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FORM 10-K--ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[No Fee Required]

For the fiscal year ended December 31, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[No Fee Required]

For the transition period from _________to _________

Commission file number 0-14194

VMS NATIONAL PROPERTIES JOINT VENTURE
(Exact name of registrant as specified in its charter)

Illinois 36-3311347
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)

Issuer's telephone number (864) 239-1000

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Units of Limited Partnership Interest
(Title of class)

Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the 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 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 market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests, as of December 31, 2001. No market exists for the limited partnership
interests of the Registrant, and, therefore, no aggregate market value can be
determined.

DOCUMENTS INCORPORATED BY REFERENCE
NONE



PART I

Item 1. Description of Business

VMS National Properties Joint Venture (the "Venture" or the "Registrant"), of
which the general partners are VMS National Residential Portfolio I ("Portfolio
I") and VMS National Residential Portfolio II ("Portfolio II"), was formed in
September 1984. Portfolio I and Portfolio II are collectively referred to as the
"Partnerships". The Partnerships are limited partnerships formed in September
1984, under the Uniform Limited Partnership Act of the State of Illinois.
Effective December 12, 1997, the managing general partner of each of the
Partnerships was transferred from VMS Realty Investment, Ltd. ("VMSRIL")
(formerly VMS Realty Partners) to MAERIL, Inc. ("MAERIL" or the "Managing
General Partner"), a wholly-owned subsidiary of MAE GP Corporation ("MAE GP")
and an affiliate of Insignia Financial Group, Inc. ("Insignia"). Effective
February 25, 1998, MAE GP was merged with Insignia Properties Trust ("IPT"),
which was an affiliate of Insignia. Effective October 1, 1998 and February 26,
1999, Insignia and IPT were respectively merged into Apartment Investment and
Management Company ("AIMCO"), a publicly traded real estate investment trust.
Thus, the Managing General Partner is now a wholly-owned subsidiary of AIMCO.

From the period October 26, 1984, through June 16, 1985, the Partnerships sold
912 Limited Partnership Interests ("Interests") at a price of $150,000 per
Limited Partnership Interest for a total of $136,800,000. The Interests of each
Partnership were offered in reliance upon exemptions from registration under the
Securities Act of 1933, as amended (the "Act"), and Regulation D thereunder. The
participation interest in the Venture of Portfolio I and Portfolio II is
approximately 71% and 29%, respectively.

The Venture originally acquired 51 residential apartment complexes located
throughout the United Sates. At December 31, 2001, 34 of the Venture's
properties had been foreclosed and two had been sold. The Venture continues to
own and operate the remaining 15 residential apartment complexes (see "Item 2.
Description of Properties").

The Managing General Partner intends to maximize the operating results and,
ultimately, the net realizable value of each of the Venture's properties in
order to achieve the best possible return for the investors. Such results may
best be achieved through property sales, refinancings, debt restructurings or
relinquishment of the assets. The Venture intends to evaluate each of its
holdings periodically to determine the most appropriate strategy for each of the
assets.

The Registrant has no employees. Management and administrative services are
provided by the Managing General Partner and by agents retained by the Managing
General Partner. In addition to day-to-day management of the properties'
operations, affiliates of the Managing General Partner also provide real estate
advisory and asset management services to the Venture. As advisor, such
affiliates provide all partnership accounting and administrative services,
investment management, and supervisory services over property management and
leasing.

The real estate business in which the Registrant is engaged is highly
competitive. There are other residential properties within the market area of
the Registrant's properties. The number and quality of competitive properties,
including those which may be managed by an affiliate of the Managing General
Partner, in such market area could have a material effect on the rental market
for the apartments at the Registrant's properties and the rents that may be
charged for such apartments.

While the Managing General Partner and its affiliates own and/or control a
significant number of apartment units in the United States, such units represent
an insignificant percentage of total apartment units in the United States and
competition for the apartments is local.

Both the income and expenses of operating the properties owned by the Registrant
are subject to factors outside of the Registrant's control, such as changes in
the supply and demand for similar properties resulting from various market
conditions, increases in unemployment or population shifts, changes in the
availability of permanent mortgage financing, changes in zoning laws, or changes
in patterns or needs of users. In addition, there are risks inherent in owning
and operating residential properties because such properties are susceptible to
the impact of economic and other conditions outside of the control of the
Registrant.

There have been, and it is possible there may be other, Federal, state, and
local legislation and regulations enacted relating to the protection of the
environment. The Venture is unable to predict the extent, if any, to which such
new legislation or regulations might occur and the degree to which such existing
or new legislation or regulations might adversely affect the properties owned by
the Venture.

The Venture monitors its properties for evidence of pollutants, toxins and other
dangerous substances, including the presence of asbestos. In certain cases
environmental testing has been performed, which resulted in no material adverse
conditions or liabilities. In no case has the Venture received notice that it is
a potentially responsible party with respect to an environmental clean up site.

A further description of the Registrant's business is included in "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in "Item 7" of this Form 10-K.

Transfer of Control

Pursuant to a series of transactions which closed on October 1, 1998, and
February 26, 1999, Insignia and IPT merged into AIMCO, a publicly traded real
estate investment trust, with AIMCO being the surviving corporation (the
"Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in the
Managing General Partner. The Managing General Partner does not believe that
this transaction has had or will have a material effect on the affairs and
operations of the Venture.

Item 2. Description of Properties

The following table sets forth the Venture's remaining investment in properties:


Date of
Property (1) Purchase Use

North Park Apartments 11/14/84 Apartment
Evansville, IN 284 Units
Chapelle Le Grande 12/05/84 Apartment
Merrillville, IN 105 Units
Terrace Gardens 10/26/84 Apartment
Omaha, NE 126 Units
Forest Ridge Apartments 10/26/84 Apartment
Flagstaff, AZ 278 Units
Scotchollow 10/26/84 Apartment
San Mateo, CA 418 Units
Pathfinder Village 10/26/84 Apartment
Freemont, CA 246 Units
Buena Vista Apartments 10/26/84 Apartment
Pasadena, CA 92 Units
Mountain View Apartments 10/26/84 Apartment
San Dimas, CA 168 Units
Crosswood Park 12/05/84 Apartment
Citrus Heights, CA 180 Units
Casa de Monterey 10/26/84 Apartment
Norwalk, CA 144 Units
The Bluffs 10/26/84 Apartment
Milwaukee, OR 137 Units
Watergate Apartments 10/26/84 Apartment
Little Rock, AR 140 Units
Shadowood Apartments 11/14/84 Apartment
Monroe, LA 120 Units
Vista Village Apartments 10/26/84 Apartment
El Paso, TX 220 Units
Towers of Westchester Park 10/26/84 Apartment
College Park, MD 303 Units

(1) All properties are fee ownership, each subject to a first and second
mortgage.

Schedule of Properties

Set forth below for each of the Registrant's properties is the gross carrying
value, accumulated depreciation, depreciable life, method of depreciation and
Federal tax basis.



Gross
Carrying Accumulated Depreciable Federal
Property Value Depreciation Method Life Tax Basis
(in thousands) (in thousands)


North Park Apartments $ 10,835 $ 7,366 SL/200% DBL 5-27.5 yrs $ 1,419
Chapelle Le Grande 5,110 3,410 SL/200% DBL 5-27.5 yrs 710
Terrace Gardens 6,846 4,065 SL/150% and 5-27.5 yrs 1,738
200% DBL
Forest Ridge Apartments 9,447 6,112 SL/150% and 5-27.5 yrs 1,618
200% DBL
Scotchollow 30,131 18,512 SL/150% DBL 5-27.5 yrs 6,749
Pathfinder Village 18,225 9,956 SL/200% DBL 5-27.5 yrs 6,342
Buena Vista Apartments 6,324 3,848 SL/200% DBL 5-27.5 yrs 1,328
Mountain View Apartments 11,319 6,443 SL/200% DBL 5-29 yrs 2,263
Crosswood Park 9,814 6,000 SL/150% DBL 5-29 yrs 2,467
Casa de Monterey 8,918 5,394 SL/200% DBL 5-27.5 yrs 2,050
The Bluffs 4,659 3,151 SL/200% DBL 5-27.5 yrs 576
Watergate Apartments 7,462 4,971 SL/200% DBL 5-27.5 yrs 1,145
Shadowood Apartments 4,613 3,125 SL 5-27.5 yrs 646
Vista Village Apartments 7,315 4,525 SL 5-27.5 yrs 1,492
Towers of Westchester Park 18,442 12,097 SL 5-27.5 yrs 3,096

$159,460 $ 98,975 $ 33,639


See "Note A" of the Notes to the Combined Financial Statements included in "Item
8" for a description of the Venture's depreciation policy.

Schedule of Property Indebtedness

The following table sets forth certain information relating to the loans
encumbering the Registrant's properties.



Principal Principal Principal
Balance At Balance At Balance
December 31, December 31, Period Due At
Property 2001 2000 Amortized Maturity
(in thousands) (in thousands)
North Park Apartments

1st mortgage $ 6,052 $ 6,135 25 yrs $ 5,376
2nd mortgage 1,977 1,860 (A) (A)
Chapelle Le Grande
1st mortgage 3,106 3,148 25 yrs 2,759
2nd mortgage 1,047 995 (A) (A)
Terrace Gardens
1st mortgage 4,298 4,357 25 yrs 3,818
2nd mortgage 1,258 1,259 (A) (A)
Forest Ridge Apartments
1st mortgage 5,711 5,789 25 yrs 5,073
2nd mortgage 1,156 1,706 (A) (A)
Scotchollow
1st mortgage 28,204 28,590 25 yrs 25,054
2nd mortgage 7,914 8,415 (A) (A)
Pathfinder Village
1st mortgage 13,032 13,210 25 yrs 11,576
2nd mortgage 3,443 4,075 (A) (A)
Buena Vista Apartments
1st mortgage 4,795 4,861 25 yrs 4,260
2nd mortgage 1,180 1,360 (A) (A)
Mountain View Apartments
1st mortgage 6,928 7,023 25 yrs 6,154
2nd mortgage 1,539 1,894 (A) (A)
Crosswood Park
1st mortgage 5,390 5,463 25 yrs 4,788
2nd mortgage 1,018 1,343 (A) (A)
Casa de Monterey
1st mortgage 3,971 4,024 25 yrs 3,479
2nd mortgage 1,153 1,232 (A) (A)
The Bluffs
1st mortgage 3,605 3,654 25 yrs 3,202
2nd mortgage 1,159 1,097 (A) (A)
Watergate Apartments
1st mortgage 2,805 2,844 25 yrs 2,492
2nd mortgage 853 827 (A) (A)
Shadowood Apartments
1st mortgage 2,180 2,209 25 yrs 1,936
2nd mortgage 507 608 (A) (A)
Vista Village Apartments
1st mortgage 3,215 3,259 25 yrs 2,856
2nd mortgage 1,048 988 (A) (A)
Towers of Westchester Park
1st mortgage 11,730 11,890 25 yrs 10,420
2nd mortgage 2,998 3,617 (A) (A)

Totals $133,272 $137,732 $93,243


Interest rates are 8.50% and 10.84% for all first and second mortgages,
respectively. All notes mature January 1, 2008.

(A) Payments based on excess monthly cash flow at each property, with any
unpaid balance due at maturity. Per the junior loan agreements, excess
monthly cash flow is defined as revenue generated from operation of a
property less (1) operating expenses of the property, (2) the debt service
payment for the senior loans, (3) the tax and insurance reserve deposit
and (4) replacement reserve deposit.

Rental Rates and Occupancy

The following table sets forth the average annual rental rates and occupancy for
2001 and 2000 for each property.

Average Annual Average
Rental Rates Per Unit Occupancy
Property 2001 2000 2001 2000

North Park Apartments $ 6,559 $ 6,506 89% 93%
Chapelle Le Grande 8,772 8,364 93% 93%
Terrace Gardens 9,828 9,635 92% 94%
Forest Ridge Apartments 7,866 7,531 98% 97%
Scotchollow 18,814 16,389 95% 99%
Pathfinder Village 18,250 15,633 95% 98%
Buena Vista Apartments 15,912 14,788 93% 97%
Mountain View Apartments 13,489 12,331 98% 98%
Crosswood Park 10,944 10,065 95% 96%
Casa de Monterey 10,037 9,161 96% 98%
The Bluffs 7,404 7,233 90% 93%
Watergate Apartments 7,603 7,446 92% 92%
Shadowood Apartments 6,988 6,743 97% 94%
Vista Village Apartments 6,619 6,562 90% 90%
Towers of Westchester Park 12,564 12,169 98% 97%

The Managing General Partner attributes the occupancy fluctuations at the
properties to the following: a decrease at North Park Apartments due to
increased competition in a soft market; a decrease at Scotchollow, Pathfinder
Village and The Bluffs due to softening markets in their respective localities
caused primarily by a weakness in the local industries and recent layoffs; a
decrease at Buena Vista Apartments due to increased competition in the local
market; an increase at Shadowood Apartments due to an aggressive marketing and
resident retention program.

As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties are subject to competition from other
residential apartment complexes in the area. The Managing General Partner
believes that all of the properties are adequately insured. Each property is an
apartment complex which leases units for lease terms of one year or less. No
residential tenant leases 10% or more of the available rental space.

Real Estate Taxes and Rates

Real estate taxes and rates in 2001 for each property were as follows:

2001 2001
Taxes Rate
(in thousands)

North Park Apartments $147 9.36%
Chapelle Le Grande 62 14.85%
Terrace Gardens 95 1.85%
Forest Ridge Apartments 97 10.05%
Scotchollow 357 1.28%
Pathfinder Village 215 1.39%
Buena Vista Apartments 75 1.24%
Mountain View Apartments 122 1.20%
Crosswood Park 123 1.05%
Casa de Monterey 95 1.16%
The Bluffs 69 1.39%
Watergate Apartments 57 6.80%
Shadowood Apartments 44 11.94%
Vista Village Apartments 118 2.94%
Towers of Westchester Park 222 1.43%

Capital Improvements

The Venture is restricted to annual capital improvements of $300 per unit for
all of the properties, which is the limit set by the Junior Debt for funding of
capital improvements. The Venture, the holder ("AIMCO LP") of the Junior Debt
encumbering the properties and the servicer of the Senior Debt encumbering the
properties have agreed to a procedure to assess whether or not capital
expenditures, in addition to those permitted under the $300 per unit maximum,
are needed at the properties and the methodology for funding any such capital
expenditures. During 1999, the Venture and the holders of the Junior and Senior
Debt agreed that additional capital expenditures were required and that these
expenditures would be funded out of the cash flows from the properties that
otherwise would have been utilized to pay debt service on the Junior Debt. In
November 1999, an agreement was signed relating to the required capital
expenditures at Towers of Westchester Park. In July 2000, similar agreements
were signed relating to North Park Apartments, Scotchollow, Pathfinder Village,
Buena Vista Apartments, Mountain View Apartments, Casa de Monterey and The
Bluffs. In August 2000, agreements were signed relating to Shadowood Apartments,
Crosswood Park, Vista Village Apartments, Watergate Apartments, Chapelle Le
Grande, and Forest Ridge Apartments and in September 2000, an agreement was
signed relating to Terrace Gardens.

North Park Apartments: The methodology discussed above for funding the required
capital expenditures has been applied to North Park Apartments. The parties
agreed that this property required capital expenditures which were estimated to
cost approximately $150,000, all of which were completed as of December 31, 2001
at a cost of approximately $183,000. Approximately $93,000 of these expenditures
were completed during 2001. These costs were funded out of cash flows from the
property that otherwise would have been utilized to service the Junior Debt. The
Venture completed approximately $240,000 in capital expenditures, including the
aforementioned capital expenditures, at North Park Apartments during the year
ended December 31, 2001, consisting primarily of structural improvements,
recreational facilities enhancements, floor covering replacements, parking lot
and electrical improvements and major landscaping. These improvements were
funded from operating cash flow and replacement reserves. The Venture is
currently evaluating the capital improvement needs of the property for the
upcoming year. The property expects to budget $300 per unit or approximately
$85,000. Additional improvements may be considered and will depend on the
physical condition of the property as well as debt restrictions, replacement
reserves and anticipated cash flow generated by the property.

Chapelle Le Grande: The methodology discussed above for funding the required
capital expenditures has been applied to Chapelle Le Grande. The parties agreed
that this property required capital expenditures which were estimated to cost
approximately $90,000 all of which were completed as of December 31, 2001 at a
cost which approximated its budgeted amount. Approximately $51,000 of these
expenditures were completed during 2001. These costs were funded out of cash
flows from the property that otherwise would have been utilized to service the
Junior Debt. The Venture completed approximately $74,000 in capital
expenditures, including the aforementioned capital expenditures, at Chapelle Le
Grande during the year ended December 31, 2001, consisting primarily of
structural improvements, roof replacements, heating and air conditioning
upgrades and floor covering replacements. These improvements were funded from
operating cash flow and replacement reserves. The Venture is currently
evaluating the capital improvement needs of the property for the upcoming year.
The property expects to budget $300 per unit or approximately $32,000.
Additional improvements may be considered and will depend on the physical
condition of the property as well as debt restrictions, replacement reserves and
anticipated cash flow generated by the property.

Terrace Gardens: The methodology discussed above for funding the required
capital expenditures has been applied to Terrace Gardens. The parties agreed
that this property required capital expenditures which have a revised completion
date of March 31, 2002 and which are estimated to cost approximately $433,000,
of which approximately $317,000 (all during 2001) were completed as of December
31, 2001. These costs were funded out of cash flows from the property that
otherwise would have been utilized to service the Junior Debt. The Venture
completed approximately $624,000 in capital expenditures, including the
aforementioned capital expenditures, at Terrace Gardens during the year ended
December 31, 2001, consisting primarily of structural and building improvements,
plumbing upgrades, floor covering replacements, pool upgrades and a water
submetering project. These improvements were funded from operating cash flow,
insurance proceeds and replacement reserves. The Venture is currently evaluating
the capital improvement needs of the property for the upcoming year. The
property expects to budget $300 per unit or approximately $38,000. Additional
improvements may be considered and will depend on the physical condition of the
property as well as debt restrictions, replacement reserves and anticipated cash
flow generated by the property.

Forest Ridge Apartments: The methodology discussed above for funding the
required capital expenditures has been applied to Forest Ridge Apartments. The
parties agreed that this property required capital expenditures which were
estimated to cost approximately $296,000 all of which were completed as of
December 31, 2001 at a cost of approximately $291,000. Approximately $26,000 of
these expenditures were completed during 2001. These costs were funded out of
cash flows from the property that otherwise would have been utilized to service
the Junior Debt. The Venture completed approximately $145,000 in capital
expenditures, including the aforementioned capital expenditures, at Forest Ridge
Apartments during the year ended December 31, 2001, consisting primarily of
structural enhancements and floor covering, water heater, and appliance
replacements. These improvements were funded from operating cash flow and
replacement reserves. The Venture is currently evaluating the capital
improvement needs of the property for the upcoming year. The property expects to
budget $300 per unit or approximately $83,000. Additional improvements may be
considered and will depend on the physical condition of the property as well as
debt restrictions, replacement reserves and anticipated cash flow generated by
the property.

Scotchollow: The methodology discussed above for funding the required capital
expenditures has been applied to Scotchollow. The parties agreed that this
property required capital expenditures which have a revised completion date of
March 31, 2002 and which are estimated to cost approximately $941,000, of which
approximately $893,000 ($568,000 during 2001) were completed as of December 31,
2001. These costs were funded out of cash flows from the property that otherwise
would have been utilized to service the Junior Debt. The Venture completed
approximately $1,287,000 in capital expenditures, including the aforementioned
capital expenditures, at Scotchollow during the year ended December 31, 2001,
consisting primarily of major structural upgrades, parking lot improvements,
exterior painting, floor covering replacements, plumbing and other upgrades.
These improvements were funded from operating cash flow and replacement
reserves. The Venture is currently evaluating the capital improvement needs of
the property for the upcoming year. The property expects to budget $300 per unit
or approximately $125,000. Additional improvements may be considered and will
depend on the physical condition of the property as well as debt restrictions,
replacement reserves and anticipated cash flow generated by the property.

Pathfinder Village: The methodology discussed above for funding the required
capital expenditures has been applied to Pathfinder Village. The parties agreed
that this property required capital expenditures which have a revised completion
date of March 31, 2002 and which are estimated to cost approximately $1,237,000,
of which approximately $1,223,000 ($378,000 during 2001) were completed as of
December 31, 2001. These costs were funded out of cash flows from the property
that otherwise would have been utilized to service the Junior Debt. The Venture
completed approximately $1,323,000 in capital expenditures, including the
aforementioned capital expenditures, at Pathfinder Village during the year ended
December 31, 2001, consisting primarily of major structural improvements, floor
covering replacements, roofing and interior and other enhancements. These
improvements were funded from operating cash flow and replacement reserves. The
Venture is currently evaluating the capital improvement needs of the property
for the upcoming year. The property expects to budget $300 per unit or
approximately $74,000. Additional improvements may be considered and will depend
on the physical condition of the property as well as debt restrictions,
replacement reserves and anticipated cash flow generated by the property.

Buena Vista Apartments: The methodology discussed above for funding the required
capital expenditures has been applied to Buena Vista Apartments. The parties
agreed that this property required capital expenditures which have a revised
completion date of March 31, 2002 and which are estimated to cost approximately
$174,000, of which approximately $156,000 (all during 2001) were completed as of
December 31, 2001. These costs were funded out of cash flows from the property
that otherwise would have been utilized to service the Junior Debt. The Venture
completed approximately $264,000 in capital expenditures, including the
aforementioned capital expenditures, at Buena Vista Apartments during the year
ended December 31, 2001, consisting primarily of plumbing upgrades, major
structural improvements, appliances, and floor covering replacements. These
improvements were funded from operating cash flow and replacement reserves. The
Venture is currently evaluating the capital improvement needs of the property
for the upcoming year. The property expects to budget $300 per unit or
approximately $28,000. Additional improvements may be considered and will depend
on the physical condition of the property as well as debt restrictions,
replacement reserves and anticipated cash flow generated by the property.

Mountain View Apartments: The methodology discussed above for funding the
required capital expenditures has been applied to Mountain View Apartments. The
parties agreed that this property required capital expenditures, all of which
were completed as of December 31, 2001 at a cost which approximated the budgeted
amount of $209,000 ($143,000 during 2001). These costs were funded out of cash
flows from the property that otherwise would have been utilized to service the
Junior Debt. The Venture completed approximately $277,000 in capital
expenditures, including the aforementioned capital expenditures, at Mountain
View Apartments during the year ended December 31, 2001, consisting primarily of
major structural and pool improvements, floor covering replacements, and
electrical upgrades. These improvements were funded from operating cash flow and
replacement reserves. The Venture is currently evaluating the capital
improvement needs of the property for the upcoming year. The property expects to
budget $300 per unit or approximately $50,000. Additional improvements may be
considered and will depend on the physical condition of the property as well as
debt restrictions, replacement reserves and anticipated cash flow generated by
the property.

Crosswood Park: The methodology discussed above for funding the required capital
expenditures has been applied to Crosswood Park. The parties agreed that this
property required capital expenditures which have a revised completion date of
March 31, 2002 and which are estimated to cost approximately $301,000, of which
approximately $248,000 ($26,000 during 2001) were completed as of December 31,
2001. These costs were funded out of cash flows from the property that otherwise
would have been utilized to service the Junior Debt. The Venture completed
approximately $497,000 in capital expenditures, including the aforementioned
capital expenditures, at Crosswood Park during the year ended December 31, 2001,
consisting primarily of structural improvements, floor covering and appliance
replacements and other enhancements. These improvements were funded from
operating cash flow and replacement reserves. The Venture is currently
evaluating the capital improvement needs of the property for the upcoming year.
The property expects to budget $300 per unit or $54,000. Additional improvements
may be considered and will depend on the physical condition of the property as
well as debt restrictions, replacement reserves and anticipated cash flow
generated by the property.

Casa de Monterey: The methodology discussed above for funding the required
capital expenditures has been applied to Casa de Monterey. The parties agreed
that this property required capital expenditures which have a revised completion
date of March 31, 2002 and which are estimated to cost approximately $378,000,
of which approximately $361,000 ($198,000 during 2001) were completed as of
December 31, 2001. These costs were funded out of cash flows from the property
that otherwise would have been utilized to service the Junior Debt. The Venture
completed approximately $542,000 in capital expenditures, including the
aforementioned capital expenditures, at Casa de Monterey during the year ended
December 31, 2001, consisting primarily of major structural upgrades, floor
covering and appliance replacements, major landscaping, cabinets and parking
area and ground lighting improvements. These improvements were funded from
operating cash flow and replacement reserves. The Venture is currently
evaluating the capital improvement needs of the property for the upcoming year.
The property expects to budget $300 per unit or approximately $43,000.
Additional improvements may be considered and will depend on the physical
condition of the property as well as debt restrictions, replacement reserves and
anticipated cash flow generated by the property.

The Bluffs: The methodology discussed above for funding the required capital
expenditures has been applied to The Bluffs. The parties agreed that this
property required capital expenditures which have a revised completion date of
March 31, 2002 and which are estimated to cost approximately $52,000, of which
approximately $17,000 (all during 2001) were completed as of December 31, 2001.
These costs are to be funded out of cash flows from the property that otherwise
would have been utilized to service the Junior Debt. The Venture completed
approximately $172,000 in capital expenditures, including the aforementioned
capital expenditures at The Bluffs during the year ended December 31, 2001,
consisting primarily of floor covering, appliance and plumbing fixture
replacements and other enhancements. These improvements were funded from
operating cash flow and replacement reserves. The Venture is currently
evaluating the capital improvement needs of the property for the upcoming year.
The property expects to budget $300 per unit or approximately $41,000.
Additional improvements may be considered and will depend on the physical
condition of the property as well as debt restrictions, replacement reserves and
anticipated cash flow generated by the property.

Watergate Apartments: The methodology discussed above for funding the required
capital expenditures has been applied to Watergate Apartments. The parties
agreed that this property required capital expenditures which have a revised
completion date of March 31, 2002 and which are estimated to cost approximately
$186,000, of which $86,000 (all during 2001) were completed as of December 31,
2001. These costs were funded out of cash flows from the property that otherwise
would have been utilized to service the Junior Debt. The Venture completed
approximately $207,000 in capital expenditures, including the aforementioned
capital expenditures, at Watergate Apartments during the year ended December 31,
2001, consisting primarily of roof replacements, floor coverings, structural
improvements, air conditioning upgrades and major landscaping. These
improvements were funded from operating cash flow, replacement reserves and
insurance proceeds. The Venture is currently evaluating the capital improvement
needs of the property for the upcoming year. The property expects to budget $300
per unit or $42,000. Additional improvements may be considered and will depend
on the physical condition of the property as well as debt restrictions,
replacement reserves and anticipated cash flow generated by the property.

Shadowood Apartments: The methodology discussed above for funding the required
capital expenditures has been applied to Shadowood Apartments. The parties
agreed that this property required capital expenditures which have a revised
completion date of March 31, 2002 and which are estimated to cost approximately
$151,000, of which $148,000 (none during 2001) were completed as of December 31,
2001. These costs were funded out of cash flows from the property that otherwise
would have been utilized to service the Junior Debt. The Venture completed
approximately $172,000 in capital expenditures at Shadowood Apartments during
the year ended December 31, 2001, consisting primarily of parking lot
improvements, structural upgrades, plumbing improvements, floor covering
replacements and other enhancements. These improvements were funded from
operating cash flow and replacement reserves. The Venture is currently
evaluating the capital improvement needs of the property for the upcoming year.
The property expects to budget $300 per unit or $36,000. Additional improvements
may be considered and will depend on the physical condition of the property as
well as debt restrictions, replacement reserves and anticipated cash flow
generated by the property.

Vista Village Apartments: The methodology discussed above for funding the
required capital expenditures has been applied to Vista Village Apartments. The
parties agreed that this property required capital expenditures which were
estimated to cost approximately $264,000 all of which were completed as of
December 31, 2001 at a cost of approximately $240,000. Approximately $199,000 of
these expenditures were completed during 2001. These costs were funded out of
cash flows from the property that otherwise would have been utilized to service
the Junior Debt. The Venture completed approximately $367,000 in capital
expenditures, including the aforementioned capital expenditures, at Vista
Village Apartments during the year ended December 31, 2001, consisting primarily
of appliance and floor covering replacements, air conditioning upgrades and
other enhancements. These improvements were funded from operating cash flow and
replacement reserves. The Venture is currently evaluating the capital
improvement needs of the property for the upcoming year. The property expects to
budget $300 per unit or $66,000. Additional improvements may be considered and
will depend on the physical condition of the property as well as debt
restrictions, replacement reserves and anticipated cash flow generated by the
property.

Towers of Westchester Park: The methodology discussed above for funding the
required capital expenditures has been applied to Towers of Westchester Park.
The parties agreed that this property required capital expenditures during 2000
which were estimated to cost approximately $1,001,000, all of which were
completed as of December 31, 2001 at a cost of approximately $1,008,000.
Approximately $88,000 of these expenditures were completed during 2001. These
costs were funded out of cash flows from the property that otherwise would have
been utilized to service the Junior Debt. The Venture completed approximately
$243,000 in capital expenditures, including the aforementioned capital
expenditures, at Towers of Westchester Park during the year ended December 31,
2001, consisting primarily of heating and air conditioning upgrades, major
landscaping and floor covering and plumbing fixture replacements. These
improvements were funded from operating cash flow and replacement reserves. The
Venture is currently evaluating the capital improvement needs of the property
for the upcoming year. The property expects to budget $300 per unit or
approximately $91,000. Additional improvements may be considered and will depend
on the physical condition of the property as well as debt restrictions,
replacement reserves and anticipated cash flow generated by the property.

The Venture has budgeted $300 per unit or approximately $888,000 for all of the
properties which is equal to the limit set by the second mortgage notes for
funding of capital improvements. In addition, approximately $404,000 has been
budgeted to complete the additional capital expenditures agreed upon by the
Venture and the holders of the Junior and Senior Debt during 1999. As the
Venture identifies properties which require additional improvements discussions
are held with the holders of both the first and second mortgage notes for
approval to perform agreed upon capital improvements.

Item 3. Legal Proceedings

The Venture is unaware of any pending or outstanding litigation that is not of a
routine nature arising in the ordinary course of business.

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

The unitholders of the Partnerships did not vote on any matter during the
quarter ended December 31, 2001.


PART II

Item 5. Market for the Registrant's Common Equity and Related
Stockholders Matters

From the period October 26, 1984, through June 16, 1985, Portfolio I and
Portfolio II sold a total of 912 Limited Partnership Interests at a price of
$150,000 per Limited Partnership Interest, for a total of $136,800,000. As of
December 31, 2001, there were 739 holders of record of Portfolio I and 288
holders of record of Portfolio II, owning 644 and 267 units, respectively. As of
December 31, 2000, there were 770 holders of record of Portfolio I and 297
holders of record of Portfolio II, owning a total of 644 and 267 units,
respectively. As of December 31, 1999, there were 795 holders of record of
Portfolio I and 313 holders of record of Portfolio II, owning a total of 644 and
267 units, respectively. No public trading market has developed for the Units,
and it is not anticipated that such a market will develop in the future.

There were no cash distributions to the partners of either of the Partnerships
for the years ended December 31, 2001, 2000 or 1999. In accordance with the
respective Agreements of Limited Partnership, there are no material restrictions
on the Partnerships' ability to make cash distributions; however, future cash
distributions are subject to the order of distributions as stipulated by the
Venture's plan of reorganization (see "Note E" to the combined financial
statements for further details of the order of distribution). Future cash
distributions will depend on the levels of net cash generated from operations,
the availability of cash reserves and the timing of debt maturities,
refinancings and/or property sales. There can be no assurance that the
Partnerships will generate sufficient funds from operations, after required
capital expenditures, required cash flow payments on the Junior Debt and the
order of distributions as stipulated by the Venture's Plan of Reorganization, to
permit any distributions to their partners in 2002 or subsequent periods. See
"Item 2. Description of Properties - Capital Improvements" for information
relating to anticipated capital expenditures at the properties.

As a result of tender offers, AIMCO and its affiliates currently own 66.24 units
of limited partnership interest in Portfolio I representing 10.29% of the
outstanding limited partnership interests, along with the 2% general partner
interest for a combined ownership in Portfolio I of 12.29%. AIMCO and its
affiliates currently own 39.83 units of limited partnership interest in
Portfolio II representing 14.92% of the outstanding limited partnership
interests, along with the 2% general partner interest for a combined ownership
in Portfolio II of 16.92%. The Venture is owned 70.69% by Portfolio I and 29.31%
by Portfolio II which results in AIMCO and its affiliates currently owning
13.65% of the Venture. It is possible that AIMCO or its affiliates will make one
or more additional offers to acquire additional limited partnership interests in
the Partnerships for cash or in exchange for units in the operating partnership
of AIMCO. Under the Partnership Agreements, unitholders holding a majority of
the interests are entitled to take action with respect to a variety of matters
which would include voting on certain amendments to the Partnership Agreements
and voting to remove the Managing General Partner. When voting on matters, AIMCO
would in all likelihood vote the units it acquired in a manner favorable to the
interest of the Managing General Partner because of its affiliation with the
Managing General Partner.

Item 6. Selected Financial Data (in thousands, except per interest data):



2001 2000 1999 1998 1997
Total revenues from rental

operations $ 33,249 $ 31,015 $ 28,658 $ 27,956 $ 25,577

Extraordinary item-gain on
extinguishment of debt $ -- $ -- $ -- $ -- $ 10,303 (A)

Net (loss) income $ (2,910) $ (40) $ (6,402) $ (6,958) $ 606

Net (loss) income per limited
Partnership interest
Portfolio I - 644 interests $ (3,130) $ (43) $ (6,842) $ (7,483) $ 654

Portfolio II - 267 interests $ (3,131) $ (45) $ (6,992) $ (7,493) $ 646

Total assets $ 68,919 $ 68,879 $ 68,445 $ 71,937 $ 73,542

Mortgage loans and notes $178,940 $179,809 $179,468 $177,190 $172,904


A) During 1997, all of the Venture's properties were refinanced. As a result,
the Venture recognized an extraordinary gain on the extinguishment of
debt.

The above selected financial data should be read in conjunction with the
combined financial statements and the related notes.

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

The matters discussed in this Form 10-K contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained in this Form 10-K and the other filings with the Securities and
Exchange Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations, including forward-looking
statements pertaining to such matter, does not take into account the effects of
any changes to the Registrant's business and results of operation. Accordingly,
actual results could differ materially from those projected in the
forward-looking statements as a result of a number of factors, including those
identified herein.

This item should be read in conjunction with the combined financial statements
and other items contained elsewhere in this report.

Results from Operations

2001 Compared with 2000

The Venture recorded a net loss for the twelve months ended December 31, 2001 of
approximately $2,910,000 compared to a net loss of approximately $40,000 for the
corresponding period in 2000 (see "Note J" of the combined financial statements
for a reconciliation of these amounts to the Registrant's federal taxable loss).
The increase in net loss for the twelve month period is primarily due to the
increase in total expenses partially offset by an increase in total revenues.

The increase in total expenses is attributable to increases in interest,
operating, depreciation, property tax and property management fee expenses. The
increase in interest expense is due to the amortization of the debt discount
related to the mortgage participation liability. The liability was recorded
during 2001 as a result of improved operations and cash flows due to extensive
rehabilitation projects at the properties which have resulted in a significant
increase in the estimated fair value of the properties (see "Item 8. Financial
Statements and Supplementary Data, Note E - Participating Mortgage Note"). The
increases in operating expense are primarily due to increases in the cost of
natural gas and insurance rates at all of the Venture's properties. Depreciation
expense increased due to property improvements and replacements placed into
service during the past twelve months which are now being depreciated. Property
tax expense increased due to an increase in the assessed value by the local
taxing authority at Crosswood Park, Vista Village, Watergate and Mountain View
Apartments. The property management fee increased due to increased rental income
at a majority of the investment properties.

The increase in total revenues was due to an increase in rental and other income
and casualty gains at Terrace Gardens Apartments and Watergate Apartments as
discussed below. Rental income increased due to increases in average rental
rates at all of the Venture's properties which more than offset a slight
decrease in occupancy at eight of the Venture's investment properties. Other
income increased due to an increase in tenant reimbursements and fees and
interest income due to higher average cash balances in interest bearing
accounts.

During the year ended December 31, 2001, a net casualty gain of approximately
$23,000 was recorded at Watergate Apartments. The casualty gain related to
damage caused by an ice storm in December 2000. The gain was the result of the
receipt of insurance proceeds of approximately $30,000 offset by approximately
$7,000 of undepreciated fixed assets being written off.

During the year ended December 31, 2001, a casualty gain of approximately
$40,000 was recorded at Terrace Garden Apartments. The casualty gain related to
wind damage in April 2001. The gain was the result of the receipt of insurance
proceeds of approximately $58,000 offset by approximately $18,000 of
undepreciated fixed assets being written off.

2000 Compared with 1999

The Venture recorded a net loss for the twelve months ended December 31, 2000 of
approximately $40,000 compared to a net loss of approximately $6,402,000 for the
corresponding period in 1999 (see "Item 8. Financial Statements and
Supplementary Data, Note J" for a reconciliation of these amounts to the
Registrant's federal taxable loss). The decrease in net loss is attributable to
an increase in total revenues and a decrease in total expenses. The increase in
total revenues was due to an increase in both rental and other income. Rental
income increased mainly due to an increase in average annual rental rates at all
of the Venture's investment properties despite decreases in occupancy at seven
of the investment properties. Other income increased primarily due to increases
in interest income and tenant auxiliary services.

Total expenses decreased primarily due to a reduction in interest expense which
more than offset an increase in operating expenses and property management fees.
Interest expense decreased due to a reduction in the amortization of the imputed
interest on the Venture's Assignment Note. This discount for imputed interest
became fully amortized during January 2000, which was the estimated maturity
date of the Assignment Note. Operating expenses increased due to an increase in
property expenses. The increase in property expense was primarily a result of an
increase in salary and related benefits, especially at Scotchollow. In addition,
there was an increase in utilities, especially natural gas, due to price
increases and an unusually cold November and December.

Included in general and administrative expenses for each of the years ended
December 31, 2001, 2000 and 1999, are reimbursements to the Managing General
Partner allowed under the Partnership Agreement associated with its management
of the Venture. Costs associated with the quarterly and annual communications
with investors and regulatory agencies and the annual audit required by the
Partnership Agreement are also included.

As part of the ongoing business plan of the Venture, the Managing General
Partner monitors the rental market environment of each of its investment
properties within the Venture to assess the feasibility of increasing rents,
maintaining or increasing occupancy levels and protecting the Venture from
increases in expenses. As part of this plan, the Managing General Partner
attempts to protect the Venture from the burden of inflation-related increases
in expenses by increasing rents and maintaining a high overall occupancy level.
However, due to changing market conditions, which can result in the use of
rental concessions and rental reductions to offset softening market conditions,
there is no guarantee that the Managing General Partner will be able to sustain
such a plan.

Liquidity and Capital Resources

At December 31, 2001, the Venture had cash and cash equivalents of approximately
$5,048,000 compared to approximately $2,153,000 at December 31, 2000, an
increase of approximately $2,895,000. The increase is the result of
approximately $7,958,000 of cash provided by operating activities which was
offset by approximately $3,183,000 and $1,880,000 of cash used in investing and
financing activities, respectively. Cash used in investing activities consisted
of property improvements and replacements partially offset by withdrawals from
escrow accounts maintained by the mortgage lender and net insurance proceeds
from casualties at Watergate Apartments and Terrace Gardens. Cash used in
financing activities consisted of principal payments made on the mortgages
encumbering the Registrant's properties partially offset by an advance made to
the Venture from an affiliate of the Managing General Partner. The Venture
invests its working capital reserves in interest-bearing accounts.

In December 2001, an affiliate of the Managing General Partner loaned the
Venture's investment properties approximately $3,590,000 to cover capital
expenditures required at all of the properties. In accordance with the terms of
the Partnership Agreement, interest is charged at the prime rate plus 3%. At
December 31, 2001, the balance of the loan was approximately $3,590,000.
Interest expense amounted to less than $1,000.

Certain affiliates of the former general partners may be entitled to receive
various fees upon disposition of the properties. These fees will be paid from
the disposition proceeds and are subordinated to the distributions required by
the Venture's 1993 bankruptcy plan. There were no property dispositions for
which proceeds were received during the years ended December 31, 2001, 2000 or
1999.

During the year ended December 31, 2000, the Managing General Partner loaned the
Venture approximately $15,000 to cover operational expenses required at Mountain
View Apartments and Casa de Monterey. These loans were made in accordance with
the terms of the Partnership Agreements. At December 31, 2001 and 2000, the
balance of the loans was approximately $18,000 and $17,000, respectively, which
includes accrued interest. Interest is charged at the prime rate plus 3%.
Interest expense was approximately $1,000 and $2,000 for the years ended
December 31, 2001 and 2000, respectively.

The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Venture and to comply with Federal,
state and local legal and regulatory requirements.

The Venture budgeted $300 per unit or approximately $888,000 for all of the
properties for 2002. The Venture's Junior Debt restricts capital expenditures
from exceeding $300 per unit annually for all of the properties. The Venture,
the holder ("AIMCO LP") of the Junior Debt encumbering the properties and the
servicer of the Senior Debt encumbering the properties have agreed to a
procedure to assess whether or not capital expenditures, in addition to those
permitted under the $300 per unit maximum, are needed at the properties and the
methodology for funding any such capital expenditures. During 1999, the Venture
and the holders of the Junior and Senior Debt agreed that additional capital
expenditures were required and that these expenditures would be funded out of
the cash flows from the properties that otherwise would have been utilized to
pay debt service on the Junior Debt. As a result, the balloon payments due on
the Junior Debt may be higher at its maturity in January 2008 as accrued but
unpaid interest is added to the principal balance.

Each of the Venture's properties is encumbered by senior and junior debt. The
senior debt has an interest rate of 8.5% per annum and requires monthly payments
of principal and interest. The junior debt has an interest rate of 10.84% per
annum and the monthly payments are based on excess monthly cash flow for each
property. All of the loans mature on January 1, 2008, and the senior debt
includes prepayment penalties if paid prior to January 1, 2007. In 1997, these
loans were recorded at the agreed valuation amount of $110,000,000, which was
less than the $152,225,000 face amount of the senior debt. If the Venture
defaults on the mortgage notes payable or is unable to pay the outstanding
agreed valuation amounts upon maturity, then the note face amounts become due.
Accordingly, the Venture deferred recognition of a gain of $42,225,000 in 1997,
which is the difference between the note face amounts and the agreed valuation
amounts. All the loans are cross-collateralized but they are not
cross-defaulted. Therefore, a default by one property under the terms of its
debt agreement does not in and of itself create a default under all of the
senior and junior debt agreements. However, if the proceeds upon the sale or
refinancing of any property are insufficient to fully repay the outstanding
senior and junior debt related to that property, any deficiency is to be
satisfied from the sale or refinancing of the remaining properties.

Both on a short-term and long-term basis, the Managing General Partner monitors
the rental market environment of each of the investment properties to assess the
feasibility of increasing rents, maintaining or increasing occupancy levels and
protecting the Venture from increases in expenses all of which have an impact on
the Venture's liquidity. The Venture's current assets are thought to be
sufficient for any short-term needs (exclusive of capital improvements, as
discussed above and below) of the Venture. The Senior Debt encumbering all of
the properties totals approximately $105,022,000 and is being amortized over 25
years, with a balloon payment of $93,243,000 due January 2008. The Junior Debt,
which also matures January 2008, totals approximately $28,250,000 and requires
monthly payments based upon monthly excess cash flow for each property. Per the
Junior Debt Agreements, excess cash flow is defined as revenue generated from
the operation of a property less (1) operating expenses of the property, (2) the
debt service payment for the Senior Loan, (3) tax and insurance reserve deposit,
and (4) replacement reserve deposit. The Venture anticipates that cash flow is
sufficient to meet the operating needs of the Venture as well as the
requirements of the Senior Debt with any excess cash flow being utilized to meet
the requirements of the Junior Debt. The Assignment Note and Long-Term
Arrangement Fee Notes totaling approximately $42,060,000 are non-interest
bearing and are subordinate to the Senior and Junior Debt.

AIMCO LP, which owns the Managing General Partner and which is a controlled
affiliate of AIMCO, purchased (i) the Junior Debt on November 19, 1999, (ii) a
significant interest in the residual value of the properties on November 16,
1999 and (iii) economic and voting rights in a 0.61% interest in Partners
Liquidating Trust in September 2000. These transactions occurred between AIMCO
LP and unrelated third parties and thus had no effect on the combined financial
statements of the Venture.

There were no cash distributions to the partners of either of the Partnerships
for the years ended December 31, 2001, 2000 or 1999. In accordance with the
respective Agreements of Limited Partnership, there are no material restrictions
on the Partnerships' ability to make cash distributions; however, future cash
distributions are subject to the order of distributions as stipulated by the
Venture's plan of reorganization (see "Note E" to the combined financial
statements for further details of the order of distribution). Future cash
distributions will depend on the levels of net cash generated from operations,
the availability of cash reserves and the timing of debt maturities,
refinancings and/or property sales. There can be no assurance that the
Partnerships will generate sufficient funds from operations, after required
capital expenditures, required cash flow payments on the Junior Debt and the
order of distributions as stipulated by the Venture's Plan of Reorganization, to
permit any distributions to their partners in 2002 or subsequent periods.

As a result of tender offers, AIMCO and its affiliates currently own 66.24 units
of limited partnership interest in Portfolio I representing 10.29% of the
outstanding limited partnership interests, along with the 2% general partner
interest for a combined ownership in Portfolio I of 12.29%. AIMCO and its
affiliates currently own 39.83 units of limited partnership interest in
Portfolio II representing 14.92% of the outstanding limited partnership
interests, along with the 2% general partner interest for a combined ownership
in Portfolio II of 16.92%. The Venture is owned 70.69% by Portfolio I and 29.31%
by Portfolio II which results in AIMCO and its affiliates currently owning
13.65% of the Venture. It is possible that AIMCO or its affiliates will make one
or more additional offers to acquire additional limited partnership interests in
the Partnerships for cash or in exchange for units in the operating partnership
of AIMCO. Under the Partnership Agreements, unitholders holding a majority of
the interests are entitled to take action with respect to a variety of matters
which would include voting on certain amendments to the Partnership Agreement
and voting to remove the Managing General Partner. When voting on matters, AIMCO
would in all likelihood vote the units it acquired in a manner favorable to the
interest of the Managing General Partner because of its affiliation with the
Managing General Partner.

Recent Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No.
144 provides accounting guidance for financial accounting and reporting for
the impairment or disposal of long-lived assets. SFAS No. 144 supersedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of". SFAS No. 144 is effective for fiscal
years beginning after December 15, 2001. The Managing General Partner does
not anticipate that its adoption will have a material effect on the financial
position or results of operations of the Partnership.

Item 7a. Market Risk Factors

The Venture is exposed to market risks from adverse changes in interest rates.
In this regard, changes in U.S. interest rates affect the interest earned on the
Venture's cash and cash equivalents as well as interest paid on its
indebtedness. As a policy, the Venture does not engage in speculative or
leveraged transactions, nor does it hold or issue financial instruments for
trading purposes. The Venture is exposed to changes in interest rates primarily
as a result of its borrowing activities used to maintain liquidity and fund
business operations. To mitigate the impact of fluctuations in U.S. interest
rates, the Venture maintains its debt as fixed rate in nature by borrowing on a
long-term basis except for advances made from an affiliate of the Managing
General Partner. These advances bear interest at the prime rate plus three basis
points. Based on interest rates at December 31, 2001, an increase or decrease of
100 basis points in market interest rates would not have a material impact on
the Venture.

The following table summarizes the Venture's debt obligations at December 31,
2001. The interest rates represent the weighted-average rates. The fair value of
the Venture's first mortgages, after discounting the scheduled loan payments to
maturity is approximately $111,703,000 at December 31, 2001, however, the
Venture is precluded from refinancing the first mortgage until January 2007. The
Managing General Partner believes that it is not appropriate to use the
Venture's incremental borrowing rate for the second mortgages, as there is
currently no market in which the Venture could obtain similar financing.
Therefore, the Managing General Partner considers estimation of fair value to be
impracticable for this indebtedness.


Long-term Debt
Principal Weighted-average
(in thousands) Interest Rate

2002 $ 1,565 8.50%
2003 1,705 8.50%
2004 1,832 8.50%
2005 2,022 8.50%
2006 2,201 8.50%
Thereafter 123,947 9.03%
$133,272

As principal payments for the junior loans are based upon monthly cash flow, all
principal is assumed to be repaid at maturity.

Item 8. Financial Statements and Supplementary Data


LIST OF COMBINED FINANCIAL STATEMENTS


Report of Ernst & Young LLP, Independent Auditors

Combined Balance Sheets - Years ended December 31, 2001 and 2000

Combined Statements of Operations - Years ended December 31, 2001, 2000
and 1999

Combined Statements of Changes in Partners' Deficit - Years ended December
31, 2001, 2000 and 1999

Combined Statements of Cash Flows - Years ended December 31, 2001, 2000
and 1999

Notes to Combined Financial Statements





Report of Ernst & Young LLP, Independent Auditors



The Partners
VMS National Properties Joint Venture


We have audited the accompanying combined balance sheets of VMS National
Properties Joint Venture as of December 31, 2001 and 2000, and the related
combined statements of operations, changes in partners' deficit, and cash flows
for each of the three years in the period ended December 31, 2001. These
financial statements are the responsibility of the Venture's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Venture's 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 combined financial position of VMS National
Properties Joint Venture at December 31, 2001 and 2000, and the combined results
of its operations and its cash flows for each of the three years in the period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States.


/s/ERNST & YOUNG LLP



Greenville, South Carolina
February 15, 2002






VMS NATIONAL PROPERTIES JOINT VENTURE

COMBINED BALANCE SHEETS
(in thousands)



December 31, December 31,
2001 2000
Assets:

Cash and cash equivalents $ 5,048 $ 2,153
Receivables and deposits 1,618 1,743
Restricted escrows 1,460 4,279
Other assets 308 329
Investment properties:
Land 13,404 13,404
Buildings and related personal property 146,056 139,698
Less accumulated depreciation (98,975) (92,727)
60,485 60,375
$ 68,919 $ 68,879
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 1,718 $ 1,245
Tenant security deposits liabilities 1,013 1,111
Accrued property taxes 569 521
Other liabilities 318 941
Accrued interest 999 1,071
Due to affiliate (Note G) 3,608 17
Mortgage notes payable, including $28,250 due to
an affiliate at 2001 and $31,276 at 2000 (Note C) 133,272 137,732
Notes payable (Note D) 42,060 42,060
Deferred gain on extinguishment of debt (Note A) 42,225 42,225
Mortgage participation liability (Note E) 4,091 --

Partners' Deficit (160,954) (158,044)
$ 68,919 $ 68,879


See Accompanying Notes to Combined Financial Statements




VMS NATIONAL PROPERTIES JOINT VENTURE

COMBINED STATEMENTS OF OPERATIONS
(in thousands, except per interest data)




For The Years Ended December 31,
2001 2000 1999
Revenues:

Rental income $31,236 $29,566 $27,503
Other income 1,950 1,449 1,155
Casualty gains (Note F) 63 -- --
Total revenues 33,249 31,015 28,658

Expenses:
Operating 9,733 8,567 8,428
Property management fees to an affiliate 1,344 1,238 1,160
General and administrative 615 643 636
Depreciation 6,299 5,929 6,000
Interest, including approximately $7,257,
$3,353 and $3,444 to an affiliate 16,344 12,989 17,029
Property taxes 1,824 1,689 1,807
Total expenses 36,159 31,055 35,060

Net loss (Note J) $(2,910) $ (40) $(6,402)

Net loss allocated to general partners (2%) $ (58) $ (1) $ (128)

Net loss allocated to limited partners (98%) (2,852) (39) (6,274)

$(2,910) $ (40) $(6,402)
Net loss per limited partnership interest:
Portfolio I (644 interests issued and
outstanding) $(3,130) $ (43) $(6,842)
Portfolio II (267 interests issued and
outstanding) $(3,131) $ (45) $(6,992)


See Accompanying Notes to Combined Financial Statements






VMS NATIONAL PROPERTIES JOINT VENTURE

COMBINED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(in thousands)



VMS National Residential Portfolio I
Limited Partners
General Accumulated Subscription
Partner Deficit Notes Total Total


Partners' deficit at December 31, 1998 $(3,445) $(102,751) $ (506) $(103,257) $(106,702)
Net loss for the year ended
December 31, 1999 (90) (4,406) -- (4,406) (4,496)
Partner's deficit at December 31, 1999 (3,535) (107,157) (506) (107,663) (111,198)
Collections of subscription notes -- -- 4 4 4
Net loss for the year ended
December 31, 2000 (1) (27) -- (27) (28)
Partners' deficit at December 31, 2000 (3,536) (107,184) (502) (107,686) (111,222)
Net loss for the year ended
December 31, 2001 (41) (2,016) -- (2,016) (2,057)
Partners' deficit at December 31, 2001 $(3,577) $(109,200) (502) $(109,702) $(113,279)


VMS National Residential Portfolio II
Limited Partners
General Accumulated Subscription
Partner Deficit Notes Total Total

Partners' deficit at December 31, 1998 $(1,442) $(43,134) $ (329) $(43,463) $(44,905)
Net loss for the year ended
December 31, 1999 (38) (1,868) -- (1,868) (1,906)
Partner's deficit at December 31, 1999 (1,480) (45,002) (329) (45,331) (46,811)
Collections of subscription notes -- -- 1 1 1
Net loss for the year ended
December 31, 2000 -- (12) -- (12) (12)
Partners' deficit at December 31, 2000 (1,480) (45,014) (328) (45,342) (46,822)
Net loss for the year ended
December 31, 2001 (17) (836) -- (836) (853)
Partners' deficit at December 31, 2001 $(1,497) $(45,850) $ (328) $(46,178) $(47,675)
Combined partners' deficit at
December 31, 2001 $(5,074) $(155,050) $ (830) $(155,880) $(160,954)


See Accompanying Notes to Combined Financial Statements




VMS NATIONAL PROPERTIES JOINT VENTURE

COMBINED STATEMENTS OF CASH FLOWS
(in thousands)




For The Years Ended December 31,
2001 2000 1999

Cash flows from operating activities:

Net loss $(2,910) $ (40) $(6,402)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 6,299 5,929 6,000
Amortization of mortgage discounts 4,091 403 4,199
Casualty gain (63) -- --
Change in accounts:
Receivables and deposits 125 120 300
Other assets 21 (18) 107
Accounts payable 129 97 244
Tenant security deposit liabilities (98) 36 (33)
Accrued interest 938 2,965 1,061
Accrued property taxes 48 (77) (449)
Due to affiliate 1 2 --
Other liabilities (623) (785) 1,233
Net cash provided by operating activities 7,958 8,632 6,260

Cash flows from investing activities:
Property improvements and replacements (6,090) (4,119) (1,857)
Insurance proceeds received 88 -- --
Net withdrawals from (deposits to) restricted
escrows 2,819 (1,698) 15
Net cash used in investing activities (3,183) (5,817) (1,842)

See Accompanying Notes to Combined Financial Statements




VMS NATIONAL PROPERTIES JOINT VENTURE

COMBINED STATEMENTS OF CASH FLOWS (continued)
(in thousands)




For The Years Ended December 31,
2001 2000 1999
Cash flows from financing activities:

Payments on mortgage notes payable $(5,470) $(2,686) $(3,345)
Payments received on subscription notes -- 5 --
Advances from an affiliate 3,590 15 --
Net cash used in financing activities (1,880) (2,666) (3,345)

Net increase in cash and cash equivalents 2,895 149 1,073

Cash and cash equivalents at beginning of year 2,153 2,004 931

Cash and cash equivalents at end of year $ 5,048 $ 2,153 $ 2,004

Supplemental disclosure of cash flow information:
Cash paid for interest, including approximately
$2,179, $733 and $2,027 paid to an affiliate $11,302 $ 9,622 $11,768

Supplemental disclosure of non-cash information:
Accrued interest added to mortgage notes payable $ 1,010 $ 2,607 $ 1,424
Property improvements and replacements included
in accounts payable and other liabilities $ 843 $ 499 $ --

See Accompanying Notes to Combined Financial Statements




VMS NATIONAL PROPERTIES JOINT VENTURE

NOTES TO COMBINED FINANCIAL STATEMENTS

December 31, 2001


Note A - Organization and Significant Accounting Policies

Organization:

VMS National Properties Joint Venture (the "Venture") was formed as a general
partnership pursuant to the Uniform Partnership Act of the State of Illinois and
a joint venture agreement (the "Venture Agreement") dated September 27, 1984,
between VMS National Residential Portfolio I ("Portfolio I") and VMS National
Residential Portfolio II ("Portfolio II") (collectively, the "Partnerships").
Effective December 12, 1997, the managing general partner of each of the
Partnerships was transferred from VMS Realty Investment, Ltd. ("VMSRIL" or the
"Former Managing General Partner") (formerly VMS Realty Partners) to MAERIL,
Inc. ("MAERIL" or the "Managing General Partner"), a wholly-owned subsidiary of
MAE GP Corporation ("MAE GP") and an affiliate of Insignia Financial Group, Inc.
("Insignia"). Effective February 25, 1998, MAE GP was merged with Insignia
Properties Trust ("IPT"), which was an affiliate of Insignia. Effective October
1, 1998 and February 26, 1999, Insignia and IPT were respectively merged into
Apartment Investment and Management Company ("AIMCO"), a publicly traded real
estate investment trust. Thus the Managing General Partner is now a wholly-owned
subsidiary of AIMCO. The directors and officers of the Managing General Partner
also serve as executive officers of AIMCO. The Partnership Agreement provides
that the Venture is to terminate on December 8, 2044, unless terminated prior to
such date. The Venture owns and operates 15 residential apartment complexes
located in or near major urban areas in the United States.

Pursuant to the terms of the Joint Venture Agreement for the Venture and the
respective Partnership Agreements for Portfolio I and Portfolio II, the Managing
General Partner will manage Portfolio I, Portfolio II, VMS National Properties
and each of the Venture's operating properties. The Limited Partners do not
participate in or control the management of their respective partnership, except
that certain events must be approved by the Limited Partners. These events
include: (1) voluntary dissolution of either Portfolio I or Portfolio II, and
(2) amending substantive provisions of either Partnership Agreement.

Basis of Accounting:

The accompanying financial statements represent the combined financial
statements of VMS National Residential Portfolio I ("Portfolio I"), VMS National
Residential Portfolio II ("Portfolio II"), and the Venture. Significant
interpartnership accounts and transactions have been eliminated from these
combined financial statements.

Allocation of Income, Loss, and Distributions:

The operating profits and losses of VMS National Properties Joint Venture are
allocated to Portfolio I and Portfolio II based on their respective ownership of
VMS National Properties Joint Venture which is 70.69% and 29.31%, respectively.
Portfolio I and Portfolio II then combine their respective share of the
operating profits and losses of VMS National Properties Joint Venture with their
respective operating profits and losses which is then allocated 98% to the
respective limited partners and 2% to the respective general partners of both
Portfolio I and Portfolio II.

Operating cash flow distributions for Portfolio I and Portfolio II will be made
at the discretion of the Managing General Partner subject to the order of
distribution indicated in the Venture's Second Amended and Restated Plan of
Reorganization (the "Plan") as approved by the US Bankruptcy Court in September
1993. Such distributions will be allocated first to the respective Limited
Partners in an amount equal to 12% per year (on a noncumulative basis) of their
contributed capital; then, to the general partners, a subordinated incentive fee
equal to 10.45% of remaining operating cash flow; and finally, of the balance to
be distributed, 98% to the Limited Partners and 2% to the general partners.

Distributions of proceeds arising from the sale or refinancing of the Venture's
properties will be allocated to Portfolio I and Portfolio II in proportion to
their respective Venture interests subject to the order of distribution
indicated in the Plan and approved by Bankruptcy Court. Distributions by
Portfolio I and Portfolio II will then be allocated as follows: (1) first to the
Limited Partners in an amount equal to their aggregate capital contributions;
(2) then to the general partners in an amount equal to their aggregate capital
contributions; (3) then, among the Limited Partners, an amount equal to
$62,000,000 multiplied by the respective percentage interest of Portfolio I or
Portfolio II in the Venture; and (4) finally, of the balance, 76% to the Limited
Partners and 24% to the general partners.

In any event, there shall be allocated to the general partners not less than 1%
of profits or losses.

Use of Estimates:

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Fair Value of Financial Instruments:

Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures about
Fair Value of Financial Instruments", as amended by SFAS No. 119, "Disclosures
about Derivative Financial Instruments and Fair Value of Financial Instruments",
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate fair value. Fair value is defined in the SFAS as the amount at which
the instruments could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. The Venture believes that
the carrying amounts of its financial instruments (except for long term debt)
approximate their fair values due to the short term maturity of these
instruments. The fair value of the Venture's first mortgages, after discounting
the scheduled loan payments to maturity, is approximately $111,703,000, however,
the Venture is precluded from refinancing the first mortgage until January 2007.
The Managing General Partner believes that it is not appropriate to use the
Venture's incremental borrowing rate for the second mortgages, the Assignment
Note and the long term arrangement fee, as there is currently no market in which
the Venture could obtain similar financing. Therefore, the Managing General
Partner considers estimation of fair value to be impracticable for this
indebtedness.

Cash and Cash Equivalents:

Includes cash on hand and in banks. At certain times, the amount of cash
deposited at a bank may exceed the limit on insured deposits. At December 31,
2001 and 2000, cash balances included approximately $4,957,000 and $616,000,
respectively, that are maintained by an affiliated management company on behalf
of affiliated entities in cash concentration accounts.

Tenant Security Deposits:

The Venture requires security deposits from lessees for the duration of the
lease and such deposits are included in receivables and deposits. The security
deposits are refunded when the tenant vacates, provided the tenant has not
damaged its space, and is current on its rental payments.

Investment Properties:

Investment properties consist of fifteen apartment complexes and are stated at
cost. Acquisition fees are capitalized as a cost of real estate. In accordance
with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," which requires impairment losses to be
recorded on long-lived assets used in operations when events and circumstances
indicate that the assets might be impaired and the undiscounted cash flows
estimated to be generated by those assets are less than the carrying amounts of
those assets. The impairment loss is measured by comparing the fair value of the
asset to its carrying amount. No adjustments for impairment of value were
recorded in the years ended December 31, 2001, 2000 or 1999. See "Recent
Accounting Pronouncements" below.

Escrows:

In connection with the December 1997 refinancing of the Venture's 15 remaining
properties, a replacement escrow was required for each property. Each property
was required to deposit an initial lump sum amount plus make monthly deposits
over the term of the loan, which varies by property. These funds are to be used
to cover replacement costs. The balance of the replacement reserves at December
31, 2001 and 2000 is approximately $1,460,000 and $4,279,000, respectively,
including interest.

Depreciation:

Depreciation is computed by the straight-line method over estimated useful lives
ranging from 25 to 29 years for buildings and improvements and the 150% or 200%
declining balance method for five to fifteen years for personal property.

Leases:

The Venture generally leases apartment units for twelve-month terms or less. The
Venture recognizes income as earned on its leases. In addition, the Managing
General Partner's policy is to offer rental concessions during particularly slow
months or in response to heavy competition from other similar complexes in the
area. Concessions are charged against rental income as incurred.

Segment Reporting:

SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
Information" established standards for the way that public business enterprises
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports. It also established standards for related
disclosures about products and services, geographic areas, and major customers.
As defined in SFAS No. 131, the Partnership has only one reportable segment. The
Managing General Partner believes that segment-based disclosures will not result
in a more meaningful presentation than the combined financial statements as
currently presented.

Advertising Costs:

The Venture expenses the cost of advertising as incurred. Advertising costs of
approximately $351,000, $355,000 and $355,000, are included in operating expense
for the years ended December 31, 2001, 2000, and 1999, respectively.

Deferred Gain on Extinguishment of Debt:

When senior and junior loans refinanced in 1997, senior loans were recorded at
the agreed valuation amount of $110,000,000, which was less than the
$152,225,000 face amount of the senior debt. If the Venture defaults on the
mortgage notes payable or is unable to pay the outstanding agreed valuation
amounts upon maturity, then the note face amounts become due. Accordingly, the
Venture deferred recognition of a gain of $42,225,000, which is the difference
between the note face amounts and the agreed valuation amounts.

Income Taxes:

Taxable income or loss of the Venture is reported in the income tax returns of
its partners. Accordingly, no provision for income taxes is made in the
financial statements of the Venture.

Reclassification:

Certain reclassifications have been made to the 2000 information to conform to
the 2001 presentation.

Recent Accounting Pronouncements:

In August 2001, the Financial Accounting Standards Board issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No.
144 provides accounting guidance for financial accounting and reporting for
the impairment or disposal of long-lived assets. SFAS No. 144 supersedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of". SFAS No. 144 is effective for fiscal
years beginning after December 15, 2001. The Managing General Partner does
not anticipate that its adoption will have a material effect on the financial
position or results of operations of the Partnership.

Note B - Transfer of Control

Pursuant to a series of transactions which closed on October 1, 1998, and
February 26, 1999, Insignia and IPT merged into AIMCO, a publicly traded real
estate investment trust, with AIMCO being the surviving corporation (the
"Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in the
Managing General Partner. The Managing General Partner does not believe that
this transaction has had or will have a material effect on the affairs and
operations of the Venture.

Note C - Mortgage Notes Payable



Principal Principal Monthly Principal
Balance At Balance At Payment Balance
December 31, December 31, Including Due At
Property 2001 2000 Interest Maturity
(in thousands) (in thousands)
North Park Apartments

1st mortgage $ 6,052 $ 6,135 $ 51 $ 5,376
2nd mortgage 1,977 1,860 (A) (A)
Chapelle Le Grande
1st mortgage 3,106 3,148 26 2,759
2nd mortgage 1,047 995 (A) (A)
Terrace Gardens
1st mortgage 4,298 4,357 36 3,818
2nd mortgage 1,258 1,259 (A) (A)
Forest Ridge Apartments
1st mortgage 5,711 5,789 48 5,073
2nd mortgage 1,156 1,706 (A) (A)
Scotchollow
1st mortgage 28,204 28,590 236 25,054
2nd mortgage 7,914 8,415 (A) (A)
Pathfinder Village
1st mortgage 13,032 13,210 109 11,576
2nd mortgage 3,443 4,075 (A) (A)
Buena Vista Apartments
1st mortgage 4,795 4,861 40 4,260
2nd mortgage 1,180 1,360 (A) (A)
Mountain View Apartments
1st mortgage 6,928 7,023 58 6,154
2nd mortgage 1,539 1,894 (A) (A)
Crosswood Park
1st mortgage 5,390 5,463 45 4,788
2nd mortgage 1,018 1,343 (A) (A)
Casa de Monterey
1st mortgage 3,971 4,024 33 3,479
2nd mortgage 1,153 1,232 (A) (A)
The Bluffs
1st mortgage 3,605 3,654 30 3,202
2nd mortgage 1,159 1,097 (A) (A)
Watergate Apartments
1st mortgage 2,805 2,844 23 2,492
2nd mortgage 853 827 (A) (A)
Shadowood Apartments
1st mortgage 2,180 2,209 18 1,936
2nd mortgage 507 608 (A) (A)
Vista Village Apartments
1st mortgage 3,215 3,259 27 2,856
2nd mortgage 1,048 988 (A) (A)
Towers of Westchester Park
1st mortgage 11,730 11,890 98 10,420
2nd mortgage 2,998 3,617 (A) (A)

Totals $133,272 $137,732 $878 $93,243



(A) Payments are based on excess monthly cash flow with any unpaid balance due
at maturity. Excess monthly cash flow is defined as revenue generated from
the operation of a property less: (1) operating expenses of the property;
(2) the debt service payment for the senior loan; (3) the tax and
insurance reserve deposit; and (4) the replacement reserve deposit.

Interest rates are 8.50% and 10.84% for all first and second mortgages,
respectively. All notes mature January 1, 2008.

The senior debt includes prepayment penalties if repaid prior to January 1,
2007. All of the loans are cross-collaterized, but they are not cross-defaulted;
therefore, a default by one property under the terms of its debt agreement does
not in and of itself create a default under all of the senior and junior debt
agreements. However, if the proceeds upon the sale or refinancing of any
property are insufficient to fully repay the outstanding senior or junior debt
related to that property, any deficiency is to be satisfied from the sale or
refinancing of the remaining properties.

Scheduled principal payments on mortgage notes payable subsequent to December
31, 2001 are as follows (in thousands):

2002 $ 1,565
2003 1,705
2004 1,832
2005 2,022
2006 2,201
Thereafter 123,947
$133,272

As principal payments for the junior loans are based upon monthly cash flow, all
principal is assumed to be repaid at maturity.

Note D - Notes Payable

Assignment Note:

The Venture executed a purchase money subordinated note (the "Assignment Note")
payable to the VMS/Stout Venture, an affiliate of the former general partner, in
exchange for the assignment by the VMS/Stout Venture of its interest in the
contract of sale to the Venture. The Assignment Note is collateralized by the
pledge from Portfolio I and Portfolio II of their respective interests in the
Venture.

In November 1993, VMS Realty Partners assigned its 50% interest in the VMS/Stout
Venture to the Partners Liquidating Trust which was established for the benefit
of the former creditors of VMS Realty Partners and its affiliates.

At December 31, 2001 and 2000 the remaining $38,810,000 of the Assignment Note
is non-interest bearing and is payable only after payment of debt of higher
priority, including the senior and junior mortgage notes payable. Pursuant to
SOP 90-7, the Assignment Note, the Long-Term Loan Arrangement Fee Note (as
defined below) and related accrued interest were adjusted to the present value
of amounts to be paid using an estimated current interest rate of 11.5%.
Interest expense is being recognized through the amortization of the discount
which totaled approximately $403,000 and $4,199,000 in 2000 and 1999,
respectively. The discount became fully amortized in January 2000.

Long-Term Loan Arrangement Fee Note:

The Venture executed an unsecured, nonrecourse promissory note (the "Long-Term
Loan Arrangement Fee Note") payable to the VMS/Stout Venture as consideration
for arranging long-term financing.

The note in the amount of $3,250,000 does not bear interest and is payable only
after debt of a higher priority, including senior and junior mortgage loans have
been repaid.

Note E - Participating Mortgage Note

AIMCO Properties LP, which owns the Managing General Partner and which is a
controlled affiliate of AIMCO, purchased (i) the Junior Debt on November 19,
1999; (ii) a significant interest in the residual value of the properties on
November 16, 1999, and (iii) a significant interest in the Bankruptcy Claims (as
defined below) effective September 2000. These transactions occurred between
AIMCO Properties, LP and an unrelated third party and thus had no effect on the
combined financial statements of the Venture. Residual value is defined as the
amount remaining from a sale of the Venture's investment properties or
refinancing of the mortgages encumbering such investment properties after
payment of selling or refinancing costs and repayment of the Senior and Junior
Debt, plus accrued interest on each. The agreement states that the Venture will
retain an amount equal to $13,500,000 plus accrued interest at 10% compounded
monthly (the "Partnership Advance Account") from the proceeds. Interest began
accruing on the Partnership Advance Account in 1993 when the bankruptcy plan was
finalized. Any proceeds remaining after the Partnership Advance Account is fully
funded are split equally (the "50/50 Split") between the Venture and AIMCO
Properties, LP. The Venture must repay the Assignment Note, the Long-term Loan
Arrangement Fee Note and other pre-petition claims (collectively the "Bankruptcy
Claims") which collectively total approximately $42,139,000 from the Partnership
Advance Account. Any amounts remaining in the Partnership Advance Account after
payment of the Bankruptcy Claims are split 75% to the Venture and 25% to AIMCO
Properties, LP.

The Venture has recorded the estimated fair value of the participation feature
as a liability and a debt discount of approximately $36,518,000. During the year
ended December 31, 2001, the Venture amortized approximately $4,091,000 of the
debt discount which is included in interest expense. The fair value of the
participation feature was calculated based upon information currently available
to the Managing General Partner and depends largely upon the fair value of the
collateral properties. These fair values were determined using the net operating
income of the properties capitalized at a rate deemed reasonable for the type of
property adjusted for market conditions, the physical condition of the property
and other factors. The Managing General Partner evaluates the fair value of the
participation feature on an annual basis or as circumstances dictate that it
should be analyzed.

Note F - Casualty Gain

During the year ended December 31, 2001, a net casualty gain of approximately
$23,000 was recorded at Watergate Apartments. The casualty gain related to
damage caused by an ice storm in December 2000. The gain was the result of the
receipt of insurance proceeds of approximately $30,000 offset by approximately
$7,000 of undepreciated fixed assets being written off.

During the year ended December 31, 2001, a casualty gain of approximately
$40,000 was recorded at Terrace Garden Apartments. The casualty gain related to
wind damage in April 2001. The gain was the result of the receipt of insurance
proceeds of approximately $58,000 offset by approximately $18,000 of
undepreciated fixed assets being written off.

Note G - Transactions With Affiliated Parties

The Venture has no employees and is dependent on the Managing General Partner
and its affiliates for the management and administration of all Subpartnership
activities. The Revised and amended Asset Management Agreement provides for (i)
certain payments to affiliates for real estate advisory services and asset
management of the Venture's retained properties for an annual compensation of
$300,000 adjusted annually by the consumer price index and (ii) reimbursement of
certain expenses incurred by affiliates on behalf of the Venture up to $100,000
per annum.

Asset management fees of approximately $300,000 were paid to an affiliate of the
Managing General Partner for each of the years ended December 31, 2001, 2000 and
1999. These fees are included in general and administrative expenses.

Affiliates of the Managing General Partner are entitled to receive a percentage
of the gross receipts from all of the Registrant's properties as compensation
for providing property management services. The Registrant paid to such
affiliates approximately $1,344,000, $1,238,000 and $1,160,000 for the years
ended December 31, 2001, 2000 and 1999, respectively.

Affiliates of the Managing General Partner received reimbursement of accountable
administrative expenses amounting to approximately $100,000 for each of the
years ended December 31, 2001, 2000 and 1999. These expenses are included in
general and administrative expenses. During the years ended December 31, 2001,
2000 and 1999, the Venture paid fees related to construction management services
provided by an affiliate of the Managing General Partner of approximately
$940,000, $125,000 and $16,000, respectively. The construction management
service fees are calculated based on a percentage of current and certain prior
year additions to investment properties and are being depreciated over 15 years.

An affiliate of the Managing General Partner received bookkeeping reimbursements
in the amount of approximately $123,000, $131,000 and $142,000 for the years
ended December 31, 2001, 2000 and 1999, respectively. These expenses are
included in operating expenses.

Prepetition property management fees were approved by the Bankruptcy Court for
payment to a former affiliate. This allowed claim may be paid only from
available Venture cash. At December 31, 2001 and 2000, the outstanding balance
of $79,000 is included in other liabilities.

In December 2001, an affiliate of the Managing General Partner loaned the
Venture's investment properties approximately $3,590,000 to cover capital
expenditures required at all of the properties. In accordance with the terms of
the Partnership Agreement, interest is charged at the prime rate plus 3%. At
December 31, 2001, the balance of the loan was approximately $3,590,000.
Interest expense amounted to less than $1,000.

During the year ended December 31, 2000, the Managing General Partner loaned the
Venture approximately $15,000 to cover operational expenses required at Mountain
View Apartments and Casa de Monterey. These loans were made in accordance with
the terms of the Partnership Agreements. At December 31, 2001 and 2000, the
balance of the loans was approximately $18,000 and $17,000, respectively, which
includes accrued interest. Interest is charged at the prime rate plus 3%.
Interest expense was approximately $1,000 and $2,000 for the years ended
December 31, 2001 and 2000, respectively.

Certain affiliates of the former general partners and the VMS/Stout Venture may
be entitled to receive various fees upon disposition of the properties. These
fees will be paid from the disposition proceeds and are subordinated to the
distributions required by the bankruptcy plan. There were no property
dispositions for which proceeds were received during the years ended December
31, 2001, 2000 or 1999.

The junior debt is held by an affiliate of the Managing General Partner. The
monthly principal and interest payments are based on monthly excess cash flow
for each property, as defined in the mortgage agreement. During the year ended
December 31, 2001, 2000 and 1999, the Venture recognized approximately
$7,236,000, $3,353,000 and $3,444,000, respectively.

Beginning in 2001, the Venture began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally self-insured for a
portion of losses and liabilities related to workers compensation, property
casualty and vehicle liability. The Venture insures its properties above the
AIMCO limits through insurance policies obtained by AIMCO from insurers
unaffiliated with the Managing General Partner. During the year ended December
31, 2001, the Venture paid AIMCO and its affiliates approximately $273,000 for
insurance coverage and fees associated with policy claims administration.

As a result of tender offers, AIMCO and its affiliates currently own 66.24 units
of limited partnership interest in Portfolio I representing 10.29% of the
outstanding limited partnership interests, along with the 2% general partner
interest for a combined ownership in Portfolio I of 12.29%. AIMCO and its
affiliates currently own 39.83 units of limited partnership interest in
Portfolio II representing 14.92% of the outstanding limited partnership
interests, along with the 2% general partner interest for a combined ownership
in Portfolio II of 16.92%. The Venture is owned 70.69% by Portfolio I and 29.31%
by Portfolio II which results in AIMCO and its affiliates currently owning
13.65% of the Venture. It is possible that AIMCO or its affiliates will make one
or more additional offers to acquire additional limited partnership interests in
the Partnerships for cash or in exchange for units in the operating partnership
of AIMCO. Under the Partnership Agreements, unitholders holding a majority of
the interests are entitled to take action with respect to a variety of matters
which would include voting on certain amendments to the Partnership Agreement
and voting to remove the Managing General Partner. When voting on matters, AIMCO
would in all likelihood vote the units it acquired in a manner favorable to the
interest of the Managing General Partner because of its affiliation with the
Managing General Partner.

Note H - Subscription Notes And Accrued Interest Receivable

Portfolio I and Portfolio II executed promissory notes requiring cash
contributions from the partners aggregating $136,800,000 to the capital of
Portfolios I and II for 644 and 267 units, respectively. Of this amount,
approximately $135,060,000 was contributed in cash through December 31, 2001,
and $910,000 was deemed uncollectible and written-off prior to December 31,
2001. The following table represents the remaining Limited Partners'
subscription notes principal balances and the related accrued interest
receivable at December 31, 2001 (in thousands):

Portfolio I Portfolio II

Subscription notes receivable $502 $328
Accrued interest receivable 63 67
Allowance for uncollectible interest
receivable (63) (67)
Total subscription notes and accrued
interest receivable $502 $328

All amounts outstanding at December 31, 2001, are considered past due and bear
interest at the default rate of 18%. No interest will be recognized until
collection is assured.

Note I - Investment Properties and Accumulated Depreciation



Initial Cost
(in thousands)
Buildings and Costs Capitalized Provision to
Related Personal Subsequent to Reduce to
Description Encumbrances Land Property Acquisition Fair Value


North Park Apartments $ 8,029 $ 557 $ 8,349 $ 1,929 $ --
Chapelle Le Grande 4,153 166 3,873 1,071 --
Terrace Garden 5,556 433 4,517 1,896 --
Forest Ridge Apartments 6,867 701 6,930 1,816 --
Scotchollow 36,118 3,510 19,344 7,277 --
Pathfinder Village 16,475 3,040 11,698 4,737 (1,250)
Buena Vista Apartments 5,975 893 4,538 893 --
Mountain View Apartments 8,467 1,289 8,490 1,540 --
Crosswood Park 6,408 611 8,597 2,606 (2,000)
Casa De Monterey 5,124 869 6,136 1,913 --
The Bluffs 4,764 193 3,667 799 --
Watergate Apartments 3,658 263 5,625 1,574 --
Shadowood Apartments 2,687 209 3,393 1,011 --
Vista Village Apartments 4,263 568 5,209 1,538 --
Towers Of Westchester Park 14,728 529 13,491 4,422 --

TOTAL $133,272 $13,831 $113,857 $35,022 $(3,250)






Gross Amount At Which Carried
At December 31, 2001
(in thousands)
Buildings Accum-
And Related ulated Year of Date of
Personal Deprec- Construc- Acquis- Depreciable
Description Land Property Total iation tion ition Life Years


North Park Apartments $ 557 $ 10,278 $ 10,835 $ 7,366 1968 11/14/84 5-27.5
Chapelle Le Grande 166 4,944 5,110 3,410 1972 12/05/84 5-27.5
Terrace Gardens 433 6,413 6,846 4,065 1973 10/26/84 5-27.5
Forest Ridge Apartments 701 8,746 9,447 6,112 1974 10/26/84 5-27.5
Scotchollow 3,510 26,621 30,131 18,512 1973 10/26/84 5-27.5
Pathfinder Village 2,753 15,472 18,225 9,956 1971 10/26/84 5-27.5
Buena Vista Apartments 893 5,431 6,324 3,848 1972 10/26/84 5-27.5
Mountain View Apartments 1,289 10,030 11,319 6,443 1978 10/26/84 5-29
Crosswood Park 471 9,343 9,814 6,000 1977 12/05/84 5-29
Casa De Monterey 869 8,049 8,918 5,394 1970 10/26/84 5-27.5
The Bluffs 193 4,466 4,659 3,151 1968 10/26/84 5-27.5
Watergate Apartments 263 7,199 7,462 4,971 1972 10/26/84 5-27.5
Shadowood Apartments 209 4,404 4,613 3,125 1974 11/14/84 5-27.5
Vista Village Apartments 568 6,747 7,315 4,525 1971 10/26/84 5-27.5
Towers Of Westchester 529 17,913 18,442 12,097 1971 10/26/84 5-27.5
Park

TOTAL $13,404 $146,056 $159,460 $ 98,975


The aggregate cost of the investment properties for Federal income tax purposes
at December 31, 2001 and 2000, is approximately $176,911,000 and $170,565,000,
respectively. The accumulated depreciation for Federal income tax purposes at
December 31, 2001 and 2000, is approximately $143,272,000 and $135,770,000,
respectively.

Reconciliation of Investment Properties and Accumulated Depreciation:

2001 2000 1999
Investment Properties

Balance at beginning of year $153,102 $148,484 $146,627
Property improvements and
replacements 6,434 4,618 1,857
Dispositions of property (76) -- --
Balance at end of year $159,460 $153,102 $148,484

Accumulated Depreciation

Balance at beginning of year $ 92,727 $ 86,798 $ 80,798
Additions charged to expense 6,299 5,929 6,000
Dispositions of property (51) -- --
Balance at end of year $ 98,975 $ 92,727 $ 86,798


Note J - Income Taxes

The following is a reconciliation of reported net loss per the financial
statements to the Federal taxable loss to partners (in thousands):

2001 2000 1999

Net loss as reported $(2,910) $ (40) $(6,402)
Depreciation differences (1,204) (1,233) (749)
Unearned income (304) (577) 812
Casualty loss (63) -- --
Other 4,156 (80) 95
Federal taxable loss $ (325) $(1,930) $(6,244)

The following is a reconciliation between the Venture's reported amounts and
Federal tax basis of net liabilities at December 31, 2001 and 2000 (in
thousands):

2001 2000
Net liabilities as reported $(160,954) $(158,044)
Land and buildings 17,451 17,460
Accumulated depreciation (44,297) (43,043)
Syndication costs 17,650 17,650
Deferred gain 42,225 42,225
Other deferred costs 9,601 9,601
Other (53,345) (53,102)
Notes payable 4,882 4,882
Subscription notes receivable 1,837 1,837
Mortgage payable (47,727) (47,727)
Residual proceeds liability 4,091 --
Accrued interest 9,571 9,571
Net liabilities - Federal tax basis $(199,015) $(198,690)

Note K - Legal Proceedings

The Venture is unaware of any pending or outstanding litigation that is not of a
routine nature arising in the ordinary course of business.

Note L - Selected Quarterly Financial Data (Unaudited)

The following is a summary of the unaudited quarterly results of operations for
the Venture (in thousands, except per interest data):




1st 2nd 3rd 4th
2001 Quarter Quarter Quarter Quarter Total

Total revenues $ 8,235 $ 8,449 $ 8,329 $ 8,236 $33,249

Total expenses 7,925 9,833 9,288 9,113 36,159

Net income (loss) $ 310 $(1,384) $ (959) $ (877) $(2,910)

Net income (loss) per limited partnership
interest:
Portfolio I (644 interests issued and
outstanding) $ 334 $(1,489) $(1,031) $ (944) $(3,130)
Portfolio II (267 interests issued
and outstanding) $ 333 $(1,490) $(1,030) $ (944) $(3,131)


1st 2nd 3rd 4th
2000 Quarter Quarter Quarter Quarter Total
Total revenues $ 7,461 $ 7,676 $ 7,889 $ 7,989 $31,015

Total expenses 7,958 7,664 7,734 7,699 31,055

Net (loss) income $ (497) $ 12 $ 155 $ 290 $ (40)

Net (loss) income per limited partnership
interest:
Portfolio I (644 interests issued and
outstanding) $ (535) $ 13 $ 168 $ 311 $ (43)
Portfolio II (267 interests issued
and outstanding) $ (536) $ 15 $ 165 $ 311 $ (45)



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 Partnerships have no officers or directors. The Managing General Partner
manages substantially all of the affairs and has general responsibility in all
matters affecting the business of the Venture. Effective December 12, 1997, the
managing general partner of each of the Partnerships was transferred from VMS
Realty Investment, Ltd. ("VMSRIL") (formerly VMS Realty Partners) to MAERIL,
Inc. ("MAERIL" or the "Managing General Partner"), a wholly-owned subsidiary of
MAE GP Corporation ("MAE GP") and an affiliate of Insignia Financial Group, Inc.
("Insignia"). Effective February 25, 1998, MAE GP was merged with Insignia
Properties Trust ("IPT"), which is an affiliate of Insignia. Effective October
1, 1998 and February 26, 1999; Insignia and IPT were respectively merged into
Apartment Investment and Management Company ("AIMCO"). Thus, the Managing
General Partner is now a wholly-owned subsidiary of AIMCO.

The names of the directors and executive officers of the Managing General
Partner, their ages and the nature of all positions with the Managing General
Partner presently held by them are set forth below. There are no family
relationships between or among any officers or directors.

Name Age Position

Patrick J. Foye 44 Executive Vice President and Director
Martha L. Long 42 Senior Vice President and Controller

Patrick J. Foye has been Executive Vice President and Director of the
Managing General Partner since October 1, 1998. Mr. Foye has served as
Executive Vice President of AIMCO since May 1998. Prior to joining AIMCO, Mr.
Foye was a partner in the law firm of Skadden, Arps, Slate, Meagher & Flom
LLP from 1989 to 1998 and was Managing Partner of the firm's Brussels,
Budapest and Moscow offices from 1992 through 1994. Mr. Foye is also Deputy
Chairman of the Long Island Power Authority and serves as a member of the New
York State Privatization Council. He received a B.A. from Fordham College
and a J.D. from Fordham University Law School.

Martha L. Long has been Senior Vice President and Controller of the Managing
General Partner since October 1998 as a result of the acquisition of Insignia
Financial Group, Inc. As of February 2001, Ms. Long was also appointed head of
the service business for AIMCO. From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997, retaining that title until October 1998. From 1988
to June 1994, Ms. Long was Senior Vice President and Controller for The First
Savings Bank, FSB in Greenville, South Carolina.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited partnerships which
either have a class of securities registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section 15(d) of such Act. Further, one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general partner of AIMCO Properties, L.P., entities that have a class of
securities registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting requirements of Section 15 (d) of such
Act.

The executive officers and director of the Managing General Partner fulfill the
obligations of the Audit Committee and oversee the Venture's financial reporting
process on behalf of the Managing General Partner. Management has the primary
responsibility for the combined financial statements and the reporting process
including the systems of internal controls. In fulfilling its oversight
responsibilities, the executive officers and director of the Managing General
Partner reviewed the audited financial statements with management including a
discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of
disclosures in the financial statements.

The executive officers and director of the Managing General Partner reviewed
with the independent auditors, who are responsible for expressing an opinion on
the conformity of those audited financial statements with accounting principles
generally accepted in the United States, their judgments as to the quality, not
just the acceptability, of the Venture's accounting principles and such other
matters as are required to be discussed with the Audit Committee or its
equivalent under auditing standards generally accepted in the United States. In
addition, the Venture has discussed with the independent auditors the auditors'
independence from management and the Venture including the matters in the
written disclosures required by the Independence Standards Board and considered
the compatibility of non-audit services with the auditors' independence.

The executive officers and director of the Managing General Partner discussed
with the Venture's independent auditors the overall scope and plans for their
audit. In reliance on the reviews and discussions referred to above, the
executive officers and director of the Managing General Partner have approved
the inclusion of the audited financial statements in the Form 10-K for the year
ended December 31, 2001 for filing with the Securities and Exchange Commission.

The Managing General Partner has reappointed Ernst & Young LLP as independent
auditors to audit the combined financial statements of the Venture for the
current fiscal year. Fees for the last fiscal year were audit services of
approximately $126,000 and non-audit services (principally tax-related) of
approximately $69,000.

Item 11. Executive Compensation

No compensation or remuneration was paid by the Venture to any officer or
director of the Managing General Partner. However, reimbursements and other
payments have been made to the Venture's current and former managing general
partners and their affiliates, as described in "Item 13. Certain Relationships
and Related Transactions".

Item 12. Security Ownership of Certain Beneficial Owners and Management

(a) Security ownership of certain beneficial owners.

Except as noted below, no persons or entity owns of record or is known by the
Venture to own beneficially more than 5% of the outstanding Interests of either
of the Partnerships as of December 31, 2001.

Entity Number of Units Percentage

National Residential Portfolio I

AIMCO Properties, LP 66.24 10.29%
(an affiliate of AIMCO)


National Residential Portfolio II

AIMCO Properties, LP 39.83 14.92%
(an affiliate of AIMCO)

AIMCO Properties, LP is indirectly ultimately controlled by AIMCO. Its business
address is 2000 South Colorado Boulevard, Denver, Colorado.

(b) Security ownership of management.

No officers or directors of MAERIL or of Prudential-Bache Properties, Inc., the
general partners of the Partnerships, own any Limited Partnership Interests in
the Partnerships.

No general partners, officers or directors of the general partners of the
Venture possess the right to acquire a beneficial ownership of Interests of
either of the Partnerships.

(c) Change in control

Pursuant to a series of transactions which closed on October 1, 1998, and
February 26, 1999, Insignia Financial Group, Inc. ("Insignia") and Insignia
Properties Trust merged into Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust, with AIMCO being the
surviving corporation (the "Insignia Merger"). As a result, AIMCO acquired 100%
ownership interest in the Managing General Partner. The Managing General Partner
does not believe that this transaction has had or will have a material effect on
the affairs and operations of the Venture.

Item 13. Certain Relationships and Related Transactions

The Venture has no employees and is dependent on the Managing General Partner
and its affiliates for the management and administration of all Subpartnership
activities. The Revised and amended Asset Management Agreement provides for (i)
certain payments to affiliates for real estate advisory services and asset
management of the Venture's retained properties for an annual compensation of
$300,000 adjusted annually by the consumer price index and (ii) reimbursement of
certain expenses incurred by affiliates on behalf of the Venture up to $100,000
per annum.

Asset management fees of approximately $300,000 were paid to an affiliate of the
Managing General Partner for each of the years ended December 31, 2001, 2000 and
1999. These fees are included in general and administrative expenses.

Affiliates of the Managing General Partner are entitled to receive a percentage
of the gross receipts from all of the Registrant's properties as compensation
for providing property management services. The Registrant paid to such
affiliates approximately $1,344,000, $1,238,000 and $1,160,000 for the years
ended December 31, 2001, 2000 and 1999, respectively.

Affiliates of the Managing General Partner received reimbursement of accountable
administrative expenses amounting to approximately $100,000 for each of the
years ended December 31, 2001, 2000 and 1999. These expenses are included in
general and administrative expenses. During the years ended December 31, 2001,
2000 and 1999, the Venture paid fees related to construction management services
provided by an affiliate of the Managing General Partner of approximately
$940,000, $125,000 and $16,000, respectively. The construction management
service fees are calculated based on a percentage of current and certain prior
year additions to investment properties and are being depreciated over 15 years.

An affiliate of the Managing General Partner received bookkeeping reimbursements
in the amount of approximately $123,000, $131,000 and $142,000 for the years
ended December 31, 2001, 2000 and 1999, respectively. These expenses are
included in operating expenses.

Prepetition property management fees were approved by the Bankruptcy Court for
payment to a former affiliate. This allowed claim may be paid only from
available Venture cash. At December 31, 2001 and 2000, the outstanding balance
of $79,000 is included in other liabilities.

In December 2001, an affiliate of the Managing General Partner loaned the
Venture's investment properties approximately $3,590,000 to cover capital
expenditures required at all of the properties. In accordance with the terms of
the Partnership Agreement, interest is charged at the prime rate plus 3%. At
December 31, 2001, the balance of the loan was approximately $3,590,000.
Interest expense amounted to less than $1,000.

During the year ended December 31, 2000, the Managing General Partner loaned the
Venture approximately $15,000 to cover operational expenses required at Mountain
View Apartments and Casa de Monterey. These loans were made in accordance with
the terms of the Partnership Agreements. At December 31, 2001 and 2000, the
balance of the loans was approximately $18,000 and $17,000, respectively, which
includes accrued interest. Interest is charged at the prime rate plus 3%.
Interest expense was approximately $1,000 and $2,000 for the years ended
December 31, 2001 and 2000, respectively.

Certain affiliates of the former general partners and the VMS/Stout Venture may
be entitled to receive various fees upon disposition of the properties. These
fees will be paid from the disposition proceeds and are subordinated to the
distributions required by the Plan. There were no property dispositions for
which proceeds were received during the years ended December 31, 2001, 2000 or
1999.

The junior debt is held by an affiliate of the Managing General Partner. The
monthly principal and interest payments are based on monthly excess cash flow
for each property, as defined in the mortgage agreement. During the year ended
December 31, 2001, 2000 and 1999, the Venture recognized approximately
$7,236,000, $3,353,000 and $3,444,000, respectively.

Beginning in 2001, the Venture began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally self-insured for a
portion of losses and liabilities related to workers compensation, property
casualty and vehicle liability. The Venture insures its properties above the
AIMCO limits through insurance policies obtained by AIMCO from insurers
unaffiliated with the Managing General Partner. During the year ended December
31, 2001, the Venture paid AIMCO and its affiliates approximately $273,000 for
insurance coverage and fees associated with policy claims administration.

As a result of tender offers, AIMCO and its affiliates currently own 66.24 units
of limited partnership interest in Portfolio I representing 10.29% of the
outstanding limited partnership interests, along with the 2% general partner
interest for a combined ownership in Portfolio I of 12.29%. AIMCO and its
affiliates currently own 39.83 units of limited partnership interest in
Portfolio II representing 14.92% of the outstanding limited partnership
interests, along with the 2% general partner interest for a combined ownership
in Portfolio II of 16.92%. The Venture is owned 70.69% by Portfolio I and 29.31%
by Portfolio II which results in AIMCO and its affiliates currently owning
13.65% of the Venture. It is possible that AIMCO or its affiliates will make one
or more additional offers to acquire additional limited partnership interests in
the Partnerships for cash or in exchange for units in the operating partnership
of AIMCO. Under the Partnership Agreements, unitholders holding a majority of
the interests are entitled to take action with respect to a variety of matters
which would include voting on certain amendments to the Partnership Agreement
and voting to remove the Managing General Partner. When voting on matters, AIMCO
would in all likelihood vote the units it acquired in a manner favorable to the
interest of the Managing General Partner because of its affiliation with the
Managing General Partner.


PART IV

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

(a) The following combined financial statements of the Registrant are
included in Item 8:

Combined Balance Sheets at December 31, 2001 and 2000.

Combined Statements of Operations for the years ended December 31, 2001,
2000 and 1999.

Combined Statements of Changes in Partners' Deficit for the years ended
December 31, 2001, 2000 and 1999.

Combined Statements of Cash Flows for the years ended December 31, 2001,
2000 and 1999.

Notes to Combined Financial Statements

Schedules are omitted for the reason that they are inapplicable or
equivalent information has been included elsewhere herein.

The following items are incorporated by reference:

Part V - Amended Restated Certificate and Agreement of:

Item 1(b)(i) Limited Partnership of VMS National Residential Portfolio
I.

Item 1(b)(ii) Limited Partnership of VMS National Residential Portfolio
II.

Item 1(b)(iii) Joint Venture Agreement between VMS National Residential
Portfolio I and VMS National Residential Portfolio II.

(b) Reports on Form 8-K:

None filed during the quarter ended December 31, 2001.

(c) Exhibits:

See Exhibit Index

EXHIBIT INDEX


Exhibit No. Description

3 and 21 Portions of the Prospectus of the Partnership dated
May 15, 1986 as supplemented by Supplement Numbers 1
through 7 dated December 18, 1986, February 11, 1987,
March 31, 1987, August 19, 1987, January 4, 1988,
April 18, 1988 and June 30, 1988 as filed with the
Commission pursuant to Rule 424(b) and (c), as well
as the Restated Limited Partnership Agreement set
forth as Exhibit A to the Prospectus, are hereby
incorporated by reference, specifically pages 15 -
21, 44 - 68, 76, 86 - 90, 106 - 108, A9 - A13, A16 -
A20 and Supplements Numbers 1 and 2.

10.1 Stipulation Regarding Entry of Agreed Final Judgment
of Foreclosure and Order Relieving Receiver of
Obligation to Operate Subject Property - Kendall Mall
is incorporated by reference to the Form 10-QSB dated
June 30, 1995.

10.2 Form of Amended, Restated and Consolidated Senior
Secured Promissory Note between the Venture and MF
VMS, L.L.C. relating to each of the Venture's
properties.

10.3 Form of Amended, Restated and Consolidated Junior
Secured Promissory Note between the Venture and MF
VMS, L.L.C. relating to each of the Venture's
properties.

11 Calculation of Net Loss Per Investor.






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.


VMS NATIONAL PROPERTIES JOINT VENTURE
(Registrant)

VMS National Residential Portfolio I

By: MAERIL, Inc.
Managing General Partner

By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President

By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller

VMS National Residential Portfolio II

By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President

By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller

Date:


Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


/s/Patrick J. Foye Date:
Patrick J. Foye
Executive Vice President
and Director


/s/Martha L. Long Date:
Martha L. Long
Senior Vice President
and Controller



Exhibit 11




VMS NATIONAL PROPERTIES JOINT VENTURE
CALCULATION OF NET LOSS PER INVESTOR
(in thousands, except per unit data)




For the Years Ended December 31,
2001 2000 1999


VMS National Properties net loss $(2,910) $ (38) $(6,272)
Portfolio I net loss -- (1) (63)
Portfolio II net loss -- (1) (67)
Combined net loss $(2,910) $ (40) $(6,402)

Portfolio I allocation: 70.69% $(2,057) $ (27) $(4,433)
-- (1) (63)
$(2,057) $ (28) $(4,496)

Net loss to general partner (2%) $ (41) $ (1) $ (90)

Net loss to limited partners (98%) $(2,016) $ (27) $(4,406)

Number of Limited Partner interests 644 644 644

Net loss per limited Partnership interest $(3,130) $ (43) $(6,842)


Portfolio II allocation: 29.31% $ (853) $ (11) $(1,839)
-- (1) (67)
$ (853) $ (12) $(1,906)

Net loss to general partner (2%) $ (17) $ -- $ (38)

Net loss to limited partners (98%) $ (836) $ (12) $(1,868)

Number of Limited Partner interests 267 267 267

Net loss per limited Partnership interest $(3,131) $ (45) $(6,992)