June 26, 1998




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, 1998
       Commission File Number 0-26522

Gentlemen:

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

Very truly yours,


\s\Dianne Groark
Dianne Groark
Assistant Controller



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, 1998                                                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.

                          $34,021,000 as of March 31, 1998


<PAGE>





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

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

Report on Form 8-K dated 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>


             BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP

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


                                 TABLE OF CONTENTS


                                                                       Page No.

PART I

     Item 1      Business                                                  K-3
     Item 2      Properties                                                K-5
     Item 3      Legal Proceedings                                         K-8
     Item 4      Submission of Matters to a Vote of
                  Security Holders                                         K-9

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 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-13
     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-15

PART IV

     Item 14     Exhibits, Financial Statement Schedule and
                  Reports on Form 8-K                                      K-18

SIGNATURES                                                                 K-19


<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, 1998. 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 A

                               SELECTED LOCAL LIMITED
                                  PARTNERSHIP DATA
<TABLE>
<CAPTION>


 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 generally 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 Agreement.

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, 1998, the following Local Limited Partnerships have
a common Local  General  Partner or affiliated  group of Local General  Partners
accounting for the specified  percentage of the total capital  contributions  in
Local Limited  Partnerships:  (i) Green Wood and Springwood  representing 21.22%
have Flournoy Development Company as Local General Partner;  (ii) Pike Place and
West End Place  representing  13.44% 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.  To  economize on direct and indirect  payroll  costs,  the
Fund,  which does not have any employees,  reimburses The Boston Financial Group
Limited  Partnership,  an affiliate of the General 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 generally 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 Partnership.


<PAGE>

<TABLE>
<CAPTION>




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


Green Wood Apartments,
   a Limited Partnership
Green Wood Apartments
Gallatin, TN                     164          $3,825,916         $3,825,916        $5,225,609              None            98%

Webster Court Apartments
   a Limited Partnership
Webster Court Apartments
Kent, WA                          92           2,318,078          2,318,078         2,862,333              None            84%

Springwood Apartments
   a Limited Partnership (1)
Springwood Apartments
Tallahassee, FL                  113           2,499,202          2,499,202         3,931,815              None            86%

Meadow Wood Associates
   of Pella, a Limited Partnership
Meadow Wood of Pella
Pella, IA                         30             893,808            893,808         1,132,206              Section 8      100%

RMH Associates, a Limited
   Partnership (1)
Hemlock Ridge
Livingston Manor, NY             100           1,697,298          1,697,298         2,167,755              Section 8       87%

Pike Place, a Limited
   Partnership (1)
Pike Place
Fort Smith, AR                   144           1,915,328          1,915,328         3,334,083              None            99%
</TABLE>


<PAGE>
<TABLE>
<CAPTION>



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

West End Place, a Limited
   Partnership (1)
West End Place
Springdale, AR                   120           1,843,010          1,843,010          2,942,013           None               100%

Oak Knoll Renaissance, a
   Limited Partnership
Oak Knoll Renaissance
Gary, IN                         256           4,922,412          4,922,412          5,403,913           Section 8          100%

Beaverdam Creek Associates,
   a Limited Partnership (2)
Beaverdam Creek
Mechanicsville, VA               120           3,629,140          3,629,140          3,364,803           None                93%

Schickedanz Brothers Palm
   Beach Limited
Live Oaks Plantation
West Palm Beach, FL              218          5,587,953           5,587,953          7,844,231           None                93%
                               ------       -------------      ------------        ------------
                               1,357        $29,132,145         $29,132,145        $38,208,761
                               ======        ===========        ===========         ===========
</TABLE>

(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.



<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  12.8% 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 August 1, 2010.

Oak  Knoll  Renaissance  Limited  Partnership,  representing  16.5% 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  12.2%  of  the  Fund's  total  investment  in  the  Local  Limited
Partnerships,  has obtained a construction loan in the original principal amount
of $3,420,000 from the Virginia Housing and Development Authority ("VHDA").  The
loan is evidenced by two mortgage  notes,  one in the amount of $2,420,000  from
VHDA and one in the amount of $1,000,000 from Virginia  Housing  Partnership
Revolving  Fund  ("VHPRF").  The VHDA mortgage note bears interest at 10.62% per
annum and the VHPRF mortgage note bears interest at 5% per annum. The loans from
VHDA and VHPRF are to be repaid on a level annuity  basis by 360 equal  payments
of principal and interest of $22,354 and $5,368 , respectively.

Additionally, on November 16, 1994, Beaverdam Creek LP entered into a promissory
note agreement with the Fund.  $2,563,040 was advanced under the agreement.  The
promissory note was unsecured and bore interest at the rate of 7% per annum. All
outstanding  principal and accrued  interest in  connection  with this note were
deemed  paid and  classified  as  capital  contributions  by the  Local  Limited
Partnership upon final closing of the mortgage during fiscal year 1996.

Schickedanz Brothers Palm Beach Limited  Partnership,  representing 20.2% 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,  1997,  $6,428,231  is  outstanding  on the
mortgage.

The  second 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, 1997, 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.


                                     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, 1998, there were 1,260 record holders of Units of the Fund.

Cash distributions, when made, are paid annually.  For the years ended March 31,
1998, 1997 and 1996, 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,
                                           1998             1997              1996             1995              1994
<S>                                   <C>              <C>               <C>              <C>               <C>  

Revenue                               $      98,132    $      100,536    $     511,713    $      763,502    $          60
Equity in losses of Local Limited
 Partnerships                            (2,083,625)       (1,922,556)        (881,551)         (161,157)               -
Net income (loss)                        (2,408,077)       (2,247,908)        (782,504)          160,473          (37,214)
Per Limited Partnership Unit (A)             (65.32)           (60.98)          (21.23)             5.52            (6.02)
Cash and cash equivalents                   213,966           273,412           71,715        10,495,010        3,863,840
Marketable Securities                     1,486,223         1,442,676        3,709,881         1,575,592                -
Investment in Local Limited
Partnerships                             25,099,334        26,813,245       26,064,146        19,840,904        2,087,172
Total assets (B)                         26,827,966        29,078,258       31,277,311        32,240,835        6,000,179
Long-term debt                                    -                 -                -                 -                -
Cash Distribution                                 -                 -                -                 -                -
Other data:
Passive loss (C)                         (2,836,009)       (2,936,579)      (1,638,463)         (511,934)               -
Per Limited Partnership Unit (C)             (76.93)           (79.66)          (44.44)           (13.89)               -
Portfolio income (C)                        151,751           161,828          764,632           628,323                -
Per Limited Partnership Unit (C)              4.12               4.39            20.74             17.04                -
Low-Income Housing Tax Credit (C)         5,234,045         5,234,045        3,307,725           313,289                -
Per Limited Partnership Unit (C)             141.98            141.98            89.72              8.50                -
Local Limited Partnership interests
owned at end of period                           10                10               10                10                1

</TABLE>

(A)  Per Limited  Partnership Unit data is based upon 36,497 units for the years
     ended March 31, 1998,  1997,  and 1996,  and a weighted  average  number of
     units outstanding of 28,774 and 6,123 for the year ended March 31, 1995 and
     the period December 6, 1993 to March 31, 1994, respectively.

(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.

Allocations to individual investors for the tax year ended December 31, 1994 are
based on the individual's admission date to the Fund.


<PAGE>


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

Liquidity and Capital Resources

At March  31,  1998,  the Fund had cash  and cash  equivalents  of  $213,966  as
compared  to $273,412  at March 31,  1997.  This  decrease  is  attributable  to
purchases  of  marketable  securities  in  excess  of  proceeds  from  sales and
maturities of marketable  securities,  investments in Local Limited Partnerships
and cash used for operations.  These decreases to cash and cash  equivalents are
offset partially by cash distributions  received from Local Limited Partnerships
and the receipt of restricted cash.

As of March 31, 1998, approximately $1,392,000 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, 1998,  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,  1998.  It is
expected that cash available for  distribution,  if any, will not be significant
in fiscal  year 1999.  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

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.

1997 versus 1996

For the year ended March 31, 1997, the Fund's operations  resulted in a net loss
of  $2,247,908,  as compared to $782,504 for the year ended March 31, 1996.  The
increase in net loss is attributable to an increase in equity in losses of Local
Limited  Partnerships and a decrease in investment and other income.  The change
in equity in losses of Local Limited  Partnerships  for the year ended March 31,
1997,  as compared to the same period in 1996 is primarily  attributable  to the
timing of  construction  completion.  Since  many of the  properties  were under
construction  during the year ended December 31, 1995, the results of operations
for the period  ended  December 31, 1995 were not  comparable  to the results of
operations for the year ended December 31, 1996.





Effect of recently issued Accounting Standard

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

 
Low-Income Housing Tax Credits

The 1997 and 1996 tax  credits  were  $141.98  per Unit and the 1995 tax credits
were $89.72 per Unit.  The 1994 tax credits per Unit were allocated to investors
based on the individual's admission date to the Partnership.  Investors admitted
during the first closing received $17.25 per Unit.  Investors  admitted in later
closings  received a lower amount.  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
generated  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 and 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.

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,  through initial lease-up
and operating satisfactorily.

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



<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, 1998, 1997, and 1996.

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.


Item 8.  Financial Statements and Supplementary Data

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


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

None.


                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

The  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

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

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

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

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

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

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

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

Item 11.  Management Remuneration

Neither the  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, 1998, the following  entities are the only entities known to the
Fund to be the beneficial owners of more than 5% of the Units outstanding:
<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 LLC       2,476 Units                      6.7%
Partner                 101 Arch Street
                        Boston, MA
</TABLE>

Oldham Institutional Tax Credits LLC is an affiliate 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, 1998.  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, 1998, 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,  1998,  1997  and  1996 are
described below and in the sections of the Prospectus entitled "Estimated Use of
Proceeds",  "Management  Compensation  and Fees" and "Profits and Losses for Tax
Purposes,  Tax Credits and Cash  Distributions".  Such sections are incorporated
herein by reference.



The Fund is permitted to enter into  transactions  involving  affiliates  of the
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 Partnership are as follows:

Organizational fees and expenses and selling expenses

In  accordance  with the  Partnership  Agreement,  the Fund is  required  to pay
certain  fees to and  reimburse  expenses of the  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. Payments made and expenses reimbursed in
the years ended March 31, 1998, 1997 and 1996, are as follows:

                                   1998             1997              1996
                                 ----------     -----------       ----------
Organizational fees and expenses
     and selling expenses        $       -      $        -       $    (5,832)


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, 1998, 1997 and 1996 are as follows:

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

Acquisition fees and expenses    $         -      $       888        $  144,429


Asset Management Fees

An affiliate of the General Partner receives a base amount of .556% (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, 1998, 1997 and 1996, are as follows:

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

Asset Management Fees        $   199,592      $   193,635        $  188,630



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  Partnership's  operations.  Reimbursements  made in the years
ended March 31, 1998, 1997 1996, are as follows:

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

Salaries and benefits expense reimbursement $ 93,551      $  108,120  $  119,711


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.  Included in operating  expenses in the
summarized  income  statements in Note 3 to the Financial  Statements is $29,440
and  $27,556 of fees earned by BFPM for the years  ended  December  31, 1997 and
1996, respectively.  Property construction was completed in September, 1995, and
as a result, no fees were earned prior to the year ended December 31, 1996.

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, 1998, the Fund has not paid any cash distributions to
partners.


<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 during the quarter ended March 31, 1998.

(a)(3)(c)   Exhibits


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

   27.  Financial Data Schedule

   28.  Additional Exhibits

        (a)   28.1  Reports of Other Independent Auditors

        (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 26, 1998
           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 26, 1998
           Randolph G. Hawthorne,
           Managing Director and
           Chief Operating Officer




     By:   /s/Michael H. Gladstone                           Date: June 26, 1998
           Michael H. Gladstone,
           A Managing Director



                                      
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, 1998
                                      INDEX


                                                                        Page No.


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

        Financial Statements

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

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

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

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

        Notes to Financial Statements                                    F-7

     Financial Statement Schedule

       Schedule III - Real Estate and Accumulated
       Depreciation                                                      F-15


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



<PAGE>


          BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP

                        REPORT OF INDEPENDENT ACCOUNTANTS


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

We have audited the  accompanying  balance sheets of Boston Financial Tax Credit
Fund VIII, A Limited  Partnership ("the Fund") as of March 31, 1998 and 1997 and
the related statements of operations,  changes in partners' equity  (deficiency)
and cash flows and the financial statement schedule listed in Item 14(a) of this
Report  on Form  10-K,  for each of the three years in the period ended March  
31, 1998.  These financial statements and the financial statement schedule are 
the responsibility of the Fund's  management.  Our responsibility is to express 
an opinion on these financial  statements and the financial  statement schedule 
based on our audits. As of March 31, 1998 and 1997, 90% and 89% of total assets,
and for the years ended  March  31,  1998,  1997 and 1996,  100% of the  equity 
in losses of Local Limited Partnerships,  reflected in the financial statements 
of the Fund, relate to  Local  Limited  Partnerships  for  which  we did  not  
audit  the  financial statements.  The financial  statements of these Local 
Limited  Partnerships were audited by other  auditors  whose  reports  have been
furnished to us, and our opinion, insofar as it relates to those investments in
Local  Limited Partnerships, is based solely on the reports of other auditors.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the 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  and the  reports  of  other  auditors  provide  a
reasonable basis for our opinion.

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






Coopers & Lybrand L.L.P.
Boston, Massachusetts
June 16, 1998


<PAGE>


          BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP

<TABLE>
<CAPTION>
                                      
                                 BALANCE SHEETS

                             March 31, 1998 and 1997


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

Assets

Cash and cash equivalents                                                 $    213,966       $   273,412
Investments in Local Limited Partnerships (Note 3)                          25,099,334        26,813,245
Restricted cash                                                                      -           503,031
Marketable securities, at fair value (Note 4)                                1,486,224         1,442,676
Organization costs, net of accumulated amortization
   of $40,833 in 1998 and $30,833 in 1997                                        9,167            19,167
Other assets                                                                    19,275            26,727
                                                                          ------------      ------------
         Total Assets                                                     $ 26,827,966       $29,078,258
                                                                          ============       ===========

Liabilities and Partners' Equity

Liabilities
     Accounts payable to affiliate (Note 5)                               $    268,817      $78,894
     Accrued expenses                                                           39,747            88,626
                                                                          ------------      ------------
         Total Liabilities                                                     308,564           167,520
                                                                          ------------      ------------

General, Initial and Investor Limited Partners' Equity                      26,519,501        28,927,578
Net unrealized losses on marketable securities                                     (99)          (16,840)
                                                                          ------------      ------------
         Total Partners' Equity                                             26,519,402        28,910,738
                                                                          ------------      ------------
         Total Liabilities and Partners' Equity                           $ 26,827,966      $ 29,078,258
                                                                          ============      ============
</TABLE>

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

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


                            STATEMENTS OF OPERATIONS

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

<TABLE>
<CAPTION>

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

Revenue:
   Investment                                                 $     92,781    $       81,930    $  419,359
   Other                                                             5,351            18,606        92,354
                                                              ------------    --------------    ----------
       Total Revenue                                                98,132           100,536       511,713
                                                              ------------    --------------    ----------

Expenses:
   Asset management fees, related party (Note 5)                   199,592           193,635       188,630
   General and administrative (includes
     reimbursements to an affiliate in the
     amounts of $93,551, $108,120 and $119,711
     in 1998, 1997 and 1996, respectively) (Note 5)                183,048           195,069       192,506
   Amortization                                                     39,944            37,184        31,530
                                                              ------------    --------------    ----------
       Total Expenses                                              422,584           425,888       412,666
                                                              ------------    --------------    ----------

Income (Loss) before equity in losses of
   Local Limited Partnerships                                     (324,452)        (325,352)        99,047

Equity in losses of Local Limited
   Partnerships (Note 3)                                        (2,083,625)      (1,922,556)      (881,551)
                                                              ------------    -------------     ----------

Net Loss                                                      $ (2,408,077)   $  (2,247,908)    $ (782,504)
                                                              ============    =============     ==========


Net Loss allocated to:
   General Partner                                            $    (24,081)   $     (22,479)    $   (7,825)
   Limited Partners                                             (2,383,996)      (2,225,429)      (774,679)
                                                              ------------      -----------     ----------
                                                              $ (2,408,077)   $  (2,247,908)    $ (782,504)
                                                              ============    =============     ==========

Net Loss per Limited Partnership Unit
    (36,497 Units)                                            $    (65.32)    $      (60.98)    $    (21.23)
                                                              ===========     =============     ===========
</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, 1998, 1997 and 1996
<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, 1995           $  3,233        $   100    $ 31,948,825      $ 16,232      $31,968,390

Refund of other issuance
   expenses                                -              -           5,832             -            5,832

Net change in net unrealized gains
   on marketable securities
   available for sale                      -              -               -       (16,766)         (16,766)

Net Loss                              (7,825)             -        (774,679)            -         (782,504)
                                    --------        -------    ------------      --------     ------------

Balance at March 31, 1996             (4,592)           100      31,179,978          (534)      31,174,952

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)
                                    --------        -------    ------------      --------     ------------

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

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)
                                    --------        -------    ------------      --------     ------------

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

</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, 1998, 1997 and 1996
<TABLE>
<CAPTION>

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

Cash flows from operating activities:
   Net Loss                                               $  (2,408,077)    $  (2,247,908)    $   (782,504)
   Adjustments to reconcile net loss to net
     cash used for operating activities:
   Equity in losses of Local Limited Partnerships             2,083,625         1,922,556          881,551
   Amortization                                                  39,944            37,184           31,530
   (Gain) loss on sale of securities                              9,053             1,618          (41,560)
   Interest income on interim loan                                    -                 -          (86,627)
   Increase (decrease) in cash arising from
     changes in operating assets and liabilities:
   Other assets                                                   7,452             6,311           (3,716)
   Accounts payable to affiliate                                189,923            (2,607)        (130,629)
   Accrued expenses                                             (48,879)           67,768          (39,457)
                                                          -------------     -------------     ------------
Net cash used for operating activities                         (126,959)         (215,078)        (171,412)
                                                          -------------     -------------     ------------

Cash flows from investing activities:
   Investment in Local Limited Partnerships                    (451,360)       (2,716,626)      (6,923,298)
   Proceeds from the sale of Local
     Limited Partner interest                                         -                 -          260,840
   Restricted cash                                              503,031           866,333       (1,369,364)
   Purchases of marketable securities                        (1,347,016)       (4,152,845)      (6,716,573)
   Proceeds from sales and maturities of
     marketable securities                                    1,311,156         6,402,126        4,607,078
   Payment of acquisition expenses                                                   (888)        (119,721)
   Cash distributions received from Local
     Limited Partnerships                                        51,702            18,675            3,323
                                                          -------------     -------------     ------------
Net cash provided by (used for) investing activities             67,513           416,775      (10,257,715)
                                                          -------------     -------------     ------------

Cash flows from financing activities:
   Refund of other issuance expenses                                  -                 -            5,832
                                                          -------------     -------------     ------------
Net cash provided by financing activities                             -                 -            5,832
                                                          -------------     -------------     ------------

Net increase (decrease) in cash and cash equivalents            (59,446)          201,697      (10,423,295)

Cash and cash equivalents, beginning of period                  273,412            71,715       10,495,010
                                                          -------------     -------------     ------------

Cash and cash equivalents, end of period                  $     213,966     $     273,412     $     71,715
                                                          =============     =============     ============
</TABLE>

Non-cash investing activity:


In 1996, the Partnership  converted  $2,563,040 of interim notes receivable from
Beaverdam Creek to capital contributions.


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, 1998,  the General  Partner has
designated approximately $1,392,000 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
of the major operating and financial policies of the Local Limited  Partnerships
in which it invests. Under the equity method, the investment is carried at cost,
adjusted  for  the  Fund's  share  of  income  or  loss  of  the  Local  Limited
Partnerships,  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)

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

The Fund, as a limited partner in the Local Limited Partnerships,  is subject to
risks inherent in the ownership of property  which are beyond its control,  such
as fluctuations in occupancy rates and operating expenses,  variations in rental
schedules,  proper maintenance and continued  eligibility of tax credits. If the
cost of operating a property exceeds the rental income earned thereon,  the 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, 1997, 1996 and 1995.

Use of Estimates

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

Cash 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  components  of  partners'
equity.

Deferred Fees

Costs incurred in connection with the  organization  of the Fund,  amounting to 
$50,000,  have been deferred and are being  amortized on a straight-line  basis
over 60 months.


<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 will adopt the new standard  beginning  in the first  quarter of the fiscal
year ending March 31, 1999, but it is not expected to have a significant  effect
on the Fund's financial position or results of operations.


Reclassifications

Certain reclassifications have been made to prior years' financial statements to
conform to the current year presentation.

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 generally
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, 1998, 1997 and 1996:
<TABLE>
<CAPTION>

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

Capital Contributions paid to Local
   Limited Partnerships                              $ 29,264,859         $ 28,813,499      $ 26,096,873

Cumulative equity in losses of Local
   Limited Partnerships                                (5,048,889)          (2,965,264)       (1,042,708)

Cumulative cash distributions received
   from Local Limited Partnerships                        (83,700)             (31,998)          (13,323)
                                                    -------------         ------------       -----------

</TABLE>

<PAGE>

       BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (continued)

3.   Investments in Local Limited Partnerships (continued)
<TABLE>
<CAPTION>

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

Investments in Local Limited Partnerships
   before adjustments                                  24,132,270           25,816,237        25,040,842

Excess of investment cost over the underlying net assets acquired:

     Acquisition fees and expenses                      1,048,010            1,048,010         1,047,122

     Accumulated amortization of acquisition
         fees and expenses                                (80,946)             (51,002)          (23,818)
                                                    -------------         ------------      ------------
Investments in Local Limited Partnerships           $  25,099,334         $ 26,813,245      $ 26,064,146
                                                    =============         ============      ============

</TABLE>

Summarized financial information as of December 31, 1997, 1996 and 1995, (due to
the Fund's policy of reporting the  financial  information  of its Local Limited
Partnership  interests  on  a 90  day  lag  basis)  of  the  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,
                                                                1997               1996               1995
                                                            ------------      ------------      ----------
<S>                                                         <C>               <C>               <C>  

Assets:
   Investment property, net                                 $ 67,138,525      $69,714,031       $72,182,803
   Current assets                                                809,218          975,295         1,426,201
   Other assets                                                2,641,507        2,397,633         1,482,127
                                                            ------------      ------------      -----------
     Total Assets                                           $ 70,589,250      $73,086,959       $75,091,131
                                                            ============      ===========       ===========

Liabilities and Partners' Equity:
   Long-term debt                                           $ 37,840,199      $38,197,782       $32,215,729
   Current liabilities                                         1,933,699        1,768,369         5,254,907
   Other liabilities                                           5,449,430        5,853,703        11,498,129
                                                            ------------     ------------      ------------
     Total Liabilities                                        45,223,328       45,819,854        48,968,765

   Fund's Equity                                              24,115,216       25,784,519        24,398,930
   Other Partners' Equity                                      1,250,706        1,482,586         1,723,436
                                                            ------------      ------------      -----------
     Total Liabilities and Partners' Equity                 $ 70,589,250      $73,086,959       $75,091,131
                                                            ============      ===========       ===========

Summarized Income Statements - for
the year ended December 31,

Rental and other income                                     $  7,474,866      $  7,594,918      $   4,565,920
                                                            ------------      ------------      -------------

Expenses:
   Operating                                                   3,805,760         3,691,624          1,990,693
   Depreciation and amortization                               2,786,344         2,841,824          1,817,463
   Interest                                                    3,133,964         3,169,226          1,777,036
                                                            ------------      ------------      -------------
     Total Expenses                                            9,726,068         9,702,674          5,585,192
                                                            ------------      ------------      -------------

Net Loss                                                    $ (2,251,202)     $ (2,107,756)     $  (1,019,272)
                                                            ============      ============      =============

Fund's share of net loss                                    $ (2,083,625)     $ (1,922,556)     $    (881,551)
                                                            ============      ============      =============
Other Partners' share of net loss                           $   (167,577)     $   (185,200)     $    (137,721)
                                                            ============      ============      =============

</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 $24,115,216
differs  from the  Fund's  Investments  in  Local  Limited  Partnerships  before
adjustments of $24,132,270  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
<S>                                     <C>               <C>                    <C>            <C>  

Debt securities issued by the
   US Treasury                          $ 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
                                        ===========        ===========           ============      ===========


Debt securities issued by the
   US Treasury                          $ 1,237,287        $        78           $   (12,799)      $ 1,224,566

Other debt securities                       222,229                  -                (4,119)          218,110
                                        -----------        -----------           -----------       -----------

Marketable securities
   at March 31, 1997                    $ 1,459,516        $        78           $   (16,918)      $ 1,442,676
                                        ===========        ===========           ===========       ===========

</TABLE>

The contractual maturities at March 31, 1998 are as follows:
<TABLE>
<CAPTION>

<S>                                                                <C>              <C>   
                                                                                       Fair
                                                                       Cost            Value

Due in one year or less                                            $   753,287      $   753,193
Due in one to five years                                               549,801          549,246
Mortgage backed securities                                             183,235          183,785
                                                                   -----------      -----------
                                                                   $ 1,486,323      $ 1,486,224
                                                                   ===========      ===========
</TABLE>

Proceeds from sales and maturities of marketable  securities were  approximately
$1,311,000,  $6,402,000  and  $4,607,000 in 1998,  1997 and 1996,  respectively.
Included  in  investment  income are gross  gains of $2,329 and gross  losses of
$11,382 which were realized on the sales in the year ended March 31, 1998, gross
gains of $257 and gross losses of $1,875 which were realized on the sales in the
year ended March 31, 1997 and gross gains of $41,560  which were realized on the
sales in the year ended March 31, 1996.



<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, 1998 have been
reimbursed to an affiliate of the General Partner.

An  affiliate  of the  General  Partner  receives  the base  amount of .556% (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
$199,592,  $193,635 and  $188,630  for the years ended March 31, 1998,  1997 and
1996, respectively, have been included in expenses. Included in accounts payable
to  affiliates  at March 31,  1998 and 1997 is  $255,527  and  $55,934  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,  1998,  1997 and 1996,  is  $93,551,  $108,120  and
$119,711, respectively, that the Fund has paid as reimbursement for salaries and
benefits. As of March 31, 1998 and 1997, $13,290 and $22,960,  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 $29,440
and  $27,556 of fees earned by BFPM for the years  ended  December  31, 1997 and
1996, respectively.  Property construction was completed in September, 1995 and,
as a result, no fees were earned prior to the year ended December 31, 1996.




<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, 1998,  1997 and 1996 to the loss reported 
for federal income tax purposes for the years ended December 31, 1997, 1996 and 
1995 is as follows:
<TABLE>
<CAPTION>

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

Net Income (Loss) per Statement of Operations                   $  (2,408,077)       $ (2,247,908)      $  (782,504)

   Adjustment for equity in losses of Local Limited
     Partnerships for financial reporting purposes
     over (under) equity in losses for tax purposes                  (782,833)           (557,984)         (240,809)

   Adjustment to reflect March 31, fiscal year-end
     to December 31, tax year-end                                      33,895              (7,036)          144,148

Related party expenses not paid at December 31,
    not deductible for tax purposes                                   204,761              95,955            46,853

Related party expenses paid in current year but expensed
   for financial reporting purposes in prior year                     (95,955)            (46,853)          (45,917)

Adjustment for amortization for financial reporting
   purposes over (under) amortization for tax purposes                 (8,165)            (10,925)            4,398
                                                                -------------        ------------       -----------

Net Income (Loss) for federal income tax purposes               $  (3,056,374)       $ (2,774,751)      $  (873,831)
                                                                =============        ============       ===========
</TABLE>

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

                                                      Financial                  Tax
                                                      Reporting               Reporting
                                                      Purposes                Purposes          Differences

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

Investments in Local Limited Partnerships          $  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  $110,000,  but are not  deductible for tax reporting
purposes.


<PAGE>

       BOSTON FINANCIAL TAX CREDIT FUND VIII, A LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS (continued)


7.   Federal Income Taxes (continued)

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


                                                      Financial                  Tax
                                                      Reporting               Reporting
                                                      Purposes                Purposes          Differences
<S>                                                <C>                     <C>                 <C> 

Investments in Local Limited Partnerships          $  26,813,245           $  25,908,789       $     904,456
                                                   =============           =============       =============
Other Assets                                       $   2,265,013           $   7,128,317       $  (4,863,304)
                                                   =============           =============       =============
Liabilities                                        $     167,520           $      70,199       $      97,321
                                                   =============           =============       =============

</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  $781,000
greater  than  for  financial  reporting  purposes;  (ii)  the  amortization  of
acquisition fees for tax return purposes exceeds financial reporting purposes by
approximately $5,000; (iii) approximately $14,000 of cash distributions received
from Local Limited  Partnerships  during the quarter ended March 31, 1997 is not
included in the Fund's Investments in Local Limited  Partnerships for tax return
purposes at  December  31,  1996;  (iv)  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 (v)
related party expenses which are deductible for financial  reporting purposes of
approximately $51,000, 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, 1998
<TABLE>

                            COST OF INTEREST AT ACQU'N DATE                                   GROSS AMOUNT

<CAPTION>
                                                                                                AT WHICH
                                                                                               CARRIED AT
                                                                                              DECEMBER 31,
                                                                                                  1997
                                              --------------------------------------------------------------
                                                                                    NET IMPROVEMENTS
                          NUMBER    TOTAL                     BUILDINGS /      CAPITALIZED
                            OF      ENCUM-                    IMPROVEMENTS    SUBSEQUENT TO
DESCRIPTION               UNITS   BRANCES *       LAND        & EQUIPMENT      ACQUISITION        LAND
-----------               -----   ---------       ----        -----------      -----------        ----
<S>                         <C>    <C>             <C>            <C>               <C>            <C>

Low and Moderate
   Income Apartment Complexes

Green Wood Apartments        164   $5,225,609      $412,500       $7,774,612         $662,116      $412,500
  Gallatin, TN
Webster Court Apartments      92    2,862,333       296,423        5,003,633           10,461       296,423
  Kent, WA
Springwood Apartments (2)    113    3,931,815       296,280        2,937,028        4,248,155       296,280
  Tallahassee, FL
Meadowwood of Pella           30    1,132,206       101,910        1,135,077          789,977        88,909
  Pella, IA
Hemlock Ridge                100    2,167,755        42,368        6,327,906        1,745,603        42,368
  Livingston Manor, NY
Pike Place Apartments        144    3,334,083       312,000        5,336,336                0       312,000
  Fort Smith, AR
West End Place               120    2,942,013       250,000        4,681,280                0       250,000
  Springdale, AR
Oak Knoll Renaissance        256    5,403,913             1        1,346,557        9,263,385       222,591
  Gary, IN
Beaverdam Creek              120    3,364,803       360,000          499,907        6,672,750     1,250,365
  Mechanicsville, VA
Live Oak Plantation          218    7,844,231     1,767,000        1,998,509       10,199,211     1,792,680
  West Palm Beach, FL
                          ==================================================================================
                            1357  $38,208,761    $3,838,482      $37,040,845      $33,591,658    $4,964,116
                          ==================================================================================

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                                                               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       $8,436,728  $8,849,228        $961,604   2/95      10 & 30    3/02/94
                                                                                years
  Gallatin, TN
Webster Court                5,014,094  $5,310,517         426,557   8/94      40 & 12    5/13/94
Apartments                                                                      years
  Kent, WA
Springwood                   7,185,183  $7,481,463       1,186,206   9/95      10 & 30    12/15/94
Apartments (2)                                                                  years
  Tallahassee, FL
Meadowwood of Pella          1,938,055  $2,026,964         144,181   8/95      Useful     6/03/94
                                                                                Lives
  Pella, IA
Hemlock Ridge                8,073,509  $8,115,877         961,051   5/95      Useful     4/29/94
                                                                                Lives
  Livingston Manor,
NY
Pike Place Apartments        5,336,336  $5,648,336         634,787   12/94    7 & 27.5    1/31/94
                                                                                years
  Fort Smith, AR
West End Place               4,681,280  $4,931,280         546,223   12/94    7 & 27.5    1/12/94
                                                                                years
  Springdale, AR
Oak Knoll                   10,387,352 $10,609,943       1,024,183   11/95     Useful     11/01/94
Renaissance                                                                     Lives
  Gary, IN
Beaverdam Creek              6,282,292  $7,532,657         574,919   9/95      Useful     11/16/94
                                                                                Lives
  Mechanicsville, VA
Live Oak Plantation         12,172,040 $13,964,720         872,749   11/95     Useful     6/28/94
                                                                                Lives
  West Palm Beach, FL
                      =============================================
                           $69,506,869 $74,470,985      $7,332,460
                      =============================================

</TABLE>

<PAGE>



(1)  Total   aggregate  for  Federal   Income  Tax  purposes  is   approximately
$74,471,000.

(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  5.65% to 10.62%.  The
                          Partnership  has not  guaranteed any of these mortgage
                          notes payable.


<PAGE>



Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships
In which Registrant has Invested at March 31, 1998
(continued)


A  reconciliation  of  the  carrying  amount  of  real  estate  and  accumulated
depreciation for the years ended December 31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>

Real Estate Investments                1997                       1996                        1995
--------------------------       -----------------         -------------------        ----------------------
<S>                                   <C>                         <C>                           <C>   

Balance at beginning of period        $74,361,818                 $74,142,268                   $40,879,327
Additions during period                   109,167                     219,550                    33,262,941
Less retirements during period                  0                           0                             0
                                                                                     
                                 =================         ===================        ======================
Balance at close of             
period                                $74,470,985                 $74,361,818                   $74,142,268
                                 =================         ===================        ======================

Accumulated Depreciation               1997                       1996                        1995
--------------------------       -----------------         -------------------        ----------------------

Balance at beginning of period  
                                       $4,647,787                  $1,959,465                    $  174,709
Depreciation                            2,684,673                   2,688,322                     1,784,756
Less retirements                                0                           0                             0
                                 =================         ===================        ======================
Balance at close of        
period                                 $7,332,460                  $4,647,787                    $1,959,465
                                 =================         ===================        ======================
</TABLE>

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

<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>

[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, 1995 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, 1995, 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
February 14, 1996

<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>

[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>

[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, 1995,
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, 1995, 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 28, 1996

<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>


[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>
[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, 1995 and 1994, 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, 1995.  These financial
statements  are  the  responsibility  of  the  partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing standards
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, 1995 and 1994, and the results of its operations and its cash flows
for the year ended  December 31, 1995, in  conformity  with  generally  accepted
accounting principles.

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,
1996 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, 1996                       Identification Number:
                                                    52-1088612

Audit Principal:  Lester A. Kanis


<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>

[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>

[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>

[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>

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

We conducted our audit in accordance with generally accepted auditing standards.
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, 1995,  and the results of its operations and its
cash  flows for the year then  ended,  in  conformity  with  generally  accepted
accounting principles.

The  accompanying  supplementary  information  shown on Page 14 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
February 2, 1996

<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>

[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, 1995,  and the related  statements of  operations,
partners'  equity  and cash  flows  for the year  then  ended.  These  financial
statements  are  the  responsibility  of  the  partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our 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,  1995,  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

Bethesda, Maryland
January 30, 1996

                                             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.



Atlanta, Georgia
January 21, 1998


<PAGE>


                      Schickedanz Bros. - Palm Beach, Ltd.


                                          

                                                                       
<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
--------------------------------------------------------------------------------------------------------------------






                                          See notes to financial statements
<PAGE>
                                                                           

                            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>

                            See notes to Financial Statements
<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>

                         See notes to Financial Statements
<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>
                               See notes to Financial Statements

<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>
                              See notes to Financial Statements
                             
<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>



                                   F:\GROUP\PFACCTG\WORD\SEC97\SCHICK97.DOC

                                                       - 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.

                            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.



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, 1995


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

         We conducted our 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, 1995, 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
Bethesda, Maryland
January 21, 1998


4520 East West Hwy
Bethesda, MD  20814-3319
Telephone: (301) 652-9100
Fax (301) 652-1848


<PAGE>


                      Schickedanz Bros. - Palm Beach, Ltd.


                                   (continued)

                                                     
                                  BALANCE SHEET

                                December 31, 1995
<TABLE>
<CAPTION>
<S>                                                                                            <C>  

                                     ASSETS
Investment in Rental Property
   Land                                                                                        $     1,792,680
   Building and improvements                                                                        11,711,351
   Furniture and fixtures                                                                              460,689
                                                                                               ---------------
                                                                                                    13,964,720
   Less accumulated depreciation                                                                      (122,588)
                                                                                                    13,842,132
Other Assets
   Cash                                                                                                    185
   Rents receivable                                                                                     33,570
   Prepaid Insurance                                                                                    28,155
   Performance bond                                                                                     19,590
   Repairs and replacement reserve                                                                       3,633
   Organization costs, less accumulated amortization of $1,960                                          17,636
   Permanent loan fees, less accumulated amortization of $4,385                                        127,176
                                                                                               ---------------
                                                                                               $    14,072,077

</TABLE>

<PAGE>



                        See notes to financial statements

                                                       
                            BALANCE SHEET (Continued)

                                December 31, 1995

                        LIABILITIES AND PARTNERS' EQUITY
<TABLE>
<CAPTION>
<S>                                                                                            <C>   
 Liabilities Applicable to Investment in Real Estate
   Note payable - First Housing                                                                $       5,501,399
   Notes payable - HOME                                                                                1,386,440
   Accrued interest payable                                                                               37,550
   Due to affiliates                                                                                   1,767,295
   Developer fee payable                                                                               1,400,000
   Accounts payable - development                                                                        105,784
                                                                                               -----------------
                                                                                                      10,198,468
 Other Liabilities
   Accounts payable                                                                                       26,276
   Real Estate taxes payable                                                                              14,871
   Tenants security deposits                                                                              75,522
                                                                                               -----------------
                                                                                                      10,312,137

 Partners' Equity                                                                                      3,759,940

                                                                                               $      14,072,077





</TABLE>

<PAGE>


                             STATEMENT OF OPERATIONS
                          Year ended December 31, 1995
<TABLE>
<CAPTION>
<S>                                                                                              <C>  
Revenues
   Rental income                                                                                 $     341,690
   Other income                                                                                         10,131
                                                                                                 -------------
       Total revenue                                                                                   351,821

Expenses
   Administrative                                                                                       14,440
   Salaries and related charges                                                                         88,481
   Maintenance and repairs                                                                              12,673
   Cleaning                                                                                              2,112
   Commissions                                                                                          10,050
   Utilities                                                                                            32,989
   Taxes                                                                                                12,888
   Miscellaneous expense                                                                                 2,566
   Property and liability insurance                                                                     14,944
   Advertising                                                                                          11,199
   Tenant credit reports                                                                                 1,165
   Management fee expense                                                                               15,434
   Trash removal                                                                                         1,910
   Exterminating                                                                                         1,524
   Other operating expenses                                                                              2,766
   Partnership filing fees                                                                               2,326
                                                                                                 -------------

       Total operating expenses                                                                        227,467

   Income from operations before interest, depreciation and amortization                               124,354

   Interest on mortgage notes                                                                          222,457

       Loss from operations before depreciation and amortization                                       (98,103)

   Depreciation expense                                                                                122,588

       Loss from operations before amortization                                                       (220,691)

   Amortization                                                                                          6,345

   Net Loss                                                                                      $    (227,036)
                                                                                                  =============


</TABLE>

<PAGE>


                          STATEMENT OF PARTNERS' EQUITY

                          Year ended December 31, 1995

<TABLE>
<CAPTION>


                                                           General               Limited
                                                           Partner               Partners                Total

<S>                                                     <C>                <C>                   <C>                    
 Balance, December 31, 1994                             $           -      $     5,615,010       $     5,615,010

 Less:  Subscriptions receivable                                    -           (5,615,010)           (5,615,010)
                                                       --------------      ---------------       ---------------

 Capital contributions received in 1995                             -            4,000,000             4,000,000

 Less:  Syndication costs                                           -              (13,024)              (13,024)

 Net loss                                                      (2,270)            (224,766)             (227,036)
                                                       --------------      ---------------       ---------------

 Balance, December 31, 1995                            $       (2,270)     $     3,762,210       $     3,759,940
                                                       ==============      ===============       ===============

 Partnership percentage                                          1.0%                99.0%                100.0%
                                                       ==============      ===============       ===============
</TABLE>


<PAGE>


                             STATEMENT OF CASH FLOWS

                          Year ended December 31, 1995

<TABLE>
<CAPTION>
<S>                                                                                              <C> 
 Cash flows from operating activities
     Net loss                                                                                    $       (227,036)
     Adjustments to reconcile net loss to net cash
     used in operating activities
       Depreciation                                                                                      122,588
       Amortization                                                                                        6,345
       Increase in prepaid expenses                                                                      (28,155)
       Increase in accounts receivable                                                                   (33,570)
       Increase in accounts payable                                                                       26,276
       Increase in tenants security deposits                                                              72,522
       Increase in accrued interest payable                                                                5,631
       Increase in real estate taxes payable                                                               3,924
                                                                                                 ---------------

         Net cash used in operating activities                                                           (51,475)
                                                                                                 ---------------

 Cash flows from investing activities
     Increase in performance bond                                                                        (19,590)
     Deposits to repairs and replacements reserve                                                         (3,633)
     Investment in rental property                                                                   (10,091,540)
     Investment in land                                                                                  (25,680)
                                                                                                 ---------------

         Net cash used in investing activities                                                       (10,140,443)

   Cash flows from financing activities
     Increase in syndication costs                                                                       (13,024)
     Capital contributions received                                                                    4,000,000
     Decrease in accrued interest payable                                                                (64,369)
     Decrease in real estate taxes payable                                                               (11,341)
     Decrease in accounts payable - development                                                          (30,162)
     Increase in developer fee payable                                                                 1,400,000
     Proceeds from mortgage payable                                                                    6,887,839
     Decrease in amounts due to affiliates                                                            (1,979,514)
                                                                                                 ---------------

         Net cash provided by financing activities                                                    10,189,429

         Net Decrease in cash                                                                             (2,489)

   Cash, beginning of year                                                                                 2,674
                                                                                                 ---------------
   Cash, end of year                                                                             $           185
                                                                                                 ===============

   Supplemental disclosure of cash flow information
     Cash paid during the year for interest
       (net of amounts capitalized of $355,048)                                                  $       184,907
                                                                                                 ===============

</TABLE>

<PAGE>



                                                     
                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 1995

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 been  allocated
         low-income  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 fifteen  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 Schickedanz
                                             Bros. - Palm Beach, Ltd.

                    NOTES TO FINANCIAL STATEMENTS (Continued)

                                December 31, 1995

to relate the cost of depreciable assets of operations over seven to forty years
by use of the  straight-line  and  accelerated  methods for financial  reporting
purposes.


<PAGE>


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

         Amortization

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

         Organization costs are amortized over 60 months 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,  Schickendanz  Enterprises,
         Inc.,  which has a 1% partnership  interest,  and two investor  limited
         partners,  Boston  Financial Tax Credit Fund VIII and, SLP, Inc., which
         collectively have an aggregate 99% 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  (credit
         adjuster). The partnership agreement requires SLP, Inc. to make a total
         capital contribution of $10 to the Partnership.

         The first and second installments,  totaling $4,000,000,  were received
         during  1995 from  Boston  Financial  Tax Credit  Fund VIII.  The third
         installment in the amount of $815,000 is payable on the latest to occur
         of (a) final  closing (b) the date of the  Partnership's  1994  federal
         income tax return is filed (c) the  issuance  of Form 8609's or (d) the
         date the  accountants  of the  Partnership  determine the amount of the
         annual credit. The fourth
NOTE B - PARTNERSHIP CONTRIBUTIONS (continued)

         installment  in the amount of $400,000 is payable on the later to occur
         of (a) financial  break-even or (b)  substantial  occupancy.  The fifth
         installment  in the  amount of  $400,000  is  payable on the first date
         following a period of six consecutive  calendar months  occurring after
         the completion  date,  during each of which the Partnership  achieves a
         110% debt service  coverage  ratio.  At December 31, 1995, the investor
         limited partner owes $1,615,000 in capital contributions.

NOTE C - CONSTRUCTION/PERMANENT LOANS PAYABLE

         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. The note bears interest at
         the rate of 10%.  Accrued  interest is paid monthly by the  Partnership
         until the conversion  date, June 28, 1996.  After the conversion  date,
         the Partnership will pay monthly principal and interest installments of
         $52,130  until  maturity on December 28, 2010. As of December 31, 1995,
         total funds in the amount of $5,501,399 have been drawn on the loan.

         The fair value of the mortgage  approximates the carrying value because
         the interest rate charged is a market rate of interest.

         A second  mortgage note in an amount to exceed  $1,531,000  through the
         Florida Home Loan program is payable to 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% of June  30th  of each  year
         commencing in 1995. Deferred interest is compounded annually and is due
         together  with one  principal  balance  on  February  28,  2015.  As of
         December 31, 1995, the Partnership has received $1,386,440 in HOME loan
         proceeds.

         The fair value of the mortgage  approximates the carrying value because
         programs with similar  characteristics  are currently  available to the
         partnerships.

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


NOTE C - CONSTRUCTION/PERMANENT LOANS PAYABLE (continued)

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

                  December 31, 1996                  $    38,476
                                    1997                  70,896
                                    1998                  77,643
                                    1999                  85,032
                                    2000                  93,124

NOTE D - RELATED PARTY TRANSACTIONS

         Amounts Due to Affiliates

         Affiliates  of the  general  partner  provided  various  amounts to the
         Partnership  during the year to fund  construction.  As of December 31,
         1995,  the  Partnership's  total  liability  to  these  affiliates  was
         $1,767,295 as detailed below.

                  Schickedanz Enterprises, Inc.                  $     117,977
                  Schickedanz Bros., Inc.                               71,037
                  Schickedanz Bros., - Pheasant Run Ltd              1,578,281
                                                                  -------------
                                                                 $   1,767,295

         These  amounts  will be repaid from capital  contribution  proceeds and
future cash flow of the Partnership.

         Management Agreement

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

         Under the  agreement,  the  Partnership is required to pay the managing
         general  partner  management  fees equal to 5% of gross  collections as
         defined.  During  1995,  management  fees of  $15,434  were  charged to
         operations.


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NOTE C - RELATED PARTY TRANSACTIONS (Continued)

         During the investor  pay-in  period,  the managing  general  partner is
         entitled to receive an annual,  non-cumulative incentive management fee
         equal to 6% of gross revenues of the Project 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.

         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.  The  development  agreement  provides  for  a  fee  of  up to
         $1,400,000. The fee has been capitalized into the cost of the building.
         As the  December  31,  1995,  the  Partnership's  liability  under this
         agreement was equal to $1,400,000.

         The  Partnership  entered into a construction  contract during the 1994
         with Schickedanz Enterprises, Inc. an affiliate of the general partner,
         in the  amount of  $8,237,560  for the  construction  of the  apartment
         complex. As of December 31, 1995, $71,037 is payable under the contact.

         Operating Deficit Guaranty

         Pursuant to the  partnership  agreement,  the  general  partner and its
         affiliate,  Thirteen Development Corporation,  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 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.  In addition,  such  potential  noncompliance  may require an
         adjustment to the contributed capital by the limited partner.
 



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