hasbeen made to the carrying value of these assets.

 

 

**Item 2****. Management’sDiscussion and Analysis of Financial Condition and Results of Operations**

 

#### **Cautionary Statements**

 

Certain matters discussed herein constitute forward-looking statementswithin the meaning of the Private Securities Litigation Reform Act of1995.  The Assisted Housing Fund L.P. I(AHF) (the Investor Partnership) intends such forward-looking statements to becovered by the safe harbor provisions for forward-looking statements and isincluding this statement for purposes of complying with these safe harborprovisions.  Although the InvestorPartnership believes the forward-looking statements are based on reasonableassumptions, the Investor Partnership can give no assurance that theirexpectations will be attained.  Actualresults and the timing of certain events could differ materially from thoseprojected or contemplated by the forward-looking statements due to a number offactors including, without limitation, occupancy levels, the outcome of legalproceeding regarding the Logan DGP, general economic and real estate conditionsand interest rates.

 

Occupancy levels at the Property Partnerships are one of the keyoperating factors for the Property Partnerships. The overall occupancy levelfor the quarter ending March 31, 2004 was 87% as compared to 95% for thesame period of 2003. Eight of the properties experienced a decline in occupancylevels from December 31, 2003 to March 31, 2004. The lowest occupancylevel at March 31, 2004 was 65%.

 

**Results of Operations**

 

For the Investor Partnership and its subsidiary Property Partnerships,the consolidated net loss was $252,089 and $195,744 for the quarters endedMarch 31, 2004 and 2003, respectively. The net loss experienced in the first quarter of 2004 was 29% higherthan that recorded in the first quarter of 2003. Net loss before depreciationwas $99,540 and $64,571 for the quarters ended March 31, 2004 and 2003,with depreciation expense of $152,550 and $131,173, respectively.

 

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Revenue totaled $444,123 for the first quarter of 2004, a 4% decreaseover the $463,387 recorded in the same period of 2003. The revenue decrease wasprimarily due to higher vacancy rates. Overall operating expenses increased by6% in the first quarter of 2004 as compared with the same period of 2003.  Loss from rental operations amounted to$203,693 and $147,614 for the first quarter of 2004 and 2003, respectively.

 

##### **Liquidity, Capital Resources, and Regulatory Compliance**

 

At March 31, 2004, the Investor Partnership’s operating cashamounted to $4,851 and the Property Partnerships’ operating cash totaled$159,760 for a combined total of $164,611. At December 31, 2003, the cash balance of $183,187 included $5,700in Investor Partnership cash and $177,487 in operating cash accounts of theProperty Partnerships.

 

Consolidated operational cash flows for the first quarter of 2004totaled $243 compared to a net operational cash flows used of $21,221 in thesame period of 2003.  Achieving positivecash flows continues to be a problem at several of the PropertyPartnerships.  For the three monthsended March 31, 2004, four properties generated positive cash flow. Forthe seven that generated negative cash flow, the deficits were funded fromrental operating cash and authorized reserve account withdrawals. The InvestorPartnership is not required to fund additional amounts to the PropertyPartnerships based on each Property Partnership agreement. Additionally, eachProperty Partnership is operated as an individual project, and without anycontractual arrangements of any kind between the Property Partnerships.

 

At March 31, 2004, Logan Apartments Company Limited Partnership’s(Logan) was approximately $38,000 in arrears in property taxes.  While this liquidity matter is a violationof RHS regulations, RHS has taken no action against Logan.  Further actions taken by a Logan DGP in 2000and 2001 that led to certain other violations of RHS regulations are thesubject of litigation and bankruptcy proceedings, more fully described in PartII. Item 1. Legal Proceedings.

 

There are no additional acquisitions nor any dispositions planned.

 

**Item 3****. Quantitativeand Qualitative Disclosures about Market Risks**

 

The management of the Investor Partnership does not believe that theoperation of the Investor Partnership and the Property Partnerships arematerially affected by interest rates or other financial market risks at thistime.  In the event of proposed futuresale of any of the Property Partnerships’ properties, mortgage interest ratesand availability of financing to potential buyers may have an impact on theselling opportunity.

 

**Item 4****. Controls andProcedures**

 

Within the ninety (90) days prior to the date of this report, anevaluation was performed under the supervision and with the participation ofthe Investor Partnership, including the President and the Principal AccountingOfficer of the General Partner, of the effectiveness of the design andoperation of the Investor Partnership’s disclosure and control procedures.  Based on that evaluation, the InvestorPartnership’s management, including the President and the Principal AccountingOfficer of the General Partner, concluded that the Investor Partnership’sdisclosure controls and procedures were effective as of March 31, 2004.  There have been no significant changes inthe Investor Partnership’s internal controls or in other factors that couldsignificantly affect internal controls subsequent to March 31, 2004.

 

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**PART II****. OTHERINFORMATION**

 

Except for the disclosures, set forth below, all items under Part IIare inapplicable or have a negative response and are therefore omitted.

 

**Item 1. Legal Proceedings**

 

There have been no changes to the legal proceedings as disclosed in ourmost recent Form 10-K filed for the year ended December 31, 2003.

 

###### **Item6.  Exhibits andReports on Form 8-K**

###### ** **

a.)                              Exhibits.

 

**INDEX OFEXHIBITS**

 
| **Exhibit No.** |   | **Description**                                                                                                                                             |
|-----------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |   |                                                                                                                                                        |
| 31(a)           |   | Certification  of the President of the General Partner Pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002 (filed herewith).                    |
|            |   |                                                                                                                                                        |
| 31(b)           |   | Certification  of the Principal Accounting Officer of the General Partner Pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). |
|            |   |                                                                                                                                                        |
| 32(a)           |   | Certification  of the President of the General Partner Pursuant to 18 U.S.C.  Section 1350 (filed herewith).                                           |
|            |   |                                                                                                                                                        |
| 32(b)           |   | Certification  of the Principal Accounting Officer of the General Partner Pursuant to 18  U.S.C. Section 1350 (filed herewith).                        |

 

(b)  No reports on Form 8-K were filed during thequarterly period ended March 31, 2004.

 

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**SIGNATURES**

 

 

Pursuantto the requirements of the Securities and Exchange Act of 1934, the Registranthas duly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized and on the date indicated.

 

 

ASSISTED HOUSING FUND L.P. I

Registrant

 
| By:    | Murphey  Favre Properties, Inc. |   |
|--------|---------------------------------|--------|
|   | *General Partner*               |   |
|   |                            |
|   |                            |
| By:    | /s/  Robert K.  Stump      |   | Date: |  May  14, 2004 |   |
|   | Robert  K.  Stump          |   |
|   | *President*                     |   |
|        |                                 |        |  |  |  |  |

 

Pursuantto the requirements of the Securities and Exchange Act of 1934, this report hasbeen signed below by the following persons on behalf of the Registrant and inthe capacities and on the dates indicated:

 
| By:    | Murphey  Favre Properties, Inc.               |   |   |          |
|--------|-----------------------------------------------|--------|--------|---------------|
|   | *General Partner*                             |   |   |          |
|   |                                          |   |   |          |   |
|   |                                          |   |   |          |   |
| By:    | /s/  Brett J. Atkinson                        |   | Date:  | May  14, 2004 |   |
|   | Brett  J. Atkinson                            |   |
|   | *Treasurer and Principal  Accounting Officer* |   |

 

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