June 24, 1999




Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

       Boston Financial Tax Credit Fund VIII, A Limited Partnership
       Form 10-K Annual Report for the Year Ended March 31, 1999
       Commission File Number 0-26522

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 the subject report.

Very truly yours,



/s/Stephen Guilmette
Stephen Guilmette
Assistant Controller


TC810K.98



<PAGE>


                                         UNITED STATES
                              SECURITIES AND EXCHANGE COMMISSION
                                     Washington, DC 20549

                                           FORM 10-K

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

For the fiscal year ended                               Commission file number
March 31, 1999                                                  33-68088

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

            Massachusetts                                    04-3205879
--------------------------------------            ---------------------------
       (State of organization)                             (I.R.S. Employer
                                                          Identification No.)

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

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

Securities registered pursuant to Section 12(b) of the Act:
                                                    Name on each exchange on
         Title of each class                             which registered
--------------------------------------       ---------------------------------
                None                                        None

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

                                  UNITS OF LIMITED PARTNERSHIP INTEREST
                                            (Title of Class)
                                               200,000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                                              Yes X No __

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (Subsection  229.405 of this chapter) is not contained herein,
and will not be contained,  to the best of registrant's knowledge, in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]

State the aggregate  sales price of partnership  units held by non affiliates of
the registrant.

                $28,801,000 as of March 31, 1999


<PAGE>





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

                                                     Part of Report on
                                                     Form 10-K into
                                                     Which the Document
                                                     is Incorporated

Documents incorporated by reference

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

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

Acquisition Reports                                        Part I, Item 1

Prospectus - Sections Entitled:

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

     "Investment Risks"                                    Part I, Item 1

     "Estimated Use of Proceeds"                           Part III, Item 13

     "Management Compensation and Fees"                    Part III, Item 13

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







<PAGE>
<TABLE>
<CAPTION>


                                     BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP

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


                                                           TABLE OF CONTENTS


                                    Page No.

PART I

<S>       <C>                                                                 <C>
     Item 1      Business                                                     K-3
     Item 2      Properties                                                   K-5
     Item 3      Legal Proceedings                                            K-8
     Item 4      Submission of Matters to a Vote of
                  Security Holders                                            K-8

PART II

     Item 5      Market for the Registrant's Units and
                  Related Security Holder Matters                             K-9
     Item 6      Selected Financial Data                                      K-10
     Item 7      Management's Discussion and Analysis of
                  Financial Condition and Results of Operations               K-11
     Item 7A.    Quantitative and Qualitative Disclosures about
                 Market Risk                                                  K-13
     Item 8      Financial Statements and Supplementary Data                  K-13
     Item 9      Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosure                      K-13

PART III

     Item 10     Directors and Executive Officers
                  of the Registrant                                           K-14
     Item 11     Management Remuneration                                      K-15
     Item 12     Security Ownership of Certain Beneficial
                  Owners and Management                                       K-15
     Item 13     Certain Relationships and Related Transactions               K-16

PART IV

     Item 14     Exhibits, Financial Statement Schedule and
                  Reports on Form 8-K                                         K-19

SIGNATURES                                                                    K-20

</TABLE>

<PAGE>


                                                                PART I


Item 1.  Business

Boston  Financial Tax Credit Fund VIII, A Limited  Partnership (the "Fund") is a
Massachusetts  limited  partnership  formed on August 25, 1993 under the laws of
the   Commonwealth   of   Massachusetts.   The  Fund's   partnership   agreement
("Partnership  Agreement") authorizes the sale of up to 200,000 Units of limited
partnership  interest  at $1,000 per Unit in series.  The first  series  offered
50,000 Units.  On July 29, 1994,  the Fund held its final investor  closing.  In
total the Fund had raised  $36,497,000  ("Gross  Proceeds")  through the sale of
36,497 Units.  Such amounts  exclude a fractional  unregistered  Unit previously
acquired  for  $100 by the  Initial  Limited  Partner.  The  offering  of  Units
terminated on March 29, 1995.

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

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

Table A on the following  page lists the  properties  owned by the Local Limited
Partnerships in which the Fund had invested as of March 31, 1999. Item 7 of this
Report contains other significant information with respect to such Local Limited
Partnerships.  The terms of the  acquisition  of each Local Limited  Partnership
interest have been described in the Form 8-Ks and a supplement to the Prospectus
listed  in  Part  IV  of  this  Report  on  Form  10-K;  such  descriptions  are
incorporated herein by this reference.


<PAGE>
<TABLE>
<CAPTION>


                                                                TABLE A

                                                        SELECTED LOCAL LIMITED
                                                           PARTNERSHIP DATA


 Property owned by Local                                                                        Date
  Limited Partnerships*                                                                       Interest
                                                      Location                                Acquired
---------------------------                      --------------------                        ------------

<S>                                             <C>                                         <C>
Green Wood                                      Gallatin, TN                                03/02/94

Webster Court                                   Kent, WA                                    05/13/94

Springwood                                      Tallahassee, FL                             12/15/94

Meadow Wood of Pella                            Pella, IA                                   06/03/94

Hemlock Ridge                                   Livingston Manor, NY                        04/29/94

Pike Place                                      Fort Smith, AR                              01/31/94

West End Place                                  Springdale, AR                              01/12/94

Oak Knoll Renaissance                           Gary, IN                                    11/01/94

Beaverdam Creek                                 Mechanicsville, VA                          11/16/94

Live Oaks Plantation                            West Palm Beach, FL                         06/28/94

</TABLE>


*   The Fund's interest in profits and losses of each Local Limited  Partnership
    arising  from  normal  operations  is 99%,  except for  Springwood  which is
    79.20%,  Hemlock Ridge which is 77%, and Pike Place and West End Place which
    are 90%.  Profits and losses arising from sale or  refinancing  transactions
    are allocated in accordance  with the respective  Local Limited  Partnership
    Agreements.

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

Each Local Limited  Partnership  has, as its general  partners  ("Local  General
Partners"),  one or more individuals or entities not affiliated with the Fund or
its General Partner.  In accordance with the partnership  agreements under which
such entities are organized ("Local Limited Partnership  Agreements"),  the Fund
depends on the Local General  Partners for the  management of each Local Limited
Partnership. As of March 31, 1999, the following Local Limited Partnerships have
a common Local  General  Partner or affiliated  group of Local General  Partners
accounting for the specified  percentage of the total capital  contributions  in
Local Limited Partnerships: (i) Green Wood and Springwood,  representing 21.71%,
have Flournoy Development Company as Local General Partner;  (ii) Pike Place and
West End Place,  representing  12.90%,  have Lindsey Management Company as Local
General  Partner.  The Local  General  Partners of the  remaining  Local Limited
Partnerships  are  identified  in  the  Acquisition  Reports  which  are  herein
incorporated by reference.

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

The Fund is managed by Arch Street VIII  Limited  Partnership,  the sole General
Partner of the Fund. The Fund, 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 Fund is set forth in Item 10 of this Report.

Item 2.  Properties

The Fund owns limited  partnership  interests in ten Local Limited  Partnerships
which  own and  operate  Properties,  some of which  benefit  from  some form of
federal,  state, or local  assistance  programs and all of which qualify for the
Tax  Credits  added  to the  Code by the Tax  Reform  Act of  1986.  The  Fund's
ownership interest in the Local Limited  Partnerships is 99%, with the exception
of  Springwood  which is 79.20%,  Hemlock Ridge which is 77%, and Pike Place and
West End Place which are 90%.

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

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

The following  schedule  provides  certain key  information on the Local Limited
Partnership interests acquired by the Fund.


<PAGE>


<TABLE>
<CAPTION>



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


Green Wood Apartments,
   a Limited Partnership
Green Wood Apartments
<S>                             <C>            <C>               <C>            <C>                 <C>                   <C>
Gallatin, TN                    164            $3,825,916        $3,825,916     $5,179,303             None               87%

Webster Court Apartments
   a Limited Partnership
Webster Court Apartments
Kent, WA                         92             2,318,078         2,318,078      2,835,486             None               96%

Springwood Apartments
   a Limited Partnership (1)
Springwood Apartments
Tallahassee, FL                 113             2,499,202         2,499,202      3,894,649             None               90%

Meadow Wood Associates
   of Pella, a Limited Partnership
Meadow Wood of Pella
Pella, IA                        30               893,808           893,808      1,110,733          Section 8             96%

RMH Associates, a Limited
   Partnership (1)
Hemlock Ridge
Livingston Manor, NY            100             1,697,298         1,697,298      2,105,654          Section 8             83%

Pike Place, a Limited
   Partnership (1)
Pike Place
Fort Smith, AR                  144             1,915,328         1,915,328      3,303,163            None                99%

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



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

West End Place, a Limited
   Partnership (1)
West End Place
<S>                                 <C>           <C>                <C>         <C>                <C>                   <C>
Springdale, AR                      120           1,843,010          1,843,010   2,914,729          None                  100%

Oak Knoll Renaissance, a
   Limited Partnership
Oak Knoll Renaissance
Gary, IN                            256           4,922,412          4,922,412   5,320,816          Section 8              98%

Beaverdam Creek Associates,
   a Limited Partnership (2)
Beaverdam Creek
Mechanicsville, VA                  120           3,629,140          3,629,140   3,333,911          None                   98%

Schickedanz Brothers Palm
   Beach Limited
Live Oaks Plantation
West Palm Beach, FL                 218           5,587,953          5,587,953   7,793,227          None                   67%
                                  ------        -----------       ------------  ------------
                                   1,357        $29,132,145        $29,132,145  $37,791,671
                                  ======        ===========        ===========  ===========

(1)          Boston  Financial Tax Credits Fund VIII has a 79.20% interest in Springwood  Apartments,  L.P., a 77% interest in RMH
             Associates,  L.P., and a 90% interest in Pike Place, L.P. and West End Place, L.P.  The mortgage payable balances
             represent 100% of the outstanding balances.

(2)          The amount paid includes funds advanced under a promissory note agreement with Boston Financial Tax Credit Fund VIII,
             a Limited Partnership.

*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.

</TABLE>


<PAGE>




Four Local Limited Partnerships invested in by the Fund each represent more than
10% of the total capital  contributions to be made to Local Limited Partnerships
by the Fund.  These Local Limited  Partnerships  are as follows:  (i) Green Wood
Apartments  Limited  Partnership,  with  Flournoy  Development  Company as Local
General Partner; (ii) Oak Knoll Renaissance Limited Partnership,  with Ronald M.
Gatton  Redevelopment  Services as Local General Partner;  (iii) Beaverdam Creek
Associates Limited  Partnership,  with Castle  Development  Corporation as Local
General Partner;  and (iv) Schickedanz  Brothers Palm Beach Limited Partnership,
which owns Live Oaks  Plantation  and has  Schickedanz  Enterprise  as its Local
General Partner.

Green Wood Apartments  Limited  Partnership,  representing  13.13% of the Fund's
total  investment in the Local Limited  Partnerships,  has obtained a $5,322,000
mortgage loan payable at 8.860% per annum with monthly payments of principal and
interest in the amount of $42,287 due through June 1, 2010.

Oak Knoll  Renaissance  Limited  Partnership,  representing  16.90% of the total
investment in the Local Limited Partnerships,  has obtained a permanent mortgage
loan  payable at 10.125%  per annum,  with  monthly  payments of  principal  and
interest  in the amount of $52,205 due through  June 1, 2018.  The  construction
loan of  $5,676,337  with the City of Gary,  Indiana,  was  repaid  in 1996 when
permanent financing was obtained.

Beaverdam  Creek  Associates   Limited   Partnership   ("Beaverdam  Creek  LP"),
representing  12.46%  of  the  Fund's  total  investment  in the  Local  Limited
Partnerships,  has obtained two mortgage loans in the original principal amounts
of $2,420,000 and $1,000,000 from the Virginia Housing and Development Authority
("VHDA").  The VHDA mortgage notes bear interest at 10.62% and 5%, respectively,
per annum.  The mortgage  notes are unsecured and are secured by a deed of trust
on  the  rental  property.  The  mortgage  notes  payable  are  due  in  monthly
installments of principal and interest of $22,354 and $5,368,  respectively,  to
the year 2025.

Schickedanz Brothers Palm Beach Limited Partnership,  representing 19.18% of the
total  investment  in the  Local  Limited  Partnerships,  entered  into two loan
agreements.  The first is with Newport Mortgage  Company,  L.P., in the original
amount of $6,493,000. The loan bears interest at a rate of 8.94% per annum, with
monthly  payments of principal and interest in the amount of $51,964 due through
July 7,  2026.  As of  December  31,  1998,  $6,377,227  is  outstanding  on the
mortgage.

The  second  loan  agreement  is a Home loan with the  Florida  Housing  Finance
Agency, with a principal amount not to exceed $1,531,000. Interest on the unpaid
principal  balance shall be due at the Applicable  Federal Rate ("AFR") for long
term  obligations  as of the  commencement  date of the loan.  Interest shall be
payable  at 3% per annum  commencing  on June 30,  1995.  Deferred  interest  is
compounded  annually and is due together with the principal  balance on February
28, 2025. As of December 31, 1998,  total funds in the amount of $1,416,000 have
been drawn on the loan.

The duration of the leases for occupancy in the Properties  described above will
be six to twelve months.  The General Partners believe the Properties  described
herein are adequately covered by insurance.

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

Item 3.  Legal Proceedings

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



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

None.

<PAGE>

                                     PART II

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

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

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

As of June 15, 1999, there were 1,234 record holders of Units of the Fund.

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



<PAGE>


Item 6.  Selected Financial Data

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

                                         March 31,         March 31,        March 31,        March 31,         March 31,
                                           1999             1998              1997             1996              1995
<S>                                   <C>              <C>               <C>              <C>               <C>
Revenue                               $     103,830    $       98,132    $     100,536    $      511,713    $     763,502
Equity in losses of Local Limited
 Partnerships                            (1,745,890)       (2,083,625)      (1,922,556)         (881,551)        (161,157)
Net income (loss)                        (2,027,965)       (2,408,077)      (2,247,908)         (782,504)         160,473
Per Limited Partnership Unit (A)             (55.01)           (65.32)          (60.98)           (21.23)            5.52
Cash and cash equivalents                   180,030           213,966          273,412            71,715       10,495,010
Marketable Securities                     1,455,618         1,486,223        1,442,676         3,709,881        1,575,592
Investment in Local Limited
Partnerships                             23,234,665        25,099,334       26,813,245        26,064,146       19,840,904
Total assets (B)                         24,889,168        26,827,966       29,078,258        31,277,311       32,240,835
Long-term debt                                    -                 -                -                 -                -
Cash Distribution                                 -                 -                -                 -                -
Other data:
Passive loss (C)                         (2,394,493)       (2,836,009)      (2,936,579)       (1,638,463)        (511,934)
Per Limited Partnership Unit (C)             (64.95)           (76.93)          (79.66)           (44.44)          (13.89)
Portfolio income (C)                        124,579           151,751          161,828           764,632          628,323
Per Limited Partnership Unit (C)               3.38             4.12              4.39             20.74            17.04
Low-Income Housing Tax Credit (C)         5,234,040         5,234,045        5,234,045         3,307,725          313,289
Per Limited Partnership Unit (C)             141.98            141.98           141.98             89.72             8.50
Local Limited Partnership interests
owned at end of period                           10                10               10                10               10

</TABLE>

(A)  Per Limited  Partnership  Unit data is based upon 36,497 units for the
     years ended March 31, 1999, 1998, 1997 and 1996, and a weighted average
     number of units outstanding of 28,774 for the year ended March 31, 1995.

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

(C)  Income Tax  information  is as of December 31, the year end of the Fund for
     income tax purposes.  Per Limited  Partnership  Unit data is based upon the
     final  investor  closing  held on July  29,  1994  for a  total  of  36,497
     outstanding Units.



<PAGE>


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

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

Liquidity and Capital Resources

At March  31,  1999,  the Fund had cash  and cash  equivalents  of  $180,030  as
compared  to $213,966  at March 31,  1998.  This  decrease  is  attributable  to
purchases of marketable securities and cash used for operations. These decreases
to cash and cash equivalents are offset partially by cash distributions received
from Local  Limited  Partnerships  and  proceeds  from sales and  maturities  of
marketable securities.

As of March 31, 1999, approximately $1,239,000 of marketable securities has been
designated  as Reserves.  The Reserves  are  established  to be used for working
capital of the Fund and contingencies  related to the ownership of Local Limited
Partnership  interests.  Management  believes that the interest income earned on
Reserves,   along  with  cash   distributions   received   from  Local   Limited
Partnerships,  to the extent  available,  will be  sufficient to fund the Fund's
ongoing  operations.  Reserves may be used to fund  operating  deficits,  if the
General Partner deems funding appropriate.

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

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

Cash Distributions

No cash  distributions  were made  during the year ended March 31,  1999.  It is
expected that cash available for  distribution,  if any, will not be significant
in fiscal  year 2000.  As funds  from  temporary  investments  are paid to Local
Limited  Partnerships,  interest earnings on those funds decrease.  In addition,
some of the  properties  benefit from some type of federal or state subsidy and,
as a consequence, are subject to restrictions on cash distributions.

Results of Operations

1999 versus 1998

For the year ended March 31, 1999, the Fund's operations  resulted in a net loss
of $2,027,965,  as compared to $2,408,077 for the year ended March 31, 1998. The
decrease in net loss is primarily attributable to a decrease in equity in losses
of Local Limited Partnerships. The decrease in equity in losses of Local Limited
Partnerships for the year ended March 31, 1999 as compared to the same period in
1998, is primarily attributable to an increase in rental and other income.



<PAGE>
1998 versus 1997

For the year ended March 31, 1998, the Fund's operations  resulted in a net loss
of $2,408,077,  as compared to $2,247,908 for the year ended March 31, 1997. The
increase  in net loss is  primarily  attributable  to an  increase  in equity in
losses of Local Limited Partnerships.  The increase in equity in losses of Local
Limited  Partnerships for the year ended March 31, 1998, as compared to the same
period in 1997, is primarily attributable to an increase in operating expenses.

Low-Income Housing Tax Credits

The 1998,  1997 and 1996 tax credits were $141.98 per Unit. The 1995 tax credits
were $89.72 per Unit.  Tax Credits are not  available  for a property  until the
property is placed in service and its apartment  units are occupied by qualified
tenants.  In the first  year the Tax Credit is  claimed,  the  allowable  credit
amount is  determined  using an  averaging  convention  to reflect the number of
months that units  comprising  the  qualified  basis were  occupied by qualified
tenants during the year. To the extent that the full amount of the annual credit
is not  allocated  in the first  year,  an  additional  credit in such amount is
available in the 11th taxable year.

As of December 31, 1995,  all of the  properties  had been placed in service and
were generating Tax Credits. Some of the properties had less than a full year of
operations  in the period  ended  December  31,  1995.  They were subject to the
averaging convention mentioned above,  therefore the Fund did not receive a full
allocation  of Tax Credits with  respect to those  properties  in 1995.  The Tax
Credits per Limited  Partnership Unit have stabilized at approximately  $142 per
unit, as properties have reached completion and have become fully leased.  Since
the Tax Credits have  stabilized,  the annual  amount  allocated to investors is
expected to remain the same for about seven years.  In years eight  through ten,
the credits are expected to decrease as properties reach the end of the ten year
credit  period.  However,  because the compliance  periods extend  significantly
beyond the tax credit periods, the Partnership is expected to retain most of its
interests in the Local Limited Partnerships for the foreseeable future.

Property Discussions

The Fund is invested in ten Local Limited  Partnerships which own ten properties
located in eight  states.  Two  properties,  representing  356 units,  underwent
rehabilitation,   and  eight  properties,   representing  1001  units,  are  new
construction.  All of the  ten  properties  are  complete  and  through  initial
lease-up.

Most of the ten Local  Limited  Partnerships  have  stabilized  operations.  The
majority  of  these  stabilized   properties  are  operating  at  break-even  or
generating positive operating cash flow.

Live Oaks  Plantation,  located in West Palm Beach,  Florida,  has experienced a
decrease in the occupancy. As of December 31, 1998, occupancy was 72%, down from
85% in  September.  The change in occupancy is primarily  due to the majority of
first-year leases expiring and management's decision not to renew all the leases
due  to  tenant  collection   problems.   Further  compounding  the  problem  is
competition  from new  affordable  housing  complexes in the area.  Accordingly,
management  is developing a more  aggressive  marketing  strategy.  The Managing
General  Partner  will be working  closely  with the Local  General  Partner and
management agent to monitor operations.

In accordance with Financial  Accounting  Standard No. 121,  "Accounting for the
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed Of",
the Fund has implemented  policies and practices for assessing impairment of its
real estate assets and investments in Local Limited Partnerships.  Each asset is
analyzed by real estate experts to determine if an impairment  indicator exists.
If so, the  carrying  value is  compared to the  undiscounted  future cash flows
expected to be derived from the asset and, if there is a significant  impairment
in value,  a  provision  to write  down the asset to fair  value will be charged
against income.


<PAGE>


Inflation and Other Economic Factors

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

Since  some  of the  properties  are  expected  to  benefit  from  some  form of
governmental assistance,  the Fund is subject to the risks inherent in that area
including  decreased  subsidies,  difficulties in finding  suitable  tenants and
obtaining permission for rent increases.  In addition, any Tax Credits allocated
to  investors  with respect to a property are subject to recapture to the extent
that the  property,  or any  portion  thereof,  ceases  to  qualify  for the Tax
Credits.

Certain  of the  properties  in which the Fund  invests  may be located in areas
suffering from poor economic  conditions.  Such conditions could have an adverse
effect  on the  rent  or  occupancy  levels  at such  properties.  Nevertheless,
management believes that the generally high demand for below market rate housing
will tend to negate such  factors.  However,  no assurance  can be given in this
regard.

Impact of Year 2000

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

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


Item 7A. Quantitative and Qualitative Disclosures about Market Risk

The Fund has invested in marketable  securities  with a fair value of $1,455,618
at March 31, 1999; these securities,  with rates ranging from 4.91% to 6.03%, do
not subject  the Fund to  significant  market  risk  because of their short term
maturities  and high  liquidity.  The Fund has no other  exposure to market risk
associated  with  activities in  derivative  financial  instruments,  derivative
commodity instruments, or other financial instruments.


Item 8.  Financial Statements and Supplementary Data

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


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

None.



<PAGE>

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

The  General  Partner of the Fund is Arch  Street VIII  Limited  Partnership,  a
Massachusetts  limited partnership (the "General Partner"),  an affiliate of The
Boston Financial Group Limited Partnership ("Boston Financial"), a Massachusetts
limited  partnership.  George  Fantini,  Jr., a Vice  President  of the  General
Partner,  resigned his position  effective June 30, 1995.  Donna Gibson,  a Vice
President of the General  Partner,  resigned  from her position on September 13,
1996.  Georgia  Murray  resigned  as  Managing  Director,  Treasurer  and  Chief
Financial  Officer of the General  Partner on May 25, 1997.  Fred N. Pratt,  Jr.
resigned as Managing Director of the General Partner on May 28, 1997. William E.
Haynsworth  resigned as a Managing  Director and Chief Operating  Officer of the
General Partner on March 23, 1998.  Peter G. Fallon resigned as a Vice President
of the General Partner on June 1, 1999.

The General  Partner was formed in August  1993.  Randloph G.  Hawthorne  is the
Chief   Operating   Officer  of  the   General   Partner  and  has  the  primary
responsibility  for evaluating,  selecting and  negotiating  investments for the
Fund. The Investment  Committee of the General Partner approves all investments.
The names and  positions  of the  principal  officers  and the  directors of the
General Partner are set forth below.

Name     Position

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

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

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

Jenny  Netzer,  age 43,  graduated  from  Harvard  University  (B.A.,  1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982.  Ms.  Netzer  joined  Boston  Financial  in 1987  and is a Senior  Vice
President leading the Institutional Tax Credit Team. She is also a member of the
Senior Leadership Team, the firm's Executive Committee.  Previously,  Ms. Netzer
led Boston  Financial's  new business  initiatives  and managed the firm's Asset
Management division,  which is responsible for the performance of 750 properties
and providing service to 35,000 investors.  Before joining Boston Financial, she
was Deputy Budget Director for the Commonwealth of Massachusetts,  where she was
responsible  for the  Commonwealth's  health care and public  pension  programs'
budgets.  Ms. Netzer was also  Assistant  Controller at Yale  University and has
been a member of the Watertown Zoning Board of Appeals.

Michael H. Gladstone,  age 42,  graduated from Emory  University  (B.A.,  1978)
and Cornell  University  (J.D.,  M.B.A.,  1982).  Mr.  Gladstone  joined Boston
Financial in 1985 and is Vice  President and General  Counsel.  He is also a
member of the Senior Leadership  Team.  Prior to joining  Boston Financial,  Mr.
Gladstone was associated with the Boston law firm of Herrick & Smith.  Mr.
Gladstone is on the Advisory Board of the Housing and Development Reporter. He
is also a member of the Investment Program  Association, The National  Realty
Committee,  Cornell Real Estate  Council,  National  Housing  Conference and the
Massachusetts Bar.

Randolph G.  Hawthorne,  age 49, is a graduate  of  Massachusetts  Institute  of
Technology (S.B., 1971) and Harvard Graduate School of Business (M.B.A.,  1973).
Mr.  Hawthorne joined Boston Financial in 1973 and is currently a Vice President
responsible for structuring and acquiring real estate  investments.  Previously,
Mr.  Hawthorne  served as Treasurer of Boston  Financial.  Mr. Hawthorne is Past
Chairman of the Board of the National  Multi Housing  Council,  having served on
the board  since  1989.  He is a past  president  of the  National  Housing  and
Rehabilitation  Association,  a member of the Residential Development Council of
the  Urban  Land  Institute,  as well as a member of the  Advisory  Board of the
Berkeley Real Estate  Center at the  University  of  California.  In addition to
speaking at industry conferences,  he is on the Editorial Advisory Boards of the
Tax Credit Advisor and Multi-Housing News.

<PAGE>

James D. Hart, age 41,  graduated from Trinity  College (B.A.) and Amos Tuck
School at Dartmouth College  (M.B.A.). Mr. Hart joined Boston  Financial in 1998
and serves as Chief  Financial  Officer and is a member of the Senior Leadership
Team.  Prior to joining  Boston  Financial,  Mr. Hart was engaged in venture
capital  management on behalf of institutional  investors,  including the
negotiation and structuring of private equity and mezzanine  transactions, as a
Vice President of Interfid Ltd. and later in the operational  management of a
venture-backed  software company as Managing  Director and Chief Financial
Officer of Bitstream Inc.  Mr. Hart has also served on the Board of Directors of
several companies, including those that went on to complete initial public
offerings.

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

William E. Haynsworth,  age 59, is a graduate of Dartmouth College (A.B.,  1961)
and Harvard Law School (L.L.B.,  1964;  L.L.M.,  1969). Mr. Haynsworth joined
Boston  Financial  in 1977 and is a Senior  Vice President  responsible  for the
structuring  of real  estate  investments  and the  acquisition  of property
interests.  Prior to joining Boston Financial,  Mr. Haynsworth was Acting
Executive  Director and General Counsel of the Massachusetts  Housing Finance
Agency. He was also the Director of  Non-Residential  Development of the Boston
Redevelopment  Authority and an associate of the law firm of Goodwin,  Procter
& Hoar. Mr. Haynsworth  is a member of the  Executive  Committee  and the Board
of Directors of the  Affordable  Housing Tax Credit  Coalition.  He is a member
of the Senior Leadership Team and the Board of Directors of Boston Financial.
Mr. Haynsworth has over 25 years of real estate experience.

Item 11.  Management Remuneration

Neither  the  partners of Arch Street  VIII  Limited  Partnership  nor any other
individual with significant involvement in the business of the Fund receives any
current or proposed remuneration from the Fund.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

As of March 31, 1999, the following  entities are the only entities known to the
Fund to be the beneficial owners of more than 5% of the Units outstanding:

                                                                      Amount
Title of Class    Name and Address of                Beneficially    Percent of
                  Beneficial Owner                     Owned            Class
---------------  -------------------------------      ------------ -------------

Limited         Oldham Institutional Tax Credits LLC   2,476 Units       6.78%
Partner         101 Arch Street
                 Boston, MA


<PAGE>

<TABLE>
<CAPTION>


                                                                      Amount
Title of Class                 Name and Address of                 Beneficially                   Percent of
                                 Beneficial Owner                      Owned                        Class
---------------           -------------------------------          --------------                -------------

<S>                     <C>                                        <C>                              <C>
Limited                 Oldham Institutional Tax Credits           5,220 Units                      14.30%
Partner                 VI LLC
                        101 Arch Street
                        Boston, MA

Limited                 Liberty Corporation                        2,079 Units                      5.70%
Partner                 PO Box 789
                        Greenville, SC

</TABLE>

Oldham Institutional Tax Credits LLC and Oldham Institutional Tax Credits VI LLC
are affiliates of Arch Street VIII Limited Partnership, the General Partner.

The equity  securities  registered  by the Fund under  Section  12(g) of the Act
consist  of  200,000  Units,  36,497 of which have been sold to the public as of
March 31, 1999.  Holders of Units are permitted to vote on matters affecting the
Fund only in certain unusual  circumstances  and do not generally have the right
to vote on the operation or management of the Fund.

As of March 31, 1999, Arch Street VIII, Inc. owns a fractional (unregistered)
Unit not included in the Units sold to the public.

Except as described in the preceding paragraphs, neither Arch Street VIII, Inc.,
Arch  Street  VIII  Limited  Partnership,  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 General  Partner does not know of any existing  arrangement  that might at a
later date result in a change in control of the Fund.

Item 13.  Certain Relationships and Related Transactions

The Fund is required to pay certain fees to and  reimburse  certain  expenses of
the General Partner or its affiliates (including Boston Financial) in connection
with the  organization  of the Fund and the offering of Units.  The Fund is also
required to pay certain fees to and  reimburse  certain  expenses of the General
Partner or its affiliates  (including  Boston  Financial) in connection with the
administration of the Fund and its acquisition and disposition of investments in
Local  Limited  Partnerships.  In addition,  the General  Partner is entitled to
certain Fund distributions under the terms of the Partnership  Agreement.  Also,
an affiliate of the General  Partner 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  years  ended  March  31,  1999,  1998  and  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.

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

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



<PAGE>

Organizational fees and expenses and selling expenses

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
certain  fees to and  reimburse  expenses of the  General  Partner and others in
connection  with the  organization  of the Fund and the  offering of its Limited
Partnership Units. Selling commissions, fees and accountable expenses related to
the sale of the Units totaling  $4,664,369 have been charged directly to Limited
Partners'  equity. In connection  therewith,  $2,828,918 of selling expenses and
$1,835,451 of offering expenses incurred on behalf of the Fund have been paid to
an  affiliate  of  the  General  Partner.  The  Fund  may be  required  to pay a
non-accountable expense allowance for marketing expense equal to a maximum of 1%
of Gross  Proceeds.  The Fund has  capitalized  an additional  $50,000 which was
reimbursed  to an  affiliate  of the General  Partner.  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.

Acquisition fees and expenses

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
acquisition fees to and reimburse acquisition expenses of the General Partner or
its affiliates for selecting, evaluating,  structuring,  negotiating and closing
the Partnership's  investments in Local Limited  Partnerships.  Acquisition fees
total 6% of the gross offering  proceeds.  Acquisition  expenses,  which include
such expenses as legal fees and expenses,  travel and  communications  expenses,
costs of appraisals, accounting fees and expenses, are expected to total 1.5% of
the gross  offering  proceeds.  Acquisition  fees  totaling  $2,189,820  for the
closing of the Fund's  Local  Limited  Partnership  Investments  were paid to an
affiliate of the General Partner.  Acquisition  expenses  totaling $335,196 were
reimbursed  to an affiliate of the General  Partner.  Payments made and expenses
reimbursed in the years ended March 31, 1999, 1998 and 1997 are as follows:

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

Acquisition fees and expenses        $          -     $       -        $    888

Asset Management Fees

An  affiliate  of the  General  Partner  receives  a base  amount of 0.565%  (as
adjusted by the CPI factor) of Gross  Proceeds  annually as an Asset  Management
Fee for administering the affairs of the Fund. Asset Management Fees incurred in
the years ended March 31, 1999, 1998 and 1997 are as follows:

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

Asset Management Fees              $    206,220     $   199,592      $  193,635

Salaries and benefits expense reimbursement

An  affiliate  of the  General  Partner  is  reimbursed  for the cost of certain
salaries and benefits expenses which are incurred by an affiliate of the General
Partner on behalf of the Fund.  The  reimbursements  are based upon the size and
complexity  of the Fund's  operations.  Reimbursements  made in the years  ended
March 31, 1999, 1998 amd 1997, are as follows:
                                      1999             1998           1997
                                 ------------     -----------      -----------

Salaries and benefits
expense reimbursement          $     77,890       $    93,551      $   108,120




<PAGE>


Property Management Fees

BFPM, an affiliate of the Managing General Partner,  currently manages Beaverdam
Creek,  a property in which the Fund has invested.  The property  management fee
charged  is equal to 4% of cash  receipts.  Fees  earned by BFPM which have been
included in operating  expenses in the summarized income statements in Note 3 to
the Financial  Statements in Part II, Item 8 for the three years ended  December
31, 1998, 1997 and 1996, are as follows:

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

Property Management Fees       $     34,183     $    29,440       $    27,556

Cash distributions paid to the General Partners

In accordance with the Partnership  Agreement,  the General Partner of the Fund,
Arch Street VIII Limited Partnership,  receives 1% of cash distributions made to
partners.  As of March 31, 1999, the Fund has not paid any cash distributions to
partners.

Additional  information  concerning  cash  distributions  and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Boston  Financial and its affiliates  during each
of the three years ended March 31, 1999 is presented in Note 5 to the  Financial
Statements.


<PAGE>



                                     PART IV

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

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

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

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

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

(a)(3) See Exhibit Index contained herein.

(a)(3)(b)  Reports on Form 8-K:
    No reports on Form 8-K were filed year the year ended March 31, 1999.

(a)(3)(c)   Exhibits


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

   27.  Financial Data Schedule

   28.  Additional Exhibits

        (a)   28.1  Reports of Other Independent Auditors

        (b)   Audited financial statements of Local Limited Partnerships

               Live Oaks

(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 TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP

      By:   Arch Street VIII, Limited Partnership
            its General Partner



     By:   /s/ Randolph G. Hawthorne            Date:    June 24, 1999
           ------------------------------                --------------------
           Randolph G. Hawthorne,
           Managing Director 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 General Partner of the
Fund and in the capacities and on the dates indicated:



     By:   /s/ Randolph G. Hawthorne           Date:    June 24, 1999
           ------------------------------               ----------------------
           Randolph G. Hawthorne,
           Managing Director and
           Chief Operating Officer




     By:   /s/Michael H. Gladstone             Date:    June 24, 1999
           ------------------------------              ---------------------
           Michael H. Gladstone,
           A Managing Director






<PAGE>

Item 8.  Financial Statements and Supplementary Data


          BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP

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


                                                                    Page No.


     Report of Independent Accountants
        For the years ended March 31, 1999, 1998 and 1997              F-2

     Financial Statements

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

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

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

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

       Notes to Financial Statements                                   F-7

     Financial Statement Schedule

       Schedule III - Real Estate and Accumulated
         Depreciation                                                  F-16

      See also Index to Exhibits on Page K-19 for the  financial  statements  of
      the Investor Local Limited  Partnership  included as a separate exhibit in
      this Annual Report of 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>




                                      F-22

                        REPORT OF INDEPENDENT ACCOUNTANTS


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

In our  opinion,  based on our audits and the  reports  of other  auditors,  the
combined  financial  statements listed in the accompanying index present fairly,
in all material  respects,  the financial  position Boston  Financial Tax Credit
Fund VIII, A Limited  Partnership  (the "Fund") at March 31, 1999 and 1998,  and
the results of its  operations and its cash flows for each of the three years in
the  period  ended  March  31,  1999,  in  conformity  with  generally  accepted
accounting  principles.  In addition,  in our opinion,  the financial  statement
schedule  listed in the  accompanying  index  presents  fairly,  in all material
respects,  the information  set forth therein when read in conjunction  with the
related combined financial statements.  These financial statements and financial
statement schedule are the responsibility of the Partnership's  management;  our
responsibility  is to  express  an opinion  on these  financial  statements  and
financial statement schedule based on our audits. We did not audit the financial
statements  of certain  local  limited  partnerships  for which total  assets of
$24,889,168 and  $26,827,966,  are included in these financial  statements as of
March 31, 1999 and 1998,  respectively, and for which net losses of  $1,745,890,
2,083,625,  and $1,922,566 are included in the accompanying financial statements
as of March 31, 1999, 1998, 1997, respectively. Those statements were audited by
other auditors whose reports  thereon have been furnished to us, and our opinion
expressed  herein,  insofar as it relates to the amounts  included for the Local
Limited  Partnerships,  is based solely on the reports of the other auditors. We
conducted our audits of these  statements in accordance with generally  accepted
auditing  standard,  which  require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examing,  on a test basis,  evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits and the  reports of other  auditors  provide a  reasonable  basis for the
opinions expressed above.


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


<PAGE>


          BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP

                                      F-23
                                 BALANCE SHEETS

                             March 31, 1999 and 1998

<TABLE>
<CAPTION>

                                                                              1999             1998
                                                                         -------------    --------------
Assets

<S>                                                                      <C>              <C>
Cash and cash equivalents                                                $     180,030    $      213,966
Investments in Local Limited Partnerships (Note 3)                          23,234,665        25,099,334
Marketable securities, at fair value (Note 4)                                1,455,618         1,486,224
Organization costs, net of accumulated amortization
   of $50,000 in 1999 and $40,833 in 1998                                            -             9,167
Other assets                                                                    18,855            19,275
                                                                         -------------    --------------
       Total Assets                                                      $  24,889,168    $   26,827,966
                                                                         =============    ==============

Liabilities and Partners' Equity

Accounts payable to affiliate (Note 5)                                   $     342,233    $      268,817
Accrued expenses                                                                54,346            39,747
                                                                         -------------    --------------
       Total Liabilities                                                       396,579           308,564
                                                                         -------------    --------------

General, Initial and Investor Limited Partners' Equity                      24,491,536        26,519,501
Net unrealized gains (losses) on marketable securities                           1,053               (99)
                                                                         -------------    --------------
       Total Partners' Equity                                               24,492,589        26,519,402
                                                                         -------------    --------------
       Total Liabilities and Partners' Equity                            $  24,889,168    $   26,827,966
                                                                         =============    ==============
The accompanying notes are an integral part of these financial statements.
</TABLE>


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


                            STATEMENTS OF OPERATIONS

                For the Years Ended March 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>


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

Revenue:
<S>                                                         <C>              <C>             <C>
   Investment                                               $      96,265    $      92,781   $      81,930
   Other                                                            7,565            5,351          18,606
                                                            -------------    -------------   -------------
       Total Revenue                                              103,830           98,132         100,536
                                                            -------------    -------------   -------------

Expenses:
   Asset management fees, related party (Note 5)                  206,220          199,592         193,635
   General and administrative (includes
     reimbursements to an affiliate in the
     amounts of $77,890, $93,551 and $108,120
     in 1999, 1998 and 1997, respectively) (Note 5)               140,575          183,048         195,069
   Amortization                                                    39,110           39,944          37,184
                                                            -------------    -------------   -------------
       Total Expenses                                             385,905          422,584         425,888
                                                            -------------    -------------   -------------

Loss before equity in losses of
   Local Limited Partnerships                                    (282,075)        (324,452)       (325,352)

Equity in losses of Local Limited
   Partnerships (Note 3)                                       (1,745,890)      (2,083,625)     (1,922,556)
                                                            -------------    -------------   -------------

Net Loss                                                    $  (2,027,965)   $  (2,408,077)  $  (2,247,908)
                                                            =============    =============   =============


Net Loss allocated to:
   General Partner                                          $     (20,280)   $     (24,081)  $     (22,479)
   Limited Partners                                            (2,007,685)      (2,383,996)     (2,225,429)
                                                            -------------    -------------   -------------
                                                            $  (2,027,965)   $  (2,408,077)  $  (2,247,908)
                                                            =============    =============   =============

Net Loss per Limited Partnership Unit
    (36,497 Units)                                          $      (55.01)   $      (65.32)  $      (60.98)
                                                            =============    =============   =============
</TABLE>

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


<PAGE>

 BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP

             STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)

                For the Years Ended March 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>

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

<S>                                 <C>             <C>         <C>               <C>            <C>
Balance at March 31, 1996           $ (4,592)       $    100    $  31,179,978     $      (534)   $  31,174,952
                                    --------        --------    -------------     -----------    -------------

Comprehensive Loss:
   Net change in net unrealized losses
     on marketable securities
     available for sale                    -               -                -         (16,306)         (16,306)
   Net Loss                          (22,479)              -       (2,225,429)              -       (2,247,908)
                                    --------        --------    -------------     -----------    -------------
Comprehensive Loss                   (22,479)              -       (2,225,429)        (16,306)      (2,264,214)
                                    --------        --------    -------------     -----------    -------------

Balance at March 31, 1997            (27,071)            100       28,954,549         (16,840)      28,910,738
                                    --------        --------    -------------     -----------    -------------

Comprehensive Income (Loss):
   Net change in net unrealized losses
     on marketable securities
     available for sale                    -               -                -          16,741           16,741
   Net Loss                          (24,081)              -       (2,383,996)              -       (2,408,077)
                                    --------        --------    -------------     -----------    -------------
Comprehensive Income (Loss)          (24,081)              -       (2,383,996)         16,741       (2,391,336)
                                    --------        --------    -------------     -----------    -------------

Balance at March 31, 1998            (51,152)            100       26,570,553             (99)      26,519,402
                                    --------        --------    -------------     -----------    -------------

Comprehensive Income (Loss):
   Net change in net unrealized losses
     on marketable securities
     available for sale                    -               -                -           1,152            1,152
   Net Loss                          (20,280)              -       (2,007,685)              -       (2,027,965)
                                    --------       ---------    -------------     -----------    -------------
Comprehensive Income (Loss)          (20,280)       -              (2,007,685)          1,152       (2,026,813)
                                    --------       ---------    --------------    -----------    --------------

Balance at March 31, 1999          $ (71,432)      $     100    $  24,562,868     $     1,053    $  24,492,589
                                   =========       =========    =============     ===========    =============

</TABLE>

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

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


                            STATEMENTS OF CASH FLOWS

                For the Years Ended March 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>

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

Cash flows from operating activities:
<S>                                                       <C>               <C>               <C>
   Net Loss                                               $  (2,027,965)    $  (2,408,077)    $ (2,247,908)
   Adjustments to reconcile net loss to net
     cash used for operating activities:
     Equity in losses of Local Limited Partnerships           1,745,890         2,083,625        1,922,556
     Amortization                                                39,110            39,944           37,184
     (Gain) loss on sales and maturities of
       marketable securities                                     (3,424)            9,053            1,618
     Increase (decrease) in cash arising from
       changes in operating assets and liabilities:
       Other assets                                                 420             7,452            6,311
       Accounts payable to affiliate                             73,416           189,923           (2,607)
       Accrued expenses                                          14,599           (48,879)          67,768
                                                          -------------     -------------     ------------
Net cash used for operating activities                         (157,954)         (126,959)        (215,078)
                                                          -------------     -------------     ------------

Cash flows from investing activities:
   Investment in Local Limited Partnerships                           -          (451,360)      (2,716,626)
   Restricted cash                                                    -           503,031          866,333
   Purchases of marketable securities                        (1,174,765)       (1,347,016)      (4,152,845)
   Proceeds from sales and maturities of
     marketable securities                                    1,209,947         1,311,156        6,402,126
   Payment of acquisition expenses                                    -                 -             (888)
   Cash distributions received from Local
     Limited Partnerships                                        88,836            51,702           18,675
                                                          -------------     -------------     ------------
Net cash provided by investing activities                       124,018            67,513          416,775
                                                          -------------     -------------     ------------

Net increase (decrease) in cash and cash equivalents            (33,936)          (59,446)         201,697

Cash and cash equivalents, beginning of period                  213,966           273,412           71,715
                                                          -------------     -------------     ------------

Cash and cash equivalents, end of period                  $     180,030     $     213,966     $    273,412
                                                          =============     =============     ============

</TABLE>

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

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


                          NOTES TO FINANCIAL STATEMENTS


1.   Organization

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

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

The Partnership  Agreement authorizes the sale of up to 200,000 Units of limited
partnership  interests  ("Units") at $1,000 per Unit in series. The first series
offered 50,000 Units.  Boston  Financial  Securities,  Inc., an affiliate of the
General Partner, has received selling commissions and underwriting advisory fees
in the amount of 6.5% and 1.25%, respectively,  of Gross Proceeds for Units sold
by the entity as a soliciting  dealer. On July 29, 1994, the Fund held its final
investor   closing.   In  total,  the  Fund  received   $36,497,000  of  capital
contributions from investors admitted as Limited Partners for 36,497 Units.

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

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

Under the terms of the Partnership  Agreement,  the Fund initially designated 5%
of the Gross Proceeds from the sale of Units as a reserve for working capital of
the Fund and  contingencies  related to ownership of Local  Limited  Partnership
interests.  The General  Partner may increase or decrease such amounts from time
to time, as it deems  appropriate.  At March 31, 1999,  the General  Partner has
designated approximately $1,239,000 of marketable securities as such Reserve.

2.   Significant Accounting Policies

Basis of Presentation

The Fund accounts for its  investments in Local Limited  Partnerships  using the
equity method of accounting,  because the Fund does not have a majority  control
over  the  major   operating  and  financial   policies  of  the  Local  Limited
Partnerships  in which it invests.  Under the equity  method,  the investment is
carried at cost,  adjusted  for the Fund's  share of income or loss of the Local
Limited  Partnerships,  additional  investments and cash  distributions from the
Local  Limited  Partnerships.  Equity in  income  or loss of the  Local  Limited
Partnerships  is included  currently in the Fund's  operations.  The Fund has no
obligation to fund liabilities of the Local Limited Partnerships beyond its


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


                    NOTES TO FINANCIAL STATEMENTS (continued)


2.   Significant Accounting Policies (continued)

Basis of Presentation (continued)

investment,  therefore,  a Local Limited  Partnership's  investment  will not be
carried   below  zero.  To  the  extent  that  equity  losses  are  incurred  or
distributions received when a Local Limited Partnership's  respective investment
balance  has been  reduced to zero,  the  losses  will be  suspended  to be used
against future income.

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

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

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

The  General  Partners  have  decided  to report  results  of the Local  Limited
Partnerships on a 90-day lag basis because the Local Limited Partnerships report
their results on a calendar year basis.  Accordingly,  the financial information
about  the Local  Limited  Partnerships  that is  included  in the  accompanying
financial statements is as of December 31, 1998, 1997 and 1996.

Use of Estimates

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

Cash Equivalents

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

Marketable Securities

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

Deferred Fees

Costs incurred in connection  with the  organization  of the Fund,  amounting to
$50,000, have been deferred and are completely amortized as of March 31, 1999.


<PAGE>

          BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (continued)


2.   Significant Accounting Policies (continued)

Income Taxes

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

Effect of recently issued Accounting Standard

The Financial  Accounting Standards Board recently issued Statement of Financial
Accounting  Standards  No. 130,  Reporting  Comprehensive  Income.  The standard
requires that changes in comprehensive  income be shown in a financial statement
that is displayed with the same  prominence as other financial  statements.  The
standard is effective for fiscal years  beginning  after  December 15, 1997. The
Fund adopted the new standard  effective  April 1, 1998 and its adoption did not
have a  significant  effect on the  Fund's  financial  position  or  results  of
operations.  The only  component of the Fund's other  accumulated  comprehensive
income is net unrealized gains and losses on marketable securities.

In accordance with Financial  Accounting  Standard No. 121,  "Accounting for the
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed Of",
the Fund has implemented  policies and practices for assessing impairment of its
real estate assets and investments in Local Limited Partnerships.  Each asset is
analyzed by real estate experts to determine if an impairment  indicator exists.
If so, the  carrying  value is  compared to the  undiscounted  future cash flows
expected to be derived from the asset and, if there is a significant  impairment
in value,  a  provision  to write  down the asset to fair  value will be charged
against income.

3.   Investments in Local Limited Partnerships

The Fund has acquired an interest in ten Local  Limited  Partnerships  which own
and operate  multi-family  housing  complexes.  The Fund,  as  Investor  Limited
Partner,  pursuant to the Local Limited Partnership  Agreements,  has acquired a
99% interest in the profits,  losses, tax credits and cash flows from operations
of the Local Limited  Partnerships,  with the exception of  Springwood,  Hemlock
Ridge,  Pike  Place  and West End  Place  which are  79.20%,  77%,  90% and 90%,
respectively.  Another  partnership  sponsored  by an  affiliate  of the General
Partner owns the remaining 19.80% Limited Partnership interest in Springwood.
Upon  dissolution,  proceeds will be  distributed  according to the  partnership
agreements.

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

                                                         1999                  1998             1997
                                                    -------------         ------------      ------------
Capital Contributions paid to Local
<S>                                                  <C>                  <C>               <C>
   Limited Partnerships                              $ 29,264,859         $ 29,264,859      $ 28,813,499

Cumulative equity in losses of Local
   Limited Partnerships                                (6,794,779)          (5,048,889)       (2,965,264)

Cumulative cash distributions received
   from Local Limited Partnerships                       (172,536)             (83,700)          (31,998)
                                                    -------------        -------------      ------------

Investments in Local Limited Partnerships
   before adjustments                                  22,297,544           24,132,270        25,816,237

Excess of investment cost over the underlying net assets acquired:

     Acquisition fees and expenses                      1,048,010            1,048,010         1,048,010

     Accumulated amortization of acquisition
         fees and expenses                               (110,889)             (80,946)          (51,002)
                                                    -------------         ------------      ------------

Investments in Local Limited Partnerships           $  23,234,665         $ 25,099,334      $ 26,813,245
                                                    =============         ============      ============
</TABLE>


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


                    NOTES TO FINANCIAL STATEMENTS (continued)


3.   Investments in Local Limited Partnerships (continued)

Summarized financial  information as of December 31, 1998, 1997 and 1996 (due to
the Fund's policy of reporting the  financial  information  of its Local Limited
Partnership  interests  on  a 90  day  lag  basis)  of  the  ten  Local  Limited
Partnerships  in  which  the  Fund was  invested  in as of the  that  date is as
follows:
<TABLE>
<CAPTION>

Summarized Balance Sheets - as of December 31,
                                                                1998              1997             1996
                                                            -------------    -------------     -------------
Assets:
<S>                                                         <C>              <C>               <C>
   Investment property, net                                 $  64,711,442    $  67,138,525     $  69,714,031
   Current assets                                                 880,542          809,218           975,295
   Other assets                                                 2,478,753        2,641,507         2,397,633
                                                            -------------    -------------     -------------
     Total Assets                                           $  68,070,737    $  70,589,250     $  73,086,959
                                                            =============    =============     =============

Liabilities and Partners' Equity:
   Long-term debt                                           $  37,318,536    $  37,840,199     $  38,197,782
   Current liabilities                                          1,956,075        1,933,699         1,768,369
   Other liabilities                                            5,517,363        5,449,430         5,853,703
                                                            -------------    -------------     -------------
     Total Liabilities                                         44,791,974       45,223,328        45,819,854

   Fund's Equity                                               22,537,757       24,115,216        25,784,519
   Other Partners' Equity                                         741,006        1,250,706         1,482,586
                                                            -------------    -------------     -------------
     Total Liabilities and Partners' Equity                 $  68,070,737    $  70,589,250     $  73,086,959
                                                            =============    =============     =============

Summarized Income Statements - for
the year ended December 31,

Rental and other income                                     $   7,809,919    $   7,474,866     $   7,594,918
                                                            -------------    -------------     -------------

Expenses:
   Operating                                                    3,805,421        3,805,760         3,691,624
   Depreciation and amortization                                2,667,667        2,786,344         2,841,824
   Interest                                                     3,260,386        3,133,964         3,169,226
                                                            -------------    -------------     -------------
     Total Expenses                                             9,733,474        9,726,068         9,702,674
                                                            -------------    -------------     -------------

Net Loss                                                    $  (1,923,555)   $  (2,251,202)    $  (2,107,756)
                                                            =============    =============     =============

Fund's share of Net Loss                                    $  (1,745,890)   $  (2,083,625)    $  (1,922,556)
                                                            =============    =============     =============
Other partners' share of Net Loss                           $    (177,665)   $    (167,577)    $    (185,200)
                                                            =============    =============     =============
</TABLE>


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


                    NOTES TO FINANCIAL STATEMENTS (continued)


3.   Investments in Local Limited Partnerships (continued)

The Fund's equity as reflected by the Local Limited  Partnerships of $22,537,757
differs  from the  Fund's  Investments  in  Local  Limited  Partnerships  before
adjustments of $22,297,544  principally  because of differences in miscellaneous
items.


4.   Marketable Securities

A summary of marketable securities is as follows:
<TABLE>
<CAPTION>
                                                              Gross                 Gross
                                                           Unrealized            Unrealized            Fair
                                           Cost               Gains                Losses               Value

Debt securities issued by the
   US Treasury and other US
   government corporations
<S>                                     <C>                <C>                   <C>               <C>
   and agencies                         $ 1,149,468        $     4,588           $    (3,318)      $ 1,150,738

Mortgage backed securities                  305,097              1,059                (1,276)          304,880
                                        ------------       -----------           -----------       -----------

Marketable securities
   at March 31, 1999                    $ 1,454,565        $     5,647           $    (4,594)      $ 1,455,618
                                        ===========        ===========           ===========       ===========


Debt securities issued by the
   US Treasury and other US
   government corporations
   and agencies                         $1,303,088$        $     1,575           $    (2,224)      $ 1,302,439

Mortgage backed securities                  183,235                550                     -           183,785
                                        -----------        -----------           -----------       -----------

Marketable securities
   at March 31, 1998                    $ 1,486,323        $     2,125           $    (2,224)      $ 1,486,224
                                        ===========        ===========           ============      ===========

</TABLE>

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

Due in less than one year                      $   324,875      $  326,055
Due in one to five years                           824,593         824,683
Mortgage backed securities                         305,097         304,880
                                               -----------      ----------
                                               $ 1,454,565      $1,455,618
                                               ===========      ==========

Actual maturities may differ from contractual  maturities because some borrowers
have the  right  to call or  prepay  obligations.  Proceeds  from  the  sales of
marketable securities were approximately $176,000,  $802,000 and $594,000 during
the fiscal years ended March 31,  1999,  1998 and 1997,  respectively.  Proceeds
from the  maturities of marketable  securities  were  approximately  $1,034,000,
$509,000 and $5,808,000  during the fiscal years ended March 31, 1999,  1998 and
1997,  respectively.  Included in  investment  income are gross gains of $4,411,
$2,329 and $257 and gross losses of $987, $11,382 and $1,875 which were realized
on the sales  during the  fiscal  years  ended  March 31,  1999,  1998 and 1997,
respectively.

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


                   NOTES TO FINANCIAL STATEMENTS (continued)


5.   Transactions with Affiliates

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
certain  fees to and  reimburse  expenses of the  General  Partner and others in
connection  with the  organization  of the Fund and the  offering of its Limited
Partnership Units. Selling commissions, fees and accountable expenses related to
the sale of the Units totaling  $4,664,369 have been charged directly to Limited
Partners'  equity. In connection  therewith,  $2,828,918 of selling expenses and
$1,835,451 of offering expenses incurred on behalf of the Fund have been paid to
an  affiliate  of  the  General  Partner.  The  Fund  may be  required  to pay a
non-accountable expense allowance for marketing expense equal to a maximum of 1%
of Gross  Proceeds.  The Fund has  capitalized  an additional  $50,000 which was
reimbursed  to an  affiliate  of the General  Partner.  Total  organization  and
offering expenses,  exclusive of selling  commissions and underwriting  advisory
fees, did not exceed 5.5% of the Gross Proceeds and  organizational and offering
expenses,  inclusive of selling commissions and underwriting  advisory fees, did
not exceed 15.0% of the Gross Proceeds.

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
acquisition fees to and reimburse acquisition expenses of the General Partner or
its affiliates for selecting, evaluating,  structuring,  negotiating and closing
the Fund's  investments in Local Limited  Partnerships.  Acquisition  fees total
6.0% of Gross  Proceeds.  Acquisition  expenses,  which include such expenses as
legal  fees  and  expenses,   travel  and  communications   expenses,  costs  of
appraisals,  accounting fees and expenses,  were expected to total 1.5% of Gross
Proceeds. Acquisition fees totaling $2,189,820 have been paid to an affiliate of
the  General  Partner for the closing of the Fund's  Local  Limited  Partnership
Investments.  Approximately  $1,477,000 of these fees are  classified as capital
contributions  to  Local  Limited  Partnerships  in  Note  3  to  the  Financial
Statements.  Acquisition  expenses totaling $335,196 at March 31, 1999 have been
reimbursed to an affiliate of the General Partner.

An  affiliate  of the  General  Partner  receives  the base amount of 0.565% (as
adjusted by the CPI factor) of Gross  Proceeds  annually as an Asset  Management
Fee  for  administering  the  affairs  of the  Fund.  Asset  Management  Fees of
$206,220,  $199,592 and  $193,635  for the years ended March 31, 1999,  1998 and
1997, respectively, have been included in expenses. Included in accounts payable
to  affiliates  at March 31,  1999 and 1998 is  $327,111  and  $255,527 of Asset
Management Fees due to an affiliate of the General Partner.

An affiliate  of the General  Partner is  reimbursed  for the actual cost of the
Fund's operating expenses.  Included in general and administrative  expenses for
the years ended March 31, 1999, 1998 and 1997, is $77,890, $93,551 and $108,120,
respectively, that the Fund has paid as reimbursement for salaries and benefits.
As of March 31, 1999 and 1998, $15,122 and $13,290,  respectively, is payable to
an affiliate of the General Partner for salaries and benefits.

BFPM, an affiliate of the Managing General Partner,  currently manages Beaverdam
Creek,  a property in which the Fund has invested.  The property  management fee
charged is equal to 4% of cash receipts.  Included in operating  expenses in the
summarized  income  statements in Note 3 to the Financial  Statements is $34,183
and  $29,440 of fees earned by BFPM for the years  ended  December  31, 1998 and
1997, respectively.



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


                    NOTES TO FINANCIAL STATEMENTS (continued)


6.   Federal Income Taxes

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

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

<S>                                                             <C>                 <C>              <C>
Net Loss per Statement of Operations                            $  (2,027,965)      $  (2,408,077)   $   (2,247,908)

Adjustment for equity in losses of Local Limited
   Partnerships for financial reporting purposes
   under equity in losses for tax purposes                           (415,055)           (782,833)         (557,984)

Adjustment to reflect March 31, fiscal year-end
   to December 31, tax year-end                                       (21,788)             33,895            (7,036)

Related party expenses not paid at December 31,
    not deductible for tax purposes                                   407,821             204,761            95,955

Related party expenses paid in current year but expensed
   for financial reporting purposes in prior year                    (204,761)            (95,955)          (46,853)

Adjustment for amortization for financial reporting
   Purposes under amortization for tax purposes                        (8,166)             (8,165)          (10,925)
                                                                -------------       -------------    --------------

Net Loss for federal income tax purposes                        $  (2,269,914)      $  (3,056,374)   $   (2,774,751)
                                                                =============       =============    ==============
</TABLE>

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

                                                      Financial                  Tax
                                                      Reporting               Reporting
                                                      Purposes                Purposes          Differences

<S>                                                <C>                     <C>                 <C>
Investments in Local Limited Partnerships          $  23,234,665           $  21,103,905       $   2,130,760
                                                   =============           ==============      =============
Other assets                                       $   1,654,503           $   6,584,853       $  (4,930,350)
                                                   =============           =============       =============
Liabilities                                        $     396,579           $      48,139       $     348,440
                                                   =============           =============       =============
</TABLE>

The  differences in assets and  liabilities of the Fund for financial  reporting
purposes are primarily attributable to: (i) the cumulative equity in losses from
Local  Limited   Partnerships  for  tax  reporting   purposes  is  approximately
$1,979,000 greater than for financial reporting purposes;  (ii) the amortization
of acquisition fees for tax return purposes exceeds financial reporting purposes
by  approximately   $21,000;   (iii)   organizational   and  offering  costs  of
approximately  $4,664,000 that have been capitalized for tax reporting  purposes
are charged to Limited Partners' equity for financial  reporting  purposes;  and
(iv)  related  party  expenses  which are  deductible  for  financial  reporting
purposes of  approximately  $327,000 but are not  deductible  for tax  reporting
purposes.


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


                    NOTES TO FINANCIAL STATEMENTS (continued)


6.   Federal Income Taxes (continued)

The  differences  in the  assets  and  liabilities  of the  Fund  for  financial
reporting  purposes  and tax  purposes  for the year ended March 31, 1998 are as
follows:

<TABLE>
<CAPTION>
                                                      Financial                  Tax
                                                      Reporting               Reporting
                                                      Purposes                Purposes          Differences

<S>                                                <C>                     <C>                 <C>
Investments in Local Limited Partnerships          $  25,099,334           $  23,389,613       $   1,709,721
                                                   =============           =============       =============
Other assets                                       $   1,728,632           $   6,557,459       $  (4,828,827)
                                                   =============           =============       =============
Liabilities                                        $     308,564           $      36,539       $     272,025
                                                   =============           =============       =============
</TABLE>


The  differences in assets and  liabilities of the Fund for financial  reporting
purposes are primarily attributable to: (i) the cumulative equity in losses from
Local  Limited   Partnerships  for  tax  reporting   purposes  is  approximately
$1,564,000 greater than for financial reporting purposes;  (ii) the amortization
of acquisition fees for tax return purposes exceeds financial reporting purposes
by  approximately   $13,000;   (iii)   organizational   and  offering  costs  of
approximately  $4,664,000 that have been capitalized for tax reporting  purposes
are charged to Limited Partners' equity for financial  reporting  purposes;  and
(iv)  related  party  expenses  which are  deductible  for  financial  reporting
purposes of  approximately  $205,000 but are not  deductible  for tax  reporting
purposes.


<PAGE>
Boston Financial Tax Credit Fund VIII, A Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships
In which Registrant has Invested at March 31, 1999
<TABLE>



                                                                                                        GROSS AMOUNT AT
                                                                                                         WHICH CARRIED
                                                                                                        AT DECEMBER 31,
                                                                                                              1998

                                                         COST OF INTEREST AT ACQUISITION DATE
                                                         ----------------------------------------------------------------

                                                                                       NET IMPROVEMENTS
                                NUMBER        TOTAL                     BUILDINGS /      CAPITALIZED
                                  OF         ENCUM-                    IMPROVEMENTS     SUBSEQUENT TO
DESCRIPTION                      UNITS      BRANCES *       LAND        & EQUIPMENT      ACQUISITION            LAND
-----------                      -----      ---------       ----        -----------      -----------            ----
<S>                                <C>        <C>           <C>            <C>               <C>              <C>

Low and Moderate
   Income Apartment Complexes

Green Wood Apartments                164      $5,179,303    $412,500        $7,774,612         $735,923         $412,500
  Gallatin, TN
Webster Court Apartments              92       2,835,486     296,423         5,003,633           10,461          296,423
  Kent, WA
Springwood Apartments (2)            113       3,894,649     296,280         2,937,028        4,257,987          296,280
  Tallahassee, FL
Meadowwood of Pella                   30       1,110,733     101,910         1,135,077          790,234           88,909
  Pella, IA
Hemlock Ridge                        100       2,105,654      42,368         6,327,906        1,762,698           42,368
  Livingston Manor, NY
Pike Place Apartments                144       3,303,163     312,000         5,336,336            8,164          312,000
  Fort Smith, AR
West End Place                       120       2,914,729     250,000         4,681,280                0          250,000
  Springdale, AR
Oak Knoll Renaissance                256       5,320,816           1         1,346,557        9,263,385          222,591
  Gary, IN
Beaverdam Creek                      120       3,333,911     360,000           499,907        6,680,217        1,256,840
  Mechanicsville, VA
Live Oak Plantation                  218       7,793,227   1,767,000         1,998,509       10,200,852        1,792,680
  West Palm Beach, FL
                               ==========================================================================================
                                             $37,791,671  $3,838,482       $37,040,845      $33,709,921       $4,970,591
                                   1,357
                               ==========================================================================================
</TABLE>

(1) Total  aggregate  cost for  Federal  Income Tax  purposes  is  approximately
$74,765,000.

(2) Boston Financial Tax Credit Fund VIII has an 80% ownership interest in
       Springwood Apartments, A Limited Partnership

                             * Mortgage   notes  payable   generally   represent
                               non-recourse   financing  of  low-income  housing
                               projects  payable  with  terms  of up to 40 years
                               with interest  payable at rates ranging from 1.0%
                               to 10.62%. The Partnership has not guaranteed any
                               of these mortgage notes payable.



<PAGE>



Boston Financial Tax Credit Fund VIII, A Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships
In which Registrant has Invested at March 31, 1999

                                GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,
                                                     1998
                               -------------------------------------------------
<TABLE>
                                                                                                   LIFE ON
                                                                                                    WHICH
                                   BUILDINGS                                                    DEPRECIATION
                                      AND                        ACCUMULATED         DATE        IS COMPUTED       DATE
DESCRIPTION                      IMPROVEMENTS        TOTAL       DEPRECIATION       BUILT          (YEARS)       ACQUIRED
-----------                      ------------        -----       ------------       -----          -------       --------
<S>                                   <C>           <C>             <C>             <C>        <C>               <C>


Low and Moderate
   Income Apartment Complexes

Green Wood Apartments                 $8,510,535    $8,923,035       $1,280,714      2/95       10 & 30 years     3/02/94
  Gallatin, TN
Webster Court Apartments               5,014,094    $5,310,517          554,610      8/94       40 & 12 years     5/13/94
  Kent, WA
Springwood Apartments (2)              7,195,015    $7,491,295        1,575,413      9/95       10 & 30 years    12/15/94
  Tallahassee, FL
Meadowwood of Pella                    1,938,312    $2,027,221          196,464      8/95       Useful Lives      6/03/94
  Pella, IA
Hemlock Ridge                          8,090,604    $8,132,972        1,263,109      5/95       Useful Lives      4/29/94
  Livingston Manor, NY
Pike Place Apartments                  5,344,500    $5,656,500          839,428     12/94      7 & 27.5 years     1/31/94
  Fort Smith, AR
West End Place                         4,681,280    $4,931,280          723,967     12/94      7 & 27.5 years     1/12/94
  Springdale, AR
Oak Knoll Renaissance                 10,387,352   $10,609,943        1,389,623     11/95       Useful Lives     11/01/94
  Gary, IN
Beaverdam Creek                        6,283,284    $7,540,124          806,651      9/95       Useful Lives     11/16/94
  Mechanicsville, VA
Live Oak Plantation                   12,173,681   $13,966,361        1,247,827     11/95       Useful Lives      6/28/94
  West Palm Beach, FL
                               =================================================
                                     $69,618,657   $74,589,248       $9,877,806
                               =================================================

</TABLE>


<PAGE>


<TABLE>

Summary of property owned and accumulated depreciation:
<S>                                     <C>                <C>                    <C>

Real Estate Investments                      1998                 1997                  1996
-------------------------------         ----------------   --------------------   ------------------

Balance at beginning of period                        $                      $                    $
                                             74,470,985             74,361,818           74,142,268
Additions during period                         118,263                109,167              219,550
Less retirements during period                        0                      0                    0
                                                                                  ------------------
                                        ================   ====================
Balance at close of period                            $                      $                    $
                                             74,589,248             74,470,985           74,361,818
                                        ================   ====================   ==================

Accumulated Depreciation                     1998                 1997                  1996
-------------------------------         ----------------   --------------------   ------------------

Balance at beginning of period                        $                      $                    $
                                              7,332,460              4,647,787            1,959,465
Depreciation                                  2,545,346              2,684,673            2,688,322
Less retirements                                      0                      0                    0
                                        ================   ====================   ==================
Balance at close of period                            $                      $                    $
                                              9,877,806              7,332,460            4,647,787
                                        ================   ====================   ==================

</TABLE>

<PAGE>
       BOSTON FINANCIAL TAX CREDIT FUND VIII
              (A Limited Partnership)

             Annual Report on form 10-K
           For The Year Ended March 31, 1999
            Reports of Independent Auditors

<PAGE>

Beaverdam

[Letterhead]
 [LOGO]
L.P. Martin & Company
A Professional Corporation

           Independent Auditor's Report

To the Partners of                       Virginia Housing Development Authority
Beaverdam Creek Associates, L.P.         Richmond, VA

We have audited the  accompanying  balance sheet of Beaverdam Creek  Associates,
L.P., a Virginia Limited Partnership (the "Partnership") as of December 31, 1998
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
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 Beaverdam Creek  Associates,
L.P. as of December 31,  1998,  and the results of its  operations  and its cash
flows for the year then ended in conformity with generally  accepted  accounting
principles.

In accordance with Government Auditing Standards, we have also issued our report
dated  January 31, 1999 on our  consideration  of  Beaverdam  Creek  Associates'
internal control over financial reporting,  and our tests of its compliance with
certain provisions of laws, regulations, contracts and grants.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements taken as a whole. The additional information required by the Virginia
Housing  Authority  included  herein is presented  for the purpose of additional
analysis  and  is  not  a  required  part  of  the  financial  statements.  Such
information has been subjected to the auditing  procedures  applied in the audit
of the  financial  statements  and,  in our  opinion,  is  fairly  stated in all
material respects in relation to the financial statements taken as a whole.

/s/ L.P. Martin & Company, P.C.
L.P. Martin & Company, P.C.
January 31, 1999
Lead Auditor Name: W. Barclay Bradshaw

<PAGE>

[Letterhead]
 [LOGO]
Keiter, Stevens, Hurst, Gary & Shreaves
A Professional Corporation

           REPORT OF INDEPENDENT AUDITORS

To the Partners of
Beaverdam Creek Associates, L.P.

We have audited the accompanying statement of assets,  liabilities and partners'
capital of Beaverdam Creek Associates, L.P., a Virginia Limited Partnership (the
"Partnership") as of December 31, 1997 and the related  statements of changes in
partners'  capital  accounts,  profit and loss, 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  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  assets,  liabilities  and  partners'  capital  of
Beaverdam Creek Associates, L.P. as of December 31, 1997, and the results of its
operations  and its cash  flows  for the year then  ended,  in  conformity  with
generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued our report
dated  January 27, 1998 on our  consideration  of  Beaverdam  Creek  Associates'
internal  control over financial  reporting and our tests of its compliance with
certain provisions of laws, regulations, contracts and grants.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements  taken as a whole.  The  supporting  data  required  by the  Virginia
Housing  Authority  included  herein is presented for the purposes of additional
analysis  and  is  not  a  required  part  of  the  financial  statements.  Such
information has been subjected to the auditing  procedures  applied in the audit
of the  financial  statements  and,  in our  opinion,  is  fairly  stated in all
material respects in relation to the financial statements taken as a whole.

/s/ Keiter, Stevens, Hurst, Gary & Shreaves
Keiter, Stevens, Hurst, Gary & Shreaves
Richmond, Virginia
January 27, 1998

<PAGE>

[Letterhead]
[LOGO]
Keiter, Stevens, Hurst, Gary & Shreaves
A Professional Corporation

           REPORT OF INDEPENDENT AUDITORS

To the Partners of
Beaverdam Creek Associates, L.P.

We have audited the accompanying statement of assets,  liabilities and partners'
capital of Beaverdam Creek Associates, L.P., a Virginia Limited Partnership (the
"Partnership") as of December 31, 1996 and the related  statements of changes in
partners'  capital  accounts,  profit and loss, 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  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  assets,  liabilities  and  partners'  capital  of
Beaverdam Creek Associates, L.P. 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.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements  taken as a whole.  The  supporting  data  required  by the  Virginia
Housing  Authority  included  herein is presented for the purposes of additional
analysis  and  is  not  a  required  part  of  the  financial  statements.  Such
information has been subjected to the auditing  procedures  applied in the audit
of the  financial  statements  and,  in our  opinion,  is  fairly  stated in all
material respects in relation to the financial statements taken as a whole.

/s/ Keiter, Stevens, Hurst, Gary & Shreaves
Keiter, Stevens, Hurst, Gary & Shreaves
Richmond, Virginia
January 29, 1997

<PAGE>

Green Wood

[Letterhead]
[LOGO]
KPMG Peat Marwick LLP

Independent Auditors' Report

The Partners
Green Wood Apartments,
A Limited Partnership:

We have audited the  accompanying  balance  sheets of Green Wood  Apartments,  A
Limited Partnership as of December 31, 1998 and 1997, and the related statements
of 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.  Those standards require 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 Green Wood  Apartments,  A
Limited  Partnership  as of December  31, 1998 and 1997,  and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
Atlanta, GA
February 26, 1999

<PAGE>

[Letterhead]
[LOGO]
KPMG Peat Marwick LLP

Independent Auditors' Report

The Partners
Green Wood Apartments,
A Limited Partnership:

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

/s/ KPMG Peat Marwick LLP
Atlanta, GA
February 16, 1998


<PAGE>

[Letterhead]
[LOGO]
KPMG Peat Marwick LLP

Independent Auditors' Report

The Partners
Green Wood Apartments,
A Limited Partnership:

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

/s/ KPMG Peat Marwick LLP
Atlanta, GA
February 7, 1997

<PAGE>

Webster

[Letterhead]
[LOGO]
HASSON LAIBLE & CO., P.S.

INDEPENDENT AUDITOR'S REPORT

To the General Partners of
Webster Court Apartments Limited Partnership:

We have audited the  accompanying  balance  sheet of Webster  Court  Apartments,
Limited Partnership, a Washington Limited Partnership,  as of December 31, 1998,
and the related  statements of income and partners'  equity,  and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  consolidated  financial  statements  are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
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 Webster  Court  Apartments,
Limited  Partnership  as of December 31, 1998 and the results of its  operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/ Hasson Laible & Co.
Seattle, Washington
February 26, 1999

<PAGE>

[Letterhead]
[LOGO]
HASSON LAIBLE & CO., P.S.

INDEPENDENT AUDITOR'S REPORT

To the General Partners of
Webster Court Apartments Limited Partnership:

We have audited the  accompanying  balance  sheet of Webster  Court  Apartments,
Limited Partnership, a Washington Limited Partnership,  as of December 31, 1997,
and the related  statements of income and partners'  equity,  and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  consolidated  financial  statements  are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
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 Webster  Court  Apartments,
Limited  Partnership  as of December 31, 1997 and the results of its  operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/ Hasson Laible & Co.
Seattle, Washington
February 9, 1998

<PAGE>

[Letterhead]
[LOGO]
HASSON LAIBLE & CO., P.S.

INDEPENDENT AUDITOR'S REPORT

To the General Partners of
Webster Court Apartments Limited Partnership:

We have audited the  accompanying  balance  sheet of Webster  Court  Apartments,
Limited Partnership, a Washington Limited Partnership,  as of December 31, 1996,
and the related  statements of income and partners'  equity,  and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  consolidated  financial  statements  are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
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 Webster  Court  Apartments,
Limited  Partnership  as of December 31, 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.

/s/ Hasson Laible & Co.
Seattle, Washington
March 31, 1997

<PAGE>

Springwood

[Letterhead]
[LOGO]
KPMG Peat Marwick LLP

Independent Auditors' Report

The Partners
Springwood Apartments, A Limited Partnership:

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

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those  standards  require  that we plan  perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  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  Springwood  Apartments,  A
Limited  Partnership  as of  December  31,  1998 and 1997 and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
Atlanta, GA
February 26, 1999

<PAGE>

[Letterhead]
[LOGO]
KPMG Peat Marwick LLP

Independent Auditors' Report

The Partners
Springwood Apartments, A Limited Partnership:

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

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those  standards  require  that we plan  perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  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  Springwood  Apartments,  A
Limited  Partnership  as of  December  31,  1997 and 1996 and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
Atlanta, GA
February 16, 1998

<PAGE>

[Letterhead]
[LOGO]
KPMG Peat Marwick LLP

Independent Auditors' Report

The Partners
Springwood Apartments, A Limited Partnership:

We have audited the  accompanying  balance  sheets of Springwood  Apartments,  A
Limited Partnership as of December 31, 1996 and 1995, and the related statements
of loss,  partners'  capital,  and cash  flows for the 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  perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  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  Springwood  Apartments,  A
Limited  Partnership  as of  December  31,  1996 and 1995 and the results of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP
Atlanta, GA
February 7, 1997

<PAGE>

RMH

[Letterhead]
[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners RMH Associates, L.P.

We have audited the  accompanying  balance sheets of RMH Associates,  L.P. as of
December  31, 1998 and 1997,  and the related  statements  of income and expense
analysis of income sufficiency, partner's equity (deficit) and cash flows in the
form  prescribed  by New York State  Division of Housing and  Community  Renewal
(DHCR) for the year ended December 31, 1998. These financial  statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
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 RMH  Associates,  L.P. as of
December  31,  1998 and 1997,  and the  results  of its  operations,  changes in
partner's  equity  (deficit) and its cash flows for the year ended  December 31,
1998, 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 26 through 39
is presented for purposes of  additional  analysis and is not a required part of
the basic financial  statements.  Such  information,  except for the information
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 reports dated February 5,
1999 on our consideration of RMH Associates, L.P. internal control structure and
on its  compliance  with  specific  requirements  applicable  to non  major  HUD
programs and fair housing and non-discrimination..

/s/Reznick Fedder & Silverman
Bethesda, Maryland                   Federal Employer
February 5, 1999                       Identification Number:
                                                    52-1088612
Audit Principal:  Lester A. Kanis

<PAGE>

[Letterhead]
[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners RMH Associates, L.P.

We have audited the  accompanying  balance sheets of RMH Associates,  L.P. as of
December 31, 1997 and 1996, and the related statements of income and expense and
cash flows in the form  prescribed  by New York State  Division  of Housing  and
Community  Renewal (DHCR) for the year ended December 31, 1997.  These financial
statements  are  the  responsibility  of  the  partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of RMH  Associates,  L.P. as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the year ended  December 31, 1997, 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 supplemental information on pages 27 through 40
is presented for purposes of  additional  analysis and is not a required part of
the basic financial  statements.  Such  information,  except for the information
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 reports dated January 24,
1998 on our consideration of RMH Associates, L.P. internal control structure and
on its  compliance  with  specific  requirements  applicable  to non  major  HUD
programs,  affirmative fair housing, and laws and regulations  applicable to the
financial statements.

/s/Reznick Fedder & Silverman
Bethesda, Maryland                              Federal Employer
January 24, 1998                             Identification Number:
                                                   52-1088612

Audit Principal:  Lester A. Kanis

<PAGE>

[Letterhead]
[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners RMH Associates, L.P.

We have audited the  accompanying  balance sheets of RMH Associates,  L.P. as of
December 31, 1996 and 1995, and the related statements of income and expense and
cash flows in the form  prescribed  by New York State  Division  of Housing  and
Community  Renewal (DHCR) for the year ended December 31, 1996.  These financial
statements  are  the  responsibility  of  the  partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of RMH  Associates,  L.P. as of
December 31, 1996 and 1995, and the results of its operations and its cash flows
for the year ended  December 31, 1996, in  conformity  with  generally  accepted
accounting principles.

Our audit was made for the  purpose  of  forming  an  opinion  on the  financial
statements taken as a whole. The supplemental information on pages 27 through 40
is presented for purposes of  additional  analysis and is not a required part of
the basic financial  statements.  Such  information,  except for the information
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 reports dated February 4,
1997 on our consideration of RMH Associates, L.P. internal control structure and
on its  compliance  with  specific  requirements  applicable  to non  major  HUD
programs,  affirmative fair housing, and laws and regulations  applicable to the
financial statements.

/s/Reznick Fedder & Silverman
Bethesda, Maryland                   Federal Employer
February 4, 1997                       Identification Number:
                                                    52-1088612

Audit Principal:  Lester A. Kanis

<PAGE>
meadow wood

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

INDEPENDENT AUDITOR'S REPORT

To the Partners
Meadow Wood Associates of Pella, L.P.
Des Moines, Iowa

We have audited the  accompanying  balance  sheets of Meadow Wood  Associates of
Pella, L.P. (a limited  partnership),  as of December 31, 1998 and 1997, and the
related  statements of  operations,  partners'  capital,  and cash flows for the
years then ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the 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 Meadow Wood  Associates  of
Pella,  L.P.,  as of  December  31,  1998  and  1997,  and  the  results  of its
operations,  changes in its partners' capital,  and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.

/s/ Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
January 30, 1999

<PAGE>

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

INDEPENDENT AUDITOR'S REPORT

To the Partners
Meadow Wood Associates of Pella, L.P.
Des Moines, Iowa

We have audited the  accompanying  balance  sheets of Meadow Wood  Associates of
Pella, L.P. (a limited  partnership),  as of December 31, 1997 and 1996, and the
related  statements of  operations,  partners'  capital,  and cash flows for the
years then ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the 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 Meadow Wood  Associates  of
Pella,  L.P.,  as of  December  31,  1997  and  1996,  and  the  results  of its
operations,  changes in its partners' capital,  and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.

/s/ Vroman, McGowen, Hurst, Clark & Smith P.C.
Des Moines, Iowa
January 31, 1998

<PAGE>

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

INDEPENDENT AUDITOR'S REPORT

To the Partners
Meadow Wood Associates of Pella, L.P.
Des Moines, Iowa

We have audited the  accompanying  balance  sheets of Meadow Wood  Associates of
Pella, L.P. (a limited  partnership),  as of December 31, 1996 and 1995, and the
related  statements of  operations,  partners'  capital,  and cash flows for the
years then ended.  These  financial  statements  are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the 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 Meadow Wood  Associates  of
Pella,  L.P.,  as of  December  31,  1996  and  1995,  and  the  results  of its
operations,  changes in its partners' capital,  and its cash flows for the years
then ended, in conformity with generally accepted accounting principles.

/s/ Vroman, McGowen, Hurst, Clark & Smith P.C.
Des Moines, Iowa
January 31, 1997

<PAGE>

PIKE PLACE

[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
Pike Place, A Limited Partnership

We have  audited  the  accompanying  balance  sheets  of Pike  Place,  A Limited
Partnership,  as of December 31, 1998 and 1997,  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.
These standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit 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  Pike  Place,  A  Limited
Partnership  as of December 31, 1998 and 1997, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

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

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 8, 1999

<PAGE>

[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
Pike Place, A Limited Partnership

We have  audited  the  accompanying  balance  sheets  of Pike  Place,  A Limited
Partnership,  as of December 31, 1997 and 1996,  and the related  statements  of
income,  partners'  capital  and cash  flows for the  years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
These standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our 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  Pike  Place,  A  Limited
Partnership  as of December 31, 1997 and 1996, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

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

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
January 31, 1998

<PAGE>

[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
Pike Place, A Limited Partnership

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

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

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

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


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

<PAGE>

WEST END

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
West End Place, A Limited Partnership

We have audited the  accompanying  balance  sheets of West End Place,  A Limited
Partnership,  as of December 31, 1998 and 1997,  and the related  statements  of
income,  partners'  capital  and cash  flows for the  years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our 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 West End Place,  A Limited
Partnership  as of December 31, 1998 and 1997, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

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

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 10, 1999

<PAGE>

[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
West End Place, A Limited Partnership

We have audited the  accompanying  balance  sheets of West End Place,  A Limited
Partnership,  as of December 31, 1997 and 1996,  and the related  statements  of
income,  partners'  capital  and cash  flows for the  years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

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

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

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
January 31, 1998

<PAGE>

[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant

Independent Auditor's Report

The Partners
West End Place, A Limited Partnership

We have audited the  accompanying  balance  sheets of West End Place,  A Limited
Partnership,  as of December 31, 1996 and 1995,  and the related  statements  of
income,  partners'  capital  and cash  flows for the  years  then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

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

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

/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 12, 1997

<PAGE>

OAK KNOLL

[Letterhead]
[LOGO]
Haran & Associates Ltd
Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT

To the Partners                                      HUD Field Office Director
OAK KNOLL RENAISSANCE LIMITED PARTNERSHIP            Indianapolis, Indiana
Gary, Indiana

We have audited the accompanying  balance sheet of OAK KNOLL RENAISSANCE LIMITED
PARTNERSHIP  (a Limited  Partnership)  as of December 31, 1998,  and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements based on our audit.

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

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

The  accompanying  supplementary  information  shown  on Page 13  through  17 is
presented for purposes of additional  analysis and is not a required part of the
basic financial statements.  Such information has been subjected to the auditing
procedures  applied in the audit of the basic  financial  statements and, in our
opinion,  is fairly stated in all material respects in relation to the financial
statements taken as a whole.

/s/ Haran & Associates Ltd
Haran & Associates Ltd
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692
Audit Partner: W. Garrett Heinl    (847) 853-2576
January 15, 1999

<PAGE>

[Letterhead]
[LOGO]
Haran & Associates Ltd
Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT

To the Partners
OAK KNOLL RENAISSANCE LIMITED PARTNERSHIP
Gary, Indiana

We have audited the accompanying  balance sheet of OAK KNOLL RENAISSANCE LIMITED
PARTNERSHIP  (a Limited  Partnership)  as of December 31, 1997,  and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements based on our audit.

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

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

The  accompanying  supplementary  information  shown  on Page 15  through  18 is
presented for purposes of additional  analysis and is not a required part of the
basic financial statements.  Such information has been subjected to the auditing
procedures  applied in the audit of the basic  financial  statements and, in our
opinion,  is fairly stated in all material respects in relation to the financial
statements taken as a whole.


/s/ Haran & Associates Ltd
Haran & Associates Ltd
Certified Public Accountant
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692
January 16, 1998

<PAGE>



[Letterhead]
[LOGO]
Haran & Associates Ltd
Certified Public Accountants

INDEPENDENT AUDITOR'S REPORT

To the Partners
OAK KNOLL RENAISSANCE LIMITED PARTNERSHIP
Gary, Indiana

We have audited the accompanying  balance sheet of OAK KNOLL RENAISSANCE LIMITED
PARTNERSHIP  (a Limited  Partnership)  as of December 31, 1996,  and the related
statements of profit and loss, changes in partners' equity and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion the financial statements referred to above present fairly, in all
material  respects,  the  financial  position of OAK KNOLL  RENAISSANCE  LIMITED
PARTNERSHIP  as of December 31, 1996,  and the results of its operations and its
cash  flows for the year then  ended,  in  conformity  with  generally  accepted
accounting principles.

The  accompanying  supplementary  information  shown  on Page 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 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 Accountant
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692
January 18, 1997

<PAGE>

<PAGE>

PALM BEACH

[Letterhead]
[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Schickendanz Bros. - Palm Beach Ltd.

We have audited the  accompanying  balance  sheet of  Schickendanz  Bros. - Palm
Beach Ltd. as of December 31, 1998,  and the related  statements of  operations,
partners'  equity  and cash  flows  for the year  then  ended.  These  financial
statements  are  the  responsibility  of  the  partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require 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 Schickendanz Bros. - Palm Beach
Ltd., as of December 31, 1998,  and the results of its  operations  and its cash
flows for the year then ended, in conformity with generally accepted  accounting
principles.

/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 22, 1999

<PAGE>

[Letterhead]
[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Schickendanz Bros. - Palm Beach Ltd.

We have audited the  accompanying  balance  sheet of  Schickendanz  Bros. - Palm
Beach Ltd. as of December 31, 1997,  and the related  statements of  operations,
partners'  equity  and cash  flows  for the year  then  ended.  These  financial
statements  are  the  responsibility  of  the  partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our 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 Schickendanz Bros. - Palm Beach
Ltd., as of December 31, 1997,  and the results of its  operations  and its cash
flows for the year then ended, in conformity with generally accepted  accounting
principles.

/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 21, 1998

<PAGE>

[Letterhead]
[LOGO]
Reznick Fedder & Silverman

INDEPENDENT AUDITORS' REPORT

To the Partners
Schickendanz Bros. - Palm Beach Ltd.

We have audited the  accompanying  balance  sheet of  Schickendanz  Bros. - Palm
Beach Ltd. as of December 31, 1996,  and the related  statements of  operations,
partners'  equity  and cash  flows  for the year  then  ended.  These  financial
statements  are  the  responsibility  of  the  partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our 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 Schickendanz Bros. - Palm Beach
Ltd., 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/Reznick Fedder & Silverman
Atlanta, Georgia
January 21, 1997

<PAGE>
                            FINANCIAL STATEMENTS AND
                          INDEPENDENT AUDITORS' REPORT

                               SCHICKEDANZ BROS. -
                                 PALM BEACH LTD.

                                DECEMBER 31, 1996


<PAGE>


                       Schickedanz Bros. - Palm Beach Ltd.

                                TABLE OF CONTENTS



                                                                         PAGE

INDEPENDENT AUDITORS' REPORT                                               3


FINANCIAL STATEMENTS


         BALANCE SHEET                                                     4


         STATEMENT OF OPERATIONS                                           6


         STATEMENT OF PARTNERS' EQUITY                                     7


         STATEMENT OF CASH FLOWS                                           8


         NOTES TO FINANCIAL STATEMENTS                                     9




<PAGE>





                          INDEPENDENT AUDITORS' REPORT



To the Partners
Schickedanz Bros. - Palm Beach Ltd.

         We have audited the accompanying  balance sheet of Schickedanz  Bros. -
Palm Beach  Ltd.,  as of  December  31,  1996,  and the  related  statements  of
operations,  partners'  equity  and cash  flows for the year then  ended.  These
financial statements are the responsibility of the partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

         We conducted our 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 Schickedanz Bros. -
Palm Beach Ltd., 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/Reznick Fedder & Silverman
Atlanta, Georgia
January 21, 1997


<PAGE>


                       Schickedanz Bros. - Palm Beach Ltd.



                                  BALANCE SHEET

                                December 31, 1996

                                     ASSETS
<TABLE>
<CAPTION>
<S>                                                                                              <C>
Current Assets
     Cash                                                                                        $           59,637
     Tenants accounts receivable                                                                             40,978
     Prepaid insurance                                                                                       17,646
     Prepaid expenses - other                                                                                   520

                                                                                                   -----------------
                                                                                                   -----------------
         Total Current Assets                                                                               118,781

Reserves and Deposits
     Reserve for replacements                                                                                53,757
     Tax and insurance escrow                                                                                65,895

         Total Reserves and Deposits                                                                        119,652

Fixed Assets
     Land                                                                                                 1,792,680
     Building                                                                                            11,711,351
     Furniture and equipment                                                                                460,689

         Total Fixed Assets                                                                              13,964,720
     Less accumulated depreciation                                                                        (497,671)

                                                                                                         13,467,049

Other Assets
     Organization costs, net of accumulated amortization of $3,919                                           13,712
    Compliance monitoring fees, net of accumulated amortization of $919                                     17,471
     Letter of credit fees, net of accumulated amortization of $1,665                                         1,665
     Loan fees, net of accumulated amortization of $10,217                                                  224,446

         Total Other Assets                                                                                 257,294

                                                                                                 $       13,962,776
</TABLE>


                                   (Continued)


<PAGE>



                        See notes to financial statements


                            BALANCE SHEET (Continued)

                                December 31, 1996

                        LIABILITIES AND PARTNERS' EQUITY
<TABLE>
<CAPTION>
<S>                                                                                              <C>
Current Liabilities
     Accounts payable                                                                            $           25,306
     Tenant security deposits                                                                                73,402
     Accrued interest payable                                                                               123,556
     Accrued management fees                                                                                 12,986

         Total Current Liabilities                                                                          235,250

Long-Term Debt
     Note payable - Newport Mortgage                                                                      6,471,047
     Note payable - HOME                                                                                  1,416,000
     Developer fee payable                                                                                  939,704

         Total Long-Term Liabilities                                                                      8,826,751

Partners' Equity                                                                                          4,900,775

         Total Liabilities and Partners' Equity                                                  $       13,962,776


<PAGE>


                             STATEMENT OF OPERATIONS
                          Year ended December 31, 1996
Revenue
     Rental income                                                                               $        1,429,450
     Other income                                                                                            34,241

                                                                                                          1,463,691

Expenses
     Administrative expenses
         Advertising                                                                                          5,049
         Office salaries                                                                                     33,156
         Management fees                                                                                     74,074
         Professional fees                                                                                   32,566
         Commissions                                                                                            950
         Office expenses                                                                                     14,604

         Tenant bad debts                                                                                    55,043
         General administrative                                                                               2,263
         Tenant credit reports                                                                                  497

              Total administrative expenses                                                                 218,202

     Operating and maintenance
         Repairs and maintenance                                                                             84,647
         Utilities                                                                                           89,689
         Janitorial and cleaning                                                                             48,036
         Trash removal                                                                                       28,469
         Exterminating                                                                                        3,869

              Total operating and maintenance                                                               254,710

     Taxes and insurance
         Real estate taxes                                                                                  137,695
         Payroll taxes                                                                                        8,025
         Property and liability insurance                                                                    60,843
         Worker's compensation                                                                                4,458
         Health insurance and other benefits                                                                  9,049
         Other taxes and insurance                                                                            4,501

              Total taxes and insurance                                                                     224,571

     Interest on mortgage notes                                                                             750,959

         Income from operations before depreciation and amortization                                         15,249

     Depreciation expense                                                                                   375,083

     Amortization expense                                                                                    84,159

                  Net loss                                                                       $        (443,993)
</TABLE>

<PAGE>


                          STATEMENT OF PARTNERS' EQUITY

                          Year ended December 31, 1996

<TABLE>
<CAPTION>


                                                            General Partner    Limited Partners
                                                                                                        Total


<S>                                                       <C>                <C>                 <C>
Balance, December 31, 1995                                $         (2,270)  $        3,762,210  $        3,759,940

Capital contributions                                                     -           1,587,953           1,587,953

Distributions                                                             -             (3,125)             (3,125)

Net loss                                                            (4,440)           (439,553)           (443,993)

Balance, December 31, 1996                                $         (6,710)  $        4,907,485  $        4,900,775

Partnership percentage                                                   1%                 99%                100%

</TABLE>

<PAGE>





                             STATEMENT OF CASH FLOWS

                          Year ended December 31, 1996
<TABLE>
<CAPTION>
<S>                                                                                              <C>
Cash flows from operating activities
     Net loss                                                                                    $         (443,993)
     Adjustments to reconcile net loss to net cash provided by
     operating activities
         Depreciation                                                                                       375,083
         Amortization                                                                                        84,159
     Decrease (increase) in assets
         Tenants accounts receivable                                                                         15,815
         Prepaid insurance                                                                                   10,509
         Prepaid expenses - other                                                                              (520)
         Tax and insurance escrow                                                                           (65,895)
     Increase (decrease) in liabilities
         Accounts payable                                                                                      (965)
         Accrued management fees                                                                             12,986
         Tenant security deposits                                                                               880
         Real estate tax payable                                                                            (14,871)
         Accrued interest payable                                                                            86,006

         Net cash provided by operating activities                                                           59,194

Cash flows from investing activities
     Compliance monitoring fees                                                                             (18,390)
     Deposits to reserve for replacements                                                                   (53,757)

         Net cash used in financing activities                                                              (72,147)

Cash flows from financing activities
     Capital contributions received                                                                       1,587,953
     Distributions paid                                                                                      (3,125)
     Payments of  amounts due to affiliates                                                              (1,767,295)
     Developer fee paid                                                                                    (460,296)
     Decrease in accounts payable - development                                                            (105,784)
     Proceeds from note payable - Newport Mortgage                                                        6,471,047
     Increase in loan costs                                                                                (174,926)
     Letter of credit fees                                                                                   (3,330)
     Proceeds from note payable - HOME                                                                       29,560
     Payoff of note payable - First Housing                                                              (5,501,399)

         Net cash provided by financing activities                                                           72,405

         NET INCREASE IN CASH                                                                                59,452

Cash, beginning                                                                                                 185

Cash, end                                                                                        $           59,637


Supplemental disclosure of cash flow information
     Cash paid during the year for interest                                                      $          664,953

</TABLE>
<PAGE>

                            NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The  partnership  was formed as a limited  partnership on June 22, 1994
         under the laws of the State of Florida,  for the purpose of  acquiring,
         constructing, developing and operating a low-income residential housing
         project.  The project consists of 218 rental units located in West Palm
         Beach,  Florida,  and is  currently  operating  under the name Live Oak
         Plantation Apartments.

         The project  consists of 6 buildings  which have each qualified for and
         been allocated  low-income housing credits pursuant to Internal Revenue
         Code Section 42, ("Section 42"), which regulates the use of the project
         as  to  occupant   eligibility   and  unit  gross  rent,   among  other
         requirements.  Each building of the project must meet the provisions of
         these  regulations  during  each of 15  consecutive  years  in order to
         remain qualified to receive the credits. In addition, Schickedanz Bros.
         - Palm Beach Ltd., has executed a Land Use Restriction  Agreement which
         requires the  utilization  of the project  pursuant to Section 42 for a
         minimum  of 35 years,  even  after  disposition  of the  project by the
         partnership.

         A summary of significant accounting policies follows.

         Use of Estimates

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

         Rental Property

         Rental  property is carried at cost.  Depreciation  is provided  for in
         amounts  sufficient  to  relate  the  cost  of  depreciable  assets  of
         operations over seven to forty years by use of the straight-line method
         for financial reporting purposes.

         Amortization

         Organization costs are amortized over 60 months using the straight-line
method.

         Compliance  monitoring  fees are amortized over the 15 year  compliance
period.

         Letter  of credit  fees are  amortized  over the term of the  letter of
credit.


<PAGE>


                       Schickedanz Bros. - Palm Beach Ltd.

                    NOTES TO FINANCIAL STATEMENTS (Continued)

                                December 31, 1996

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Loan fees are  amortized  over the term of the mortgage  loan using the
straight-line method.

         Rental Income

         Rental  income is  recognized as rentals  become due.  Rental  payments
         received in advance are deferred  until earned.  All leases between the
         partnership and tenants of the property are operating leases.

         Income Taxes

         No  provision  or benefit for income  taxes has been  included in these
         financial  statements  since taxable  income or loss passes through to,
         and is reportable by, the partners individually.

NOTE B - PARTNERSHIP CONTRIBUTIONS

         The partnership has one general partner, Schickedanz Enterprises, Inc.,
         which has a 1 percent  partnership  interest,  and two investor limited
         partners,  Boston  Financial Tax Credit Fund VIII and SLP, Inc.,  which
         collectively have an aggregate 99 percent partnership interest.

         The partnership  agreement  requires  Boston  Financial Tax Credit Fund
         VIII to make five capital contribution installments totaling $5,615,000
         subject to any  low-income  housing tax credit  adjustments  Due to the
         deferral  of the  start of the  credit  period  until  1996,  the final
         capital  contribution  was  reduced by $27,047.  Capital  contributions
         totaling  $1,587,953  were received during the year. As of December 31,
         1996, all required limited partner capital  contributions  after credit
         adjustment have been received.

NOTE C - LONG-TERM DEBT

         The partnership  entered into a construction loan agreement on June 28,
         1994,  with the principal  amount not to exceed  $6,150,000  with First
         Housing Development Corporation of Florida. This loan was refinanced on
         June 28, 1996. The new loan is with Newport Mortgage company,  L.P., in
         the  original  amount of  $6,493,000.  The loan bears  interest at 8.94
         percent and is payable in monthly  interest and principal  installments
         of $51,964  until  maturity on July 7, 2026.  As of December  31, 1996,
         $6,471,047 is outstanding on the mortgage.
NOTE C - LONG-TERM DEBT

         The  partnership  has a second mortgage note in an amount not to exceed
         $1,531,000  with the Florida  Housing  Finance  Agency.  The note bears
         interest at the  Applicable  Federal Rate for long-term  obligations in
         effect under  Internal  Revenue  Code Section 1274 (d)(1).  Interest is
         payable at the rate of 3 percent  on June 30th of each year  commencing
         in 1995.  Deferred interest is compounded  annually and is due together
         with the  principal  balance on February 28,  2025.  As of December 31,
         1996, $1,416,000 is outstanding under the loan.

         The liability of the  partnership  under the above loans are limited to
         the  underlying  value of the  real  estate  collateral,  improvements,
         easements  or other  interests,  assignment  of  rents,  assignment  of
         leases, and personal property.

         Aggregate  annual  maturities of the mortgage  payable over each of the
         next five years are as follows:

                             December 31, 1997           $     42,875
                                          1998                 50,944
                                          1999                 55,690
                                          2000                 60,878
                                          2001                 66,549

NOTE D - RELATED PARTY TRANSACTIONS

         Management Agreement

         The  partnership  has  entered  into  a  management  agreement  and  an
         incentive  management  agreement  under which the  general  partner has
         agreed to provide management,  operational,  supervisory,  maintenance,
         consultive,  bookkeeping,  financial,  and  reporting  services  to the
         partnership.

         Under the  agreement,  the  partnership  is required to pay the general
         partner  management  fees  equal to 5 percent of gross  collections  as
         defined.  During  1996,  management  fees of  $74,074  were  charged to
         operations, of which $12,986 are payable at December 31, 1996.



<PAGE>





NOTE D - RELATED PARTY TRANSACTIONS (Continued)

         During the investor  pay-in  period,  the managing  general  partner is
         entitled to receive an annual,  noncumulative  incentive management fee
         equal to 6  percent  of  gross  revenues,  as  defined.  The  incentive
         management fee is payable only to the extent of cash flow available for
         distribution as defined in the partnership agreement. This fee will not
         be earned or paid until any outstanding Project expense loans have been
         repaid and until any outstanding  recapture amount has been paid to the
         investor limited partner under the terms of the partnership  agreement.
         No incentive management fees were paid during 1996.

         Development Fees

         On  September  26, 1994,  the  partnership  entered into a  development
         agreement with Thirteen  Development  Corporation,  an affiliate of the
         general partner, for services in connection with the development of the
         project.  During 1996,  an amendment to the  development  agreement was
         executed   replacing  the  former   developer,   Thirteen   Development
         corporation with the successor developer,  Schickedanz Bros. - Pheasant
         Run  Ltd.,  an  affiliate  of  the  general  partner.   This  amendment
         discharged the former developer of all rights and  responsibilities and
         bestowed these rights and  responsibilities on the successor developer.
         The development agreement provides for a fee of up to $1,400,000. As of
         December 31, 1996, the partnership's liability under this agreement was
         $939,704.

         Operating Deficit Guaranty

         Pursuant to the partnership agreement,  the general partner and its two
         of affiliates,  Thirteen Development Corporation and Schickedanz Bros.,
         Inc. are required to loan the  partnership  amounts to cover  operating
         deficits of the project until repayment of the $1,531,000  Florida HOME
         loan.

NOTE E - COMMITMENTS AND CONTINGENCIES

         The project's  low-income housing credits are contingent on its ability
         to maintain  compliance with applicable sections of Section 42. Failure
         to maintain  compliance  with occupant  eligibility,  and/or unit gross
         rent, or to correct  noncompliance within a specified time period could
         result in recapture of previously taken tax credits plus interest.



<PAGE>
                                              FINANCIAL STATEMENTS AND
                                            INDEPENDENT AUDITORS' REPORT

                                                SCHICKEDANZ BROS. -
                                                  PALM BEACH, LTD.

                                                  DECEMBER 31, 1997


<PAGE>


                                        Schickedanz Bros. - Palm Beach, Ltd.

                                                  TABLE OF CONTENTS



                                                                           PAGE

INDEPENDENT AUDITORS' REPORT                                                 3


FINANCIAL STATEMENTS


         BALANCE SHEET                                                       4


         STATEMENT OF OPERATIONS                                             6


         STATEMENT OF PARTNERS' EQUITY                                       7


         STATEMENT OF CASH FLOWS                                             8


         NOTES TO FINANCIAL STATEMENTS                                       9




<PAGE>



                                                                       - 3 -


                                            INDEPENDENT AUDITORS' REPORT



To the Partners
Schickedanz Bros. - Palm Beach, Ltd.

         We have audited the accompanying  balance sheet of Schickedanz  Bros. -
Palm Beach,  Ltd.,  as of December  31,  1997,  and the  related  statements  of
operations,  partners'  equity,  and cash flows for the year then  ended.  These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial  statements based
on our audit.

         We conducted our 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 Schickedanz Bros.
Palm Beach,  Ltd., as of December 31, 1997,  and the results of its  operations,
and its cash  flows  for the year  then  ended,  in  conformity  with  generally
accepted accounting principles.


/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 21, 1998


<PAGE>


                      Schickedanz Bros. - Palm Beach, Ltd.


                                          See notes to financial statements

                                                                        - 4 -
<TABLE>
<CAPTION>

                                  BALANCE SHEET

                                December 31, 1997
<S>                                                                                              <C>
--------------------------------------------------------------------------------------------------------------------
                                                      ASSETS
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Current Assets
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Cash                                                                                        $           43,421
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Tenants accounts receivable                                                                             29,816
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Prepaid insurance                                                                                       15,506
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

                                                                                                   -----------------
                                                                                                   -----------------
         Total Current Assets                                                                                88,743
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Reserves and Deposits
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Reserve for replacements                                                                                75,441
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Tax and insurance escrow                                                                               243,950
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Total Reserves and Deposits                                                                        319,391
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Fixed Assets
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Land                                                                                                 1,792,680
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Building                                                                                            11,711,351
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Furniture and equipment                                                                                460,689
------------------------------------------------------------------------------------------------   -----------------
------------------------------------------------------------------------------------------------   -----------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
         Total Fixed Assets                                                                              13,964,720
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Less accumulated depreciation                                                                        (872,749)
------------------------------------------------------------------------------------------------   -----------------
------------------------------------------------------------------------------------------------   -----------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
                                                                                                         13,091,971
------------------------------------------------------------------------------------------------   -----------------
------------------------------------------------------------------------------------------------   -----------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Other Assets
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Organization costs, net of accumulated amortization of $9,798                                            9,798
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Compliance monitoring fees, net of accumulated amortization of $2,145                                   16,245
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Letter of credit fees, net of accumulated amortization of $4,671                                         1,341
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Loan fees, net of accumulated amortization of $25,400                                                  208,830
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Total Other Assets                                                                                 236,214
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
                                                                                                 $       13,736,319
--------------------------------------------------------------------------------------------------------------------


<PAGE>



                                          See notes to financial statements

                                                                             - 8 -

                            BALANCE SHEET (Continued)

                                December 31, 1997

--------------------------------------------------------------------------------------------------------------------
                                         LIABILITIES AND PARTNERS' EQUITY
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------   -----------------
------------------------------------------------------------------------------------------------   -----------------
Current Liabilities
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Accounts payable                                                                            $           35,008
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Tenant security deposits                                                                                69,129
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Prepaid rents                                                                                            5,422
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Due to affiliate                                                                                        18,978
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Accrued management fees                                                                                 11,394
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Accrued interest payable                                                                               241,546
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Accrued real estate taxes                                                                              173,734
------------------------------------------------------------------------------------------------   -----------------
------------------------------------------------------------------------------------------------   -----------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
         Total Current Liabilities                                                                          555,211
------------------------------------------------------------------------------------------------   -----------------
------------------------------------------------------------------------------------------------   -----------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Long-Term Debt
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Note payable - Newport Mortgage                                                                      6,428,231
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Note payable - HOME                                                                                  1,416,000
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Developer fee payable                                                                                  939,704
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Total Long-Term Liabilities                                                                      8,783,935
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Commitments and Contingencies                                                                                     -
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Partners' Equity                                                                                          4,397,173
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
                                                                                                 $       13,736,319
--------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                             STATEMENT OF OPERATIONS
                          Year ended December 31, 1997
<S>                                                                                              <C>
--------------------------------------------------------------------------------------------------------------------
Revenue
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Rental income                                                                               $        1,390,102
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Other income                                                                                            28,200
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
                                                                                                          1,418,302
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Operating Expenses
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Administrative expenses
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Advertising                                                                                          2,162
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Office salaries                                                                                     38,916
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Management fees                                                                                     70,914
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Professional fees                                                                                   12,751
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Office expenses                                                                                     11,932
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Tenant bad debts                                                                                    85,468
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         General administrative                                                                               2,071
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Tenant credit reports                                                                                  895
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
              Total administrative expenses                                                                 225,109
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Repairs and maintenance
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Repairs and maintenance                                                                            196,142
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Utilities                                                                                          102,970
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Janitorial and cleaning                                                                             52,941
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Trash removal                                                                                       28,311
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Exterminating                                                                                        2,508
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
              Total repairs and maintenance                                                                 382,872
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Taxes and insurance
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Real estate taxes                                                                                  151,615
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Payroll taxes                                                                                        8,152
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Property and liability insurance                                                                    49,536
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Workers' compensation                                                                                4,641
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Health insurance and other benefits                                                                 11,480
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Other taxes and insurance                                                                              623
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
              Total taxes and insurance                                                                     226,047
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Interest on mortgage notes                                                                             689,032
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
              Total operating expenses                                                                    1,523,060
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Loss from operations before depreciation and amortization                                        (104,758)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Depreciation expense                                                                                   375,078
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Amortization expense                                                                                    23,766
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
                  Net loss                                                                       $        (503,602)
--------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                            STATEMENT OF PARTNERS' EQUITY

                                            Year ended December 31, 1997
<S>                                                       <C>                <C>                   <C>

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


                                                            General Partner    Limited Partners
                                                                                                        Total
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

Balance, December 31, 1996                                $         (6,710)  $     4,907,485       $  4,900,775

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

------------------------------------------------------------
------------------------------------------------------------
Net loss                                                            (5,036)         (498,566)          (503,602)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997                                $        (11,746)  $     4,408,919  $       4,397,173
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Partnership percentage                                                   1%               99%               100%
--------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>


                                               STATEMENT OF CASH FLOWS

                                            Year ended December 31, 1997
<TABLE>
<CAPTION>
<S>                                                                                              <C>
--------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Net loss                                                                                    $        (503,602)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Adjustments to reconcile net loss to net cash provided by                                              375,078
     operating activities
         Depreciation
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Amortization                                                                                        23,766
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Decrease (increase) in assets
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Tenants accounts receivable                                                                         11,162
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Prepaid insurance                                                                                    2,140
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Prepaid expenses - other                                                                               520
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Tax and insurance escrow                                                                         (178,055)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Increase (decrease) in liabilities
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Accounts payable                                                                                    40,074
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Accrued management fees                                                                           (12,986)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Tenant security deposits                                                                           (4,273)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Real estate tax payable                                                                            173,734
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Accrued interest payable                                                                           117,990
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Prepaid rents                                                                                        5,422
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Net cash provided by operating activities                                                           50,970
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Deposits to reserve for replacements                                                                  (29,975)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Withdrawals from reserve for replacement                                                                 8,291
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Net cash used in investing activities                                                             (21,684)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Loan repayments                                                                                       (42,816)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Letter of credit fees                                                                                  (2,686)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Net cash used in financing activities                                                             (45,502)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         NET DECREASE IN CASH                                                                              (16,216)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Cash, beginning                                                                                              59,637
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Cash, ending                                                                                     $           43,421
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Supplemental disclosure of cash flow information                                                            571,042
     Cash paid during the year for interest                                                      $
--------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>




                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 1997

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Schickedanz  Bros.  - Palm  Beach,  Ltd.,  (the  "Partnership")  was
         formed as a limited  partnership  on June 22, 1994 under the laws of
         the state of Florida,  for the purpose of acquiring,  constructing,
         developing,  and  operating a low-income  residential  housing  project
         Live Oak  Plantation Apartments (the "Project") consists of 218 rental
         units located in West Palm Beach, Florida.

         The Project  consists of 6 buildings  which have each qualified for and
         been  allocated  low-income  housing tax  credits  pursuant to Internal
         Revenue Code Section 42 ("Section 42"),  which regulates the use of the
         Project as to occupant  eligibility  and unit gross  rent,  among other
         requirements.  Each building of the Project must meet the provisions of
         these  regulations  during  each of 15  consecutive  years  in order to
         remain qualified to receive the credits. In addition, Schickedanz Bros.
         - Palm Beach, Ltd., has executed a Land Use Restriction Agreement which
         requires the  utilization  of the Project  pursuant to Section 42 for a
         minimum  of 35 years,  even  after  disposition  of the  Project by the
         Partnership.

         A summary of significant accounting policies follows.

         Use of Estimates

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

         Rental Property

         Rental  property is carried at cost.  Depreciation  is provided  for in
         amounts  sufficient  to  relate  the  cost  of  depreciable  assets  of
         operations over seven to forty years by use of the straight-line method
         for financial reporting purposes.


<PAGE>


                      Schickedanz Bros. - Palm Beach, Ltd.

                    NOTES TO FINANCIAL STATEMENTS (Continued)

                                December 31, 1997

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Amortization

         Organization costs are amortized over 60 months using the straight-line
         method.

         Compliance  monitoring  fees are amortized over the 15 year  compliance
         period.

         Letter  of credit  fees are  amortized  over the term of the  letter of
         credit.

         Loan fees are  amortized  over the term of the mortgage  loan using the
         straight-line method.

         Rental Income

         Rental  income is  recognized as rentals  become due.  Rental  payments
         received in advance are deferred  until earned.  All leases between the
         Partnership and tenants of the property are operating leases.

         Income Taxes

         No  provision  or benefit for income  taxes has been  included in these
         financial  statements  since taxable  income or loss passes through to,
         and is reportable by, the partners individually.

NOTE B - LONG-TERM DEBT

         The  Partnership  has a  first  mortgage  in  the  original  amount  of
         $6,493,000 with Newport Mortgage Company,  L.P. The loan bears interest
         at 8.94  percent  and is  payable  in monthly  interest  and  principal
         installments  of $51,964 until maturity on July 7, 2026. As of December
         31, 1997, $6,428,231 is outstanding on the mortgage.

         The  Partnership  has a second mortgage note in an amount not to exceed
         $1,531,000  with the  Florida  Housing  Finance  Agency  under the HOME
         Investment   Partnership  Program.  The  note  bears  interest  at  the
         Applicable  Federal  Rate for  long-term  obligations  in effect  under
         Internal  Revenue Code Section 1274 (d)(1).  Interest is payable at the
         rate of 3  percent  on  June  30th of each  year  commencing  in  1995.
         Deferred  interest is compounded  annually and is due together with the
         principal  balance on  February  28,  2025.  As of December  31,  1997,
         $1,416,000 is outstanding under the loan.


<PAGE>


NOTE B - LONG-TERM DEBT (Continued)

         The  liability of the  Partnership  under the above loans is limited to
         the  underlying  value of the  real  estate  collateral,  improvements,
         easements  or other  interests,  assignment  of  rents,  assignment  of
         leases, and personal property.

         Aggregate  annual  maturities of the mortgage  payable over each of the
         next five years are as follows:

--------------------------------------------------------------------------------
                                HOME Loan       Newport Mortgage          Total
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 December 31, 1998    $               -  $           50,944  $           50,944
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              1999                    -              55,690              55,690
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              2000                    -              60,878              60,878
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              2001                    -              66,549              66,549
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
              2002                    -              72,748              72,748
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
        Thereafter            1,416,000           6,121,422           7,537,422
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                      $       1,416,000  $        6,428,231  $        7,844,231
--------------------------------------------------------------------------------

NOTE C - RELATED PARTY TRANSACTIONS

         Management Agreement

         The  Partnership  has  entered  into  a  management  agreement  and  an
         incentive  management  agreement  under which the  general  partner has
         agreed to provide management,  operational,  supervisory,  maintenance,
         consultive,  bookkeeping,  financial,  and  reporting  services  to the
         Partnership.

         Under the  agreement,  the  Partnership  is required to pay the general
         partner  management  fees  equal to 5 percent of gross  collections  as
         defined.  During  1997,  management  fees of  $70,914  were  charged to
         operations.


<PAGE>


NOTE C - RELATED PARTY TRANSACTIONS (Continued)

         The  managing  general  partner  is  entitled  to  receive  an  annual,
         noncumulative  incentive  management  fee equal to 6  percent  of gross
         revenues,  as defined.  The incentive management fee is payable only to
         the extent of cash flow  available for  distribution  as defined in the
         partnership  agreement.  This fee will not be earned or paid  until any
         outstanding  project  expense  loans  have  been  repaid  and until any
         outstanding  recapture  amount  has been paid to the  investor  limited
         partner  under the terms of the  partnership  agreement.  No  incentive
         management fees were paid during 1997.

         Development Fees

         On  September  26, 1994,  the  Partnership  entered into a  development
         agreement with Thirteen  Development  Corporation,  an affiliate of the
         general partner, for services in connection with the development of the
         Project.  During 1996,  an amendment to the  development  agreement was
         executed   replacing  the  former   developer,   Thirteen   Development
         Corporation with the successor developer,  Schickedanz Bros. - Pheasant
         Run  Ltd.,  an  affiliate  of  the  general  partner.   This  amendment
         discharged the former developer of all rights and  responsibilities and
         bestowed these rights and  responsibilities on the successor developer.
         As of December 31, 1997,  the maximum  developer  fee has been incurred
         and the partnership's liability under this agreement was $939,704. This
         liability  is  expected to be repaid from future cash flow as set forth
         in the partnership agreement.

NOTE D - COMMITMENTS AND CONTINGENCIES

         The  Project's  low-income  housing tax credits are  contingent  on its
         ability to maintain  compliance with applicable sections of Section 42.
         Failure to maintain compliance with occupant  eligibility,  and/or unit
         gross rent, or to correct  noncompliance within a specified time period
         could  result  in  recapture  of  previously  taken  tax  credits  plus
         interest.

         Pursuant to its mortgage agreement, the Partnership is required to
         deposit $2,725 monthly, or $32,700 annually to a reserve for
         replacements.  All required deposits have been made.


<PAGE>





                                                       - 13 -

NOTE D - COMMITMENTS AND CONTINGENCIES (Continued)

         Pursuant to the HOME loan,  the  Partnership  is required to rent at
         least 32 units to tenants  whose  income does not exceed 50 percent of
         Palm Beach County median annual income.  This requirement must be met
         for a period of 35 years.

         Pursuant to the partnership agreement,  the general partner is required
         to loan the  Partnership  amounts to cover  operating  deficits  of the
         Project.  The liability is limited to $550,000 for the first four years
         after  the  development  obligation  date  and  then it is  limited  to
         $100,000 until dissolution of the Partnership.  Operating deficit loans
         are non-interest bearing and are repayable in accordance with the terms
         of the partnership agreement.


<PAGE>




                            FINANCIAL STATEMENTS AND
                          INDEPENDENT AUDITORS' REPORT

                               SCHICKEDANZ BROS. -
                                PALM BEACH, LTD.

                                DECEMBER 31, 1998


<PAGE>





                      Schickedanz Bros. - Palm Beach, Ltd.

                                TABLE OF CONTENTS



                                                                         PAGE

INDEPENDENT AUDITORS' REPORT                                               3


FINANCIAL STATEMENTS

         BALANCE SHEET                                                     4

         STATEMENT OF OPERATIONS                                           6


         STATEMENT OF PARTNERS' EQUITY                                     7


         STATEMENT OF CASH FLOWS                                           8


         NOTES TO FINANCIAL STATEMENTS                                     9




<PAGE>









                          INDEPENDENT AUDITORS' REPORT



To the Partners
Schickedanz Bros. - Palm Beach, Ltd.

         We have audited the accompanying  balance sheet of Schickedanz  Bros. -
Palm Beach,  Ltd.,  as of December  31,  1998,  and the  related  statements  of
operations,  partners'  equity,  and cash flows for the year then  ended.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

         We conducted our audit in accordance with generally  accepted  auditing
standards.  Those standards require 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 Schickedanz Bros. -
Palm Beach,  Ltd., as of December 31, 1998,  and the results of its  operations,
and its cash  flows  for the year  then  ended,  in  conformity  with  generally
accepted accounting principles.


/s/Reznick Fedder & Silverman
Atlanta, Georgia
January 22, 1999


<PAGE>




                     Schickedanz Bros. - Palm Beach, Ltd.


                        See notes to financial statements



                                  BALANCE SHEET

                                December 31, 1998
<TABLE>
<CAPTION>

<S>                                                                                              <C>
--------------------------------------------------------------------------------------------------------------------
                                     ASSETS
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

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

Current Assets
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Cash                                                                                        $            3,693
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Tenants accounts receivable                                                                             15,963
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Prepaid insurance                                                                                       16,638
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

                                                                                                   -----------------
                                                                                                   -----------------
         Total Current Assets                                                                                36,294
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Reserves and Deposits
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Reserve for replacements                                                                                54,976
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Tax and insurance escrow                                                                                70,146
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Total Reserves and Deposits                                                                        125,122
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Fixed Assets
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Land                                                                                                 1,792,680
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Building                                                                                            11,711,351
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Furniture and equipment                                                                                462,330
------------------------------------------------------------------------------------------------   -----------------
------------------------------------------------------------------------------------------------   -----------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
         Total Fixed Assets                                                                              13,966,361
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Less accumulated depreciation                                                                      (1,247,827)
------------------------------------------------------------------------------------------------   -----------------
------------------------------------------------------------------------------------------------   -----------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
                                                                                                         12,718,534
------------------------------------------------------------------------------------------------   -----------------
------------------------------------------------------------------------------------------------   -----------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Other Assets
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Utility deposits                                                                                         2,160
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Organization costs, net of accumulated amortization of $13,717                                           5,874
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Compliance monitoring fees, net of accumulated amortization of $3,371                                   15,019
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Letter of credit fees, net of accumulated amortization of $6,011                                         1,250
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Loan fees, net of accumulated amortization of $41,015                                                  193,230
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Total Other Assets                                                                                 217,533
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
                                                                                                 $       13,097,483
--------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>




                        See notes to financial statements



<TABLE>
<CAPTION>
                     Schickedanz Bros. - Palm Beach, Ltd.

                          BALANCE SHEET (Continued)

                                December 31, 1998
<S>                                                                                              <C>

--------------------------------------------------------------------------------------------------------------------
                        LIABILITIES AND PARTNERS' EQUITY
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

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

Current Liabilities
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Accounts payable                                                                            $           73,275
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Tenant security deposits                                                                                54,582
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Accrued management fees                                                                                  5,634
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
     Accrued interest payable                                                                               310,945
------------------------------------------------------------------------------------------------   -----------------
------------------------------------------------------------------------------------------------   -----------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
         Total Current Liabilities                                                                          444,436
------------------------------------------------------------------------------------------------   -----------------
------------------------------------------------------------------------------------------------   -----------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Long-Term Debt
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Note payable - Newport Mortgage                                                                      6,377,227
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Note payable - HOME                                                                                  1,416,000
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Developer fee payable                                                                                  939,704
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Total Long-Term Liabilities                                                                      8,732,931
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Commitments and Contingencies                                                                                     -
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Partners' Equity                                                                                          3,920,116
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
                                                                                                 $       13,097,483
--------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                      Schickedanz Bros. - Palm Beach, Ltd.

                             STATEMENT OF OPERATIONS
<S>                                                                                              <C>

                          Year ended December 31, 1998
--------------------------------------------------------------------------------------------------------------------
Revenue
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Rental income                                                                               $        1,399,167
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Other income                                                                                            40,936
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
                                                                                                          1,440,103
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Operating Expenses
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Administrative expenses
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Advertising                                                                                          6,978
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Office salaries                                                                                     41,876
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Management fees                                                                                     72,098
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Professional fees                                                                                    3,659
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Office expenses                                                                                      6,578
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Tenant bad debts                                                                                   117,095
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         General administrative                                                                                 750
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Tenant credit reports                                                                                  926
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Security                                                                                            30,991
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
              Total administrative expenses                                                                 280,951
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Repairs and maintenance
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Repairs and maintenance                                                                            122,017
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Utilities                                                                                          118,965
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Janitorial and cleaning                                                                             53,457
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Trash removal                                                                                       26,239
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Exterminating                                                                                        1,971
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
              Total repairs and maintenance                                                                 322,649
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Taxes and insurance
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Real estate taxes                                                                                  153,163
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Payroll taxes                                                                                        8,836
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Property and liability insurance                                                                    48,783
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Workers' compensation                                                                                5,036
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Health insurance and other benefits                                                                 14,293
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Other taxes and insurance                                                                              586
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
              Total taxes and insurance                                                                     230,697
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Interest on mortgage notes                                                                             684,444
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
              Total operating expenses                                                                    1,518,741
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Loss from operations before depreciation and amortization                                         (78,638)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Depreciation expense                                                                                   375,078
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Amortization expense                                                                                    23,341
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
                  Net loss                                                                       $        (477,057)
--------------------------------------------------------------------------------------------------------------------

</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                      Schickedanz Bros. - Palm Beach, Ltd.

                          STATEMENT OF PARTNERS' EQUITY

                          Year ended December 31, 1998

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



                                                            General Partner    Limited Partners        Total
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

Balance, December 31, 1997                                $        (11,746)  $       4,408,919   $        4,397,173
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------
------------------------------------------------------------
Net loss                                                            (4,771)           (472,286)            (477,057)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998                                $        (16,517)  $       3,936,633   $        3,920,116
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Partnership percentage                                                  1%                 99%                 100%
--------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                     Schickedanz Bros. - Palm Beach, Ltd.

                           STATEMENT OF CASH FLOWS

                          Year ended December 31, 1998
<S>                                                                                              <C>

--------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Net loss                                                                                    $        (477,057)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Adjustments to reconcile net loss to net cash provided by                                              375,078
     operating activities
         Depreciation
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Amortization                                                                                        23,341
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Decrease (increase) in assets
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Tenants accounts receivable                                                                         13,853
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Prepaid insurance                                                                                  (1,132)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Utility deposits                                                                                   (2,160)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Tax and insurance escrow                                                                           173,804
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
     Increase (decrease) in liabilities
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Accounts payable                                                                                    38,267
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Accrued management fees                                                                            (5,760)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Tenant security deposits                                                                          (14,547)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Real estate tax payable                                                                          (173,734)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
         Accrued interest payable                                                                            69,399
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Prepaid rents                                                                                      (5,422)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Net cash provided by operating activities                                                           13,930
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Purchases of equipment                                                                                 (1,641)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Deposits to reserve for replacements                                                                  (32,700)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Withdrawals from reserve for replacements                                                               53,165
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Net cash provided by investing activities                                                           18,824
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Loan repayments                                                                                       (51,004)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Letter of credit fees                                                                                  (2,500)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
     Payments to affiliates                                                                                (18,978)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         Net cash used in financing activities                                                             (72,482)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
         NET DECREASE IN CASH                                                                              (39,728)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Cash, beginning                                                                                              43,421
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Cash, ending                                                                                     $            3,693
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------


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

</TABLE>


<PAGE>



                       Schickedanz Bros. - Palm Beach, Ltd.


                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 1998

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Schickedanz Bros.-Palm Beach,Ltd., (the  "Partnership") was formed as a
         limited  partnership on June 22, 1994 under the laws of the state of
         Florida, for the purpose of acquiring,  constructing,  developing, and
         operating a low-income  residential  housing project.  Live Oak
         Plantation  Apartments (the "Project") consists of 218 rental units
         located in West Palm Beach, Florida.

         The Project  consists of 6 buildings  which have each qualified for and
         been  allocated  low-income  housing tax  credits  pursuant to Internal
         Revenue Code Section 42 ("Section 42"),  which regulates the use of the
         Project as to occupant  eligibility  and unit gross  rent,  among other
         requirements.  Each building of the Project must meet the provisions of
         these  regulations  during  each of 15  consecutive  years  in order to
         remain qualified to receive the credits. In addition, Schickedanz Bros.
         - Palm Beach, Ltd., has executed a Land Use Restriction Agreement which
         requires the  utilization  of the Project  pursuant to Section 42 for a
         minimum  of 35 years,  even  after  disposition  of the  Project by the
         Partnership.

         A summary of significant accounting policies follows.

         Use of Estimates

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

         Rental Property

         Rental  property is carried at cost.  Depreciation  is provided  for in
         amounts  sufficient  to  relate  the  cost  of  depreciable  assets  of
         operations over seven to forty years by use of the straight-line method
         for financial reporting purposes.


<PAGE>

Schickedanz Bros. - Palm Beach, Ltd.

NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 1998

NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Amortization

         Organization costs are amortized over 60 months using the straight-line
         method.

         Compliance  monitoring  fees are amortized over the 15 year  compliance
         period using the straight-line method.

         Letter  of credit  fees are  amortized  over the term of the  letter of
         credit using the straight-line method.

         Loan fees are  amortized  over the term of the mortgage  loan using the
         straight-line method.

         Rental Income

         Rental  income is  recognized as rentals  become due.  Rental  payments
         received in advance are deferred  until earned.  All leases between the
         Partnership and tenants of the property are operating leases.

         Income Taxes

         No  provision  or benefit for income  taxes has been  included in these
         financial  statements  since taxable  income or loss passes through to,
         and is reportable by, the partners individually.

NOTE B - LONG-TERM DEBT

         The  Partnership  has a  first  mortgage  in  the  original  amount  of
         $6,493,000 with Newport Mortgage Company,  L.P. The loan bears interest
         at 8.94  percent  and is  payable  in monthly  interest  and  principal
         installments of $51,964 until maturity on July 7, 2026.

         The  Partnership  has a second mortgage note in an amount not to exceed
         $1,531,000  with the  Florida  Housing  Finance  Agency  under the HOME
         Investment   Partnership  Program.  The  note  bears  interest  at  the
         Applicable  Federal  Rate for  long-term  obligations  in effect  under
         Internal  Revenue Code Section 1274 (d)(1).  Interest is payable at the
         rate of 3  percent  on  June  30th of each  year  commencing  in  1995.
         Deferred  interest is compounded  annually and is due together with the
         principal  balance on  February  28,  2025.  As of December  31,  1998,
         $1,416,000 is outstanding under the loan.



<PAGE>



Schickedanz Bros. - Palm Beach, Ltd.

NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 1998

NOTE B - LONG-TERM DEBT (Continued)

         The  liability of the  Partnership  under the above loans is limited to
         the  underlying  value of the  real  estate  collateral,  improvements,
         easements  or other  interests,  assignment  of  rents,  assignment  of
         leases, and personal property.

         Aggregate  annual  maturities of the mortgage  payable over each of the
         next five years are as follows:
<TABLE>
<CAPTION>
           <S>                        <C>                <C>                 <C>

------------------------------------------------------------------------------------------------
                                       Newport Mortgage       HOME Loan             Total
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
           December 31, 1999          $          55,690  $                -  $           55,690
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
                        2000                     60,878                   -              60,878
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
                        2001                     66,549                   -              66,549
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
                        2002                     72,748                   -              72,748
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
                        2003                     79,525                   -              79,525
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
                  Thereafter                  6,041,837           1,416,000           7,457,837
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
                                      $       6,377,227  $        1,416,000  $        7,793,227
------------------------------------------------------------------------------------------------
</TABLE>

NOTE C - RELATED PARTY TRANSACTIONS

         Management Agreement

         The  Partnership  has  entered  into  a  management  agreement  and  an
         incentive  management  agreement  under which the  general  partner has
         agreed to provide management,  operational,  supervisory,  maintenance,
         consultive,  bookkeeping,  financial,  and  reporting  services  to the
         Partnership.  Under the agreement,  the  Partnership is required to pay
         the  general  partner  management  fees  equal  to 5  percent  of gross
         collections as defined.

         The  managing  general  partner  is  entitled  to  receive  an  annual,
         noncumulative  incentive  management  fee equal to 6  percent  of gross
         revenues,  as defined.  The incentive management fee is payable only to
         the extent of cash flow  available for  distribution  as defined in the
         partnership  agreement.  This fee will not be earned or paid  until any
         outstanding  project  expense  loans  have  been  repaid  and until any
         outstanding  recapture  amount  has been paid to the  investor  limited
         partner  under the terms of the  partnership  agreement.  No  incentive
         management fees were paid during 1998.



<PAGE>



Schickedanz Bros. - Palm Beach, Ltd.

NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 1998





NOTE C - RELATED PARTY TRANSACTIONS (Continued)

         Development Fees

         On  September  26, 1994,  the  Partnership  entered into a  development
         agreement with Thirteen  Development  Corporation,  an affiliate of the
         general partner, for services in connection with the development of the
         Project.  During 1996,  an amendment to the  development  agreement was
         executed   replacing  the  former   developer,   Thirteen   Development
         Corporation with the successor developer,  Schickedanz Bros. - Pheasant
         Run  Ltd.,  an  affiliate  of  the  general  partner.   This  amendment
         discharged the former developer of all rights and  responsibilities and
         bestowed these rights and  responsibilities on the successor developer.
         The  remaining  liability  is to be repaid from future cash flow as set
         forth in the partnership agreement.

NOTE D - COMMITMENTS AND CONTINGENCIES

         The  Project's  low-income  housing tax credits are  contingent  on its
         ability to maintain  compliance with applicable sections of Section 42.
         Failure to maintain compliance with occupant  eligibility,  and/or unit
         gross rent, or to correct  noncompliance within a specified time period
         could  result  in  recapture  of  previously  taken  tax  credits  plus
         interest.

         Pursuant to its  mortgage  agreement,  the  Partnership  is required to
         deposit  $2,725  monthly,   or  $32,700   annually  to  a  reserve  for
         replacements.  All required  deposits  have been made.  Pursuant to the
         HOME loan,  the  Partnership  is  required to rent at least 32 units to
         tenants  whose  income does not exceed 50 percent of Palm Beach  County
         median annual income.  This  requirement must be met for a period of 35
         years.

         Pursuant to the partnership agreement,  the general partner is required
         to loan the  Partnership  amounts to cover  operating  deficits  of the
         Project.  The liability is limited to $550,000 for the first four years
         after  the  development  obligation  date  and  then it is  limited  to
         $100,000 until dissolution of the Partnership.  Operating deficit loans
         are non-interest bearing and are repayable in accordance with the terms
         of the partnership agreement.










<PAGE>