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

For the fiscal year ended March 15, 2002
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]

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. Since
November 25, 1997, the general partners of the Partnership have been 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 25, 1997,
affiliates of the Related General Partner and Liberty GP Inc. ("LGP"), then the
general partners of the Partnership, entered into a Purchase Agreement pursuant
to which the Related General Partner purchased LGP's general partnership
interest in the Partnership (the "Transfer"). In addition to the Transfer, the
Related General Partner also acquired LGP's special limited partnership interest
in the Partnership and its general partnership interest in Liberty Associates.
Prior to the Transfer, Liberty Associates was an affiliate of Lehman Brothers.

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" or "Properties") 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") that are eligible for
the historic rehabilitation tax credit (the "Historic Rehabilitation Tax
Credit", and together with the Low-Income Housing Tax Credit, "Tax Credits").
The Partnership's investment in each Local Partnership represents a 20% to 98%
interest in each of the Local Partnerships. As of March 15, 2002, the
Partnership had acquired interests in 31 Local Partnerships and does not
anticipate making any additional investments. See Item 2, Properties, below.

Liberty Associates is the special limited partner in all 31 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.

At its inception, the investment objectives of the Partnership were 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 Housing Tax Credits (for each Property, ten
years from the date of investment or, if later, the date the Property is placed
in service);

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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 Apartment
Complexes and Rehabilitation Projects; and

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 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. None of
the Local Partnerships in which the Partnership has acquired an interest has
suffered an event of recapture.

As of December 31, 2001, the Tax Credit Period for all the Properties has
expired, although the Partnership must continue to own an interest in the
Properties for an additional five years in order to avoid recapture of the Tax
Credits.

As of March 15, 2002, 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 each of its investment objectives.

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.

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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. Set forth below is a schedule of these 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 14, Schedule III.

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

*Affiliates of the Partnership with same management

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

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Local Partnership Schedule
--------------------------
(continue)

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Local Partnership Schedule
--------------------------
(continue)

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 5,567 registered holders of an aggregate of 15,987.5 BACs,
as of May 15, 2002.

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,
2002. 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.

During the years ended March 15, 1998 through 2002, total assets decreased
primarily due to depreciation, partially offset by net additions to property and
equipment.

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Selected Quarterly Financial Data (Unaudited)

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

LIQUIDITY AND CAPITAL RESOURCES

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 obligations of the Partnership. During the years ended March
15, 2002, 2001 and 2000, such distributions amounted to approximately
$1,028,000, $53,000 and $1,774,000, respectively. In addition, certain fees and
expense reimbursements owed to the General Partners amounting to approximately
$6,235,000, $5,545,000 and $4,607,000 were accrued and unpaid as of March 15,
2002, 2001 and 2000, respectively. In particular, partnership management fees
owed to the General Partners amounting to approximately $6,215,000, and
$5,390,000 were accrued and unpaid as of March 15, 2002 and 2001, respectively.
Furthermore, expense reimbursements and asset monitoring fees owed to the
General Partners amounting to approximately $20,000 and $155,000 were accrued
and unpaid as of March 15, 2002 and 2001, respectively. Without the General
Partners' continued accrual without payment of these fees and expense
reimbursements, the Partnership will not be in the position to meet its
obligations. The General Partners have allowed for the accrual without payment
of these amounts but are under no obligation to continue to do so.

During the year ended March 15, 2002, cash and cash equivalents of the
Partnership decreased approximately $280,000. This decrease is attributable to
an increase in property and equipment ($1,811,000), repayments of mortgage notes
($2,905,000) and an increase in deferred costs ($50,000) which exceeded cash
provided by operating activities ($2,600,000), a net increase in due to local
general partners and affiliates ($1,239,000), an increase in due to selling
partners ($92,000), a decrease in cash held in escrow relating to investing
activities ($501,000) and a decrease in capitalization of consolidated
subsidiaries attributable to minority interest ($54,000). Included in the
adjustments to reconcile the net loss to cash provided by operating activities
is depreciation and amortization of approximately $9,179,000.

A working capital reserve of approximately $3,021,000 remained unused at March
15, 2002.

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
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 15-year period during which the Properties must
comply with various rent and other restrictions.

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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.

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
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, 2002, 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, 2002, 2001 and 2000 (the 2001, 2000 and 1999 Fiscal
Years, respectively).

The Partnership's revenues continue to consist primarily of the results of the
Partnership's investment in consolidated Local Partnerships. Twenty one 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 2001, 2000 and 1999 Fiscal Years totaled $7,920,150,
$7,961,124 and $8,588,356, respectively. The 2000 Fiscal Year is net of an
extraordinary gain of $500,000.

The Partnership continues to meet the investment objective of generating Housing
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
$23,744, $398,165 and $3,090,724 in Tax Credits for the 2001, 2000 and 1999 tax
years, respectively. As of December 31, 2001, the Tax Credit period for the
Partnership has expired, although the Partnership must continue to own an
interest in the Properties for an additional five years in order to avoid
recapture of the Tax Credits.

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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.

2000 VS. 1999

Rental income increased approximately 2% for the 2000 Fiscal Year as compared to
the 1999 Fiscal Year primarily due to rental rate increases.

Other increased approximately $206,000 for the 2000 Fiscal Year as compared to
the 1999 Fiscal Year primarily due to one Local Partnership receiving a grant
from HUD and higher cash and cash equivalents balances at the Partnership level.

Total expenses remained fairly consistent for the 2000 Fiscal Year as compared
to the 1999 Fiscal Year with an increase of approximately 2%.

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 2001 Fiscal Year, Redwood experienced a loss of $194,921,
including $217,787 of depreciation and $4,553 of amortization, and at December
31, 2001 had a working capital deficiency of $693,518 and a deficit in partners'
equity of $1,339,887. 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 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 2001, 2000 and 1999 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, 2002 and 2001 was
reduced to zero by prior years' losses and the minority interest balance was
approximately $400,000 and $402,000, respectively. Redwood's net loss after
minority interest amounted to approximately $193,000, $185,000 and $177,000 for
the 2001, 2000 and 1999 Fiscal Years, respectively.

WILLOUGHBY-WYCKOFF HOUSING ASSOCIATES

The financial statements for Willoughby-Wyckoff Housing Associates
("Willoughby") have been prepared on the basis that it will continue as a going
concern, which contemplates continuity of operations, realization of assets and
liquidation of liabilities in the ordinary course of business. There are certain
conditions that raise substantial doubt about Willoughby's ability to continue
as a going concern. Willoughby has had operating losses and equity deficiencies
and has required loans from related parties to meet its obligations. The Local
General Partner plans to continue to minimize costs within their control and
seek additional funding sources to sup-

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plement project operations. Continuance of Willoughby as a going concern is
dependent upon Willoughby's ability to obtain additional funding to supplement
project operations and enable Willoughby to meet its obligations as they become
due. The financial statements do not include any adjustments that might result
from the outcome of these uncertainties. The Partnership's investment in
Willoughby at March 15, 2002 and 2001 was reduced to zero by prior years' losses
and the minority interest balance was approximately $267,000 and $270,000,
respectively. Willoughby's net loss after minority interest amounted to
approximately $276,000, $193,000 and $204,000 for the 2001, 2000 and 1999 Fiscal
Years.

AUTUMN PARK ASSOCIATES, L.P.

Autumn Park Associates, L.P. ("Autumn Park") incurred a net loss of $237,159
during the year ended December 31, 2001, and as of that date, Autumn Park's
current liabilities exceeded its current assets by $131,529 and its total
liabilities exceeded its total assets by $459,106. 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 or to hold the
property out for sale. 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,
2002 and 2001 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 $237,000, $182,000 and $186,000 for the 2001,
2000 and 1999 Fiscal Years, respectively.

SHILOH GROVE, L.P.

Shiloh Grove, L.P. ("Shiloh") relies heavily on its Project-based Section 8
Contract for financial stability. The Contract expired on November 30, 2000 but
had been subsequently renewed at the same Contract rent level for a one-year
period. Subsequently, the Contract has been renewed on a month-to-month basis
but there can be no guarantee that HUD will continue to renew the Contract which
will likely have a significant negative effect on Shiloh.

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.

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Item 8. Financial Statements and Supplementary Data.
Sequential
Page
----------
(a) 1. Consolidated Financial Statements

Independent Auditors' Report 16

Consolidated Balance Sheets at March 15, 2002 and 2001 82

Consolidated Statements of Operations for the Years Ended
March 15, 2002, 2001 and 2000 83

Consolidated Statements of Changes in Partners' Deficit
for the Years Ended March 15, 2002, 2001 and 2000 84

Consolidated Statements of Cash Flows for the Years
Ended March 15, 2002, 2001 and 2000 85

Notes to Consolidated Financial Statements 87

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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, 2002 and 2001,
and the related consolidated statements of operations, changes in partners'
deficit, and cash flows for the years ended March 15, 2002, 2001 and 2000 (the
2001, 2000 and 1999 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 2001, 2000 and 1999)
subsidiary partnerships whose losses aggregated $6,641,429 (2001 Fiscal Year),
$6,053,620 (2000 Fiscal Year) and $6,740,616 (1999 Fiscal Year) and whose assets
constituted 93% of the Partnership's assets at March 15, 2002 and 2001,
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,
2002 and 2001 and the results of their operations and their cash flows for the
years ended March 15, 2002, 2001 and 2000, 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 2001 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 $473,730 (2001 Fiscal Year), $381,572
(2000 Fiscal Year) and $384,713 (1999 Fiscal Year) and their assets aggregated
$6,826,787 and $7,339,450 at March 15, 2002 and 2001, 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 31, 2002

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[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

-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. 118-94004, as of December 31, 2000 and 1999 and the related statements of
loss, Partners' capital and cash flows for the year ended December 31, 2000.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of B & C Housing Associates T/A
St. Thomas Square/Worthington Apartments (A Limited Partnership), HUD Project
No. 118-94004, as of December 31, 2000 and 1999, and the results of its
operations, changes in its Partners' capital and its cash flows for the year
ended December 31, 2000 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 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 30, 2001 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 January 30, 2001 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 30, 2001

-18-

[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 27, 2002

-19-

[Fishbein & Company, P.C. Letterhead]

INDEPENDENT AUDITORS' 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, 2000 and 1999,
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 generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of State Street 86 Associates
Limited Partnership as of December 31, 2000 and 1999, 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 26, 2001

-20-

[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

-21-

[Fishbein & Company, P.C. Letterhead]

INDEPENDENT AUDITORS' REPORT

Partners
Foxglenn Investors

We have audited the accompanying balance sheets of FOXGLENN INVESTORS (A Limited
Partnership) as of December 31, 2000 and 1999, 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 generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Foxglenn Investors as of
December 31, 2000 and 1999, 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 25, 2001

-22-

[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

-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, 2000 and 1999, and
the related statement of income, changes in 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 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 Shiloh Grove Limited
Partnership as of December 31, 2000 and 1999, and the results of its operations,
changes in partners' equity, and cash flows for the years 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 accompanying supplementary information included
in these financial statements are presented for the purposes of additional
analysis and are 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 audit of the financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.

/s/ Baumgarten & Company LLP
Certified Public Accountants
Cleveland, Ohio
February 21, 2001

-24-

[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

-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, 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

-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, 1999, and the related statements of income, comprehensive income, 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 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 SILVER BLUE LAKE APARTMENTS,
LTD. as of December 31, 1999, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.

/s/ Friedman Alpren & Green LLP
New York, New York
February 1, 2000

-27-

[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

-28-

[Bick-Fredman & Co Letterhead]

Independent Auditor's Report

The General and Limited Partners
Lancaster Towers Associates, L.P.
Cleveland, Ohio

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, 2000 and 1999, and the related statements of income, partners'
capital 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 U.S. 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 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, 2000 and 1999, and the results of its operations and
cash flows for the years then ended, in conformity with U.S. generally accepted
accounting principles.

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 12, 2001 on our
consideration of Lancaster Towers Associates, L.P.'s internal control and
reports dated January 12, 2001 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 audit.

/s/ Bick-Fredman & Co.
Cleveland, Ohio
January 12, 2001

-29-

[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

-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), as of December 31, 2000 and
1999, and the related statements of operations, Partners' capital, and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
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), as of December 31, 2000 and
1999, and the results of its operations, changes in its Partners' capital and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.

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 22, 2001 on our
consideration of West Kinney Associates', L.P. T/A Willie T. Wright Plaza (A
Limited Partnership), internal control and reports dated January 22, 2001 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 22, 2001

-31-

[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

-32-

[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, 2000 and 1999, 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 audit.

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

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

/s/ GREGG ASSOCIATES, PC
David R. Gregg
Certified Public Accountant
Portland, Oregon
February 26, 2001

-33-

[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

-34-

[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

-35-

[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

-36-

[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, 2000
and 1999 and the related statements of loss, Partners' capital and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan 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, 2000 and
1999 and the results of its operations, changes in its Partners' capital and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.

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 12, 2001

-37-

[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

-38-

[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, 2000 and
1999 and the related statements of loss, Partners' capital and cash flows for
the year ended December 31, 2000. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Greenleaf Associates, L.P. (A
Limited Partnership), HUD Project No. 084-94009, as of December 31, 2000 and
1999 and the results of its operations, changes in its Partners' capital and its
cash flows for the year ended December 31, 2000 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 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 19, 2001 on our
consideration of Greenleaf Associates, L.P.'s (A Limited Partnership), HUD
Project No. 084-94009, internal control and reports dated January 19, 2001 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 19, 2001

-39-

[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

-40-

[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, 2000 and 1999, and the related statements of income,
changes in partners' capital 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 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 I 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. 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, 2000 and 1999 and the results of its operations, changes in
partners' capital, and cash flows for the years 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 issued by the U.S. Department of Housing and
Urban Development, I have also issued a report dated January 22, 2001, on my
consideration of Alameda Towers Associates, LP's internal control structure and
reports dated January 22, 2001, 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 17 to 24 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, 2001
Stamp No. 1690922 of the Puerto Rico College of CPA was affixed to the original.
January 22, 2001

-41-

[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

-42-

[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

-43-

[L.H. FRISHKOFF & COMPANY LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Dixie Apartment Associates, Ltd.
(A Limited Partnership)
Miami, Florida

FHA PROJECT NO. FL29-K005-013-131

We have audited the accompanying statements of financial condition of Dixie
Apartment Associates, Ltd. (A Limited Partnership) as of December 31, 1999 and
1998, 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 audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dixie Apartment Associates,
Ltd. (A Limited Partnership) as of December 31, 1999 and 1998, and the results
of its operations, changes in partners' capital (deficit) and its cash flows for
the years then ended, in conformity with generally accepted accounting
principles.

/s/ L.H. Frishkoff & Company LLP
New York, New York
February 17, 2000

-44-

[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

-45-

[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

-46-

[L.H. FRISHKOFF & COMPANY LLP Letterhead]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Ludlam Gardens Apartments, Ltd.
(A Limited Partnership)
Miami, Florida

FHA Project No. FL29-K005-009-123

We have audited the accompanying statements of financial condition of Ludlam
Gardens Apartments, Ltd. (A Limited Partnership) as of December 31, 1999 and
1998 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 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 Ludlam Gardens Apartments, Ltd.
(A Limited Partnership) as of December 31, 1999 and 1998 and the results of its
operations, changes in partners' capital and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

/s/ L.H. Frishkoff & Company LLP
New York, New York
February 17, 2000

-47-

[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

-48-

[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, 2000 and 1999, 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, 2000 and 1999, 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
March 9, 2001 except for Note 8, as to which the date is April 9, 2001

-49-

[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 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, 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

-50-

[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

-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 December 31, 1999, 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, 1999, 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 17,
2000, on our consideration of Apple Creek Housing Associates, Ltd.'s internal
control structure and reports dated February 17, 2000, 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 17, 2000

-52-

[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

-53-

[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, 2000 and 1999, 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 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, 2000 and 1999, and the results of its
operations and its cash flows for the years then ended in conformity with
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, 2000, the Partnership experienced a
loss of $186,845 (including $217,259 of depreciation and $4,553 of amortization
expense) and as of that date, had a working capital deficiency of $655,420 and a
partners' deficit of $1,129,966.

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 22, 2001 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 22, 2001

-54-

[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

-55-

[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, 2000 and 1999 and
the related statements of operations, Partners' capital and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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, 2000 and 1999 and the results of
its operations, changes in its Partners' capital and its cash flows for the
years then ended in conformity with generally accepted accounting principles.

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 13, 2001

-56-

[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

-57-

[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, 2000 and 1999, 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 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 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 Walnut Park Plaza Associates as
of December 31, 2000 and 1999, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

In accordance with GOVERNMENT AUDITING STANDARDS, we have also issued a report
dated February 15, 2001, on our consideration of Walnut Park Plaza Associates
internal control and a report dated February 15, 2001 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 15, 2001

-58-

[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

-59-

[HENICK & YLVISAKER, Certified Public Accountants Letterhead]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Bayridge Associates Limited Partnership

We have audited the accompanying Balance Sheets of Bayridge Associates Limited
Partnership (an Oregon Limited Partnership) as of December 31, 1999 and 1998 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 generally accepted auditing
standards. Those standards require that we plan and perform our 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 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 Bayridge Associates Limited
Partnership, as of December 31, 1999 and 1998 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.

/s/ Henick & Ylvisaker
Portland, Oregon
February 22, 2000

-60-

[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

-61-

[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, 2000 and 1999, 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 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 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, 2000 and 1999, and the results of its operations
and its cash flows for the years 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 issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 10, 2001 on our
consideration of UNITED-PENNSYLVANIAN LIMITED PARTNERSHIP's internal controls
and reports dated February 10, 2001 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 Standard 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 10, 2001

-62-

[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

-63-

[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, 2000 and 1999, 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 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 2051 Grand Concourse Housing
Associates as of December 31, 2000 and 1999, 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 30, 2001

-64-

[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

-65-

[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, 2000 and 1999 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 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 Concourse Artists Housing
Associates as of December 31, 2000 and 1999, 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 30, 2001

-66-

[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

-67-

[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, 2000 and 1999, 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 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 Willoughby-Wyckoff Housing
Associates as of December 31, 2000 and 1999, 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 30, 2001

-68-

[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

-69-

[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, 2000 and 1999, 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 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 Robin Housing Associates as of
December 31, 2000 and 1999, 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 30, 2001

-70-

[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 (shownon 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

-71-

[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

-72-

[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, 1999, 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
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above, (not presented
herein) present fairly, in all material respects, the financial position of Lund
Hill Associates as of December 31, 1999, 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 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 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 a report
dated January 15, 2000 on our consideration of the Partnership's internal
controls and a report dated January 15, 2000 on its compliance with laws and
regulations.

/s/ Smith & Radigan
Atlanta, Georgia
January 15, 2000

-73-

[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

-74-

[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, 2000 and 1999, 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, 2000 and 1999, 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 21, 2001

-75-

[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

-76-

[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, 2000 and
1999 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 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 Quality Hill Historic
District-Phase II-A, L.P. as of December 31, 2000 and 1999, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

/s/ Rubin, Brown, Gornstein & Co. LLP
St. Louis, Missouri
January 31, 2001

-77-

[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

-78-

[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, 2000 and 1999 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 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 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, 2000 and 1999, 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 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 22, 2001

-79-

[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

-80-

[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

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

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

-82-

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

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

-83-

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

See accompanying notes to consolidated financial statements.

-84-

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

See accompanying notes to consolidated financial statements.

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

See accompanying notes to consolidated financial statements

-86-

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

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, 2002, the Partnership has invested in 31 subsidiary partnerships and
does not anticipate making any additional investments.

Since November 25, 1997, the general partners of the Partnership have been
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 25, 1997, affiliates of the Related General Partner and Liberty GP Inc.
("LGP"), then the general partners of the Partnership, entered into a Purchase
Agreement pursuant to which the Related General Partner purchased LGP's general
partnership interest in the Partnership (the "Transfer"). In addition to the
Transfer, the Related General Partner also acquired LGP's special limited
partnership interest in the Partnership and its general partnership interest in
Liberty Associates. Prior to the Transfer, Liberty Associates was an affiliate
of Lehman Brothers.

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

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

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.

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 $273,000, $234,000 and
$242,000 for the years ended March 15, 2002, 2001 and 2000, 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, 2002, the Partnership has not recorded any loss on impairment
of assets or reduction to estimated fair value.

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

d) Offering Costs

Costs incurred to sell BACs, including brokerage and the nonaccountable expense
allowance, are considered selling and offering expenses. These costs are charged
directly to limited partners' capital (Note 8).

e) 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).

f) 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.

g) 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.

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

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

(*) 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.

NOTE 4 - Property and Equipment

The components of property and equipment are as follows:

* Reclassified for comparative purposes.

Included in property and equipment are $6,859,371 of acquisition fees paid to
the General Partners and $952,737 of acquisition expenses. In addition, as of
March 15, 2002, 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, 2002, 2001 and 2000 amounted
to $8,810,056, $8,935,422 and $9,535,858, respectively.

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:

NOTE 6 - Deferred Costs

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

*Over the life of the respective mortgages.

Amortization of deferred costs for the years ended March 15, 2002, 2001 and 2000
amounted to $368,517, $585,620 and $257,950, respectively.

During the year ended March 15, 2001, deferred costs of $683,947 and accumulated
amortization of $581,089 were written off.

NOTE 7 - Mortgage Notes Payable

The mortgage notes are payable in aggregate monthly installments of
approximately $1,082,000 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.

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

Annual principal payment requirements as of March 15, 2002 for each of the next
five fiscal years and thereafter are as follows:

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 does not specify terms of repayment for this contribution and is
considered to be cancellation indebtedness income as part of a troubled debt
restructuring agreement.

In December 2000, Grove Parc Associates, L.P. ("Woodlawn") refinanced its
outstanding mortgage note payable of $4,356,284. The new mortgage in the amount
of $12,000,000 bears interest at 7.45% and requires monthly payments of
principal and interest in the amount of $80,481 through January 2036.

In December 2001, Willoughby-Wyckoff Housing Associates, L.P. ("Willoughby")
refinanced the two mortgages payable to NY City Housing Development Corporation
("HDC") in an aggregate amount of $1,198,193 and NY City Housing Preservation
and Development ("HPD") in an aggregate amount of $1,081,153. The new HDC
mortgage bears interest at 7% per annum and requires monthly installments of
$9,114 through June 2018. The new HPD mortgage is interest only at 1% and
requires monthly installments of $901 through June 2018, at which time
principals and any unpaid interest will be due.

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

In February 2002, Ludlam Gardens Apartments' previous mortgage note payable of
$2,486,169 was repaid 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%, through March 12, 2011 when a balloon payment is due.

On February 1, 2002, Silver Blue Lake Apartments refinanced the loan 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.

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.

The costs incurred to related parties for the years ended March 15, 2002, 2001
and 2000 were as follows:

A) Related Party Fees

*Reclassified for comparative purposes.

(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

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

fees owed to the General Partners amounting
to approximately $6,215,000 and $5,390,000 were accrued and unpaid as of March
15, 2002 and 2001, 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 $20,000 and
$155,000 were accrued and unpaid as of March 15, 2002 and 2001, 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
$1,961,943, $1,920,494 and $1,898,852 for the years ended March 15, 2002, 2001
and 2000, respectively. Of these fees $1,075,401, $1,018,809 and $1,164,422 was
incurred to affiliates of the Local General Partners. In addition, $115,221,
$105,120 and $96,453 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.

The General Partners of the Partnership were allocated approximately $79,000,
$80,000 and $86,000 of passive losses for the years ended March 15, 2002, 2001
and 2000, respectively.

(e) Liberty Associates received cash distributions of approximately $6,000,
$5,000 and $4,500 during the years ended March 15, 2002, 2001 and 2000,
respectively.

Liberty Associates was allocated Low-Income Housing Tax Credits of approximately
$2,200, for each of the taxable years ended March 15, 2002, 2001 and 2000,
respectively.

(f) Due to local general partners and affiliates at March 15, 2002 and 2001
consists of the following:

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

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

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, 2002, no
guarantees have been funded.

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

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:

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 Willoughby-Wyckoff
Housing 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 2001 Fiscal Year, Redwood experienced a loss of $194,921,
including $217,787 of depreciation and $4,553 of amortization, and at December
31, 2001 had a working capital deficiency of $693,518 and a deficit in partners'
equity of $1,339,887. These conditions raise substantial doubt about Redwood's
ability to continue as a going concern. Redwood's

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

continuation as a going concern is dependent upon its ability to achieve
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 2001, 2000 and
1999 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, 2002 and 2001 was reduced to zero by prior years' losses and the minority
interest balance was approximately $400,000 and $402,000, respectively.
Redwood's net loss after minority interest amounted to approximately $193,000,
$185,000 and $177,000 for the 2001, 2000 and 1999 Fiscal Years, respectively.

WILLOUGHBY-WYCKOFF HOUSING ASSOCIATES

The financial statements for Willoughby-Wyckoff Housing Associates
("Willoughby") have been prepared on the basis that it will continue as a going
concern, which contemplates continuity of operations, realization of assets and
liquidation of liabilities in the ordinary course of business. There are certain
conditions that raise substantial doubt about Willoughby's ability to continue
as a going concern. Willoughby has had operating losses and equity deficiencies
and has required loans from related parties to meet its obligations. The Local
General Partner, plans to continue to minimize costs within their control and
seek additional funding sources to supplement project operations. Continuance of
Willoughby as a going concern is dependent upon Willoughby's ability to obtain
additional funding to supplement project operations and enable Willoughby to
meet its obligations as they become due. The financial statements do not include
any adjustments that might result from the outcome of these uncertainties. The
Partnership's investment in Willoughby at March 15, 2002 and 2001 was reduced to
zero by prior years' losses and the minority interest balance was approximately
$267,000 and $270,000, respectively. Willoughby's net loss after minority
interest amounted to approximately $276,000, $193,000 and $204,000 for the 2001,
2000 and 1999 Fiscal Years.

b) Subsidiary Partnerships - Other

AUTUMN PARK ASSOCIATES, L.P.

Autumn Park Associates, L.P. ("Autumn Park") incurred a net loss of $237,159
during the year ended December 31, 2001, and as of that date, Autumn Park's
current liabilities exceeded its current assets by $131,529 and its total
liabilities exceeded its total assets by $459,106. 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 or to hold the
property out for sale. 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,
2002 and 2001 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 $237,000, $182,000 and $186,000 for the 2001,
2000 and 1999 Fiscal Years, respectively.

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

SHILOH GROVE, L.P.

Shiloh Grove, L.P. ("Shiloh") relies heavily on its Project-based Section 8
Contract for financial stability. The Contract expired on November 30, 2000 but
had been subsequently renewed at the same Contract rent level for a one-year
period. Subsequently, the Contract has been renewed on a month-to-month basis
but there can be no guarantee that HUD will continue to renew the Contract which
will likely have a significant negative effect on Shiloh.

c) Lease Commitment

Redwood entered into a forty-year ground lease 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, 2001, 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, 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, 2002, uninsured cash and cash
equivalents approximated $3,958,000.

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, 2001, the Tax Credit Period for
the Partnership has expired.

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LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 15, 2002

NOTE 12 - Subsequent Events

On May 22, 2002, Dixie Apartment Associates, LTD., ("Dixie") entered into a
purchase and sale agreement with an unaffiliated third party for a purchase
price of $1,350,000. The closing is expected to occur in mid-2002. 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 $6,740,000, such
gain will be recognized in the second quarter of 2002.

-99-

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. 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.

STEPHEN M. ROSS, 62, is President, Director and 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, 47, 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 Directors
of Aegis Realty, Inc., Charter Municipal Mortgage Acceptance Company and America
Mortgage Acceptance Company.

STUART J. BOESKY, 46, 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

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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 Directors of Aegis Realty, Inc.,
Charter Municipal Mortgage Acceptance Company and American Mortgage Acceptance
Company.

GLENN F. HOPPS, 39, 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, 36, 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, 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.

-101-

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

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.

On November 25, 1997, affiliates of the Related General Partner and LGP, then
the general partners of the Partnership, entered into a Purchase Agreement
pursuant to which the Transfer was effected. In addition to the Transfer, the
Related General Partner also acquired LGP's special limited partnership interest
in the Partnership and its general partnership interest in Liberty Associates.
Prior to the Transfer, Liberty Associates was an affiliate of Lehman Brothers.

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.

-102-

PART IV

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

-103-

** 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 105

(b) REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the quarter.

-104-

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

-105-

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 6, 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 6, 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:

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 31, 2002 on page 16 and based on the reports
of other auditors, we have also audited supporting Schedule I for the 2001, 2000
and 1999 Fiscal Years and Schedule III at March 15, 2002. 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 2001 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 $473,730 (2001 Fiscal Year), $381,572
(2000 Fiscal Year) and $384,713 (1999 Fiscal Year) and their assets aggregated
$6,826,787 and $7,339,450 at March 15, 2002 and 2001, 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 31, 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

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

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

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 2002

LIBERTY TAX CREDIT PLUS L.P.
AND SUBSIDIARIES
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
Partnership Property Pledged as Collateral
MARCH 15, 2002

(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.

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.