LIBERTY TAX CREDIT PLUS LP - 10-K Annual Report

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

FORM 10-K
(Mark One)

X ANNUAL R EPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
------- EXCHANGE ACT OF 1934

For the fiscal year ended March 15, 2003

OR

------- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission File Number 0-17015

LIBERTY TAX CREDIT PLUS L.P.
----------------------------

(Exact name of registrant as specified in its charter)

Delaware 13-3446500
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

625 Madison Avenue, New York, New York 10022
- ---------------------------------------- --------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (212) 421-5333

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

None

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

Beneficial Assignment Certificates and Limited Partnership Interests
(Title of Class)

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes No X
----- -----

The approximate aggregate book value of the voting and non-voting common
equity held by non-affiliates of the Registrant as of September 15, 2002, was
($24,594,089), based on Limited Partner equity (deficit) as of such date.

DOCUMENTS INCORPORATED BY REFERENCE
None

PART I

Item 1. Business.

General
- -------

Liberty Tax Credit Plus L.P. (the "Partnership") is a limited partnership which
was formed under the laws of the State of Delaware on June 26, 1987. The general
partners of the Partnership are Related Credit Properties L.P., a Delaware
limited partnership (the "Related General Partner") and Liberty Associates III
L.P., a Delaware limited partnership ("Liberty Associates", and together with
the Related General Partner, the "General Partners"). The Related General
Partner is also the special limited partner of the Partnership. The general
partner of the Related General Partner is Related Credit Properties Inc., a
Delaware corporation. The general partner of Liberty Associates is the Related
General Partner.

On November 20, 1987, the Partnership commenced a public offering (the
"Offering") of Beneficial Assignment Certificates ("BACs") representing
assignments of limited partnership interests in the Partnership ("Limited
Partnership Interests"), pursuant to a prospectus dated November 20, 1987, as
supplemented by the supplements thereto dated January 14, 1988 and March 14,
1988 (as so supplemented, the "Prospectus"). As of April 4, 1988 (the date on
which the Partnership held the final closing of the sale of BACs and on which
the Offering was terminated), the Partnership had received $79,937,500 of gross
proceeds of the Offering from 5,525 investors.

The Partnership was formed to invest, as a limited partner, in other limited
partnerships (referred to herein as "Local Partnerships," "subsidiaries" or
"subsidiary partnerships") which own leveraged low and moderate-income
multifamily residential complexes ("Apartment Complexes") that are eligible for
the low-income housing tax credit ("Housing Tax Credit") enacted in the Tax
Reform Act of 1986, and to a lesser extent in Local Partnerships owning
properties ("Rehabilitation Projects"), and together with the Apartment
Complexes, the "Properties" that are eligible for the historic rehabilitation
tax credit (the "Historic Rehabilitation Tax Credit", and together with the
Housing Tax Credit, the "Tax Credits"). The Partnership's investment in each
Local Partnership represents a 20% to 98% interest in each of the Local
Partnerships. The Partnership does not anticipate making any additional
investments. As of March 15, 2003, the Partnership has disposed of three of its
31 original Properties. See Item 2, Properties, below.

Liberty Associates is the special limited partner in all of the Local
Partnerships, as well as a general partner of the Partnership. Liberty
Associates has certain rights and obligations in its role as special limited
partner, which permit it to exercise control over the management and policies of
the Local Partnerships.

The investment objectives of the Partnership are to:

1. Entitle qualified BACs holders to substantial Housing Tax Credits (and
potentially Historic Rehabilitation Tax Credits) over the period of the
Partnership's entitlement to claim Tax Credits (for each Property, ten years
from the date of investment or, if later, the date the Property is placed in
service);

2. Participate in any capital appreciation in the value of the Properties and
provide distributions of sale or refinancing proceeds upon the disposition of
Properties;

3. Preserve and protect the Partnership's capital;

4. Provide cash distributions, when available, from the operations of
Properties; and

2

5. Allocate passive losses to individual BACs holders to offset passive income
that they may realize from rental real estate investments and other passive
activities, and allocate passive losses to corporate BACs holders to offset
active business income.

One of the Partnership's objectives is to entitle qualified BACs holders to Tax
Credits over the period of the Partnership's entitlement to claim Tax Credits
(for each Property, generally ten years from the date of investment or, if
later, the date the Property is leased to qualified tenants; referred to herein
as the "Tax Credit Period"). Each of the Local Partnerships in which the
Partnership has acquired an interest has been allocated by respective state
credit agencies the authority to recognize Tax Credits during the Tax Credit
Period provided that the Local Partnership satisfies the rent restriction,
minimum set-aside and other requirements for recognition of the Tax Credits at
all times during the 15-year period (the "Compliance Period") commencing at the
beginning of the Tax Credit Period. Once a Local Partnership has become eligible
to recognize Tax Credits, it may lose such eligibility and suffer an event of
"recapture" if its Property fails to remain in compliance with the Tax Credit
requirements at any time during the Compliance Period. None of the Local
Partnerships in which the Partnership has acquired an interest has suffered an
event of recapture.

As of December 31, 2002, the Tax Credit Period for all of the Properties have
expired, although each Local Partnership must continue to comply with the Tax
Credit requirements until the end of the Compliance Period in order to avoid
recapture of the Tax Credits.

The Partnership continues to meet its primary objective of generating Tax
Credits for qualified BACs holders. The Partnership generated $21,629, $23,744
and $397,482 in Tax Credits during the 2002, 2001 and 2000 Fiscal Years,
respectively. At this time, there can be no assurance that the Partnership will
continue to meet this investment objective.

The Partnership also continues to meet its objective of allocating passive
losses to individual BACs holders to offset passive income that they may realize
from rental real estate investment and other passive activities, and allocating
passive losses to the corporate BACs holders to offset business income. At this
time, there can be no assurance that the Partnership will continue to meet this
investment objective.

As of March 15, 2003, the Partnership has not met its investment objective of
providing cash distributions from the operations of the Properties. The
Partnership does not anticipate providing cash distributions to BACs holders
other than distributions of sale or refinancing proceeds upon the disposition of
Properties. Accordingly, at this time there can be no assurance that the
Partnership will achieve this investment objective.

The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally. However, no more than
20% of the Properties are located in any single state.

The Partnership is the beneficiary of certain subsidy agreements pursuant to
which the United States Department of Housing and Urban Development ("HUD")
subsidizes the amount of rent that the Local Partnerships earn. There are
substantial risks associated with owning properties receiving government
assistance, such as the possibility that Congress may not appropriate funds to
enable HUD to make rental assistance payments. HUD also restricts annual cash
distributions to partners based on operating results and a percentage of the
owners' equity contribution. The Partnership cannot sell or substantially
liquidate its investments in subsidiary partnerships during the period that the
subsidy agreements are in existence without HUD's approval. Furthermore, there
may not be market demand for apartments at full market rents when the rental
assistance contracts expire.

3

Segments
- --------
The Partnership operates in one segment, which is the investment in multi-family
residential properties.

Competition
- -----------
The real estate business is highly competitive and substantially all of the
Properties acquired by the Partnership are subject to active competition from
similar properties in their respective vicinities. In addition, various other
limited partnerships may, in the future, be formed by the General Partners
and/or their affiliates to engage in businesses which may be competitive with
the Partnership.

Employees
- ---------
The Partnership does not have any direct employees. All services are performed
for the Partnership by its General Partners and their affiliates. The General
Partners receive compensation in connection with such activities as set forth in
Items 11 and 13. In addition, the Partnership reimburses the General Partners
and certain of their affiliates for expenses incurred in connection with the
performance by their employees of services for the Partnership in accordance
with the Partnership's Amended and Restated Agreement of Limited Partnership
(the "Partnership Agreement").

Item 2. Properties.

The Partnership has acquired an interest as a limited partner in 31 Local
Partnerships. During the year ended March 15, 2003, the properties and the
related assets and liabilities of two Local Partnerships and the limited
partnership interest in one Local Partnership were sold (see Note 12 in Item
8.). Set forth below is a schedule of the Local Partnerships including certain
information concerning the Properties (the "Local Partnership Schedule").
Further information concerning those Local Partnerships and their Properties,
including any encumbrances affecting the Properties, may be found in Item 15,
Schedule III.

Except for the seven Local Partnerships listed below, the following is the
allocation of ownership percentage for each of the Local Partnerships:

Local General Partner 1%
Special Limited Partner 1%
Limited Partner - Liberty Tax Credit Plus L.P. 98%

General Special Liberty Tax Other
Partner(s) Limited Partners Credit Plus L.P. Limited Partners*
---------- ---------------- ---------------- -----------------

Shiloh Grove 5% 1% 94% 0%
Concourse Artists 1% 1% 79% 19%
Grand Concourse 1% 1% 79% 19%
Robin Housing 1% 1% 79% 19%
Willoughby - Wyckoff 1% 1% 79% 19%
Penn Alto 1% 1% 19.60% 78.40%
Sartain 1% 1% 71.54% 26.46%

*Each is an affiliate of the Partnership with the same management

4

Local Partnership Schedule
--------------------------

% of Units Occupied at May 1,
Name and Location ------------------------------
(Number of Units) Date Acquired 2003 2002 2001 2000 1999
- ----------------- ------------- ---- ---- ---- ---- ----

B & C Housing Associates, L.P. December 1987 99 97 93 92 91
Tulsa, OK (220)

State Street 86 Associates, L.P. February 1988 98 99 97 100 97
Camden, NJ (200)

Fox Glenn Investors, L.P. March 1988 98 95 97 93 97
Seat Pleasant, MD (172)

Shiloh-Grove, L.P. (Mt. Vernon) February 1988 100 95 99 94 97
Columbus, OH (394)

Silver Blue Lake Apartments, LTD. February 1988 96 93 87 93 92
Miami, FL (123)

Lancaster Towers Associates, LTD. May 1988 99 100 100 100 99
Lancaster, NY (157)

West Kinney Associates, L.P. June 1988 100 97 97 94 98
Newark, NJ (114)

Autumn Park Associates, L.P. June 1988 88 88 95 93 83
Wilsonville, OR (144)

Regent Street Associates, L.P. June 1988 90 100 94 93 89
Philadelphia, PA (80)

Magnolia Arms Associates, LTD. July 1988 98 99 90 91 94
Jacksonville, FL (232)

Greenleaf Associates, L.P. July 1988 97 94 97 97 97
Kansas City, Mo (195)

Alameda Towers Associates, L.P. July 1988 90 97 99 99 96
San Juan, PR (150)

Dixie Apartment Associates, LTD. July 1988 (a) 100 97 100 100
Miami, FL (29)

Ludlam Gardens Apartments, LTD. July 1988 (a) 99 99 97 97
Miami, FL (90)

Grove Parc Associates, L.P.
(Woodlawn) July 1988 98 92 94 95 98
Chicago, IL (504)

2108 Bolton Drive Associates, L.P. July 1988 78 92 97 99 100
Atlanta, GA (358)

5

Local Partnership Schedule
--------------------------
(continued)

% of Units Occupied at May 1,
Name and Location ------------------------------
(Number of Units) Date Acquired 2003 2002 2001 2000 1999
- ----------------- ------------- ---- ---- ---- ---- ----

Apple Creek Housing
Associates, LTD. June 1988 (b) 93 99 98 90
Arvado, CO (195)

Redwood Villa Associates September 1988 98 99 100 99 98
San Diego, CA (92)

Charles Drew Court
Associates, L.P. September 1988 100 95 97 100 100
Atlantic City, NJ (38)

Walnut Park Plaza
Associates, L.P. September 1988 80 89 83 89 86
Philadelphia, PA (227)

Bayridge Associates, L.P. December 1988 91 91 97 90 96
Beaverton, OR (246)

United-Pennsylvanian, L.P. December 1988 99 97 99 99 98
Erie, PA (112)

2051 Grand Concourse
Associates, L.P. November 1988 98 91 100 95 98
Bronx, NY (63)

Concourse Artists Housing
Associates, L.P. November 1988 96 100 96 96 96
Bronx, NY (23)

Willoughby/Wycoff Housing
Associates, L.P. November 1988 99 100 87 87 93
Bronx, NY (68)

Robin Housing Associates, L.P. November 1988 96 98 93 98 98
Bronx, NY (100)

Lund Hill Associates, L.P. January 1989 100 100 100 100 100
Superior, WI (150)

Tanglewood Apartments, L.P. October 1988 94 98 93 96 89
Joplin, MO (176)

Quality Hill Historic District-
Phase II-A, L.P. March 1989 94 94 92 98 100
Kansas City, MO (49)

6

Local Partnership Schedule
--------------------------
(continued)

% of Units Occupied at May 1,
Name and Location ------------------------------
(Number of Units) Date Acquired 2003 2002 2001 2000 1999
- ----------------- ------------- ---- ---- ---- ---- ----

Penn Alto Associates, L.P. June 1989 84 83 82 82 89
Altoona, PA (150)

Sartain School Venture, L.P. August 1990 100 97 97 100 91
Philadelphia, PA (35)

(a) The properties and the related assets and liabilities were sold during the
fiscal year ended March 15, 2003 (see Note 12 in Item 8. Financial
Statements and Supplemental Data).

(b) The Partnership's limited partnership interest was sold during the fiscal
year ended March 15, 2003 (see Note 12 in Item 8. Financial Statements and
Supplemental Data).

All development deficit, rent-up and operating deficit guarantees with respect
to the Properties have expired.

All leases are generally for periods not greater than one to two years and no
tenant occupies more than 10% of the rentable square footage.

Commercial tenants (to which average rental per square foot applies) comprise
less than 5% of the rental revenues of the Local Partnership. Maximum rents for
the residential units are determined annually by HUD and reflect
increases/decreases in consumer price indices in various geographic areas.
Market conditions, however, determine the amount of rent actually charged.

Management annually reviews the physical state of the Properties and budgets
improvements when required, which improvements are generally funded from cash
flow from operations or release of replacement reserve escrows to the extent
available.

Management continuously reviews the insurance coverage of the Properties and
believes such coverage is adequate.

See Item 1., Business, above for the general competitive conditions to which the
Properties described above are subject.

Real estate taxes are calculated using rates and assessed valuations determined
by the township or city in which the property is located. Such taxes have
approximated 1% of the aggregate cost of the properties as shown in Schedule III
to the financial statements included herein.

Item 3. Legal Proceedings.

None.

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

None.

7

PART II

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

The Partnership has issued 15,987.5 Limited Partnership Interests, each
representing a $5,000 capital contribution to the Partnership, for aggregate
gross proceeds of $79,937,500. All of the issued and outstanding Limited
Partnership Interests have been issued to Liberty Credit Assignor Inc. (the
"Assignor Limited Partner"), which has in turn issued BACs to the purchasers
thereof for an aggregate purchase price of $79,937,500. Each BAC represents all
of the economic and virtually all of the ownership rights attributable to a
Limited Partnership Interest held by the Assignor Limited Partner. BACs may be
converted into Limited Partnership Interests at no cost to the holder (other
than the payment of transfer costs not to exceed $100), but Limited Partnership
Interests so acquired are not thereafter convertible into BACs.

Neither the BACs nor the Limited Partnership Interests are traded on any
established public trading market. Because of the provisions of the Revenue Act
of 1987, unless there are further changes in such law, the Partnership does not
intend to include the BACs for quotation on NASDAQ or for listing on any
national or regional stock exchange or any other established securities market.
The Revenue Act of 1987 contained provisions which have an adverse impact on
investors in "publicly traded partnerships." Accordingly, the General Partners
have imposed limited restrictions on the transferability of the BACs and the
Limited Partnership Interests in secondary market transactions. The restrictions
should prevent a public trading market from developing and may adversely affect
the ability of an investor to liquidate his or her investment quickly. It is
expected that such procedures will remain in effect until such time, if ever, as
further revision of the Revenue Act of 1987 may permit the Partnership to lessen
the scope of the restrictions.

The Partnership has 5,581 registered holders of an aggregate of 15,987.5 BACs,
as of May 1, 2003.

All of the Partnership's general partnership interests, representing an
aggregate capital contribution of $2,000, are held by the two General Partners.

Certain Local Partnerships are subject to HUD restrictions which limit annual
cash distributions to partners and restrict the Local Partnerships from selling
or otherwise liquidating their assets without HUD's approval during the period
that the agreement with HUD is in existence.

There are no material legal restrictions in the Partnership Agreement on the
ability to make distributions.

The Partnership has made no distributions to the BACs holders as of March 15,
2003. The Partnership does not anticipate providing cash distributions to the
BACs holders other than distributions of sale or refinancing proceeds upon the
disposition of Properties.

8

Item 6. Selected Financial Data.

The information set forth below presents selected financial data of the
Partnership. Additional financial information is set forth in the audited
financial statements in Item 8 hereof.

For the Year Ended March 15,
---------------------------------------------------------------------------------
OPERATIONS 2003 2002 2001 2000 1999
- ---------- ------------- ------------- ------------- ------------- -------------

Revenues $ 43,490,483 $ 37,918,705 $ 37,421,097 $ 36,518,877 $ 36,007,881

Operating expenses (44,557,403) (46,267,377) (46,357,904) (45,568,571) (44,080,952)
------------- ------------- ------------- ------------- -------------

Loss before minority
interest and extraordi-
nary item (1,066,920) (8,348,672) (8,936,807) (9,049,694) (8,073,071)

Minority interest in loss
of subsidiaries 466,991 428,522 475,683 461,338 344,685
------------- ------------- ------------- ------------- -------------

Loss before extraordi-
nary item (599,929) (7,920,150) (8,461,124) (8,588,356) (7,728,386)

Extraordinary item 0 0 500,000 0 (530,379)
------------- ------------- ------------- ------------- -------------

Net loss $ (599,929) $ (7,920,150) $ (7,961,124) $ (8,588,356) $ (8,258,765)
============= ============= ============= ============= =============

Loss before extra-
ordinary item per BAC $ (37.15) $ (490.44) $ (523.94) $ (531.82) $ (478.57)

Extraordinary item
per BAC 0 0 30.96 0 (32.84)
------------- ------------- ------------- ------------- -------------

Net loss per weighted
average BAC $ (37.15) $ (490.44) $ (492.98) $ (531.82) $ (511.41)
============= ============= ============= ============= =============

March 15,
---------------------------------------------------------------------------------
FINANCIAL POSITION 2003 2002 2001 2000 1999
- ------------------ ------------- ------------- ------------- ------------- -------------

Total assets $ 158,553,482 $ 170,552,302 $ 178,650,012 $ 180,711,472 $ 186,633,608
============= ============= ============= ============= =============

Total liabilities $(186,336,777) $(197,397,871) $(197,201,242) $(190,839,539) $(187,558,858)
============= ============= ============= ============= =============

Minority interest $ (1,743,507) $ (2,111,304) $ (2,485,493) $ (2,947,532) $ (3,561,993)
============= ============= ============= ============= =============

Total partners' deficit $ (29,556,802) $ (28,956,873) $ (21,036,723) $ (13,075,599) $ (4,487,243)
============= ============= ============= ============= =============

During the years ended March 15, 1999 through 2002, total assets decreased
primarily due to depreciation, partially offset by net additions to property and
equipment. During the year ended March 15, 2003, total assets and liabilities
decreased primarily due to the sale of Local Partnerships.

9

Selected Quarterly Financial Data (Unaudited)

Quarter Ended
------------------------------------------------------------
June 15, September 15, December 15, March 15,
OPERATIONS 2002 2002 2002 2003
- ---------- ------------ ------------ ------------ ------------

Revenues $ 9,264,532 $ 15,822,189 $ 8,708,683 $ 9,695,079

Operating expenses (11,314,298) (10,703,674) (10,966,844) (11,572,587)
------------ ------------ ------------ ------------

Loss before minority
interest (2,049,766) 5,118,515 (2,258,161) (1,877,508)

Minority interest in loss of
subsidiaries 128,929 179,148 113,124 45,790
------------ ------------ ------------ ------------

Net (loss) income $ (1,920,837) $ 5,297,663 $ (2,145,037) $ (1,831,718)
============ ============ ============ ============

Net (loss) income per
weighted average BAC $ (118.94) $ 328.05 $ (132.82) $ (113.44)
============ ============ ============ ============

Quarter Ended
------------------------------------------------------------
June 15, September 15, December 15, March 15,
OPERATIONS 2001 2001 2001 2001
- ---------- ------------ ------------ ------------ ------------

Revenues $ 9,325,958 $ 9,256,789 $ 9,351,767 $ 9,984,191

Operating expenses (11,370,593) (11,075,276) (11,258,237) (12,563,271)
------------ ------------ ------------ ------------

Loss before minority (2,044,635) (1,818,487) (1,906,470) (2,579,080)
interest

Minority interest in loss of
subsidiaries 130,784 35,577 220,841 41,320
------------ ------------ ------------ ------------

Net loss $ (1,913,851) $ (1,782,910) $ (1,685,629) $ (2,537,760)
============ ============ ============ ============

Net loss per weighted
average BAC $ (118.51) $ (110.40) $ (104.38) $ (157.15)
============ ============ ============ ============

10

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

Liquidity and Capital Resources
- -------------------------------

The Partnership's capital has been invested in 31 Local Partnerships. During the
year ended March 15, 2003, the properties and the related assets and liabilities
of two Local Partnerships and the limited partnership interest in one Local
Partnership were sold (the "Sold Assets"). For a discussion of these sales, see
Note 12 in Item 8.

The Partnership's primary source of funds is cash distributions from operations
of the Local Partnerships in which the Partnership has invested. Such funds are
available to meet the obligations of the Partnership. During the years ended
March 15, 2003, 2002 and 2001, such distributions amounted to approximately
$855,000, $1,028,000 and $53,000, respectively. In addition, certain fees and
expense reimbursements owed to the General Partners amounting to approximately
$7,212,000, $6,235,000 and $5,545,000 were accrued and unpaid as of March 15,
2003, 2002 and 2001, respectively. In particular, partnership management fees
owed to the General Partners amounting to approximately $7,151,000 and
$6,215,000 were accrued and unpaid as of March 15, 2003 and 2002, respectively.
Furthermore, expense reimbursements and asset monitoring fees owed to the
General Partners amounting to approximately $61,000 and $20,000 were accrued and
unpaid as of March 15, 2003 and 2002, respectively. Without the General
Partners' continued accrual without payment of the partnership management fees,
the Partnership will not be in the position to meet its obligations. The General
Partners have allowed for the accrual without payment of the partnership
management fees but are under no obligation to continue to do so.

During the year ended March 15, 2003, cash and cash equivalents of the
Partnership decreased approximately $312,000. This decrease is attributable to
an increase in property and equipment ($3,112,000), net proceeds and principal
repayments of mortgage notes ($811,000) and an increase in deferred costs
($376,000) which exceeded cash provided by operating activities ($942,000), a
net increase in due to local general partners and affiliates ($1,187,000), an
increase in due to selling partners ($70,000), proceeds from sale of property
($200,000), a decrease in cash held in escrow relating to investing activities
($1,489,000) and a decrease in capitalization of consolidated subsidiaries
attributable to minority interest ($99,000). Included in the adjustments to
reconcile the net loss to cash provided by operating activities is depreciation
and amortization of approximately $8,227,000 and gain on sale of property
($6,763,000).

A working capital reserve of approximately $3,638,000 remained unused at March
15, 2003.

The Partnership is not expected to have access to additional sources of
financing.

On October 20, 1999, President Clinton signed FY 2000 VA, the HUD Independent
Agencies Appropriations Act. The Act contained revisions to the HUD
Mark-to-Market Program and other HUD programs concerning the preservation of the
HUD housing stock. On December 29, 1999, HUD issued Notice H99-36 addressing
"Project Based Section 8 Contracts Expiring in Fiscal Year 2000" reflecting the
changes in the Act and superceding earlier HUD Notices 98-34, 99-08, 99-15,
99-21 and 99-32. Notice 99-36 clarified many of the earlier uncertainties with
respect to the earlier HUD Section 8 Mark-to-Market Programs and continued the
Mark-up-to-Market Program which allows owners with Section 8 contracts where
contract rents are currently below market to increase the rents to market
levels.

For a discussion of contingencies affecting certain Local Partnerships, see
Results of Operations of Certain Local Partnerships below. Since the maximum
loss the Partnership would be liable for is its net investment in the respective
Local Partnerships, the resolution of the existing contingencies is not
anticipated to impact future results of operations, liquidity or financial

11

condition in a material way. However, the Partnership's loss of its investment
in a Local Partnership may result in recapture of Tax Credits if the investment
is lost before expiration of the Compliance Period.

Except as described above, management is not aware of any trends or events,
commitments or uncertainties which have not otherwise been disclosed that will
or are likely to impact liquidity in a material way. Management believes the
only impact would be from laws that have not yet been adopted. The portfolio is
diversified by the location of the Properties around the United States so that
if one area of the country is experiencing downturns in the economy, the
remaining properties in the portfolio may be experiencing upswings. However, the
geographic diversification of the portfolio may not protect against a general
downturn in the national economy.

Sale of Underlying Properties/Local Partnership Interests
- ------------------------------------------------------------
For a discussion of the sale of properties in which the Partnership owns direct
and indirect interests, see Note 12 of the Financial Statements.

Critical Accounting Policies
- ----------------------------

In preparing the consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements. The summary should be read in conjunction with the more
complete discussion of the Company's accounting policies included in Note 2 to
the consolidated financial statements in this annual report on Form 10-K.

Property and Equipment
- ----------------------

Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, and any other costs incurred
in acquiring the properties. The cost of property and equipment is depreciated
over their estimated useful lives using accelerated and straight-line methods.
Expenditures for repairs and maintenance are charged to expense as incurred;
major renewals and betterments are capitalized. At the time property and
equipment are retired or otherwise disposed of, the cost and accumulated
depreciation are eliminated from the assets and accumulated depreciation
accounts and the profit or loss on such disposition is reflected in earnings.
The Partnership complies with Statement of Financial Accounting Standards (SFAS)
No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". A loss
on impairment of assets is recorded when management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows).

Income Taxes
- ------------

The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31.

Results of Operations
- ---------------------

Property and equipment to be held and used are carried at cost which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring such property and equipment. The cost

12

of property and equipment is depreciated over their estimated useful lives using
accelerated and straight-line methods. Expenditures for repairs and maintenance
are charged to expense as incurred; major renewals and betterments are
capitalized. At the time property and equipment are retired or otherwise
disposed of, the cost and accumulated depreciation are eliminated from the
assets and accumulated depreciation accounts and the profit or loss on such
disposition is reflected in earnings. A loss on impairment of assets is recorded
when management estimates amounts recoverable through future operations and sale
of the property on an undiscounted basis is below depreciated cost. At that
time, property investments themselves are reduced to estimated fair value
(generally using discounted cash flows) when the property is considered to be
impaired and the depreciated cost exceeds estimated fair value.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated.

Through March 15, 2003, the Partnership has not recorded any loss on impairment
of assets or reduction to estimated fair value.

The following is a summary of the results of operations of the Partnership for
the years ended March 15, 2003, 2002 and 2001 (the 2002, 2001 and 2000 Fiscal
Years, respectively).

The Partnership's revenues continue to consist primarily of the results of the
Partnership's investment in consolidated Local Partnerships. Eighteen of the
Local Partnerships receive HUD Section 8 subsidies which serve to stabilize the
revenues of these Local Partnerships. The majority of the Local Partnership
income continues to be in the form of rental income with the corresponding
expenses being divided among operations, depreciation, and mortgage interest.

The net loss for the 2002, 2001 and 2000 Fiscal Years totaled $599,929,
$7,920,150 and $7,961,124, respectively. The 2000 Fiscal Year is net of an
extraordinary gain of $500,000.

The Partnership continues to meet the investment objective of generating Tax
Credits to qualified BACs holders. To date, all of the Local Partnerships have
remained in compliance with the Tax Credit requirements, and therefore none has
suffered an event of recapture of Tax Credits. The Partnership generated
$21,629, $23,744 and $398,165 in Tax Credits for the 2002, 2001 and 2000 tax
years, respectively. As of December 31, 2002, the Tax Credit Period for all of
the properties have expired, although each Local Partnership must continue to
comply with the Tax Credit requirements until the end of the Compliance Period
for an additional five years from the date of expiration in order to avoid
recapture of the Tax Credits.

2002 vs. 2001
- -------------

Rental income decreased approximately 2% for the 2002 Fiscal Year as compared to
the 2001 Fiscal Year. Excluding the Sold Assets, rental income decreased less
than 1%, primarily due to a decrease in occupancy at one local partnership.

Other income decreased approximately $360,000 for the 2002 Fiscal Year as
compared to the 2001 Fiscal Year. Excluding the Sold Assets, other income
decreased approximately $328,000 primarily due to lower interest rates on cash
and cash equivalent balances at the Local Partnerships and Partnership level and
a decrease in grant income at one Local Partnership.

A gain on sale of properties was recorded in the 2002 Fiscal Year (see Note 12).

Total expenses, excluding the Sold Assets and taxes and insurance, remained
fairly consistent with a decrease of approximately 1% for the 2002 Fiscal Year
as compared to the 2001 Fiscal Year.

13

Taxes increased approximately $163,000 for the 2002 Fiscal Year as compared to
the 2001 Fiscal Year. Excluding the Sold Assets, taxes increased approximately
$202,000, primarily due to an increase in real estate taxes at one Local
Partnership due to a tax reassessment as well as small increases at several
other Local Partnerships.

Insurance increased approximately $432,000 for the 2002 Fiscal Year as compared
to the 2001 Fiscal Year. Excluding the Sold Assets, insurance increased
approximately $446,000, primarily due to an increase in insurance premiums at
the Local Partnerships.

Depreciation and amortization expense decreased approximately $952,000 for the
2002 Fiscal Year as compared to the 2001 Fiscal Year, primarily due to decreases
related to the Sold Assets.

2001 vs. 2000
- -------------

Rental income increased approximately 1% for the 2001 Fiscal Year as compared to
the 2000 Fiscal Year primarily due to rental rate increases.

Total expenses, excluding operating, taxes and insurance, remained fairly
consistent for the 2001 Fiscal Year as compared to the 2000 Fiscal Year with a
decrease of approximately 1%.

Operating expenses increased approximately $506,000 for the 2001 Fiscal Year as
compared to the 2000 Fiscal Year, primarily due to an increase in gas prices at
five Local Partnerships.

Taxes decreased approximately $184,000 for the 2001 Fiscal Year as compared to
the 2000 Fiscal Year, primarily due to reassessment of property taxes in 2001 at
two Local Partnerships.

Insurance increased approximately $149,000 for the 2001 Fiscal Year as compared
to the 2000 Fiscal Year, primarily due to an increase in premiums at five Local
Partnerships.

Results of Operations of Certain Local Partnerships
- ---------------------------------------------------

Redwood Villa Associates, L.P.
- ------------------------------
Redwood Villa Associates, L.P. ("Redwood") has sustained operating losses since
its inception. For the 2002 Fiscal Year, Redwood experienced a loss of $158,212,
including $212,830 of depreciation and $4,553 of amortization, and at December
31, 2002 had a working capital deficiency of $708,645 and a partners' deficit of
$1,513,099. These conditions raise substantial doubt about Redwood's ability to
continue as a going concern. Redwood's continuation as a going concern is
dependent upon its ability to achieve continued profitable operations or obtain
future capital contributions from the partners. The Local General Partner,
whenever possible, plans to reduce operating costs to achieve profitable
operations. The financial statements for the 2002, 2001 and 2000 Fiscal Years
for Redwood have been prepared assuming that Redwood will continue as a going
concern. The Partnership's investment in Redwood at March 15, 2003 and 2002 was
reduced to zero by prior years' losses and the minority interest balance was
approximately $399,000 and $400,000, respectively. Redwood's net loss after
minority interest amounted to approximately $157,000, $193,000 and $185,000 for
the 2002, 2001 and 2000 Fiscal Years, respectively.

Walnut Park Plaza Associates, L.P.
- ----------------------------------
The financial statements for Walnut Park Plaza Associates ("Walnut Park") have
been prepared on the basis that it will continue as a going concern. Walnut Park
incurred a net loss of $505,737 during the year ended December 31, 2002 and as
of that date the Local Partnership's cash flows from operations were
insufficient to pay current liabilities. In addition, Walnut Park is currently
in default in its bond payments to the Redevelopment Authority of the City of
Philadelphia Multifamily Housing Revenue Refunding Bond due to the inability to
pay its monthly obligation. Those factors create on uncertainty about the Local
Partnership's ability to continue as a going concern. Management of the Local
Partnership is developing a plan to obtain additional financing or restructure

14

its existing bonds. The ability of the Local Partnership to continue as a going
concern is dependent on obtaining additional financing or restructuring its
existing bond. The financial statements do not include any adjustments that
might be necessary if the Local Partnership is unable to continue as a going
concern. The Partnership's investment in Walnut Park at March 15, 2003 and 2002
was reduced to zero by prior years' losses and the minority interest balance was
approximately $1,109,000 and $1,114,000, respectively. Walnut Park's net loss
after minority interest amounted to approximately $501,000, $389,000 and
$121,805 for the 2002, 2001 and 2000 Fiscal Years, respectively.

Autumn Park Associates, L.P.
- ----------------------------
Autumn Park Associates, L.P. ("Autumn Park") incurred a net loss of $183,448
during the year ended December 31, 2002, and as of that date, Autumn Park's
current liabilities exceeded its current assets by $8,764 and its total
liabilities exceeded its total assets by $642,553. These factors, as well as
uncertain conditions that Autumn Park faces regarding the deterioration and
needed repairs of the buildings, tenants' turnover and vacancies, and debt
service requirements, create uncertainty about Autumn Park's ability to continue
in existence. Autumn Park's management has developed and implemented a plan to
improve tenant selection in order to reduce turnovers and vacancies. The
management is developing a plan to refinance the mortgage to reduce its annual
debt service obligation. The ability of Autumn Park to continue operations is
dependent on increased cash flow from rent collections and/or reduced debt
service requirements. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary if Autumn Park is unable
to continue operations. The Partnership's investment in Autumn Park at March 15,
2003 and 2002 was reduced to zero by prior years' losses and the minority
interest balance was zero at those dates. Autumn Park's net loss after minority
interest amounted to approximately $183,000, $237,000 and $182,000 for the 2002,
2001 and 2000 Fiscal Years, respectively.

Shiloh Grove, L.P.
- ------------------
The Project-based Section 8 Contract for Shiloh Grove, L.P. ("Shiloh") had been
renewed on a month-to month basis at the same Contract rent level as in previous
years. In July 2002, HUD, implementing procedures permissible under the
Market-to-Market program, reduced the Contract rents to a level aligned with the
local Fair Market Rents, significantly reducing the monthly revenue without a
corresponding reduction in debt service, creating a financial crisis for the
property. Through cost cutting measures implemented by the management of Shiloh
and the use of reserves, the property was able to meet debt service obligations
through the end of the 2002 and the mortgage is current as of 12/31/02. During
this same period, Shiloh worked closely with HUD to bring about a reduction in
the annual debt service and bring it in line with new revenue projections
resulting from the reduction of Contract rents earlier in the year. At the same
time, Shiloh is also in discussions which could result in the sale of the Local
General Partner interest to a new entity. As of 12/31/2002, both these issues
are still in negotiation (See Note 12 to the Financial Statements).

For a discussion of Mortgage Notes payable, see Note 7 to the Financial
Statements.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

Not applicable.

15

Item 8. Financial Statements and Supplementary Data.

Sequential
Page
----------
(a)1. Consolidated Financial Statements

Independent Auditors' Report 17

Consolidated Balance Sheets at March 15, 2003 and 2002 85

Consolidated Statements of Operations for the Years Ended
March 15, 2003, 2002 and 2001 86

Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 15, 2003, 2002 and 2001 87

Consolidated Statements of Cash Flows for the Years Ended
March 15, 2003, 2002 and 2001 88

Notes to Consolidated Financial Statements 91

16

INDEPENDENT AUDITOR'S REPORT
----------------------------

To the Partners of
Liberty Tax Credit Plus L.P. and Subsidiaries
(A Delaware Limited Partnership)

We have audited the consolidated balance sheets of Liberty Tax Credit Plus L.P.
(A Delaware Limited Partnership) and Subsidiaries as of March 15, 2003 and 2002,
and the related consolidated statements of operations, changes in partners'
deficit, and cash flows for the years ended March 15, 2003, 2002 and 2001 (the
2002, 2001 and 2000 Fiscal Years, respectively). These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial statements for 30 (Fiscal Years 2002, 2001 and 2000)
subsidiary partnerships whose losses aggregated $700,428 (2002 Fiscal Year),
$6,641,429 (2001 Fiscal Year), and $6,053,620 (2000 Fiscal Year) and whose
assets constituted 93% of the Partnership's assets at March 15, 2003 and 2002,
presented in the accompanying consolidated financial statements. The financial
statements for these subsidiary partnerships were audited by other auditors
whose reports thereon have been furnished to us and our opinion expressed
herein, insofar as it relates to the amounts included for these subsidiary
partnerships, is based solely upon the reports of the other auditors.

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

In our opinion, based upon our audits, and the reports of the other auditors
referred to above, the accompanying consolidated financial statements referred
to in the first paragraph present fairly, in all material respects, the
financial position of Liberty Tax Credit Plus L.P. and Subsidiaries at March 15,
2003 and 2002 and the results of their operations and their cash flows for the
years ended March 15, 2003, 2002 and 2001, in conformity with U.S. generally
accepted accounting principles.

As discussed in Note 11(a), the consolidated financial statements include the
financial statements of two subsidiary partnerships with significant
contingencies and uncertainties regarding their continuing operations. During
the 2002 Fiscal Year, these subsidiary partnerships incurred significant
operating losses and have significant equity deficiencies. These conditions
raise substantial doubt about the subsidiary partnerships' abilities to continue
as going concerns. The financial statements of these two subsidiary partnerships
were prepared assuming that each will continue as a going concern. The two
subsidiary partnerships' losses aggregated $663,949 (2002 Fiscal Year), $240,856
(2001 Fiscal Year) and $66,246 (2000 Fiscal Year) and their assets aggregated
$10,746,963 and $11,018,863 at March 15, 2003 and 2002, respectively.
Management's plans regarding these matters are also discussed in Note 11(a). The
accompanying consolidated financial statements do not include any adjustments
that might result from the outcome of these uncertainties.

TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP

New York, New York
May 30, 2002

17

[ASHER & COMPANY LETTERHEAD]

Independent Auditor's Report

The Partners
B & C Housing Associates
T/A St. Thomas Square/Worthington Apartments
Marlton, New Jersey

We have audited the accompanying balance sheets of B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94008, as of December 31, 2002 and 2001, and the related statements of
loss, Partners' capital and cash flows for the year ended December 31, 2002.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94008, as of December 31, 2002 and 2001, and the results of its
operations, changes in its Partners' capital and its cash flows for the year
ended December 31, 2002 in conformity with accounting principles generally
accepted in the United States of America.

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

In accordance with Government Auditing Standards we have also issued reports
dated February 8, 2003 on our consideration of B & C Housing Associates' T/A St.
Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project No.
118-94004, internal control and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grants. Those reports are an
integral part of an audit performed in accordance with Government Auditing
Standards and should be read in conjunction with this report in considering the
results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
February 8, 2003

18

[ASHER & COMPANY LETTERHEAD]

Independent Auditor's Report

The Partners
B & C Housing Associates
T/A St. Thomas Square/Worthington Apartments
Marlton, New Jersey

We have audited the accompanying balance sheets of B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94004, as of December 31, 2001 and 2000, and the related statements of
loss, Partners' capital and cash flows for the year ended December 31, 2001.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94004, as of December 31, 2001 and 2000, and the results of its
operations, changes in its Partners' capital and its cash flows for the year
ended December 31, 2001 in conformity with accounting principles generally
accepted in the United States of America.

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

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 1, 2002 on our
consideration of B & C Housing Associates' T/A St. Thomas Square/Worthington
Apartments (A Limited Partnership), HUD Project No. 118-94004, internal control
and reports dated February 1, 2002 on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to fair
housing and non-discrimination. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
February 1, 2002

19

[FISHBEIN & COMPANY, P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

Partners
State Street 86 Associates Limited Partnership

We have audited the accompanying balance sheets of STATE STREET 86 ASSOCIATES
LIMITED PARTNERSHIP (A Limited Partnership) as of December 31, 2002 and 2001,
and the related statements of operations, partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of State Street 86 Associates
Limited Partnership as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles generally accepted in the United States
of America.

/s/ Fishbein & Company, P.C.
Elkins Park, Pennsylvania
January 21, 2003

20

[FISHBEIN & COMPANY, P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

Partners
State Street 86 Associates Limited Partnership

We have audited the accompanying balance sheets of STATE STREET 86 ASSOCIATES
LIMITED PARTNERSHIP (A Limited Partnership) as of December 31, 2001 and 2000,
and the related statements of operations, partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of State Street 86 Associates
Limited Partnership as of December 31, 2001 and 2000, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Fishbein & Company, P.C.
Elkins Park, Pennsylvania
January 17, 2002

21

[Fishbein & Company, P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

Partners
Foxglenn Investors

We have audited the accompanying balance sheets of FOXGLENN INVESTORS (A Limited
Partnership) as of December 31, 2002 and 2001, and the related statements of
operations, partners' equity deficiency and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Foxglenn Investors as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Fishbein & Company, P.C.
Elkins Park, Pennsylvania
January 16, 2003

22

[Fishbein & Company, P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

Partners
Foxglenn Investors

We have audited the accompanying balance sheets of FOXGLENN INVESTORS (A Limited
Partnership) as of December 31, 2001 and 2000, and the related statements of
operations, partners' equity deficiency and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Foxglenn Investors as of
December 31, 2001 and 2000, and the results of its operations and its cash flows
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.

/s/ Fishbein & Company, P.C.
Elkins Park, Pennsylvania
January 22, 2002

23

[Baumgarten & Company LLP Letterhead]

Independent Auditor's Report

To the Partners
Shiloh Grove Limited Partnership
Beachwood, Ohio

We have audited the accompanying balance sheets of Shiloh Grove Limited
Partnership, (an Ohio Limited Partnership) as of December 31, 2002 and 2001, and
the related statements of income, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Shiloh Grove Limited
Partnership as of December 31, 2002 and 2001, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information included in these financial statements is presented for the purposes
of additional analysis and is not a required part of the basic financial
statements of Shiloh Grove Limited Partnership. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

/s/ Baumgarten & Company LLP
Certified Public Accountants
Cleveland, Ohio
February 21, 2003

24

[Baumgarten & Company LLP Letterhead]

Independent Auditor's Report

To the Partners
Shiloh Grove Limited Partnership
Beachwood, Ohio

We have audited the accompanying balance sheets of Shiloh Grove Limited
Partnership, (an Ohio Limited Partnership) as of December 31, 2001 and 2000, and
the related statements of income, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Shiloh Grove Limited
Partnership as of December 31, 2001 and 2000, and the results of its operations,
changes in partners' equity, and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information included in these financial statements are presented for the
purposes of additional analysis and is not a required part of the basic
financial statements of Shiloh Grove Limited Partnership. Such information has
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

/s/ Baumgarten & Company LLP
Certified Public Accountants
Cleveland, Ohio
February 18, 2002

25

[FRIEDMAN ALPREN & GREEN LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Silver Blue Lake Apartments, Ltd.

We have audited the accompanying balance sheet of SILVER BLUE LAKE APARTMENTS,
LTD. (a limited partnership), FHA Project No. FL29-K005-009-124, as of December
31, 2002, and the related statements of operations, changes in partners' capital
deficiency and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SILVER BLUE LAKE APARTMENTS,
LTD. as of December 31, 2002, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Friedman Alpren & Green LLP
New York, New York
February 4, 2003

26

[FRIEDMAN ALPREN & GREEN LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Silver Blue Lake Apartments, Ltd.

We have audited the accompanying balance sheet of SILVER BLUE LAKE APARTMENTS,
LTD. (a limited partnership), FHA Project No. FL29-K005-009-124, as of December
31, 2001, and the related statements of operations, comprehensive loss, changes
in partners' capital deficiency and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SILVER BLUE LAKE APARTMENTS,
LTD. as of December 31, 2001, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Friedman Alpren & Green LLP
New York, New York
February 8, 2002

27

[FRIEDMAN ALPREN & GREEN LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Silver Blue Lake Apartments, Ltd.

We have audited the accompanying balance sheet of SILVER BLUE LAKE APARTMENTS,
LTD. (a limited partnership), FHA Project No. FL29-K005-009-124, as of December
31, 2000, and the related statements of operations, comprehensive loss, changes
in partners' capital deficiency and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SILVER BLUE LAKE APARTMENTS,
LTD. as of December 31, 2000, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Friedman Alpren & Green LLP
New York, New York
February 6, 2001

28

[Bick-Fredman & Co Letterhead]

Independent Auditor's Report

To the General and Limited Partners
Lancaster Towers Associates, L.P.

We have audited the accompanying balance sheets of Lancaster Towers Associates,
L.P. (A Delaware Limited Partnership), FHA Project No. 014-44031-LDC-R as of
December 31, 2002 and 2001, and the related statements of income, partners'
capital and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lancaster Towers Associates,
L.P. as of December 31, 2002 and 2001, and the results of its operations and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 10, 2003 on our
consideration of Lancaster Towers Associates, L.P.'s internal control and
reports dated January 10, 2003 on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination, and specific requirements applicable to nonmajor
HUD program transactions. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.

/s/ Bick-Fredman & Co.
Cleveland, Ohio
January 10, 2003

29

[Bick-Fredman & Co Letterhead]

Independent Auditor's Report

To the General and Limited Partners
Lancaster Towers Associates, L.P.

We have audited the accompanying balance sheets of Lancaster Towers Associates,
L.P. (a Delaware Limited Partnership), FHA Project No. 014-44031-LDC-R as of
December 31, 2001 and 2000, and the related statements of income, partners'
capital and cash flows for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lancaster Towers Associates,
L.P. as of December 31, 2001 and 2000, and the results of its operations and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 11, 2002 on our
consideration of Lancaster Towers Associates, L.P.'s internal control and
reports dated January 11, 2002 on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination, and specific requirements applicable to nonmajor
HUD program transactions. Those reports are an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.

/s/ Bick-Fredman & Co.
Cleveland, Ohio
January 11, 2002

30

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

The Partners
West Kinney Associates, L.P.
T/A Willie T. Wright Plaza
Marlton, New Jersey

We have audited the accompanying balance sheets of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, as of
December 31, 2002 and 2001, and the related statements of operations, changes in
Partners' capital, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, as of
December 31, 2002 and 2001, and the results of its operations, changes in its
Partners' capital and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have issued reports dated
January 23, 2003 on our consideration of West Kinney Associates, L.P.'s T/A
Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, internal
control and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grants. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 23, 2003

31

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

The Partners
West Kinney Associates, L.P.
T/A Willie T. Wright Plaza
Marlton, New Jersey

We have audited the accompanying balance sheets of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, as of
December 31, 2001 and 2000, and the related statements of operations, changes in
Partners' capital, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Kinney Associates, L.P.
T/A Willie T. Wright Plaza (A Limited Partnership) Project No. NJHMFA 607, as of
December 31, 2001 and 2000, and the results of its operations, changes in its
Partners' capital and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have issued a report dated January 30, 2002 on our
consideration of West Kinney Associates', L.P. T/A Willie T. Wright Plaza (A
Limited Partnership) Project No. NJHMFA 607, internal control and reports dated
January 30, 2002 on its compliance with specific requirements applicable to its
major HUD program and specific requirements applicable to fair housing and
non-discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 30, 2002

32

[GREGG ASSOCIATES Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Autumn Park Associates Limited Partnership

We have audited the accompanying balance sheet of Autumn Park Associates Limited
Partnership as of December 31, 2002 and the related statements operation,
partners' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Autumn Park Associates Limited
Partnership as of December 31, 2001 were audited by other auditors whose report
dated February 20, 2002, expressed an unqualified opinion on those statements.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership as of December
31, 2002 and the results of its operations and its cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.

/s/ Merina & Company, LLP
West Linn, Oregon
February 21, 2003

33

[GREGG ASSOCIATES Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Autumn Park Associates Limited Partnership
Portland, Oregon

We have audited the accompanying balance sheets of Autumn Park Associates
Limited Partnership, as of December 31, 2001 and 2000, and the related
statements of profit and loss, changes in partners' capital, and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Autumn Park Associates Limited
Partnership, as of December 31, 2001 and 2000, and the results of its
operations, changes in partners' capital, and cash flows for the year then ended
in conformity with accounting principles generally accepted in the United States
of America.

/s/ GREGG ASSOCIATES, PC
David R. Gregg
Certified Public Accountant
Portland, Oregon
February 20, 2002

34

[REZNICK FEDDER & SILVERMAN Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Regent Street Associates

We have audited the accompanying balance sheets of Regent Street Associates as
of December 31, 2002 and 2001, and the statements of operations, partners'
equity (deficit) and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Regent Street Associates as of
December 31, 2002 and 2001, and the results of its operations, the changes in
partners' equity (deficit) and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports for the year
ended December 31, 2002, dated January 31, 2003, on our consideration of Regent
Street Associates' internal control and on its compliance with specific
requirements applicable to major HUD programs and specific requirements
applicable to Fair Housing and Non-Discrimination. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental information
on pages 28 through 32 is presented for purposes of additional analysis and is
not a required part of the basic financial statements of the Partnership. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

/s/ Reznick Fedder & Silverman
Taxpayer Identification Number;
52-1088612
Baltimore, Maryland

January 31, 2003

Lead Auditor: Michael A. Cumming

35

[REZNICK FEDDER & SILVERMAN Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Regent Street Associates

We have audited the accompanying balance sheet of Regent Street Associates as of
December 31, 2001, and the statements of operations, changes in partners' equity
(deficit) and cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit. The
financial statements of Regent Street Associates for the year ended December 31,
2000, were audited by other auditors whose report, dated February 10, 2001,
expressed an unqualified opinion on those statements.

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

In our opinion, the 2001 financial statements referred to above present fairly,
in all material respects, the financial position of Regent Street Associates as
of December 31, 2001, and the results of its operations, the changes in
partners' equity (deficit) and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.

Our 2001 audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 27
through 31 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs," we have also issued reports for the year
ended December 31, 2001 dated February 8, 2002, on our consideration of Regent
Street Associates' internal control and on its compliance with specific
requirements applicable to major HUD programs and specific requirements
applicable to Fair Housing and Non-Discrimination. Those reports are an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the results of our
audit.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
February 8, 2002

36

[ZINER, KENNEDY & LEHAN LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Regent Street Associates

We have audited the accompanying balance sheets of Regent Street Associates (a
Pennsylvania limited partnership) as of December 31, 2000 and 1999, and the
related statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Regent Street Associates at
December 31, 2000 and 1999, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan LLP
Boston, Massachusetts
February 10, 2001

37

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

The Partners
Magnolia Arms Associates, Ltd.
T/A Palm Terrace Apartments
Marlton, New Jersey

We have audited the accompanying balance sheets of Magnolia Arms Associates,
Ltd. T/A Palm Terrace Apartments (A Limited Partnership) as of December 31, 2002
and 2001, and the related statements of income (loss), Partners' capital and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Magnolia Arms Associates, Ltd.
T/A Palm Terrace Apartments (A Limited Partnership) as of December 31, 2002 and
2001, and the results of its operations, changes in its Partners' capital and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.

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

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 15, 2003

38

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

The Partners
Magnolia Arms Associates, Ltd.
T/A Palm Terrace Apartments
Marlton, New Jersey

We have audited the accompanying balance sheets of Magnolia Arms Associates,
Ltd. T/A Palm Terrace Apartments (A Limited Partnership) as of December 31, 2001
and 2000, and the related statements of income and loss, Partners' capital and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Magnolia Arms Associates, Ltd.
T/A Palm Terrace Apartments (A Limited Partnership) as of December 31, 2001 and
2000, and the results of its operations, changes in its Partners' capital and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.

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

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 15, 2002

39

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

The Partners
Greenleaf Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-94009, as of December 31, 2002 and
2001, and the related statements of loss, Partners' capital and cash flows for
the year ended December 31, 2002. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-94009, as of December 31, 2002 and
2001, and the results of its operations, changes in its Partners' capital and
its cash flows for the year ended December 31, 2002 in conformity with
accounting principles generally accepted in the United States of America.

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

In accordance with Government Auditing Standards, we have also issued reports
dated January 17, 2003 on our consideration of Greenleaf Associates, L.P.'s (A
Limited Partnership), HUD Project No. 084-94009, internal control and on our
tests of its compliance with certain provisions of laws, regulations, contracts,
and grants. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 17, 2003

40

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

The Partners
Greenleaf Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-94009, as of December 31, 2001 and
2000, and the related statements of loss, Partners' capital and cash flows for
the year ended December 31, 2001. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-94009, as of December 31, 2001 and
2000, and the results of its operations, changes in its Partners' capital and
its cash flows for the year ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of America.

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

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 16, 2002 on our
consideration of Greenleaf Associates, L.P.'s (A Limited Partnership), HUD
Project No. 084-94009, internal control and reports dated January 16, 2002 on
its compliance with specific requirements applicable to major HUD programs and
specific requirements applicable to fair housing and non-discrimination. Those
reports are an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 16, 2002

41

[JOSE E. ROSARIO & CO. Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners of Puerto Rico Housing Finance Corporation
Alameda Towers Associates, L.P. San Juan, Puerto Rico
Rio Piedras, PR

I have audited the accompanying balance sheets of Alameda Towers Associates,
L.P. HUD Project No. RQ-46-K-006-003, as of December 31, 2002 and 2001, and the
related statements of loss, changes in partners' capital, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on my audits.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Alameda Towers Associates, L.P. as
of December 31, 2002 and 2001 and the results of its operations, changes in
partners' capital, and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America and
Puerto Rico.

In accordance with Government Auditing Standards, I have also issued a report
dated January 30, 2003 on my consideration of Alameda Towers Associates, L.P.'s
internal control and on my tests of its compliance with certain provisions of
laws, regulations, contracts, and grants. Those reports are an integral part of
an audit performed in accordance with Government Auditing Standards and should
be read in conjunction with this report in considering the results of my audits.

My audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 13 to 19 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of Alameda Towers
Associates, LP. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in my opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ Jose E. Rosario & Co.
License No. 961 Expires December 1, 2004
Stamp No. 1865278 of the Puerto Rico College of CPA was
affixed to the original.
January 30, 2002
San Juan, Puerto Rico

42

[JOSE E. ROSARIO & CO. Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners of Puerto Rico Housing Finance Corporation
Alameda Towers Associates, L.P. San Juan, Puerto Rico
Rio Piedras, PR

I have audited the accompanying balance sheets of Alameda Towers Associates,
L.P. as of December 31, 2001 and 2000, and the related statements of income,
changes in partners' capital and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audits.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Alameda Towers Associates, L.P. as
of December 31, 2001 and 2000 and the results of its operations, changes in
partners' capital, and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America and
Puerto Rico.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, I have also issued a report dated January 29, 2002 on my
consideration of Alameda Towers Associates, LP's internal control and reports
dated January 29, 2002, on its compliance with specific requirements applicable
to major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the results of my audits.

My audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 14 to 19 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of Alameda Towers
Associates, LP. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in my opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.

/s/ Jose E. Rosario & Co.
License No. 961 Expires December 1, 2004
Stamp No. 1780471 of the Puerto Rico College of CPA was
affixed to the original.
January 29, 2002

43

[Friedman, Alpren & Green, LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Dixie Apartment Associates, Ltd.

We have audited the accompanying balance sheet of Dixie Apartment Associates,
Ltd. (a limited partnership), as of December 31, 2002, and the related
statements of operations, changes in partners' capital deficiency and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dixie Apartment Associates,
Ltd. as of December 31, 2002, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Friedman, Alpren & Green LLP
New York, New York
February 6, 2003

44

[Ernst & Young Letterhead]

REPORT OF INDEPENDENT AUDITORS

To the Partners
Dixie Apartment Associates, Ltd.

We have audited the accompanying balance sheet of Dixie Apartment Associates,
Ltd., a limited partnership, as of December 31, 2001, and the related statements
of operations, partners' capital deficit and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dixie Apartment Associates,
Ltd. at December 31, 2001, and the results of its operations and its cash flows
for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Ernst & Young LLP
Indianapolis, Indiana
February 22, 2002

45

[Reznick Fedder & Silverman Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Dixie Apartment Associates, Ltd.

We have audited the accompanying balance sheet of Dixie Apartment Associates,
Ltd. as of December 31, 2000, and the related statements of operations partners'
capital (deficit) and cash flows for the year then ended. These financial
statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The accompanying financial statements of Dixie Apartment Associates,
Ltd., for the year ended December 31, 1999, were audited by other auditors whose
report thereon dated February 17, 2000, expressed an unqualified opinion on
those statements.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dixie Apartment Associates,
Ltd. as of December 31, 2000, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 17 through 18
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Atlanta, Georgia
February 24, 2001

46

[Friedman, Alpren & Green LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Ludlam Gardens Apartments, Ltd.

We have audited the accompanying balance sheet of Ludlam Gardens Apartments,
Ltd., (a limited partnership) as of December 31, 2002, and the related
statements of operations, changes in partners' capital deficiency and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ludlam Gardens Apartments, Ltd.
as of December 31, 2002, and the results of its operations and its cash flows
for the year then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Friedman, Alpren & Green LLP
New York, New York
February 4, 2003

47

[Ernst & Young Letterhead]

REPORT OF INDEPENDENT AUDITORS

To the Partners
Ludlam Gardens Apartments, Ltd.

We have audited the accompanying balance sheet of Ludlam Gardens Apartments,
Ltd., a limited partnership, as of December 31, 2001, and the related statements
of operations, partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ludlam Gardens Apartments, Ltd.
at December 31, 2001, and the results of its operations and its cash flows for
the year then ended in conformity with accounting principles generally accepted
in the United States.

/s/ Ernst & Young, LLP
Indianapolis, Indiana
February 22, 2002

48

[Reznick Fedder & Silverman Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Ludlam Gardens Apartments, Ltd.

We have audited the accompanying balance sheet of Ludlam Gardens Apartments,
Ltd. as of December 31, 2000, and the related statements of operations partners'
capital and cash flows for the year then ended. These financial statements are
the responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit. The
accompanying financial statements of Ludlam Gardens Apartments, Ltd., for the
year ended December 31, 1999, were audited by other auditors whose report
thereon dated February 17, 2000, expressed an unqualified opinion on those
statements.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ludlam Gardens Apartments, Ltd.
as of December 31, 2000, and the results of its operations and its cash flows
for the year then ended, in conformity with generally accepted accounting
principles.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 16 through 17
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Atlanta, Georgia
February 24, 2001

49

[PHILIP ROOTBERG & COMPANY, LLP Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Grove Parc Associates Limited Partnership

We have audited the accompanying balance sheet of Grove Parc Associates Limited
Partnership (a limited partnership) as of December 31, 2002 and 2001, and the
related statements of operations, partners' deficit, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Grove Parc Associates Limited
Partnership as of December 31, 2002 and 2001, and the results of its operations,
changes in its partners' deficit and its cash flows for the years then ended in
conformity with U.S. generally accepted accounting principles.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
listed on the preceding contents page are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

/s/ Philip Rootberg & Company, LLP
Chicago, Illinois
January 30, 2003

50

[PHILIP ROOTBERG & COMPANY, LLP Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Grove Parc Associates Limited Partnership

We have audited the accompanying balance sheet of Grove Parc Associates Limited
Partnership (a limited partnership) as of December 31, 2001 and 2000, and the
related statements of operations, partners' deficit, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Grove Parc Associates Limited
Partnership as of December 31, 2001 and 2000, and the results of its operations,
changes in its partners' deficit and its cash flows for the years then ended in
conformity with U.S. generally accepted accounting principles.

Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
listed on the preceding contents page are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

/s/ Philip Rootberg & Company, LLP
Chicago, Illinois
February 13, 2002

51

[Michael Sczekan & Co., P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the General Partners
Apple Creek Housing Associates, Ltd.
Arvada, Colorado

We have audited the accompanying Balance Sheet of Apple Creek Housing
Associates, Ltd. FHA Project Number 101-35515, as of May 31, 2002, and the
related statements of profit and loss, changes in project equity and cash flows
for the period January 1 through May 31, 2002. These financial statements are
the responsibility of the Project's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Apple Creek Housing Associates,
Ltd., as of May 31, 2002, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs we have also issued a report dated August 12,
2002, on our consideration of Apple Creek Housing Associates, Ltd.'s internal
control structure and reports dated August 12, 2002, on its compliance with laws
and regulations and compliance with specific requirements applicable to major
HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination.

Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
13 through 18 is presented for the purposes of additional analysis and are not a
required part of the financial statements of Apple Creek Housing Associates,
Ltd. Such information has been subjected to the same auditing procedures applied
in the examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the financial
statements taken as a whole.

Respectfully submitted,

/s/ Michael Sczekan & Co., P.C.
Certified Public Accountants

Englewood, Colorado
August 12, 2002

52

[Michael Sczekan & Co., P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the General Partners
Apple Creek Housing Associates, Ltd.
Arvada, Colorado

We have audited the accompanying Balance Sheet of Apple Creek Housing
Associates, Ltd. FHA Project Number 101-35515, as of December 31, 2001, and the
related statements of profit and loss, changes in project equity and cash flows
for the year then ended. These financial statements are the responsibility of
the Project's management. Our responsibility is to express an Fopinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Apple Creek Housing Associates,
Ltd., as of December 31, 2001, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs we have also issued a report dated February 25,
2002, on our consideration of Apple Creek Housing Associates, Ltd.'s internal
control structure and reports dated February 25, 2002, on its compliance with
laws and regulations and compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination.

Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
13 through 18 is presented for the purposes of additional analysis and are not a
required part of the financial statements of Apple Creek Housing Associates,
Ltd. Such information has been subjected to the same auditing procedures applied
in the examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the financial
statements taken as a whole.

Respectfully submitted,

/s/Michael Sczekan & Co., P.C.
Certified Public Accountants

Englewood, Colorado
February 25, 2002

53

[Michael Sczekan & Co., P.C. Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the General Partners
Apple Creek Housing Associates, Ltd.
Arvada, Colorado

We have audited the accompanying Balance Sheet of Apple Creek Housing
Associates, Ltd. FHA Project Number 101-35515, as of December 31, 2000, and the
related statements of profit and loss, changes in project equity and cash flows
for the year then ended. These financial statements are the responsibility of
the Project's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Apple Creek Housing Associates,
Ltd., as of December 31, 2000, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs we have also issued a report dated February 8,
2001, on our consideration of Apple Creek Housing Associates, Ltd.'s internal
control structure and reports dated February 8, 2001, on its compliance with
laws and regulations and compliance with specific requirements applicable to
major HUD programs and specific requirements applicable to Fair Housing and
Non-Discrimination.

Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data included in the report on pages
13 through 20 is presented for the purposes of additional analysis and are not a
required part of the financial statements of Apple Creek Housing Associates,
Ltd. Such information has been subjected to the same auditing procedures applied
in the examination of the basic financial statements and, in our opinion, are
presented fairly in all material respects in relation to the financial
statements taken as a whole.

Respectfully submitted,

/s/Michael Sczekan & Co., P.C.
Certified Public Accountants

Englewood, Colorado
February 8, 2001

54

[BRODSHATZER, WALLACE, SPOON & YIP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Redwood Villa Associates
(A Limited Partnership)

We have audited the balance sheets of Redwood Villa Associates (A Limited
Partnership) ("Partnership") as of December 31, 2002 and 2001, and the related
statements of operations, changes in partners' deficit, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Redwood Villa Associates (A
Limited Partnership) as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 2 to the
financial statements, the Partnership has sustained operating losses since
inception. For the year ended December 31, 2002, the Partnership experienced a
loss of $158,212 (including $212,830 of depreciation and $4,553 of amortization
expense) and as of that date, had a working capital deficiency of $708,645 and a
partners' deficit of $1,513,099.

These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. Management's plans regarding these matters are
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

In accordance with Government Auditing Standards, we have also issued our report
dated January 29, 2003 on our consideration of Redwood Villa Associates' (A
Limited Partnership) internal control over financial reporting and our tests of
its compliance with certain provisions of laws, regulations, contracts and
grants.

/s/ Brodshatzer, Wallace, Spoon & Yip
San Diego, California
January 29, 2003

55

[BRODSHATZER, WALLACE, SPOON & YIP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Redwood Villa Associates
(A Limited Partnership)

We have audited the balance sheets of Redwood Villa Associates (A Limited
Partnership) ("Partnership") as of December 31, 2001 and 2000, and the related
statements of operations, changes in partners' deficit, and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Redwood Villa Associates (A
Limited Partnership) as of December 31, 2001 and 2000, and the results of its
operations and its cash flows for the years then ended in conformity with United
States generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 2 to the
financial statements, the Partnership has sustained operating losses since
inception. For the year ended December 31, 2001, the Partnership experienced a
loss of $194,921 (including $217,787 of depreciation and $4,553 of amortization
expense) and as of that date, had a working capital deficiency of $693,518 and a
partners' deficit of $1,339,887.

These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. Management's plans regarding these matters are
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

In accordance with Government Auditing Standards, we have also issued our report
dated January 31, 2002 on our consideration of Redwood Villa Associates' (A
Limited Partnership) internal control over financial reporting and our tests of
its compliance with certain provisions of laws, regulations, contracts and
grants.

/s/ BRODSHATZER, WALLACE, SPOON & YIP
San Diego, California
January 31, 2002

56

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

The Partners
Charles Drew Court Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Charles Drew Court
Associates, L.P. (A Limited Partnership) as of December 31, 2002 and 2001, and
the related statements of operations, Partners' capital and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Charles Drew Court Associates,
L.P. (A Limited Partnership) as of December 31, 2002 and 2001, and the results
of its operations, changes in its Partners' capital and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.

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

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 10, 2003

57

[Asher & Company, Ltd. Letterhead]

Independent Auditors' Report

The Partners
Charles Drew Court Associates, L.P.
Marlton, New Jersey

We have audited the accompanying balance sheets of Charles Drew Court
Associates, L.P. (A Limited Partnership) as of December 31, 2001 and 2000, and
the related statements of operations, Partners' capital and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Charles Drew Court Associates,
L.P. (A Limited Partnership) as of December 31, 2001 and 2000, and the results
of its operations, changes in its Partners' capital and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.

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

/s/ Asher & Company, Ltd.
Philadelphia, Pennsylvania
January 15, 2002

58

[Matthews, Carter and Boyce, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To The Partners
Walnut Park Plaza Associates
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Walnut Park Plaza Associates
(a Pennsylvania Limited Partnership) as of December 31, 2002 and 2001, and the
related statements of operations, changes in partners' capital (deficit), and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Walnut Park Plaza Associates as
of December 31, 2002 and 2001, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 2003, on our consideration of Walnut Park Plaza Associates
internal control and a report dated January 31, 2003 on its compliance with
laws, regulations, contracts and grants applicable to Walnut Park Plaza
Associates.

The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note 10 to the
financial statements, the Partnership has suffered recurring losses from
operations and does not have sufficient cash flow from operations to pay current
liabilities, which raise substantial doubt about its ability to continue as a
going concern. Management's plans regarding those matters are also described in
Note 10. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/ Matthews, Carter and Boyce, P.C.
Fairfax, Virginia
January 31, 2003

59

[Matthews, Carter and Boyce, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To The Partners
Walnut Park Plaza Associates
Philadelphia, Pennsylvania

We have audited the accompanying balance sheets of Walnut Park Plaza Associates
(a Pennsylvania Limited Partnership) as of December 31, 2001 and 2000, and the
related statements of operations, changes in partners' capital (deficit), and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Walnut Park Plaza Associates as
of December 31, 2001 and 2000, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued a report
dated February 25, 2002, on our consideration of Walnut Park Plaza Associates
internal control and a report dated February 25, 2002 on its compliance with
laws, regulations, contracts and grants applicable to Walnut Park Plaza
Associates.

/s/ Matthews, Carter and Boyce, P.C.
McLean, Virginia
February 25, 2002

60

[Reznick Fedder & Silverman Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Bayridge Associates Limited Partnership

We have audited the accompanying balance sheets of Bayridge Associates Limited
Partnership as of December 31, 2002 and 2001, and the related statements of
operations, partners' equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bayridge Associates Limited
Partnership, as of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.

/s/ Reznick Fedder & Silverman
Atlanta, Georgia
January 31, 2003

61

[Reznick Fedder & Silverman Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Bayridge Associates Limited Partnership

We have audited the accompanying balance sheets of Bayridge Associates Limited
Partnership as of December 31, 2001 and 2000, and the related statements of
operations, partners' equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bayridge Associates Limited
Partnership, as of December 31, 2001 and 2000, and the results of its operations
and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.

/s/ Reznick Fedder & Silverman
Atlanta, Georgia
January 28, 2002

62

[Habif, Arogeti & Wynne, LLP. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
United-Pennsylvanian Limited Partnership

We have audited the accompanying balance sheets of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP, PHFA Project No. R-251-8E, as of December 31, 2002 and 2001, and
the related statements of profit and loss, changes in partners' equity
[deficit], and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP as of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles generally.

In accordance with Government Auditing Standards, issued by the Comptroller
General of the United States and the Consolidated Audit Guide for Audits of HUD
Programs issued by the U.S. Department of Housing and Urban Development, Office
of the Inspector General, we have also issued our reports dated February 23,
2003, on our consideration of UNITED-PENNSYLVANIAN LIMITED PARTNERSHIP's
internal control and on our tests of its compliance with certain provisions of
laws regulations, contracts, and grants. Those reports are an integral part of
an audit performed in accordance with Government Auditing Standards and should
be read in conjunction with this report in considering the result of our audit.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supporting information
on pages13 to 21 is presented for the purpose of additional analysis and is not
a required part of the basic financial statements of the Partnership. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.

/s/ Habif, Arogeti & Wynne, LLP
Atlanta, Georgia
February 23, 2003

63

[Habif, Arogeti & Wynne, LLP. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
United-Pennsylvanian Limited Partnership

We have audited the accompanying balance sheets of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP, PHFA Project No. R-251-8E, as of December 31, 2001 and 2000, and
the related statements of profit and loss, changes in partners' equity
[deficit], and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of UNITED-PENNSYLVANIAN LIMITED
PARTNERSHIP as of December 31, 2001 and 2000, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 22, 2002, on our
consideration of UNITED-PENNSYLVANIAN LIMITED PARTNERSHIP's internal control and
reports dated February 22, 2002, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing and Non-Discrimination, and its compliance with laws
and regulations. Those reports are an integral part of an audit performed in
accordance with Government Auditing Standards and should be read in conjunction
with this report in considering the result of our audit.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report [shown on pages 15 to 23] is presented for the purpose of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audits
of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.

/s/ Habif, Arogeti & Wynne, LLP
Atlanta, Georgia
February 22, 2002

64

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
2051 Grand Concourse Housing Associates
3743-A White Plains Road
Bronx, New York 10467

We have audited the accompanying balance sheets of 2051 Grand Concourse Housing
Associates (a limited partnership) as of December 31, 2002 and 2001, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 2051 Grand Concourse Housing
Associates as of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C
White Plains, New York
January 31, 2003

65

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
2051 Grand Concourse Housing Associates
3743-A White Plains Road
Bronx, New York 10467

We have audited the accompanying balance sheets of 2051 Grand Concourse Housing
Associates (a limited partnership) as of December 31, 2001 and 2000, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 2051 Grand Concourse Housing
Associates as of December 31, 2001 and 2000, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C
White Plains, New York
January 31, 2002

66

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Concourse Artists Housing Associates
3743-A White Plains Road
Bronx, New York 10467

We have audited the accompanying balance sheets of Concourse Artists Housing
Associates (a limited partnership) as of December 31, 2002 and 2001, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Concourse Artists Housing
Associates as of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 31, 2003

67

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Concourse Artists Housing Associates
3743-A White Plains Road
Bronx, New York 10467

We have audited the accompanying balance sheets of Concourse Artists Housing
Associates (a limited partnership) as of December 31, 2001 and 2000, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Concourse Artists Housing
Associates as of December 31, 2001 and 2000, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 31, 2002

68

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Willoughby-Wyckoff Housing Associates
3743-A White Plains Road
Bronx, New York 10467

We have audited the accompanying balance sheets of Willoughby-Wyckoff Housing
Associates (a limited partnership) as of December 31, 2002 and 2001, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Willoughby-Wyckoff Housing
Associates as of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 31, 2003

69

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Willoughby-Wyckoff Housing Associates
3743-A White Plains Road
Bronx, New York 10467

We have audited the accompanying balance sheets of Willoughby-Wyckoff Housing
Associates (a limited partnership) as of December 31, 2001 and 2000, and the
related statements of operations, partners' capital (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Willoughby-Wyckoff Housing
Associates as of December 31, 2001 and 2000, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in Note 1B to the
financial statements, the Partnership has had operating losses and equity
deficiencies. These conditions raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 31, 2002

70

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Robin Housing Associates
3743-A White Plains Road
Bronx, New York 10467

We have audited the accompanying balance sheets of Robin Housing Associates (a
limited partnership) as of December 31, 2002 and 2001, and the related
statements of operations, partners' capital (deficiency), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Robin Housing Associates as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 31, 2003

71

[Marden, Harrison & Kreuter Certified Public Accountants, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Robin Housing Associates
3743-A White Plains Road
Bronx, New York 10467

We have audited the accompanying balance sheets of Robin Housing Associates (a
limited partnership) as of December 31, 2001 and 2000, and the related
statements of operations, partners' capital (deficiency), and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Robin Housing Associates as of
December 31, 2001 and 2000, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.

/s/ Marden, Harrison & Kreuter
Certified Public Accountants, P.C.
White Plains, New York
January 31, 2002

72

[KENNETH W. BRYANT, CERTIFIED PUBLIC ACCOUNTANT Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lund Hill Associates

I have audited the accompanying balance sheet of Lund Hill Associates, (a
limited partnership), WHEDA Project No. 021, as of December 31, 2002, and the
related statements of profit and loss, changes in partners' equity (deficit),
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. My responsibility is to express
an opinion on these financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lund Hill Associates as of December
31, 2002, and the results of its operations and its cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.

In accordance with Government Auditing Standards, I have also issued my reports
dated February 7, 2003 on my consideration of Lund Hill Associates internal
control and on my tests of its compliance with certain provisions of laws,
regulations, contracts, and grants. Those reports are an integral part of an
audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of my audit.

The accompanying supplemental information (shown on pages 14-23) is presented
for purposes of additional analysis and is not a required part of the basic
financial statements of Lund Hill Associates. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in my opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.

/s/ Kenneth W. Bryant
Atlanta, Georgia
February 7, 2003

73

[KENNETH W. BRYANT, CERTIFIED PUBLIC ACCOUNTANT Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lund Hill Associates

I have audited the accompanying balance sheet of Lund Hill Associates, (a
limited partnership), WHEDA Project No. 021, as of December 31, 2001, and the
related statements of partners' equity (deficit), operations and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. My responsibility is to express an opinion on these
financial statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lund Hill Associates as of December
31, 2001, and the results of its operations and its cash flows and its changes
in partners' equity for the year then ended in conformity with accounting
principles generally accepted in the United States of America.

My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report (shown on pages 14 to 23) are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in my opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

In accordance with Government Auditing Standards, I have also issued dated
January 30, 2002, on my consideration of the Partnership's internal controls and
a report dated January 30, 2002 on its compliance with laws and regulations.
These reports are an integral part of an audit performed in accordance with
Government Auditing Standards and should be read in conjunction with this report
in considering the results of my audit.

/s/ Kenneth W. Bryant
Atlanta, Georgia
January 30, 2002

74

[SMITH & RADIGAN CERTIFIED PUBLIC ACCOUNTANTS, LLC LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners
Lund Hill Associates

We have audited the accompanying balance sheet of Lund Hill Associates, (a
limited partnership), WHEDA Project No. 021, as of December 31, 2000, and the
related statements of partners' equity (deficit), operations and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above, (not presented
herein) present fairly, in all material respects, the financial position of Lund
Hill Associates as of December 31, 2000, and the results of its operations and
its cash flows for the year then ended, in conformity with generally accepted
accounting principles.

/s/ Smith & Radigan
Atlanta, Georgia
January 31, 2001

75

[RICK J. TANNEBERGER, CERTIFIED PUBLIC ACCOUNTANT Letterhead]

Independent Auditor's Report

The Partners
Tanglewood Apartments, A Limited Partnership

We have audited the accompanying balance sheets of Tanglewood Apartments, A
Limited Partnership, as of December 31, 2002 and 2001, and the related
statements of income, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tanglewood Apartments, A
Limited Partnership as of December 31, 2002 and 2001, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on page 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

/s/ Rick J. Tanneberger, CPA, P.A.
Fayetteville, Arkansas
February 10, 2003

76

[RICK J. TANNEBERGER, CERTIFIED PUBLIC ACCOUNTANT Letterhead]

Independent Auditor's Report

The Partners
Tanglewood Apartments, A Limited Partnership

We have audited the accompanying balance sheets of Tanglewood Apartments, A
Limited Partnership, as of December 31, 2001 and 2000, and the related
statements of income, partners' capital and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tanglewood Apartments, A
Limited Partnership as of December 31, 2001 and 2000, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on page 12 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

/s/ Rick J. Tanneberger, CPA, P.A.
Fayetteville, Arkansas
January 25, 2002

77

[RBG & CO. Letterhead]

Independent Auditors' Report

Partners
Quality Hill Historic District - Phase II-A, L.P.
St. Louis, Missouri

We have audited the accompanying balance sheet of Quality Hill Historic
District-Phase II-A, L.P., a limited partnership, as of December 31, 2002 and
2001, and the related statements of income, partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Quality Hill Historic
District-Phase II-A, L.P. as of December 31, 2002 and 2001, and the results of
its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

/s/ Rubin, Brown, Gornstein & Co. LLP
St. Louis, Missouri
January 31, 2003

78

[RBG & CO. Letterhead]

Independent Auditors' Report

Partners
Quality Hill Historic District - Phase II-A, L.P.
St. Louis, Missouri

We have audited the accompanying balance sheet of Quality Hill Historic
District-Phase II-A, L.P., a limited partnership, as of December 31, 2001 and
2000, and the related statements of income, partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Quality Hill Historic
District-Phase II-A, L.P. as of December 31, 2001 and 2000, and the results of
its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

/s/ Rubin, Brown, Gornstein & Co. LLP
St. Louis, Missouri
January 25, 2002

79

[HAMILTON & MUSSER, P.C. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Penn Alto Associates, Limited Partnership
Altoona, Pennsylvania 16601

We have audited the accompanying balance sheets of Penn Alto Associates, Limited
Partnership as of December 31, 2002 and 2001 and the related statements of
income, changes in partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Penn Alto Associates, Limited
Partnership, as of December 31, 2002 and 2001, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information on pages
9 and 10 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

/s/ Hamilton & Musser, P.C.
Certified Public Accountants
Mechanicsburg, Pennsylvania
February 14, 2003

80

[HAMILTON & MUSSER, P.C. LETTERHEAD]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Penn Alto Associates, Limited Partnership
Altoona, Pennsylvania 16601

We have audited the accompanying balance sheets of Penn Alto Associates, Limited
Partnership as of December 31, 2001 and 2000 and the related statements of
income, changes in partners' capital, and cash flows for the years then ended.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Penn Alto Associates, Limited
Partnership, as of December 31, 2001 and 2000, and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information on pages
9 and 10 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

/s/ Hamilton & Musser, P.C.
Certified Public Accountants
Mechanicsburg, Pennsylvania
February 20, 2002

81

[REZNICK FEDDER & SILVERMAN Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners
Sartain School Venture

We have audited the accompanying balance sheets of Sartain School Venture as of
December 31, 2002 and 2001, and the related statements of profit and loss,
changes in partners' deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sartain School Venture at
December 31, 2002 and 2001, and the results of its operations, the changes in
partners' deficit and its cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report
for the year ended December 31, 2002, dated January 31, 2003, on our
consideration of Sartain School Venture's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.

Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 23 through 26
is presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 31, 2003

82

[REZNICK FEDDER & SILVERMAN Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Sartain School Venture

We have audited the accompanying balance sheet of Sartain School Venture as of
December 31, 2001, and the related statements of profit and loss, changes in
partners' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Sartain School Venture for the year ended
December 31, 2000, were audited by other auditors whose report, dated January
13, 2001, expressed an unqualified opinion on those statements.

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

In our opinion, the 2001 financial statements referred to above present fairly,
in all material respects, the financial position of Sartain School Venture at
December 31, 2001, and the results of its operations, the changes in partners'
deficit and its cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.

Our 2001 audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 23
through 26 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued our report
for the year ended December 31, 2001 dated January 25, 2002, on our
consideration of Sartain School Venture's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts and grants. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in
conjunction with this report in considering the results of our audit.

/s/ Reznick Fedder & Silverman
Baltimore, Maryland
January 25, 2002

83

[ZINER, KENNEDY & LEHAN LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Sartain School Venture

We have audited the accompanying balance sheets of Sartain School Venture (a
Pennsylvania limited partnership) as of December 31, 2000 and 1999 and the
related statements of operations, changes in partners' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's general partners and contracted management agent. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Sartain School Venture at
December 31, 2000 and 1999, and the results of its operations, changes in
partners' equity and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Ziner, Kennedy & Lehan, LLP
Boston, Massachusetts
January 13, 2001

84

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

ASSETS

March 15,
------------------------------
2003 2002*
------------- -------------

Property and equipment, at cost, less accumulated
depreciation (Notes 2, 4, 7 and 11) $ 133,543,024 $ 144,303,061
Cash and cash equivalents (Notes 2, 3 and 11) 6,067,262 6,379,655
Cash held in escrow (Notes 3 and 5) 13,328,404 14,707,928
Accounts receivable - tenants 780,278 704,001
Deferred costs, less accumulated amortization (Notes 2 and 6) 3,250,600 3,384,587
Other assets 1,583,913 1,073,070
------------- -------------

Total assets $ 158,553,481 $ 170,552,302
============= =============

LIABILITIES AND PARTNERS' DEFICIT

Liabilities

Mortgage notes payable (Notes 3 and 7) $ 147,794,611 $ 161,496,588
Accounts payable and other liabilities 12,746,386 12,336,409
Due to local general partners and affiliates (Note 8) 16,794,330 15,607,233
Due to general partners and affiliates (Note 8) 7,727,769 6,723,981
Due to selling partners 1,303,680 1,233,660
------------- -------------

186,366,776 197,397,871

Minority interests (Note 2) 1,743,507 2,111,304
------------- -------------

Commitments and contingencies (Notes 7, 8 and 11)

Partners' deficit

Limited partners (15,987.5 BACs issued and
outstanding) (Note 1) (28,531,390) (27,937,460)
General partners (1,025,412) (1,019,413)
------------- -------------

Total partners' deficit (29,556,802) (28,956,873)
------------- -------------

Total liabilities and partners' deficit $ 158,553,481 $ 170,552,302
============= =============

* Reclassified for comparative purposes.
See accompanying notes to consolidated financial statements.

85

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended March 15,
--------------------------------------------
2003 2002 2001
------------ ------------ ------------

Revenues

Rental income $ 35,016,201 $ 35,847,433 $ 35,349,851
Other (Notes 7 and 11) 1,711,157 2,071,272 2,071,246
Gain on sale of properties (Note 12) 6,763,125 0 0
------------ ------------ ------------

Total revenues 43,490,483 37,918,705 37,421,097
------------ ------------ ------------
Expenses

General and administrative 6,550,377 6,700,549 6,654,371
General and administrative-
related parties 2,636,105 2,524,079 2,482,344
Repairs and maintenance 7,181,706 7,239,106 7,131,149
Operating 4,506,866 4,646,526 4,140,548
Taxes 1,784,791 1,621,544 1,805,936
Insurance 1,957,496 1,525,334 1,376,691
Interest 11,713,295 12,831,666 13,245,823
Depreciation and amortization 8,226,767 9,178,573 9,521,042
------------ ------------ ------------

44,557,403 46,267,377 46,357,904
------------ ------------ ------------

Loss before minority interest and
extraordinary item (1,066,920) (8,348,672) (8,936,807)

Minority interest in loss of subsidiaries 466,991 428,522 475,683
------------ ------------ ------------

Loss before extraordinary item (599,929) (7,920,150) (8,461,124)

Extraordinary item-forgiveness of
indebtedness income (Note 7) 0 0 500,000
------------ ------------ ------------

Net loss $ (599,929) $ (7,920,150) $ (7,961,124)
============ ============ ============

Number of BACs outstanding 15,987.5 15,987.5 15,987.5
============ ============ ============

Loss before extraordinary item-
limited partners $ (593,930) $ (7,840,949) $ (8,376,513)
Extraordinary item-limited partners 0 0 495,000
------------ ------------ ------------
Net loss-limited partners $ (593,930) $ (7,840,949) $ (7,881,513)
============ ============ ============

Loss before extraordinary item per BAC $ (37.15) $ (490.44) $ (523.94)
Extraordinary item per BAC 0 0 30.96
------------ ------------ ------------
Net loss per BAC $ (37.15) $ (490.44) $ (492.98)
============ ============ ============

See accompanying notes to consolidated financial statements.

86

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT

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

Partners' deficit - March 16, 2000 $(13,075,599) $(12,214,998) $ (860,601)
Net loss, year ended March 15, 2001 (7,961,124) (7,881,513) (79,611)
------------ ------------ ------------

Partners' deficit - March 15, 2001 (21,036,723) (20,096,511) (940,212)
Net loss, year ended March 15, 2002 (7,920,150) (7,840,949) (79,201)
------------ ------------ ------------

Partners' deficit - March 15, 2002 (28,956,873) (27,937,460) (1,019,413)
Net loss, year ended March 15, 2003 (599,929) (593,930) (5,999)
------------ ------------ ------------

Partners' deficit - March 15, 2003 $(29,556,802) $(28,531,390) $ (1,025,412)
============ ============ ============

See accompanying notes to consolidated financial statements.

87

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

Year Ended March 15,
--------------------------------------------
2003 2002 2001
------------ ------------ ------------

Cash flows from operating activities:
Net loss $ (599,929) $ (7,920,150) $ (7,961,124)
------------ ------------ ------------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Gain on sale of properties (Note 12) (6,763,125) 0 0
Extraordinary item-forgiveness of debt 0 0 (500,000)
Write-off of deferred costs 287,019 0 0
Cancellation of indebtedness income (68,571) (68,571) (68,571)
Accrued interest added to principal
of mortgage note payable 197,846 174,277 164,111
Depreciation and amortization 8,226,767 9,178,573 9,521,042
(Increase) decrease in assets:
Cash held in escrow (464,404) (46,054) (115,500)
Accounts receivable - tenants (80,267) 248,515 (161,723)
Other assets (529,719) 235,297 (256,896)
Increase (decrease) in liabilities:
Accounts payable and other liabilities 448,700 560,243 992,382
Due to general partners and affiliates 1,041,768 666,187 965,332
Minority interest in loss of subsidiaries (466,991) (428,522) (475,683)
------------ ------------ ------------

Total adjustments 1,829,023 10,519,945 10,064,494
------------ ------------ ------------

Net cash provided by operating activities 1,229,094 2,599,795 2,103,370
------------ ------------ ------------

Cash flows from investing activities:
Proceeds from sale of property 200,000 0 0
Decrease (increase) in cash held in escrow 1,488,901 500,824 (4,061,193)
Improvements to property and equipment (3,112,269) (1,810,743) (1,038,585)
------------ ------------ ------------

Net cash used in investing activities (1,423,368) (1,309,919) (5,099,778)
------------ ------------ ------------

Cash flows from financing activities:
Increase in deferred costs (663,074) (50,376) (1,106,120)
Increase in due to local general
partners and affiliates 1,638,028 1,581,611 349,101
Decrease in due to local general
partners and affiliates (450,931) (342,271) (1,908,808)
Increase in due to selling partners 70,020 91,570 83,833
Proceeds from mortgage notes 20,559,376 0 12,870,332
Repayment of mortgage notes (21,370,732) (2,904,963) (6,586,009)
Decrease in capitalization of consolidated
subsidiaries attributable to minority interest 99,194 54,333 13,644
------------ ------------ ------------

Net cash (used in) provided by financing
activities (118,119) (1,570,096) 3,715,973
------------ ------------ ------------

88

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(continued)

Year Ended March 15,
--------------------------------------------
2003 2002 2001
------------ ------------ ------------

Net (decrease) increase in cash and cash
equivalents (312,393) (280,220) 719,565

Cash and cash equivalents, beginning of year 6,379,655 6,659,875 5,940,310
------------ ------------ ------------

Cash and cash equivalents, end of year $ 6,067,262 $ 6,379,655 $ 6,659,875
============ ============ ============

Supplemental disclosure of cash flows information:
Cash paid during the year for interest $ 9,309,001 $ 10,509,548 $ 12,698,874
============ ============ ============

Supplemental disclosures of noncash
investing and financing activities:
Increase in accounts payable and other
liabilities for property and equipment
additions $ 0 $ 438,546 $ 0
Increase in due to local general partners
and affiliates for accounts payable and
other liabilities 0 31,128 27,603
Decrease in accounts payable and other
liabilities for deferred loss on sale of
properties 63,084 0 0

89

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(continued)

Year Ended March 15,
--------------------------------------------
2003 2002 2001
------------ ------------ ------------

Summarized below are the components
of the gain on sale of properties:
Decrease in property and equipment, net
of accumulated depreciation $ 5,903,905 $ 0 $ 0
Decrease in cash held in escrow 355,027 0 0
Decrease in prepaid expenses and other assets 18,876 0 0
Decrease in accounts receivable 3,990 0 0
Decrease in deferred costs 188,591 0 0
Decrease in mortgage notes payable (13,019,896) 0 0
Increase in accounts payable, accrued expenses
and other liabilities 24,362 0 0
Decrease in due to general partners and affiliates (37,980) 0 0

See accompanying notes to consolidated financial statements.

90

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

NOTE 1 - General

Liberty Tax Credit Plus L.P., a Delaware limited partnership (the
"Partnership"), was organized on June 26, 1987, but had no activity until
October 1, 1987 (which date is considered to be inception for financial
accounting purposes). The Partnership had no operations until commencement of
the public offering on November 20, 1987.

The Partnership's business is to invest as a limited partner in other limited
partnerships ("Local Partnerships," "subsidiaries" or "subsidiary partnerships")
owning leveraged apartment complexes that are eligible for the low-income
housing tax credit (the "Low-Income Housing Tax Credit") enacted in the Tax
Reform Act of 1986, and to a lesser extent in Local Partnerships owning
properties that are eligible for the historic rehabilitation tax credit. As of
March 15, 2003, the Partnership had invested in 31 subsidiary partnerships.
During the year ended March 15, 2003, the Partnership sold its Limited
Partnership interest in one Local Partnership and the properties and the related
assets and liabilities of two Local Partnerships.

The general partners of the Partnership are Related Credit Properties L.P., a
Delaware limited partnership (the "Related General Partner") and Liberty
Associates III L.P., a Delaware limited partnership ("Liberty Associates", and
together with the Related General Partner, the "General Partners"). The Related
General Partner is also the special limited partner of the Partnership. The
general partner of the Related General Partner is Related Credit Properties
Inc., a Delaware corporation. The general partner of Liberty Associates is the
Related General Partner.

The terms of the Partnership's Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement") provide, among other things, that net
profits or losses and distributions of cash flow are, in general, allocated 99%
to the limited partners and BACs holders and 1% to the General Partners.

NOTE 2 - Summary of Significant Accounting Policies

a) Basis of Consolidation

The consolidated financial statements include the accounts of the Partnership
and 31 subsidiary partnerships in which the Partnership is a limited partner.
Through the rights of the Partnership and/or a General Partner, which General
Partner has a contractual obligation to act on behalf of the Partnership, to
remove the general partner of the subsidiary partnerships and to approve certain
major operating and financial decisions, the Partnership has a controlling
financial interest in the subsidiary partnerships. All intercompany accounts and
transactions with the subsidiary partnerships have been eliminated in
consolidation.

For financial reporting purposes, the Partnership's fiscal year ends on March
15. The Partnership's fiscal year ends on March 15 in order to allow adequate
time for the subsidiaries financial statements to be prepared and consolidated.
The books and records of the Partnership are maintained on the accrual basis of
accounting, in accordance with U.S. generally accepted accounting principles
("GAAP"). All subsidiaries have calendar year ends. Accounts of the subsidiary
partnerships have been adjusted for intercompany transactions from January 1
through March 15.

Increases (decreases) in the capitalization of consolidated subsidiary
partnerships attributable to minority interest arise from cash contributions
from and cash distributions to the minority interest partners.

91

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

The Partnership's investment in each subsidiary partnership is equal to the
respective subsidiary partnership's partners' equity less minority interest
capital, if any. Losses attributable to minority interests which exceed the
minority interests' investment in subsidiary partnerships have been charged to
the Partnership. Such losses aggregated approximately $15,000, $273,000 and
$234,000 for the years ended March 15, 2003, 2002 and 2001, respectively. In
consolidation, all subsidiary partnership losses are included in the
Partnership's capital account except for losses allocated to minority interest
capital.

b) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash in banks, and investments
in short-term highly liquid instruments purchased with original maturities of
three months or less.

c) Property and Equipment

Property and equipment to be held and used are carried at cost, which includes
the purchase price, acquisition fees and expenses, construction period interest
and any other costs incurred in acquiring the properties. The cost of property
and equipment is depreciated over their estimated useful lives using accelerated
and straight-line methods. Expenditures for repairs and maintenance are charged
to expense as incurred; major renewals and betterments are capitalized. At the
time property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time, property
investments themselves are reduced to estimated fair value (generally using
discounted cash flows) when the property is considered to be impaired and the
depreciated cost exceeds estimated fair value.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated.

Through March 15, 2003, the Partnership has not recorded any loss on impairment
of assets or reduction to estimated fair value.

d) Income Taxes

The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31 (Note 9).

e) Loss Contingencies

The Partnership records loss contingencies as a charge to income when
information becomes available which indicates that it is probable that an asset
has been impaired or a liability has been incurred as of the date of the
financial statements and the amount of loss can be reasonably estimated.

92

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

f) Use of Estimates

The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly
actual results could differ from those estimates.

NOTE 3 - Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments (all of which are held for non-trading
purposes) for which it is practicable to estimate that value:

Cash and Cash Equivalents and Cash Held in Escrow
- -------------------------------------------------
The carrying amount approximates fair value.

Mortgage Notes Payable
- ----------------------
The fair value of mortgage notes payable is estimated, where practicable, based
on the borrowing rate currently available for similar loans.

The estimated fair values of the Partnership's mortgage notes payable are as
follows:

March 15, 2003 March 15, 2002
------------------------ -------------------------
Carrying Carrying
Amount Fair Value Amount Fair Value
----------- ---------- ----------- -----------

Mortgage notes payable for
which it is:
Practicable to estimate fair value $68,157,031 $68,157,031 $72,186,348 $72,186,348
Not practicable $79,637,580 (*) $89,310,240 (*)

(*) Management believes it is not practicable to estimate the fair value of the
mortgage notes payable because mortgage programs with similar characteristics
are not currently available to the Local Partnerships.

The carrying amount of other financial instruments that require such disclosure
approximates fair value.

93

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

NOTE 4 - Property and Equipment

The components of property and equipment are as follows:

March 15, Estimated
------------------------------ Useful Lives
2003 2002 (Years)
------------- ------------- ------------

Land $ 11,179,181 $ 11,804,469 --
Buildings and improvements 234,742,544 243,590,454 15 to 40
Other 6,573,947 6,472,329 3 to 20
------------- -------------
252,495,672 261,867,252
Less: Accumulated depreciation (118,952,648) (117,564,191)
------------- -------------

$ 133,543,024 $ 144,303,061
============= =============

Included in property and equipment are $6,859,371 of acquisition fees paid to
the General Partners and $809,661 of acquisition expenses. In addition, as of
March 15, 2003, buildings and improvements include $2,870,719 of capitalized
interest.

In connection with the development or rehabilitation of the Properties, the
subsidiary partnerships have incurred developer's fees of $23,360,275 to the
local general partners and affiliates. Such fees have been included in the cost
of property and equipment.

Depreciation expense for the years ended March 15, 2003, 2002 and 2001 amounted
to $7,905,317, $8,810,056 and $8,935,422, respectively.

During the 2002 Fiscal Year, there was a decrease in accumulated depreciation in
the amount of $6,516,860 due to write-offs on dispositions.

NOTE 5 - Cash Held in Escrow

March 15,
---------------------------
2003 2002
----------- -----------

Real estate taxes, insurance, and other $ 2,551,193 $ 2,217,225
Reserve for replacements 9,853,944 11,560,958
Other 923,267 929,745
----------- -----------
$13,328,404 $14,707,928
=========== ===========

94

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

NOTE 6 - Deferred Costs

The components of other deferred costs and their periods of amortization are as
follows:

March 15,
-------------------------- Period
2003 2002 (Months)
----------- ----------- -----------

Operating guarantee fee $ 510,443 $ 510,443 60
Financing expenses 5,328,418 5,310,905 *
Supervisory salaries 783,020 783,020 60
Other 48,518 48,518 Various
----------- -----------
6,670,399 6,652,886
Less: Accumulated amortization (3,419,798) (3,268,299)
----------- -----------
$ 3,250,601 $ 3,384,587
=========== ===========

*Over the life of the respective mortgages.

Amortization of deferred costs for the years ended March 15, 2003, 2002 and 2001
amounted to $321,450, $368,517 and $585,620, respectively.

During the year ended March 15, 2003, deferred costs of $645,561 and accumulated
amortization of $169,951 were written off.

NOTE 7 - Mortgage Notes Payable

The mortgage notes are payable in aggregate monthly installments of
approximately $957,000 including principal and interest at rates varying from 1%
to 12% per annum, through 2036. Each subsidiary partnership's mortgage note
payable is collateralized by the land and buildings of the respective subsidiary
partnership and the assignment of certain subsidiary partnership's rents and
leases and is without further recourse.

Annual principal payment requirements as of March 15, 2003 for each of the next
five fiscal years and thereafter are as follows:

Fiscal Year Ending Amount
- ------------------ ------------

2003 $ 8,701,955
2004 7,120,008
2005 8,524,776
2006 4,718,637
2007 13,642,628
Thereafter 105,086,607
------------

$147,794,611
============

On August 29, 2002, B&C Housing Associates, L.P. refinanced its outstanding
mortgage note payable of approximately $5,359,000 under the Mark-To-Market
Program sponsored by HUD. The new mortgages in the amounts of $1,201,000,
$4,157,376 and $1,201,000 bear interest at 7.5%, 4% and 4%, respectively,
through October 30, 2032. The refinancing proceeds were committed for the
Partnership for the purpose of paying for related transaction costs and
increasing the amount of reserve of replacement.

95

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

On February 1, 2002, Silver Blue Lake Apartments refinanced its outstanding
mortgage payable with a new mortgage note for $2,500,000, payable to the Local
General Partner. The new note matures on January 31, 2007 and requires monthly
payments of interest only at LIBOR plus 2.25%. As a result of this refinancing,
the restrictions of the trustee escrow fund and debt service reserve fund were
released and used to pay down the old mortgage.

In February 2002, Ludlam Gardens Apartments' ("Ludlam") mortgage note payable of
$2,486,169 was refinanced and paid in full with the proceeds from a new mortgage
note payable of $2,850,000. The new mortgage note payable is secured by a deed
of trust on the real estate and is due in monthly installments of $20,070,
including interest at 7.25%. Ludlam was sold on January 23, 2003 (see Note 12).

On January 31, 2002, Alameda Towers Associates, Ltd. refinanced its outstanding
mortgage note payable of approximately $7,800,000. The new mortgage in the
amount of $8,650,000 bears interest at 7% through January 31, 2032.

On April 1, 2000, the Redevelopment Authority of the City of Philadelphia
Multifamily Housing Revenue Refunding Bond issued Series 2000 Bonds for
$5,500,000 bearing interest of 7.50% for the sole purpose of providing funds to
pay a portion of the principal of the Issuer's Multifamily Housing Revenue
Bonds, Series 1988 which were in default during 1999. The original bond holder
of the Series 1988 agreed to contribute to Walnut Park Plaza Associates ("Walnut
Park") $500,000 of the $5,500,000 payment for rehabilitation of the multifamily
rental housing project and for payment of bond issuance costs. The 2000 Series
Bond Indenture did not specify terms of repayment for this contribution and
therefore was considered to be cancellation indebtedness income as part of a
troubled debt restructuring agreement.

See Note 11 and 12 for other subsidiary partnerships' financing activities.

NOTE 8 - Related Party Transactions

An affiliate of the General Partners has a 1% interest as a special limited
partner, in each of the subsidiary partnerships. An affiliate of the General
Partners also has a minority interest in certain subsidiary partnerships.

96

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

The costs incurred to related parties for the years ended March 15, 2003, 2002
and 2001 were as follows:

A) Related Party Fees

Year Ended March 15,
------------------------------------
2003 2002 2001
---------- ---------- ----------

Partnership management fees (a) $1,122,750 $1,138,000 $1,138,000
Expense reimbursement (b) 146,661 131,492 151,415
Property management fees incurred
to affiliates of the General Partners (c) 1,188,870 1,075,401 1,018,809
Local administrative fee (d) 66,500 63,965 69,000
---------- ---------- ----------
Total general and administrative-
General Partners 2,524,781 2,408,858 2,377,224
---------- ---------- ----------
Property management fees incurred
to affiliates of the Local General Partners (c) 111,324 115,221 105,120
---------- ---------- ----------

Total general and administrative-
related parties $2,636,105 $2,524,079 $2,482,344
========== ========== ==========

(a) The General Partners are entitled to receive a partnership management fee,
after payment of all Partnership expenses, which together with the local annual
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement) for administering the affairs
of the Partnership. The partnership management fee, subject to the foregoing
limitation, will be determined by the General Partners in their sole discretion
based upon their review of the Partnership's investments. Partnership management
fees owed to the General Partners amounting to approximately $7,151,000 and
$6,215,000 were accrued and unpaid as of March 15, 2003 and 2002, respectively.

(b) The Partnership reimburses the General Partners and their affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the Partnership's behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partners performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships' performance. Expense reimbursements and asset monitoring fees owed
to Related Credit Properties L.P. amounting to approximately $61,000 and $20,000
were accrued and unpaid as of March 15, 2003 and 2002, respectively.

The General Partners have allowed for the accrual without payment of the amounts
set forth in (a) and (b) but are under no obligation to continue to do so.

(c) Property management fees incurred by subsidiary partnerships amounted to
$1,902,472, $1,961,943 and $1,920,494 for the years ended March 15, 2003, 2002
and 2001, respectively. Of these fees $1,188,870, $1,075,401 and $1,018,809 was
incurred to affiliates of the Local General Partners. In addition $111,324,
$115,221 and $105,120 was incurred to affiliates of the Partnership.

(d) Liberty Associates, the special limited partner of the subsidiary
partnerships, is entitled to receive a local administrative fee of up to $2,500
per year from each subsidiary partnership.

97

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

(e) Liberty Associates received cash distributions of approximately $7,000,
$6,000 and $5,000 during the years ended March 15, 2003, 2002 and 2001,
respectively.

Liberty Associates was allocated Low-Income Housing Tax Credits of approximately
$200, $200 and $5,000 for the taxable years ended March 15, 2003, 2002 and 2001,
respectively.

(f) Due to local general partners and affiliates at March 15, 2003 and 2002
consists of the following:

March 15,
-------------------------
2003 2002
----------- -----------

Accrued ground lease $ 358,147 $ 358,147
Operating deficit advances 123,055 123,055
Operating advances 2,008,329 1,392,193
Development fee payable 132,448 132,851
Residual loan payable 52,500 52,500
Interest 6,635,589 5,735,215
Long-term notes payable (g) 5,525,906 5,539,560
Management and other fees 1,958,356 2,273,712
----------- -----------
$16,794,330 $15,607,233
=========== ===========

(g) Long-term notes payable consist of the following:

March 15,
-------------------------
2003 2002
----------- -----------

Grove Parc Assoc. L.P.
This note bears interest at 7.39% compounded
annually on May 1 of each year. The note is secured
by a mortgage subordinate in rights to mortgages
securing the building loan. Both principal and
interest on the loan are due and payable in full out
of residual receipts on April 29, 2010, or are
immediately due and payable upon refinancing or
sale of the project. $ 5,040,000 $ 5,040,000
Dixie Apartment Assoc. LTD. ("Dixie")
- -------------------------------------
This promissory note bears interest at 11%
payable on demand. Dixie was sold on January 16,
2003 (see Note 12). 105,187 105,187
Ludlam Gardens Apartments LTD. ("Ludlam")
- -----------------------------------------
This promissory note bears interest at 11% payable
on demand. Ludlam was sold on January 23, 2003 (see
Note 12). 241,049 254,703
B & C Housing Associates
- ------------------------
This promissory note bears interest on the unpaid
principal balance at prime plus 2% per annum payable
along with principal as and when permitted by the
partnership agreement and payable only from surplus
cash. 139,670 139,670
----------- -----------

$ 5,525,906 $ 5,539,560
=========== ===========

98

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

B) Guarantees

The general partners of Bayridge Associates Limited Partnership ("Bayridge"), a
subsidiary partnership, agreed to provide guarantees of up to $1,000,000 to fund
debt service deficiencies in the event certain debt coverage and debt service
ratios were not met for specified periods of time. As of March 15, 2003, no
guarantees have been funded.

In November 2002, FASB Interpretation No. 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees of Indebtedness of Others" ("FASB
Interpretation No. 45"), was issued. The accounting recognition provisions of
FASB Interpretation No. 45 are effective January 1, 2003 on a prospective basis.
They require that a guarantor recognize at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing or
modifying any guarantee after December 31, 2002. Under prior accounting
principles, a guarantee would not have been recognized as a liability until a
loss was probable and reasonably estimated. At March 15, 2003, the Partnership
has not issued or modified any existing guarantees and has not determined the
impact, if any, that adoption of the accounting recognition provisions of FASB
Interpretation No. 45 would have on the Partnerships future financial position
or results of operations.

99

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

NOTE 9 - Income Taxes

A reconciliation of the financial statement net loss to the income tax loss for
the Partnership and its consolidated subsidiaries is as follows:

Year Ended December 31,
-----------------------------------------
2002 2001 2000
------------ ------------ -----------

Financial statement

Net loss $ (599,929) $(7,920,150) $(7,961,124)
Difference between depreciation and amorti-
zation expense recorded for financial reporting
purposes and the accelerated cost recovery
system utilized for income tax purposes (341,315) (56,153) 591,198
Difference resulting from parent company hav-
ing a different fiscal year for income tax and
financial reporting purposes (54,280) 71,677 (36,404)
Difference between gain on sale of properties
for financial reporting purposes and for income
tax purposes (406,824) 0 0
Tax basis forgiveness of debt 0 0 (10,000)
Differences resulting principally from rental
income recognized for income tax purposes and
deferred for financial reporting purposes
and interest and other operating expenses
deducted for financial reporting purposes not
deducted for income tax purposes 80,359 (335,427) 63,699
----------- ----------- -----------

Net loss as shown on the income tax return for
the calendar year ended $(1,321,989) $(8,240,053) $(7,352,631)
=========== =========== ===========

NOTE 10 - Extraordinary item

See Note 7 above for the extraordinary item in regard to Walnut Park.

NOTE 11 - Commitments and Contingencies

a) Subsidiary Partnership - Going Concern

Two subsidiary partnerships, Redwood Villa Associates and Walnut Park Plaza
Associates have significant contingencies and uncertainties regarding their
continuing operations which raise substantial doubt about their abilities to
continue as going concerns. The financial statements of these two subsidiary
partnerships were prepared assuming that each will continue as a going concern.

Redwood Villa Associates, L.P.
- -------------------------------
Redwood Villa Associates, L.P. ("Redwood") has sustained operating losses since
its inception. For the 2002 Fiscal Year, Redwood experienced a loss of $158,212,
including $212,830 of depreciation and $4,553 of amortization, and at December
31, 2002 had a working capital deficiency of $708,645 and a partners' deficit of
$1,513,099. These conditions raise substantial doubt about Redwood's ability to
continue as a going concern. Redwood's continuation as a going concern is

100

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

dependent upon its ability to achieve continued profitable operations or obtain
future capital contributions from the partners. The Local General Partner,
whenever possible, plans to reduce operating costs to achieve profitable
operations. The financial statements for the 2002, 2001 and 2000 Fiscal Years
for Redwood have been prepared assuming that Redwood will continue as a going
concern. The Partnership's investment in Redwood at March 15, 2003 and 2002 was
reduced to zero by prior years' losses and the minority interest balance was
approximately $399,000 and $400,000, respectively. Redwood's net loss after
minority interest amounted to approximately $157,000, $193,000 and $185,000 for
the 2002, 2001 and 2000 Fiscal Years, respectively.

Walnut Park Plaza Associates, L.P.
- ------------------------------------
The financial statements for Walnut Park Plaza Associates ("Walnut Park") have
been prepared on the basis that it will continue as a going concern. Walnut Park
incurred a net loss of $505,737 during the year ended December 31, 2002 and as
of that date the Local Partnership's cash flows from operations were
insufficient to pay current liabilities. Those factors create on uncertainty
about the Local Partnership's ability to continue as a going concern. Management
of the Local Partnership is developing a plan to obtain additional financing or
restructure its existing bonds. The ability of the Local Partnership to continue
as a going concern is dependent on obtaining additional financing or
restructuring its existing bond. The financial statements do not include any
adjustments that might be necessary if the Local Partnership is unable to
continue as a going concern. The Partnership's investment in Walnut Park at
March 15, 2003 and 2002 was reduced to zero by prior years' losses and the
minority interest balance was approximately $1,109,000 and $1,114,000,
respectively. Walnut Park's net loss after minority interest amounted to
approximately $501,000, $389,000 and $121,805 for the 2002, 2001 and 2000 Fiscal
Years, respectively.

b) Subsidiary Partnerships - Other

Autumn Park Associates, L.P.
- ----------------------------
Autumn Park Associates, L.P. ("Autumn Park") incurred a net loss of $183,448
during the year ended December 31, 2002, and as of that date, Autumn Park's
current liabilities exceeded its current assets by $8,764 and its total
liabilities exceeded its total assets by $642,553. These factors, as well as
uncertain conditions that Autumn Park faces regarding the deterioration and
needed repairs of the buildings, tenants' turnover and vacancies, and debt
service requirements, create uncertainty about Autumn Park's ability to continue
in existence. Autumn Park's management has developed and implemented a plan to
improve tenant selection in order to reduce turnovers and vacancies. The
management is developing a plan to refinance the mortgage to reduce its annual
debt service obligation. The ability of Autumn Park to continue operations is
dependent on increased cash flow from rent collections and/or reduced debt
service requirements. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary if Autumn Park is unable
to continue operations. The Partnership's investment in Autumn Park at March 15,
2003 and 2002 was reduced to zero by prior years' losses and the minority
interest balance was zero at those dates. Autumn Park's net loss after minority
interest amounted to approximately $183,000, $237,000 and $182,000 for the 2002,
2001 and 2000 Fiscal Years, respectively.

Shiloh Grove, L.P.
- ------------------
The Project-based Section 8 Contract for Shiloh Grove, L.P. ("Shiloh") had been
renewed on a month-to month basis at the same Contract rent level as in previous
years. In July 2002, HUD, implementing procedures permissible under the
Market-to-Market program, reduced the Contract rents to a level aligned with the
local Fair Market Rents, significantly reducing the monthly revenue without a

101

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

corresponding reduction in debt service, creating a financial crisis for the
property. Through cost cutting measures implemented by the management of Shiloh
and the use of reserves, the property was able to meet debt service obligations
through the end of 2002 and the mortgage is current as of December 31, 2002.
During this same period, Shiloh worked closely with HUD to bring about a
reduction in the annual debt service and bring it in line with new revenue
projections resulting from the reduction of Contract rents earlier in the year.
At the same time, Shiloh is also in discussions which could result in the sale
of the Local General Partner interest to a new entity. As of December 31, 2002,
both of these issues are still in negotiation (See Note 12).

c) Lease Commitment

Redwood entered into a forty-year ground lease with a related party for the land
on which the building is built. As stipulated in the lease, the subsidiary
partnership agrees to pay all real estate taxes, license and permit fees, among
other charges that may be assessed upon the land or improvements. At December
31, 2002, Redwood was committed to minimum future rentals on the noncancellable
lease in the amount of $60,000 a year through 2028. The lease payments are
payable from available cash and at December 31, 2002 and 2001 the subsidiary
partnership has accrued lease payments of $358,147.

d) Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various banks.
Accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation (FDIC) up to $100,000. As of March 15, 2003 uninsured cash and cash
equivalents approximated $4,895,000.

e) Other

The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however no more than 20%
of the properties are located in any single state. There are also substantial
risks associated with owning properties receiving government assistance, for
example the possibility that Congress may not appropriate funds to enable HUD to
make rental assistance payments. HUD also restricts annual cash distributions to
partners based on operating results and a percentage of the owners' equity
contribution. The Partnership cannot sell or substantially liquidate its
investments in subsidiary partnerships during the period that the subsidy
agreements are in existence, without HUD's approval. Furthermore, there may not
be market demand for apartments at full market rents when the rental assistance
contracts expire.

f) Tax Credits

A portion of the Tax Credits could be subject to recapture in future years if
(i) a Local Partnership ceases to meet qualification requirements, or (ii) if
there is a decrease in the qualified basis of the Local Partnership property or
(iii) if there is a reduction in the Local Partnership interest in the property
at any time during the 15-year Compliance Period that began with the first tax
year of the Credit Period. As of December 31, 2002, the Tax Credit Period for
each Local Partnership has expired.

NOTE 12 - Sale of Properties

On January 23, 2003, the property and the related assets and liabilities of
Ludlam Gardens Apartments, LTD. ("Ludlam") were sold to an unaffiliated third

102

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2003

party for a purchase price of $3,900,000 resulting in a gain of approximately
$1,193,000. Such gain will be recognized in the first quarter of 2003.

On January 16, 2003, the property and the related assets and liabilities of
Dixie Apartment Associates, LTD. ("Dixie") were sold to an unaffiliated third
party for a purchase price of $1,300,000 resulting in a gain of approximately
$546,000. Such gain will be recognized in the first quarter of 2003.

On July 17, 2002, Mount Vernon Plaza I and Mount Vernon Plaza II (two of the
three buildings of Shiloh-Grove, LP ("Shiloh")) entered into a purchase and sale
agreement with an unaffiliated third party purchaser pursuant to which Shiloh
agreed to sell its limited partnership interest in Mount Vernon Plaza I and
Mount Vernon Plaza II for a purchase price of $13,637,249. No assurance can be
given that the closing will actually occur.

On May 31, 2002, the Partnership's Limited Partnership interest in Apple Creek
Housing Associates, LTD. ("Apple Creek") was sold to an unaffiliated third party
purchaser for $200,000 resulting in a gain of approximately $6,763,000,

NOTE 13 - Subsequent Event

On May 19, 2003, the property and the related assets and liabilities of Silver
Blue Apartments, LTD., (" Silver Blue") were sold to an unaffiliated third party
for a purchase price of $3,500,000 resulting in a gain of approximately
$1,103,000. Such gain will be recognized in the first quarter of 2003.

103

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 Partnership has no directors or officers. The Partnership's affairs are
managed and controlled by the General Partners.

In December 2002, Charter Municipal Mortgage Acceptance Company ("CharterMac"),
which is also managed by an affiliate of Related Capital Company, announced a
proposed acquisition of Related Capital Company, an affiliate of the General
Partner. Pursuant to the proposed acquisition, CharterMac will acquire
controlling interests in the general partners of the General Partners. This
acquisition is not anticipated to affect the Partnership or its day-to-day
operations as management of the General Partners will not change.

Certain information concerning the directors and executive officers of Related
Credit Properties, Inc., the general partner of the Related General Partner
(which, in turn, is the general partner of Liberty Associates), who may be
deemed directors or executive officers of the Partnership is set forth below.

Related Credit Properties Inc.
- ------------------------------

Name Position
- ---- --------

Stephen M. Ross Director

Alan P. Hirmes President

Stuart J. Boesky Executive Vice President

Glenn F. Hopps Treasurer

Teresa Wicelinski Secretary

STEPHEN M. ROSS, 63, is the President, a Director and a shareholder of The
Related Realty Group, Inc., the general partner of The Related Companies, L.P.
He graduated from the University of Michigan School of Business Administration
with a Bachelor of Science degree and from Wayne State University School of Law
with a Juris Doctor degree. Mr. Ross then received a Master of Laws degree in
taxation from New York University School of Law. He joined the accounting firm
of Coopers & Lybrand in Detroit as a tax specialist and later moved to New York,
where he worked for two large Wall Street investment banking firms in their real
estate and corporate finance departments. Mr. Ross formed the predecessor of The
Related Companies, L.P. in 1972 to develop, manage, finance and acquire
subsidized and conventional apartment developments. Mr. Ross also serves on the
Board of Trustees of Charter Municipal Mortgage Acceptance Company.

ALAN P. HIRMES, 48, has been a Certified Public Accountant in New York since
1978. Prior to joining Related Capital Company ("Capital") in October 1983, Mr.
Hirmes was employed by Weiner & Co., Certified Public Accountants. Mr. Hirmes is
also a Vice President of Capital. Mr. Hirmes graduated from Hofstra University
with a Bachelor of Arts degree. Mr. Hirmes also serves on the Board of Trustees
of Aegis Realty, Inc., Charter Municipal Mortgage Acceptance Company and America
Mortgage Acceptance Company.

104

STUART J. BOESKY, 47, practiced real estate and tax law in New York City with
the law firm of Shipley & Rothstein from 1984 until February 1986 when he joined
Capital. From 1983 to 1984 Mr. Boesky practiced law with the Boston law firm of
Kaye, Fialkow, Richard & Rothstein and from 1978 to 1980 was a consultant
specializing in real estate at the accounting firm of Laventhol & Horwath. Mr.
Boesky graduated from Michigan State University with a Bachelor of Arts degree
and from Wayne State School of Law with a Juris Doctor degree. He then received
a Master of Laws degree in Taxation from Boston University School of Law. Mr.
Boesky also serves on the Board of Trustees of Charter Municipal Mortgage
Acceptance Company and American Mortgage Acceptance Company.

GLENN F. HOPPS, 40, joined Capital in December, 1990, and prior to that date was
employed by Marks Shron & Company and Weissbarth, Altman and Michaelson,
certified public accountants. Mr. Hopps graduated from New York State University
at Albany with a Bachelor of Science degree in Accounting.

TERESA WICELINSKI, 37, joined Capital in June 1992, and prior to that date was
employed by Friedman, Alpren & Green, certified public accountants. Ms.
Wicelinski graduated from Pace University with a Bachelor of Arts degree in
Accounting.

Item 11. Executive Compensation.

The Partnership has no officers or directors. The Partnership does not pay or
accrue any fees, salaries or other forms of compensation to directors or
executive officers of the General Partners for their services. However, under
the terms of the Amended and Restated Agreement of Limited Partnership of the
Partnership, the Partnership has entered into certain arrangements with the
General Partners and their affiliates which provide for compensation to be paid
to the General Partners and their affiliates. Such arrangements include (but are
not limited to) agreements to pay nonrecurring Acquisition Fees, a
nonaccountable Acquisition Expense allowance, a partnership management fee and
an accountable expense reimbursement. The General Partners are entitled, in the
aggregate, to 1% of all cash distributions and an additional 15% of
distributions from net sale or refinancing proceeds after the BACs holders have
received distributions of such proceeds equal to their original capital
contributions plus a 10% return thereon (to the extent not previously paid out
of cash flow). Certain directors and executive officers of the General Partners
receive compensation from the General Partners and their affiliates for services
performed for various affiliated entities which may include services performed
for the Partnership. Such compensation may be based in part on the performance
of the Partnership. See also Note 8 to the Financial Statements in Item 8, which
is incorporated in this Item 11 by reference thereto.

Tabular information concerning salaries, bonuses and other types of compensation
payable to executive officers has not been included in this annual report. As
noted above, the Partnership has no executive officers. The levels of
compensation payable to the General Partners and/or their affiliates is limited
by the terms of the Partnership Agreement and may not be increased therefrom on
a discretionary basis.

105

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The general partnership interests in the Partnership are owned as follows:

Name and Address of Amount and Nature of Percentage
Title of Class Beneficial Ownership Beneficial Ownership of Class
- -------------- ------------------- -------------------- ----------

General Partnership Related Credit $1,000 capital contribution 98%
Interest in the Properties L.P. - directly owned
Partnership 625 Madison Avenue
New York, NY 10022

General Partnership Liberty Associates III L.P. $1,000 capital contribution 2%
Interest in the 625 Madison Avenue - directly owned
Partnership New York, NY 10022

Liberty Associates III L.P. holds a 1% limited partnership interest in each
Local Partnership.

No person is known by the Partnership to be the beneficial owner of more than 5%
percent of the Limited Partnership Interests and/or the BACs; and none of the
General Partners nor any director or executive officer of any of the General
Partners owns any Limited Partnership Interests or BACs.

Item 13. Certain Relationships and Related Transactions.

The Partnership has and will continue to have certain relationships with the
General Partners and their affiliates, as discussed in Item 11 and also Note 8
to the Financial Statements in Item 8 above, which is incorporated herein by
reference thereto and as set forth above. However, there have been no direct
financial transactions between the Partnership and the directors and executive
officers of the General Partners.

Item 14. Controls and Procedures

The Principal Executive Officer and Principal Financial Officer of Related
Credit Properties L.P. and Liberty Associates III, L.P., each of which is a
general partner of the Partnership, has evaluated the Partnership's disclosure
controls and procedures relating to the Partnership's annual report on Form 10-K
for the period ending March 15, 2003 as filed with the Securities and Exchange
Commission and has judged such controls and procedures to be effective as of
March 15, 2003 (the "Evaluation Date").

There have been no significant changes in the internal controls or in other
factors that could significantly affect internal controls relating to the
Partnership since the Evaluation Date.

106

PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

Sequential
Page
----------
(a) 1. Financial Statements

Independent Auditors' Report 17

Consolidated Balance Sheets at March 15, 2003 and 2002 85

Consolidated Statements of Operations for the Years Ended
March 15, 2003, 2002 and 2001 86

Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 15, 2003, 2002 and 2001 87

Consolidated Statements of Cash Flows for the Years Ended
March 15, 2003, 2002 and 2001 88

Notes to Consolidated Financial Statements 91

(a) 2. Financial Statement Schedules
-----------------------------

Independent Auditors' Report 115

Schedule I - Condensed Financial Information of Registrant 116

Schedule III - Real Estate and Accumulated Depreciation 119

All other schedules have been omitted because the required
information is included in the financial statements and notes
thereto or they are not applicable or not required.

(a) 3. Exhibits
--------

(3A) Limited Partnership Agreement of Liberty Tax Credit Plus L.P.
dated October 9, 1987 **

(3B) Form of Amended and Restated Agreement of Partnership of
Liberty Tax Credit Plus L.P. (attached to Prospectus as
Exhibit A) **

(3C) Certificate of Limited Partnership of Liberty Tax Credit
Plus L.P., together with amendments filed September 14,
1987 and October 8, 1987 **

(10A) Form of Subscription Agreement (attached to Prospectus as
Exhibit B) **

(10B) Form of Purchase Agreement for purchase of Local Partnership
Interests **

(10C) Form of Local Partnership Agreement **

107

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(continued)

Sequential
Page
----------

** Incorporated herein as an exhibit by reference to
exhibits filed with Amendment No. 1 to Liberty Tax
Credit Plus L.P.'s Registration Statement on Form S-11,
file No. 33-15479.

(21) Subsidiaries of the Registrant - the Local Partnerships
set forth in Item 2 may be considered subsidiaries of
the Registrant. 109

(b) Reports on Form 8-K
-------------------

No reports on Form 8-K were filed during the year ended
March 15, 2003.

(c) Exhibits:

99.1 Certification Pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.

108

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(continued)

Jurisdiction
(c) Subsidiaries of the Registrant (Exhibit 21) of Organization
------------------------------ ---------------

B & C Housing Associates, L.P. OK
State Street 86 Associates, L.P. DE
Fox Glenn Investors, L.P. PA
Shiloh-Grove L.P. (Mt. Vernon) OH
Silver Blue Lake Apartments, LTD. FL
Lancaster Towers Associates, LTD. DE
West Kinney Associates, L.P. NJ
Autumn Park Associates, L.P. OR
Regent Street Associates, L.P. PA
Magnolia Arms Associates, L.P. FL
Greenleaf Associates, L.P. MO
Alameda Towers Associates, L.P. PR
Grove Parc Associates, L.P. (Woodlawn) IL
2108 Bolton Drive Associates, L.P. DE
Redwood Villa Associates CA
Charles Drew Court Associates, L.P. NJ
Walnut Park Plaza Associates, L.P. PA
Bayridge Associates, L.P. OR
United-Pennsylvanian, L.P. PA
2051 Grand Concourse Associates, L.P. NY
Concourse Artists Housing Associates, L.P. NY
Willoughby/Wycoff Housing Associates, L.P. NY
Robin Housing Associates, L.P. NY
Lund Hill Associates, L.P. DE
Tanglewood Apartments, L.P. MO
Quality Hill Historic District-Phase II-A, L.P. MO
Penn Alto Associates, L.P. PA
Sartain School Venture, L.P. PA

(d) Not applicable

109

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.

LIBERTY TAX CREDIT PLUS L.P.
----------------------------
(Registrant)

By: RELATED CREDIT PROPERTIES L.P.,
a General Partner

By: Related Credit Properties Inc.,
its General Partner

Date: June 3, 2002
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President and Chief
Executive Officer
(Principal Executive and
Financial Officer)

By: LIBERTY ASSOCIATES III, L.P.,
a General Partner

By: Related Credit Properties L.P.,
its General Partner

By: Related Credit Properties Inc.,
its General Partner

Date: June 3, 2002
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
President and Chief
Executive Officer
(Principal Executive and
Financial Officer)

Pursuant to the requirements of the Securities 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:

Signature Title Date
- ------------------ --------------------------------------- -------------

President and Chief
Executive Officer, (principal
executive and financial officer)
of Related Credit Properties Inc.,
general partner of Related Credit
Properties L.P. (a General Partner of
/s/ Alan P. Hirmes Registrant) which is also the general
- ------------------ partner of Liberty Associates III, L.P.
Alan P. Hirmes (a General Partner of Registrant) June 3, 2002

Treasurer (principal accounting
officer) of Related Credit
Properties Inc., general partner of
Related Credit Properties L.P.
(a General Partner of Registrant)
/s/ Glenn F. Hopps which is also the general partner of
- ------------------ Liberty Associates III, L.P.
Glenn F. Hopps (a General Partner of Registrant) June 3, 2002

Director of Related Credit
Properties Inc., a general partner of
Related Credit Properties L.P.
(a General Partner of Registrant)
/s/ Stephen M. Ross which is also the general partner of
- ------------------- Liberty Associates III, L.P.
Stephen M. Ross (a General Partner of Registrant) June 3, 2002

CERTIFICATION

I, Alan P. Hirmes, Principal Executive Officer and Principal Financial Officer
of Related Credit Properties L.P. and Liberty Associates III, L.P. (the "General
Partners"), each of which is a general partner of Liberty Tax Credit Plus L.P.
(the "Partnership"), hereby certify that:

1. I have reviewed this annual report on Form 10-K for the period ending
March 15, 2003 of the Partnership;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Partnership as of, and for, the periods presented in
this annual report;

4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15-d-14)
for the Partnership and I have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the Partnership, including its
consolidated subsidiaries, is made known to me by others within those
entities, particularly during the period in which this annual report
is being prepared;

b) evaluated the effectiveness of the Partnership's disclosure
controls and procedures as of March 15, 2003 (the "Evaluation Date");
and

c) presented in this annual report my conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation as of the Evaluation Date;

5. I have disclosed, based on my most recent evaluation, to the
Partnership's auditors and to the boards of directors of the General
Partners:

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Partnership's ability to
record, process, summarize and report financial data and have
identified for the Partnership's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Partnership's
internal controls; and

6. I have indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Principal Executive Officer and
Principal Financial Officer
June 3, 2003

CERTIFICATION PURSUANT TO
18.U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Liberty Tax Credit Plus L.P. (the
"Partnership") on Form 10-K for the period ending March 15, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Alan P. Hirmes, Principal Executive Officer and Principal Financial Officer of
Related Credit Properties L.P. and Liberty Associates III, L.P., the general
partners of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.

By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Principal Executive Officer and Principal Financial Officer
June 3, 2003

INDEPENDENT AUDITORS' REPORT
----------------------------

To the Partners of
Liberty Tax Credit Plus L.P. and Subsidiaries
(A Delaware Limited Partnership)

In connection with our audits of the consolidated financial statements of
Liberty Tax Credit Plus L.P. and Subsidiaries included in the Form 10-K as
presented in our opinion dated May, 2003 on page 16 and based on the reports of
other auditors, we have also audited supporting Schedule I for the 2002, 2001
and 2000 Fiscal Years and Schedule III at March 15, 2003. In our opinion, and
based on the reports of the other auditors (certain of which were modified due
to the uncertainty of these subsidiary partnerships' abilities to continue in
existence), these consolidated schedules present fairly, when read in
conjunction with the related consolidated financial statements, the financial
data required to be set forth therein.

As discussed in Note 11(a), the consolidated financial statements include the
financial statements of two subsidiary partnerships with significant
contingencies and uncertainties regarding their continuing operations. During
the 2002 Fiscal Year, these subsidiary partnerships incurred significant
operating losses and have significant equity deficiencies. These conditions
raise substantial doubt about the subsidiary partnerships' abilities to continue
as going concerns. The financial statements of these two subsidiary partnerships
were prepared assuming that each will continue as a going concern. The two
subsidiary partnerships' losses aggregated $663,949 (2002 Fiscal Year), $240,856
(2001 Fiscal Year) and $66,246 (2000 Fiscal Year) and their assets aggregated
$10,746,963 and $11,018,863 at March 15, 2003 and 2002, respectively.
Management's plans regarding these matters are also discussed in Note 11(a). The
accompanying consolidated financial statements do not include any adjustments
that might result from the outcome of these uncertainties.

TRIEN ROSENBERG ROSENBERG
WEINBERG CIULLO & FAZZARI LLP

New York, New York
May 30, 2002

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Summarized condensed financial information of registrant (not including
consolidated subsidiary partnerships):

LIBERTY TAX CREDIT PLUS L.P.
CONDENSED BALANCE SHEETS

ASSETS

March 15,
-------------------------
2003 2002
----------- -----------

Cash and cash equivalents $ 3,637,764 $ 3,021,486
Investment in subsidiary partnerships 12,845,366 14,416,537
Other assets 165,466 87,053
----------- -----------

Total assets $16,648,596 $17,525,076
=========== ===========

LIABILITIES AND PARTNERS' EQUITY

Due to general partner and affiliates $ 7,211,781 $ 6,235,410
----------- -----------

Total liabilities 7,211,781 6,235,410

Partners' equity 9,436,815 11,289,666
----------- -----------

Total liabilities and partners' equity $16,648,596 $17,525,076
=========== ===========

Investments in subsidiary partnerships are recorded in accordance with the
equity method of accounting, wherein the investments are not reduced below zero.
Accordingly, partners' equity on the consolidated balance sheet will differ from
partners' equity shown above.

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT

LIBERTY TAX CREDIT PLUS L.P.
CONDENSED STATEMENTS OF OPERATIONS

Year Ended March 15,
-----------------------------------------
2003 2002 2001
----------- ----------- -----------

Revenues $ 12,847 $ 43,008 $ 95,431
----------- ----------- -----------

Expenses

Administrative and management 142,844 207,206 297,192
Administrative and management-related parties 1,269,411 1,269,492 1,289,415
----------- ----------- -----------

Total expenses 1,412,255 1,476,698 1,586,607
----------- ----------- -----------

Loss from operations (1,399,408) (1,433,690) (1,491,176)

Gain on sale on investment in subsidiary
partnership 6,497,938 0 0

Equity in loss of subsidiary partnerships (*) (7,528,994) (872,379) (1,547,959)

Distribution income from subsidiary partnerships 577,613 906,188 0
----------- ----------- -----------

Net loss $(1,852,851) $(1,399,881) $(3,039,135)
=========== =========== ===========

(*) Includes suspended prior year losses in excess of investment in accordance
with equity method of accounting amounting to $6,336,652, $0, and $0 for the
years ended March 15, 2003, 2002, and 2001, respectively.

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT

LIBERTY TAX CREDIT PLUS L.P.
CONDENSED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents

Year Ended March 15,
-----------------------------------------
2003 2002 2001
----------- ----------- -----------

Cash flows from operating activities:

Net loss $(1,852,851) $(1,399,881) $(3,039,135)
----------- ----------- -----------

Adjustments to reconcile net loss to net cash
used in operating activities:
Gain on sale on investment of subsidiary
partnership (6,497,938) 0 0
Equity in loss of subsidiary partnerships 7,528,994 872,379 1,547,959
Distribution income from subsidiary
partnerships (577,613) (906,188) 0
(Increase) decrease in assets:
Other assets (15,344) 66,396 29,560
Increase (decrease) in liabilities:
Due to general partners and affiliates 976,371 689,920 938,832
----------- ----------- -----------

Total adjustments 1,414,470 722,507 2,516,351
----------- ----------- -----------

Net cash used in operating activities (438,381) (677,374) (522,784)
----------- ----------- -----------

Cash flows from investing activities:

Proceeds from sale of investment in
subsidiary 200,000 0 0
Distributions from subsidiaries 854,659 1,027,779 52,848
----------- ----------- -----------

Net cash provided by investing activities 1,054,659 1,027,779 52,848
----------- ----------- -----------

Net increase (decrease) in cash and cash
equivalents 616,278 350,405 (469,936)

Cash and cash equivalents, beginning of year 3,021,486 2,671,081 3,141,017
----------- ----------- -----------

Cash and cash equivalents, end of year $ 3,637,764 $ 3,021,486 $ 2,671,081
=========== =========== ===========

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 2003

Initial Cost to Partnership Cost Capitalized
---------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnership's Residential Property Encumbrances Land Improvements Improvements
- --------------------------------------------- ------------ ------------ ------------- ----------------

B & C Housing Associates, L.P.
Tulsa, OK $ 6,556,685 $ 727,300 $ 5,420,791 $ 2,638,904
State Street 86 Associates, L.P.
Camden, NJ 6,746,337 861,947 12,460,882 504,102
Fox Glenn Investors, L.P.
Seat Pleasant, MD 5,539,500 491,209 6,548,849 522,815
Shiloh Grove L.P. (Mt Vernon)
Columbus, OH 11,894,867 764,874 16,618,743 489,506
Silver Blue Lake Apartments Ltd.
Miami, FL 2,500,000 537,204 4,755,176 201,386
Lancaster Towers Associates, Ltd.
Lancaster, NY 1,888,473 147,000 3,673,921 816,625
West Kinney Associates, L.P.
Newark, NJ 3,961,972 262,466 6,072,924 510,447
Autumn Park Associates, L.P.
Wilsonville, OR 3,798,770 369,932 2,251,887 3,564,042
Regent Street Associates, L.P.
Philadelphia, PA 4,312,225 40,000 7,387,283 275,779
Magnolia Arms Associates, Ltd.
Jacksonville, FL 6,314,137 125,000 8,165,738 778,781
Greenleaf Associates L.P.
Kansas City, MO 4,286,223 695,000 5,125,103 311,941
Alameda Towers, Associates L.P.
San Juan, PR 8,569,691 644,000 15,157,047 704,447
Dixie Apartment Associates, Ltd. (c)
Miami, FL 864,763 194,480 1,354,562 75,205
Ludlam Gardens Apartments, Ltd. (c)
Miami, FL 2,826,651 755,057 3,943,234 92,607
Grove Parc Associates, L.P. (Woodlawn)
Chicago, IL 11,852,622 600,000 9,386,536 11,907,942
2108 Bolton Drive Associates, L.P.
Atlanta, GA 7,356,449 835,000 6,599,896 6,214,133
Apple Creek Housing Associates, Ltd. (d)
Arvada, CO 0 618,136 10,973,665 (11,591,801)
Redwood Villa Associates
San Diego, CA 3,844,036 0 5,931,183 98,327
Charles Drew Court Associates, L.P.
Atlantic City, NJ 3,924,428 100 7,893,416 394,430
Walnut Park Plaza Associates, L.P.
Philadelphia, PA 7,330,000 454,707 7,690,675 2,859,139
Bayridge Associates, L.P.
Beaverton, OR 10,034,559 917,682 488,333 11,424,515

Gross Amount at which Carried At Close of Period
------------------------------------------------
Buildings and Accumulated
Subsidiary Partnership's Residential Property Land Improvements Total Depreciation
- --------------------------------------------- ------------ ------------- ------------ ------------

B & C Housing Associates, L.P.
Tulsa, OK $ 729,685 $ 8,057,310 $ 8,786,995 $ 4,245,809
State Street 86 Associates, L.P.
Camden, NJ 864,332 12,962,599 13,826,931 7,607,404
Fox Glenn Investors, L.P.
Seat Pleasant, MD 493,594 7,069,279 7,562,873 3,852,881
Shiloh Grove L.P. (Mt Vernon)
Columbus, OH 767,259 17,105,864 17,873,123 8,672,844
Silver Blue Lake Apartments Ltd.
Miami, FL 539,589 4,954,177 5,493,766 2,597,481
Lancaster Towers Associates, Ltd.
Lancaster, NY 149,385 4,488,161 4,637,546 2,384,529
West Kinney Associates, L.P.
Newark, NJ 264,850 6,580,987 6,845,837 3,395,866
Autumn Park Associates, L.P.
Wilsonville, OR 938,336 5,247,525 6,185,861 3,122,126
Regent Street Associates, L.P.
Philadelphia, PA 42,384 7,660,678 7,703,062 4,027,251
Magnolia Arms Associates, Ltd.
Jacksonville, FL 127,384 8,942,135 9,069,519 5,112,485
Greenleaf Associates L.P.
Kansas City, MO 697,384 5,434,660 6,132,044 3,235,007
Alameda Towers, Associates L.P.
San Juan, PR 646,384 15,859,110 16,505,494 5,422,597
Dixie Apartment Associates, Ltd. (c)
Miami, FL 194,480 1,429,767 1,624,247 711,560
Ludlam Gardens Apartments, Ltd. (c)
Miami, FL 755,057 4,035,841 4,790,898 2,031,808
Grove Parc Associates, L.P. (Woodlawn)
Chicago, IL 602,384 21,292,094 21,894,478 9,302,384
2108 Bolton Drive Associates, L.P.
Atlanta, GA 837,384 12,811,645 13,649,029 7,166,260
Apple Creek Housing Associates, Ltd. (d)
Arvada, CO 0 0 0 0
Redwood Villa Associates
San Diego, CA 2,384 6,027,126 6,029,510 3,084,943
Charles Drew Court Associates, L.P.
Atlantic City, NJ 143,846 8,144,100 8,287,946 4,547,219
Walnut Park Plaza Associates, L.P.
Philadelphia, PA 457,091 10,547,430 11,004,521 4,137,533
Bayridge Associates, L.P.
Beaverton, OR 920,066 11,910,464 12,830,530 5,878,640

Life on which
Depreciation in
Year of Latest Income
Construction/ Date Statement is
Subsidiary Partnership's Residential Property Renovation Acquired Computed (a)(b)
- --------------------------------------------- ------------- ------------- ---------------

B & C Housing Associates, L.P.
Tulsa, OK 1987 Dec. 1987 27.5 years
State Street 86 Associates, L.P.
Camden, NJ 1987 Feb. 1988 27.5 years
Fox Glenn Investors, L.P.
Seat Pleasant, MD 1987 Mar. 1988 15 to 27.5 years
Shiloh Grove L.P. (Mt Vernon)
Columbus, OH 1987 Feb. 1988 27.5 years
Silver Blue Lake Apartments Ltd.
Miami, FL 1987 Feb. 1988 27.5 years
Lancaster Towers Associates, Ltd.
Lancaster, NY 1987 May 1988 27.5 years
West Kinney Associates, L.P.
Newark, NJ 1983 June 1988 27.5 years
Autumn Park Associates, L.P.
Wilsonville, OR 1988 June 1988 15 to 27.5 years
Regent Street Associates, L.P.
Philadelphia, PA 1987 June 1988 27.5 years
Magnolia Arms Associates, Ltd.
Jacksonville, FL 1987 July 1988 27.5 years
Greenleaf Associates L.P.
Kansas City, MO 1987 July 1988 27.5 years
Alameda Towers, Associates L.P.
San Juan, PR 1987 July 1988 40 years
Dixie Apartment Associates, Ltd. (c)
Miami, FL 1987 July 1988 27.5 years
Ludlam Gardens Apartments, Ltd. (c)
Miami, FL 1987 July 1988 27.5 years
Grove Parc Associates, L.P. (Woodlawn)
Chicago, IL 1988 July 1988 27.5 to 31.5 years
2108 Bolton Drive Associates, L.P.
Atlanta, GA 1988 July 1988 15 to 27.5 years
Apple Creek Housing Associates, Ltd. (d)
Arvada, CO 1988 June 1988 28 years
Redwood Villa Associates
San Diego, CA 1988 Sept. 1988 27.5 years
Charles Drew Court Associates, L.P.
Atlantic City, NJ 1987 Sept. 1988 27.5 years
Walnut Park Plaza Associates, L.P.
Philadelphia, PA 1988 Sept. 1988 35 years
Bayridge Associates, L.P.
Beaverton, OR 1988 Dec. 1988 15 to 27.5 years

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 2003

Initial Cost to Partnership Cost Capitalized
---------------------------- Subsequent to
Buildings and Acquisition:
Subsidiary Partnership's Residential Property Encumbrances Land Improvements Improvements
- --------------------------------------------- ------------ ------------ ------------- ----------------

United-Pennsylvanian, L.P.
Erie, PA 3,336,860 217,000 4,191,327 1,415,276
2051 Grand Concourse Associates, L.P.
Bronx, NY 3,604,636 31,500 5,221,117 63,211
Concourse Artists Housing Associates, L.P.
Bronx, NY 1,486,014 5,750 16,100 2,310,570
Willoughby-Wycoff Housing Associates, L.P.
Bronx, NY 4,122,983 17,000 47,600 6,173,703
Robin Housing
Bronx, NY 5,144,224 26,750 70,700 8,188,254
Lund Hill Associates, L.P.
Superior, WI 3,208,974 205,000 4,877,828 940,225
Tanglewood Apartments, L.P.
Joplin, MO 2,984,189 114,932 5,233,022 97,171
Quality Hill Historic District-Phase II-A, L.P.
Kansas City, MO 3,465,670 215,181 6,403,141 217,102
Penn Alto Associates, L.P.
Altoona, PA 4,129,911 60,000 2,731,082 9,025,904
Sartain School Venture, L.P.
Philadelphia, PA 1,908,762 3,883 3,486,875 154,258
-----------------------------------------------------------------

$147,794,611 $ 10,938,090 $ 180,178,636 $ 61,378,946
============ ============ ============= ================

Gross Amount at which Carried At Close of Period
------------------------------------------------
Buildings and Accumulated
Subsidiary Partnership's Residential Property Land Improvements Total Depreciation
- --------------------------------------------- ------------ ------------- ------------ ------------

United-Pennsylvanian, L.P.
Erie, PA 219,385 5,604,218 5,823,603 3,728,781
2051 Grand Concourse Associates, L.P.
Bronx, NY 33,885 5,281,943 5,315,828 2,708,878
Concourse Artists Housing Associates, L.P.
Bronx, NY 8,135 2,324,285 2,332,420 1,179,828
Willoughby-Wycoff Housing Associates, L.P.
Bronx, NY 19,386 6,218,917 6,238,303 3,172,174
Robin Housing
Bronx, NY 29,136 8,256,568 8,285,704 4,226,476
Lund Hill Associates, L.P.
Superior, WI 207,900 5,815,153 6,023,053 2,055,735
Tanglewood Apartments, L.P.
Joplin, MO 117,832 5,327,293 5,445,125 2,830,201
Quality Hill Historic District-Phase II-A, L.P.
Kansas City, MO 267,233 6,568,191 6,835,424 2,233,941
Penn Alto Associates, L.P.
Altoona, PA 93,905 11,723,081 11,816,986 5,111,753
Sartain School Venture, L.P.
Philadelphia, PA 9,126 3,635,890 3,645,016 1,168,254
------------------------------------------------------------

$11,179,181 $ 241,316,491 $252,495,672 $118,952,648
============ ============= ============ ============

Life on which
Depreciation in
Year of Latest Income
Construction/ Date Statement is
Subsidiary Partnership's Residential Property Renovation Acquired Computed (a)(b)
- --------------------------------------------- ------------- ------------- ---------------

United-Pennsylvanian, L.P.
Erie, PA 1988 Dec. 1988 15 to 25 years
2051 Grand Concourse Associates, L.P.
Bronx, NY 1986 Nov. 1988 27.5 years
Concourse Artists Housing Associates, L.P.
Bronx, NY 1986 Nov. 1988 27.5 years
Willoughby-Wycoff Housing Associates, L.P.
Bronx, NY 1987 Nov. 1988 27.5 years
Robin Housing
Bronx, NY 1986 Nov. 1988 27.5 years
Lund Hill Associates, L.P.
Superior, WI 1988 Jan. 1989 20 to 40 years
Tanglewood Apartments, L.P.
Joplin, MO 1988 Oct. 1988 27.5 years
Quality Hill Historic District-Phase II-A, L.P.
Kansas City, MO 1988 Mar. 1989 20 to 40 years
Penn Alto Associates, L.P.
Altoona, PA 1989 June 1989 27.5 years
Sartain School Venture, L.P.
Philadelphia, PA 1989 Aug. 1990 15 to 40 years

(a) Since all properties were acquired as operating properties, depreciation is
computed using primarily the straight line method over the estimated useful
lives determined by the Partnership date of acquisition.
(b) Furniture and fixtures, included in buildings and improvements, are
depreciated primarily by the straight line method over their estimated
useful lives ranging from 3 to 20 years.
(c) The Property and the related assets and liabilities were sold during the
fiscal year ended March 15, 2003. See Note 12 in Item 8., Financial
Statements and Supplementary Data.
(d) The Partnership's Local Partnership Interests in these Local Partnerships
were sold during the fiscal year ended March 15, 2003. See Note 12 in Item
8., Financial Statements and Supplementary Data.

Cost of Property and Equipment Accumulated Depreciation
---------------------------------------------- ----------------------------------------------
Year Ended March 15,
-----------------------------------------------------------------------------------------------
2003 2002 2001 2003 2002 2001
------------- ------------- ------------- ------------- ------------- -------------

Balance at beginning of period $ 261,867,252 $ 259,617,963 $ 258,579,378 $ 117,564,191 $ 108,754,135 $ 99,818,713
Additions during period:
Improvements 3,112,269 2,249,289 1,038,585
Depreciation expense 7,905,317 8,810,056 8,935,422
Deduction during period:
Dispositions (12,483,849) 0 0 (6,516,860) 0 0
------------- ------------- ------------- ------------- ------------- -------------
Balance at end of period $ 252,495,672 $ 261,867,252 $ 259,617,963 $ 118,952,648 $ 117,564,191 $ 108,754,135
============= ============= ============= ============= ============= =============

At the time the local partnerships were acquired by Liberty Tax Credit Plus
Limited Partnership, the entire purchase price paid by Liberty Tax Credit Plus
Limited Partnership was pushed down to the local partnerships as property and
equipment with an offsetting credit to capital. Since the projects were in the
construction phase at the time of acquisition, the capital accounts were
insignificant at the time of purchase. Therefore, there are no material
differences between the original cost basis for tax and GAAP.