PATRIOT TAX CREDIT PROPERTIES 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 31, 2002

OR

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

Commission File Number 0-20638

PATRIOT TAX CREDIT PROPERTIES L.P.
----------------------------------
(formerly known as Prudential-Bache Tax Credit Properties L.P.)
(Exact name of registrant as specified in its charter)

DELAWARE 13-3519080
- ---------------------------------------- ----------------------
(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 Unit Certificates
(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

Patriot Tax Credit Properties L.P. (the "Registrant"), a Delaware limited
partnership, was formed on May 3, 1989 and will terminate on December 31, 2029
unless terminated sooner under the provisions of the Amended and Restated
Agreement of Limited Partnership (the "Partnership Agreement"). The Registrant
was formed to invest in low-income, multi-family residential complexes
("Apartment Complexes" or "Properties") and, to a lesser extent, in historic
apartment complexes undergoing rehabilitation ("Historic Complexes" or
"Properties") through the acquisition of interests (the "Local Partnership
Interests") in local partnerships (the "Local Partnerships") that are the owners
of the Properties. These investments were made with proceeds from the initial
sale of 38,125 Beneficial Unit Certificates ("BUC$"). The Registrant's fiscal
year for tax and financial reporting purposes ends on December 31 and March 31,
respectively.

The primary objectives of the Registrant are to provide the limited partners
with low-income housing tax credits allowed under Section 42 of the Internal
Revenue Code of 1986, as amended ("Housing Tax Credits") over the credit period
for each Property in which the Registrant has invested and to a lesser extent,
10-year historic rehabilitation tax credits allowed under Section 48(g) of the
Internal Revenue Code of 1986, as amended. The Registrant invested only in Local
Partnerships that owned Properties which qualified for Housing Tax Credits. No
properties were acquired from any entity in which Prudential-Bache Properties,
Inc. (the former general partner) or any affiliate had an interest. The
Registrant's investments are composed of limited partnership interests in Local
Partnerships owning then newly constructed or existing structures that have
undergone substantial rehabilitation. The Local Partnerships in which the
Registrant has invested must be operated in accordance with the low-income
housing rules and regulations to protect the related tax credits. It is not
expected that any of the Local Partnerships in which the Registrant has invested
will generate any significant cash flow to provide distributions to the holders
of BUC$ ("BUC$ holders") or the limited partners.

The Registrant expects that in order to avoid recapture of Housing Tax Credits,
its holding period with respect to each Local Partnership Interest will be at
least as long as the 15-year compliance period and may be substantially longer.

The Registrant is in the final year of its 10-year Housing Tax Credit period,
however, the compliance period is still in effect.

Each Property in which the Registrant invested is substantially mortgaged.
However, the aggregate indebtedness did not exceed 85% of the appraised fair
market value of any Property at the time of acquisition. The first mortgage
financing encumbering the Properties was arranged by the general partner of the
Local Partnership (the "Local General Partner") owning the Properties prior to
the time the Registrant became a limited partner therein.

The Registrant acquired its Local Partnership Interest in each Local Partnership
by purchasing it directly from the existing limited and/or general partner of
the Local Partnership. In each of the Registrant's investments, the Local
General Partner of the Local Partnership owning the complex was required to
provide personal guarantees and/or establish cash escrows, financial bonds
and/or letters of credit to protect the Registrant against, among other things,
the failure to meet certain operating criteria. All of these guarantees and
escrows have expired.

2

The Registrant is engaged solely in the business of investing in Local
Partnerships that own Properties; therefore, presentation of industry segment
information is not applicable. For more information regarding the Properties,
see Item 2, Properties. For more information regarding the Registrant's
operations, see Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations.

One Property had income which exceeded 15% of the Registrant's total revenue.
Income from Palm Beach Apartments Ltd. ("Summer Creek Villas") as a percentage
of the Registrant's total revenue was 50.89%, 56.56% and 53.56% during the years
ended March 31, 2002, 2001 and 2000, respectively.

No single tenant accounted for 10% or more of the Registrant's total revenue for
any of the three years in the period ended March 31, 2002.

GENERAL PARTNER
On October 1, 1997, as part of the settlement of class action litigation known
as Prudential Securities Inc. Limited Partnership Litigation, MDL No. 1005,
Prudential-Bache Properties, Inc. ("PBP") withdrew as the general partner and
transferred its general partner interest in the Partnership to RCC Partners 96,
L.L.C. (the "New GP"), an affiliate of Related Capital Company ("RCC") pursuant
to a purchase agreement dated as of December 19, 1996 among PBP and its
affiliates and RCC (the "Purchase Agreement"). Affiliates of RCC have in the
past provided and currently provide services to the Registrant and also serve as
general or co-general partner of five of the eight Local Partnerships in which
the Registrant has an interest. The Registrant's Partnership Agreement was
amended to reflect this withdrawal and admission and authorized PBP to transfer
and assign its interest in the Registrant to the New GP and to withdraw from the
Registrant. The terms of the transaction are more fully described in the
Registrant's Information Statement dated June 18, 1997 (the "Information
Statement"), which was previously distributed to all BUC$ holders and partners
of the Registrant.

Pursuant to the Purchase Agreement, P-B Tax Credit S.L.P. ("PBSLP") withdrew as
special limited partner of each of the Local Partnerships and was replaced by
Independence SLP L.P. (the "New SLP"), an affiliate of RCC. All special limited
partnership interests in the Local Partnerships were transferred to the New SLP.
Also pursuant to the Purchase Agreement, Prudential-Bache Investor Services II,
Inc. ("P-B II") withdrew as assignor limited partner of the Partnership and was
replaced by Related Insured BUC$ Associates, Inc., an affiliate of RCC, (the
"New ALP"). All assignor limited partnership interests in the Registrant were
transferred to the New ALP.

The New GP is a Delaware limited liability company which was formed in July
1996, and is owned and controlled by the partners of RCC. The New GP has no
material net worth.

Affiliates of the New GP and RCC have had significant involvement with the
Registrant and the Local Partnerships, of which five are owned by RCC
affiliates. During the acquisition phase of the Registrant's operation,
affiliates of RCC provided among other services, various services to PBP
pursuant to a Real Estate Consulting Services Agreement. These services included
the identification, evaluation, negotiation and closing of certain of the
Registrant's investments for which RCC was paid a portion of the acquisition
fees and expenses paid to PBP.

RCC provided, in the past and will continue to provide ongoing monitoring
services with respect to the Registrant's investments pursuant to the Property
Investment Monitoring Agreement for which RCC, in the past, received from PBP a
portion of the partnership management fee payable to PBP and an annual expense
allowance of up to $1,300 per site visit (after the initial four site visits).

3

Pursuant to the Purchase Agreement, the following changes were made to the
Partnership Agreement:

(a) amended to change the name of the Registrant to "Patriot Tax Credit
Properties L.P.", a Delaware limited partnership.

(b) amended to confirm that PBP continues to be party to the indemnification
provisions set forth in the Partnership Agreement.

(c) amended to reflect: (1) the reduction in the General Partner's maximum
participating interest in cash flow from 0.5% annually of invested assets to
0.375% annually; (2) the reduction by 50% of the General Partner's residual
interest in the Registrant, comprised of (i) subordinated interest in
disposition proceeds and (ii) interest in distributions of sale or refinancing
proceeds; and (3) corresponding reductions in the General Partner's interest in
profits and losses.

Finally, pursuant to the Purchase Agreement, PBP and PBSLP forgave all deferred
and unpaid fees due to them by the Registrant and the Local Partnerships. The
aggregate amount of such deferred and unpaid fees was $1,034,498 as of September
30, 1997 and was reflected as a capital contribution in the Consolidated
Statement of Changes in Partners' Capital.

COMPETITION
The General Partner has formed various entities to engage in businesses that may
be competitive with the Registrant.

The Registrant's business is affected by competition to the extent that the
underlying Properties from which it derives tax credits may be subject to
competition relating to rental rates and amenities from comparable neighboring
properties.

EMPLOYEES
The Registrant has no employees. Management and administrative services for the
Registrant are performed by the General Partner and its affiliates pursuant to
the Partnership Agreement. See Notes 1, 3 and 6 to the consolidated financial
statements set forth in Item 8.

4

Item 2. Properties.

As of March 31, 2002, the Registrant holds interests in Local Partnerships which
own the following Properties which continue to be operated in a manner to
qualify for Housing Tax Credits:

(a) At March 31, 2002, the Registrant holds a 66.5% interest in Summer Creek
Villas, a 98% interest in Hubbard's Ridge, Hill Top Homes and Compton Townhouses
and a 98.99% interest in Cutler Canal II, Diamond Street, Papillion Heights and
Brookland Park Plaza.

Hubbard's Ridge is comprised of seven separate three-story buildings on
approximately 6.5 acres. The buildings are wood-framed structures on
post-tensioned flat slab grade foundations and have white stucco exteriors with
asphalt shingles on sloped roofs. Each building contains an average of 28 units.
The unit mix consists of 164 one-bedroom units ranging in size from 657 square
feet to 783 square feet and 32 two-bedroom units ranging in size from 1,145
square feet to 1,167 square feet.

Cutler Canal II is comprised of 216 units in 13 two-story garden-style
residential buildings on approximately 9.4 acres. It borders on a Metro-Dade
Water Management District Canal on the east with approximately 1,200 square feet
of frontage giving certain units waterfront views. Each building has a laundry
room and two storage rooms. There are three basic floor plans

5

with sizes ranging from 700 square feet for a one-bedroom apartment to 1,100
square feet for a three-bedroom unit.

Diamond Street consists of 48 units in 16 buildings. The buildings are
three-story brownstone row houses with historic features and similar layouts. Of
the 48 apartment units, 46 are two-bedroom apartment units and two are
efficiency apartment units.

Papillion Heights consists of two buildings, each containing 24 units. The
buildings are 2 1/2 stories of wood frame and brick exterior with pitched roofs.
Of the total 48 apartment units, two are one-bedroom units and 46 are
two-bedroom units.

Hill Top Homes is comprised of a two-story building surrounded by 13 one-story
fourplexes which are brick with wood siding and pitched roofs. The buildings are
surrounded by a security gate of brick columns and wrought iron fencing with a
guard house at the entrance. Of the total 171 apartment units, 18 are
three-bedroom/one bath apartment units, each comprising approximately 925 square
feet; 52 are two-bedroom/two bath apartment units, each comprising approximately
1,100 square feet; 98 are two-bedroom/one bath apartment units, each comprising
approximately 936 square feet; and three are one-bedroom/one bath apartment
units, each comprising approximately 1,000 square feet.

Summer Creek Villas consists of 61 concrete block and stucco buildings housing
770 apartment units situated on approximately 60 acres of residential-planned
unit-development zoned land. 182 of the units are one-bedroom/one-bath
apartments, each comprising 570 square feet; 372 are two-bedroom/one-bath
apartments, each comprising 773 square feet; 144 are three-bedroom/two-bath
apartments, each comprising 980 square feet; and 72 are three-bedroom/two-bath
villa units, each comprising 1,050 square feet. In September 1997, the Local
General Partner for Summer Creek Villas decided to divide the apartment complex
into two individual entities called the Arbors and the Crossings.

Brookland Park Plaza is a three-level brick building and is a registered
historic landmark. The building is comprised of stucco and brick exterior and a
sloped red glazed tile roof. It is a 77-unit development with 68,564 net
rentable square feet. All 77 units are one-bedroom apartment units each
comprising approximately 890 square feet. Each unit contains a refrigerator,
range oven, carpeting and air-conditioning. Brookland Park Plaza also maintains
a community room for tenants.

The Compton Townhouses consists of six two-story buildings containing a total of
39 townhouse units. Four of the buildings contain six units; one building has
seven units; and one has eight units. All units have three bedrooms and
two-and-one-half baths. Total gross building area is 52,595 square feet; net
rentable area is 47,814 square feet. The average net area of the subject units
is 1,226 square feet.

For additional information describing the Registrant's properties and
encumbrances, see Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations and Schedule III - Real Estate and
Accumulated Depreciation.

Item 3. Legal Proceeding

None.

Item 4. Submission of Matters to a Vote of Limited Partners

None.

6

PART II

Item 5. Market for the Registrant's BUC$ and Related Limited Partner Matters

As of June 1, 2002, there were $2,238 BUC$ holders of record owning a total of
38,125 BUC$. Additionally, the General Partner holds one BUC$. A significant
secondary market for BUC$ has not developed, and it is not expected that one
will develop in the future. There are also certain restrictions set forth in the
Partnership Agreement limiting the ability of a limited partner to transfer
BUC$.

There are no material restrictions upon the Registrant's present or future
ability to make distributions in accordance with the provisions of the
Partnership Agreement; however, the Registrant has paid no distributions from
operations or otherwise since inception. No distributions are anticipated in the
foreseeable future.

7

Item 6. Selected Financial Data.

The following table presents selected financial data of the Registrant. This
data should be read in conjunction with the consolidated financial statements of
the Registrant and the notes thereto set forth in Item 8.

8

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

LIQUIDITY AND CAPITAL RESOURCES

The Registrant invested in eight Local Partnerships that are owners of
affordable multi-family residential complexes. The Local Partnerships are
operated in accordance with the rules and regulations of Section 42 of the
Internal Revenue Code in order to protect the Housing Tax Credits. The
Registrant's primary source of funds is rental revenues, which are fully
utilized at the property level. As of March 31, 2002, there was approximately
$377,000 in working capital reserves available to fund Registrant level
expenses. The Registrant is dependent upon the support of the General Partner
and certain of its affiliates in order to meet its obligations at the Registrant
level. The General Partner and these affiliates have agreed to continue such
support for the foreseeable future.

At the Local Partnership level, certain Local General Partners and/or their
affiliates have made deficit guaranty agreements with respect to the Local
Partnerships which, under certain circumstances, required the Local General
Partners and/or their affiliates to fund cash flow deficits. These operating
deficit advances do not bear interest and are repayable by the Local Partnership
in accordance with the respective deficit guaranty agreements. In addition, the
Registrant's financial statements as of March 31, 2002 and 2001 also reflect
payables of $282,000 and $427,000 under operating deficit guaranty agreements at
Hubbard's Ridge and Hill Top Homes, which have expired. As of March 31, 2002,
all operating deficit guaranty agreements have expired.

SUMMER CREEK VILLAS LOCAL PARTNERSHIP
The Summer Creek Villas has experienced lower than expected economic occupancy
levels over the course of the last several years, which has resulted in
recurring losses from operations and has adversely affected the liquidity of
Summer Creek Villas. Despite an increase in rent levels during 2001, Summer
Creek Villas' operations are impeded by the inability to raise rents
sufficiently to pay for the operating and debt costs. Summer Creek Villas has
been unable to obtain maximum rents as potential residents are restricted based
on county median income levels, which limit the maximum income that a
prospective resident can earn. The Summer Creek Villas has been obligated, since
1996, to repay significant amounts of principal on its mortgage.

During 2001 and 2000, in an effort to improve occupancy, the Summer Creek Villas
invested funds to improve the physical condition of the property. Such
improvements primarily consisted of painting, landscaping, new playground,
asphalt repairs, and individual units fixture and finish replacements.

The Local General Partner of Summer Creek Villas was formerly obligated to fund
operating deficits under two separate operating deficit guaranty agreements,
which ended December 31, 1997. Total advances made by the Local General Partner
under the operating deficit guaranties totaled $2,742,460. In addition, the
Local General Partner has made voluntary loans in excess of its obligations
under the guaranties to fund operations of $1,645,074. Additional voluntary
loans during 2001 and 2000 of $1,525,000 and $2,436,936, respectively, have been
received from Patriot Tax Credit Properties, L.P. and Palm Beach Investor, L.P.
(Washington Mutual).

Effective January 1, 1999, Summer Creek Villas entered into a funding
agreement with its Class C local limited partner which provides for a series
of loans to be made to Summer Creek Villas in each of the years 1999, 2000
and 2001, in amounts not to exceed $2,000,000 in the aggregate. Although no
formal agreements have been reached with the other partners, additional loans
from the Partnership (which is the Class A limited partner) are expected to
be obtained in accordance

9

with the loans to be provided under the funding agreement. Loans made in 2001
and 2000 to fund operating deficit's total $1,525,000 and $2,436,936,
respectively. As of December 31, 2001, no additional funding is required.
Management of Summer Creek Villas plans to request additional funding from
its partners (including the Partnership) in the coming year.

These loans, if obtained, are expected to enable the Summer Creek Villas to
continue operations and make payments on its mortgage while management endeavors
to improve occupancy rates and rental rates to sufficient levels to sustain
operations independent of such funding.

During 2001, the management agent, an affiliate of Summer Creek Villas, advanced
Summer Creek Villas operating funds in the form of deferred management fees and
unreimbursed payroll in the amount of $797,017. The management agent is not
obligated to provide such advances.

As of March 31, 2002 and 2001, the consolidated financial statements include
total assets of $32,067,406 and $33,168,512, respectively, total liabilities of
$36,100,522 and $33,486,565, respectively, and a minority interest of $796,380
and $409,237, respectively, attributable to this subsidiary.

Summer Creek Villas' ability to continue its operations is dependent upon
management achieving the plans described in the foregoing paragraphs. The
accompanying consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty. Any adjustments would be
limited solely to Summer Creek Villas' financial statements included herein.

RESULTS OF OPERATIONS

The operating results of the Local Partnerships consolidated herein are for the
twelve-month periods ended December 31. Information disclosed below with respect
to each Local Partnership is consistent with this method.

FISCAL 2002 VS. FISCAL 2001

Rental income increased approximately $524,000 for the year ended March 31, 2002
as compared to 2001, primarily due to rental rate increases and an increase in
occupancy at Summer Creek Villas.

No other operating accounts had significant changes.

FISCAL 2001 VS. FISCAL 2000

Rental income increased approximately $1,617,000 for the year ended March 31,
2001 as compared to 2000, primarily due to an increase in occupancy and rental
rates at Summer Creek Villas, Hubbard's Ridge and Diamond Street Venture.

Other income increased approximately $229,000 for the year ended March 31, 2001
as compared to 2000, primarily due to an increase in application fees,
termination fees and tenant damage fees at Summer Creek Villas.

Interest income increased approximately $15,000 for the year ended March 31,
2001 as compared to 2000, primarily due to an increase in interest income from
the restricted replacement reserve cash at Summer Creek Villas.

10

Total expenses, excluding repairs and maintenance, general and administration
and property management fees, remained fairly consistent with an increase of
approximately $383,000 for the year ended March 31, 2001 as compared to 2000.

Repairs and maintenance increased approximately $614,000 for the year ended
March 31, 2001 as compared to 2000, primarily due to the rehabilitation of
apartments at Summer Creek Villas and Diamond Street Venture.

General and administrative increased approximately $901,000 for the year ended
March 31, 2001 as compared to 2000, primarily due to an increase of salaries and
employee costs, administration, marketing and promotion costs at Summer Creek
Villas.

Property management fees increased approximately $91,000 for the year ended
March 31, 2001 as compared to 2000, primarily due to an increase in rental
income resulting in higher management fees at Hubbard's Ridge, Summer Creek
Villas, and a change in the management agent at Papillion.

PROPERTY INFORMATION

The Registrant currently holds interests in eight Local Partnerships. The
following schedule gives specific details about the related Properties.

11

(a) At March 31, 2002, the Registrant holds a 66.5% interest in Summer Creek
Villas, a 98% interest in Hubbard's Ridge, Hill Top Homes and Compton Townhouses
and a 98.99% interest in Cutler Canal II, Diamond Street, Papillion Heights and
Brookland Park Plaza.

(b) The investment in property relating to the Diamond Street Venture was
reduced by $2,700,000 as of March 31, 1995 representing a loss on impairment of
assets.

(c) Occupancies are calculated by dividing occupied units by total available
units.

Net operating income before debt service of the Local Partnerships for each of
the years in the three-year period ended March 31, 2002, was as follows:

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

Not applicable.

12

Item 8. Financial Statements and Supplementary Data.

13

INDEPENDENT AUDITORS' REPORT

To the Partners of
Patriot Tax Credit Properties L.P. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Patriot Tax
Credit Properties L.P. and Subsidiaries as of March 31, 2002 and 2001, and the
related consolidated statements of operations, changes in partners' capital
(deficit) and cash flows for the years ended March 31, 2002, 2001 and 2000. The
consolidated financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these consolidated
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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Patriot Tax Credit
Properties L.P. and Subsidiaries as of March 31, 2002, 2001, and the results of
their operations, changes in Partners' capital (deficit), and their cash flows
for the years ended March 31, 2002, 2001 and 2000, in conformity with accounting
principles generally accepted in the United States of America.

Our report on the 2002 financial statements of a subsidiary included an
explanatory paragraph describing conditions that raised substantial doubt
regarding its ability to continue as a going concern, as discussed in note 10 to
the consolidated financial statements.

REZNICK FEDDER & SILVERMAN

Bethesda, Maryland
June 4, 2002

14

[Letterhead of Dickey, Wolf & Humbard, LLC]

INDEPENDENT AUDITORS' REPORT

To The Partners
RMB Limited Partnership

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

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 RMB 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/ DICKEY, WOLF & HUMBARD, LLC
Certified Public Accountants
Harrisonville, MO
January 23, 2002

15

[Letterhead of Dickey, Wolf & Humbard, LLC]

INDEPENDENT AUDITORS' REPORT

To The Partners
RMB Limited Partnership

We have audited the accompanying balance sheets of RMB LIMITED PARTNERSHIP (a
Texas Limited Partnership) as of December 31, 2000 and 1999, and the related
statements of income, 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. 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 RMB 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 accounting principles generally
accepted in the United States of America.

/s/ DICKEY, WOLF & HUMBARD, LLC
Certified Public Accountants
Harrisonville, MO
January 18, 2001

16

[Letterhead of KPMG]

INDEPENDENT AUDITORS' REPORT

To the General Partners
Cutler Canal II Associates, Ltd.

We have audited the accompanying balance sheet of Cutler Canal II Associates,
Ltd. 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 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 Cutler Canal II 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 accounting principles
generally accepted in the United States of America.

Our audits was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information included in the
Schedule of Certain Expenses 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 procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.

/s/ KPMG
Greenville, South Carolina
February 13, 2002

17

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Cutler Canal II Associates, Ltd.

We have audited the accompanying balance sheets of Cutler Canal II Associates,
Ltd., as of December 31, 2000 and 1999, and the related statements of
operations, 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 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 Cutler Canal II Associates,
Ltd., 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 audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 18
and 19 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/ Reznick Fedder & Silverman
Atlanta, Georgia
January 30, 2001

18

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Diamond Street Venture

We have audited the accompanying balance sheet of Diamond Street Venture as of
December 31, 2001, and the related statements of profit and loss, changes in
partners' equity (deficit) and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Diamond Street Venture for the year ended
December 31, 2000, were audited by other auditors whose report, dated January
29, 2001, expressed an unqualified opinion on those statements.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and the standards applicable to financial audits
contained in GOVERNMENT AUDITING STANDARDS, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our 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 Diamond Street Venture 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 26
and 29 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 a report
for the year ended December 31, 2001, dated February 8, 2002, on our
consideration of Diamond Street 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
February 8, 2002

19

[Letterhead of Ziner, Kennedy & Lehan LLP]

INDEPENDENT AUDITORS' REPORT

To the Partners of
Diamond Street Venture

We have audited the accompanying balance sheets of Diamond Street 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 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 Diamond Street Venture as of
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 29, 2001

20

[Letterhead of Schultz, Durham & Rapp, P.C.]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Papillion Heights Apartments, L.P.
(A Limited Partnership)
Springfield, Missouri

We have audited the balance sheets of Papillion Heights Apartments, 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 Papillion Heights Apartments,
L.P. (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
accounting principles generally accepted in the United States of America.

/s/ Schultz, Durham & Rapp, P.C.
Springfield, Missouri
February 12, 2002

21

[Letterhead of Schultz, Durham & Rapp, P.C.]

INDEPENDENT AUDITOR'S REPORT

To the Partners
Papillion Heights Apartments, L.P.
(A Limited Partnership)
Springfield, Missouri

We have audited the balance sheets of Papillion Heights Apartments, 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 Papillion Heights Apartments,
L.P. (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.

/s/ Schultz, Durham & Rapp, P.C.
Springfield, Missouri
February 1, 2001

22

[Letterhead of Dickey, Wolf & Humbard, LLC]

INDEPENDENT AUDITORS' REPORT

To the Partners
Hill Top Homes Apartments Limited Partnership

We have audited the accompanying balance sheets of HILL TOP HOMES APARTMENTS
LIMITED PARTNERSHIP, (a Texas Limited Partnership) as of December 31, 2001 and
2000, and the related statements of operations, partners' equity/(deficit) and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 HILL TOP HOMES APARTMENTS
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/ Dickey, Wolf & Humbard, LLC
Certified Public Accountants
Harrisonville, MO
January 23, 2002

23

[Letterhead of Dickey, Wolf & Humbard, LLC]

INDEPENDENT AUDITORS' REPORT

To the Partners
Hill Top Homes Apartments Limited Partnership

We have audited the accompanying balance sheets of HILL TOP HOMES APARTMENTS
LIMITED PARTNERSHIP, (a Texas Limited Partnership) as of December 31, 2000 and
1999, and the related statements of operations, partners' equity/(deficit) and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 HILL TOP HOMES APARTMENTS
LIMITED PARTNERSHIP as of December 31, 2000 and 1999, and the results of its
operations and its cash flows for they years then ended, in conformity with
accounting principles generally accepted in the United States of America.

/s/ Dickey, Wolf & Humbard, LLC
Certified Public Accountants
Harrisonville, MO
January 18, 2001

24

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Palm Beach Apartments, Ltd.

We have audited the accompanying balance sheets of Palm Beach Apartments, Ltd.
as of December 31, 2001 and 2000, and the related statements of operations,
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 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 Palm Beach Apartments, Ltd., as
of December 31, 2001 and 2000, 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.

The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note B to the
financial statements, the Partnership has suffered recurring losses from
operations and has a capital deficiency that raises substantial doubt regarding
its ability to continue as a going concern. Management's plans in connection
with these matters are also described in Note B. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 19
and 20 is presented for purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected to
the auditing procedures applied in the 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/ Reznick Fedder & Silverman
Atlanta, Georgia
February 5, 2002

25

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Palm Beach Apartments, Ltd.

We have audited the accompanying balance sheets of Palm Beach Apartments, Ltd.
as of December 31, 2000 and 1999, and the related statements of operations,
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 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 Palm Beach Apartments, Ltd., 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 B to the
financial statements, the Partnership has suffered recurring losses from
operations and has a capital deficiency that raises substantial doubt regarding
its ability to continue as a going concern. Management's plans in connection
with these matters are also described in Note B. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 21
and 22 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/ Reznick Fedder & Silverman
Atlanta, Georgia
February 16, 2001

26

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Brookland Park Plaza Limited Partnership

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

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 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 Brookland Park Plaza Limited
Partnership as of December 31, 2001, and the results of its operations, the
changes in partners' equity (deficit) and cash flows for the year 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 supplemental information on pages 21 through 25
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 dated January 17,
2002 on our consideration of Brookland Park Plaza Limited Partnership's internal
control and on its compliance with specific requirements applicable to major HUD
programs and 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
Lead Auditor: Renee G. Scruggs
Bethesda, Maryland
Taxpayer Identification Number: 52-1088612
January 17, 2002

27

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Brookland Park Plaza Limited Partnership

We have audited the accompanying balance sheet of Brookland Park Plaza Limited
Partnership as of December 31, 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 audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brookland Park Plaza Limited
Partnership as of December 31, 2000, and the results of its operations, the
changes in partners' equity (deficit) and 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 21 through 25
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 dated January 16,
2001 on our consideration of Brookland Park Plaza Limited Partnership's internal
control and on its compliance with specific requirements applicable to major HUD
programs and 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
Lead Auditor: Renee G. Scruggs
Bethesda, Maryland
Taxpayer Identification Number: 52-1088612
January 16, 2001

28

[Letterhead of Reznick Fedder & Silverman]

INDEPENDENT AUDITORS' REPORT

To the Partners
Brookland Park Plaza Limited Partnership

We have audited the accompanying balance sheet of Brookland Park Plaza Limited
Partnership as of December 31, 1999, and the related statements of operations,
partners' (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 generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brookland Park Plaza Limited
Partnership as of December 31, 1999, and the results of its operations, the
changes in partners' equity (deficit) and 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 21 through 25
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 dated January 20,
2000 on our consideration of Brookland Park Plaza Limited Partnership's internal
control and on its compliance with specific requirements applicable to major HUD
programs, fair housing and non-discrimination.

/s/ Reznick Fedder & Silverman
Lead Auditor: Renee G. Scruggs
Bethesda, Maryland
Taxpayer Identification Number: 52-1088612
January 20, 2000

29

[Letterhead of Barnes, Dennig & Co., Ltd.]

Report of Independent Certified Public Accountants

To the Partners
Compton Townhouses Limited Partnership
(An Ohio Limited Partnership)

We have audited the accompanying balance sheets of Compton Townhouses Limited
Partnership (An Ohio Limited Partnership), 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. 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 Compton Townhouses Limited
Partnership (An Ohio 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/ Barnes, Dennig & Co., Ltd.
Cincinnati, Ohio
January 22, 2002

30

[Letterhead of Barnes, Dennig & Co., Ltd.]

Report of Independent Certified Public Accountants

To the Partners
Compton Townhouses Limited Partnership
(An Ohio Limited Partnership)

We have audited the accompanying balance sheets of Compton Townhouses Limited
Partnership (An Ohio 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 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 Compton Townhouses Limited
Partnership (An Ohio 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/ Barnes, Dennig & Co., Ltd.
Cincinnati, Ohio
January 24, 2001

31

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

ASSETS

See accompanying notes to consolidated financial statements.

32

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

33

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)

See accompanying notes to consolidated financial statements.

34

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying notes to consolidated financial statements.

35

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002

NOTE 1 - General

Patriot Tax Credit Properties L.P., a Delaware limited partnership (the
"Partnership"), was formed on May 3, 1989, and will terminate on December 31,
2029, unless terminated sooner under the provisions of the Amended and Restated
Agreement of Limited Partnership (the "Partnership Agreement"). The Partnership
was formed to invest as a limited partner in other partnerships ("Local
Partnerships" or "subsidiaries") owning apartment complexes ("Apartment
Complexes" or "Properties") that are eligible for the low-income housing tax
credit or the historic rehabilitation tax credit ("Tax Credit"). The general
partner of the Partnership, from inception to September 30, 1997,
Prudential-Bache Properties, Inc. (the "General Partner" or "PBP"), is not
affiliated with a general partner of any Local Partnership ("Local General
Partner"). P.B. Tax Credit S.L.P. ("PBSLP"), an affiliate of PBP, acted as
special limited partner of each Local Partnership entitling it to certain rights
with respect to the operation and management of each Local Partnership. At March
31, 2002, the Partnership has investments in eight Local Partnerships.

On October 1, 1997, RCC Partners 96, L.L.C. became the new General Partner (the
"New GP" or "General Partner") and is an affiliate of Related Capital Company
("RCC"). Also Independence SLP L.P. became the new SLP (the "New SLP") and is an
affiliate of RCC, and Related Insured BUC$ Associates, Inc., an affiliate of
RCC, became the new assignor Limited Partner (the "New ALP").

NOTE 2 - Summary of Significant Accounting Policies

a) Basis of Accounting and Principles of Consolidation

The books and records of the Partnership are maintained on the accrual basis of
accounting in accordance with accounting principle generally accepted in the
United States of America. The preparation of financial statements in conformity
with accounting principle generally accepted in the United States of America
requires the General Partner to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements as well as the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

The consolidated financial statements include the assets, liabilities and
results of operations of the subsidiaries. All subsidiaries have fiscal years
ending December 31. Intercompany transactions have been eliminated.

Minority interest in Local Partnerships represents the minority partners' share
of the net assets of the Local Partnerships.

b) Investment in Property

The impairment of Properties to be held and used is determined to exist when
estimated amounts recoverable through future operations on an undiscounted basis
are below the Prop-

36

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002

erties' carrying value. If a property is determined to be impaired, it is
recorded at the lower of its carrying value or its estimated fair value.

The determination of estimated fair value is based not only upon future cash
flows, which rely upon estimates and assumptions including expense growth,
occupancy and rental rates, and Tax Credits, but also upon market capitalization
and discount rates as well as other market indicators. However, changes in
market conditions and circumstances may occur in the near term which would cause
these estimates and assumptions to change, which, in turn, could cause the
amounts ultimately realized upon the sale or other disposition of the Properties
to differ materially from their estimated fair value. Such changes may also
require write-downs in future years.

The cost of buildings and improvements is depreciated using the straight-line
method over their estimated useful lives, which range from 27.5 to 40 years.

c) Cash and Cash Equivalents

Cash and cash equivalents include money market funds whose cost approximates
market value.

d) Cash and Cash Equivalents Held in Escrow

Cash and cash equivalents held in escrow include restricted funds held for
payment of real estate taxes and insurance, tenant security deposits and
replacement reserves.

e) Taxes

The Partnership is not required to provide for, or pay, any Federal or state
income taxes. Income tax attributes that arise from its operations are passed
directly to the partners. The Partnership may be subject to other state and
local taxes in jurisdictions in which it operates. For income tax purposes, the
Partnership's year ends on December 31.

f) Profits and Loss Allocations/Distributions

Net income or loss is allocated 99.5% to the limited partners and .5% to the
General Partner.

Distributions of cash may be made in accordance with the Partnership Agreement
and, if made, are allocated 99.5% to the limited partners and .5% to the General
Partner. As of March 31, 2002, no distributions have been paid.

g) Rental Income

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

h) Reclassification

37

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002

Certain items in the 2001 financial statements have been reclassified to conform
to the 2000 and 2002 presentation.

NOTE 3 - Costs, Fees and Expenses

a) Deferred Financing Costs

Deferred financing costs include amounts paid for services rendered in arranging
the financing for the Local Partnerships. These costs were capitalized and are
being amortized over the lives of the related debt. The accumulated amortization
as of March 31, 2002 and 2001 is, $3,433,205 and $3,191,270, respectively.

b) Management Fees

Each individual Property has a managing agent who performs the necessary
functions in operating the Property. The property management fee is equal to a
percentage of the annual gross revenues of a Property paid in consideration of
the property management services provided (See Note 7).

The General Partner is entitled to receive a partnership management fee, payable
from operations and reserves, in an amount not to exceed the difference between
...375% per annum of Invested Assets (as defined in the Partnership Agreement) and
the local administrative fee payable to the New SLP. This partnership management
fee is for administering the affairs of the Partnership (See Note 6). Unpaid
portions of the management fee for any year accrue without interest.

c) General and Administrative

The Partnership reimburses the General Partner and its affiliates for actual
Partnership operating expenses payable by or allocable to the Partnership (See
Note 6). The Partnership also pays amounts directly to unrelated third parties
for certain operating expenses.

38

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002

NOTE 4 - Investment in Property

The Partnership's Properties and related debt at March 31 were:

(a) The Partnership holds a 66.5% interest in Summer Creek Villas, a 98%
interest in Hubbard's Ridge, Hill Top Homes and Compton Townhouses and a 98.99%
interest in Cutler Canal II, Diamond Street, Papillion Heights and Brookland
Park Plaza.

(b) The investment in property relating to the Diamond Street Venture was
reduced by $2,700,000 as of March 31, 1995 representing a loss on impairment of
assets.

39

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002

NOTE 5 - Mortgage Notes Payable

Mortgage notes are collateralized by land, buildings and improvements and leases
related thereto. Annual principal payment requirements for each of the next five
years ending December 31, the date at which the Local Partnerships are
reporting, and thereafter are as follows:

Mortgage notes consist of both first mortgages and support loans (second and
third mortgages). First mortgages amounting to $41,075,770 bear interest at
rates ranging from 6.25% to 10.75% and have final maturities ranging from
September 1, 2006 to May 1, 2031. First mortgages include $24,776,886 in the
form of a guaranteed bond bearing interest at 10.451% (including a .125% service
fee payable to an affiliate of the Local General Partner) maturing on June 20,
2008. The support loans include two loans totaling $2,440,000 maturing on May 1,
2016 and December 15, 2029, the latter of which bears interest at 1%, and the
former being non-interest bearing, and a $2,500,000 loan bearing interest at a
maximum rate of 9% and maturing on January 16, 2005. The $2,500,000 loan
includes a base interest rate of 3% and an additional interest rate of 6%. The
base interest rate is payable annually from Project Income, as defined in the
loan agreement, and can be deferred if Project Income is inadequate. The
additional interest is payable from Project Income, if available, and only after
payment of a cumulative annual 12% return on capital to the limited partners of
the Local Partnership. Currently, only the base interest rate is being paid;
however, the additional interest of 6% continues to be accrued in the
accompanying consolidated financial statements.

On December 28, 2001, Hubbard's Ridge refinanced its outstanding mortgage note
payable in the amount of $1,852,154. The new mortgage in the amount of
$4,600,000 is payable in monthly installments of $31,131 including interest at
the rate 7.17% per annum through January 1, 2012, at which time the balance will
be due. Proceeds from the new mortgage were used to pay the prior mortgage note
payable, repay funds advanced from the Local General Partner and General
Partner, establish escrows, pay refinancing costs and the remaining cash was
distributed to the Partnership in the amount of approximately $1,939,000. The
Partnership used the proceeds to repay affiliates of the General Partner.

At March 31, 2002 and 2001, the estimated fair values of the mortgage notes
payable were approximately $42,823,333 and $47,022,241, respectively. These
estimates were based upon the present value of expected cash flows discounted
at rates currently available to the Local Partnerships for similar loans.
Fair value estimates are made at a specific point in time, based on relevant
market information, and are subjective in nature and involve uncertainties
and matters of significant judgment. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that the Local
Partnerships would pay upon maturity or disposition of the loans.

40

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002

NOTE 6 - Related Parties

During their respective ownership periods, the General Partner and its
affiliates have performed and will continue to perform services for the
Partnership which include, but are not limited to: accounting and financial
management, registrar, transfer and assignment functions, asset management,
investor communications, printing and other administrative services. The General
Partner and its affiliates receive partnership management fees and
reimbursements for general and administrative costs incurred in connection with
these services, the amount of which is limited by the provisions of the
Partnership Agreement. The costs and expenses incurred to the General Partner
were:

The Partnership is dependent upon the support of the General Partner and certain
of its affiliates in order to meet its obligations at the Partnership level. The
General Partner and these affiliates have agreed to continue such support for
the foreseeable future.

During the year ended March 31, 2002, the General Partner and its affiliates
advanced $730,958 to the Partnership and as of March 31, 2002 and 2001, total
advances outstanding are $6,565,471 and $5,834,513, respectively. The advances
are unsecured, and bear interest at prime +2% and due on demand.

NOTE 7 - Local General Partners and Affiliates of Local Partnerships

Certain Local General Partners and their affiliates provided services in
connection with the construction, financing and development of the Apartment
Complexes. Interest is accrued on certain loans made by three of the Local
General Partners during the years ended March 31, 2002, 2001 and 2000,
respectively. Additionally, during the years ended March 31, 2002, 2001 and
2000, five of the Local Partnerships were managed by a Local General Partner or
its affiliates. The costs were:

41

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002

Due to Local General Partners and affiliates of Local Partnerships includes
amounts payable for accrued interest, advances, property management fees and
operating loans made in accordance with operating deficit guaranty agreements.

The Local General Partner of Summer Creek Villas was formerly obligated to fund
operating deficits under two separate operating deficit guaranty agreements.
Total advances made by the Local General Partner under the operating deficit
guaranties totaled $2,742,460. In addition, the Local General Partner has made
voluntary loans in excess of its obligations under the guaranties to fund
operations of $1,645,074, even though as of December 31, 1997, the Local General
Partner was no longer required to fund operations of the Summer Creek Villas.

At March 31, 2002, the properties owned by four of the Local Partnerships are
managed by a Local General Partner or its affiliates and one Local Partnership
is managed by an affiliate of the General Partner and Local General Partner.

At March 31, 2002 and 2001, development fees of $1,151,510 and $1,450,709 were
payable to various Local General Partners.

NOTE 8 - Quarterly Financial Information (Unaudited)

NOTE 9 - Concentration of Credit Risk

The Partnership maintains its cash in several banks which are insured by the
Federal Deposit Insurance Corporation (FDIC) for a balance up to $100,000. At
times during 2002, the account balance exceeded the FDIC limit.

NOTE 10 - Forgiveness of Indebtedness Income

RMB LIMITED PARTNERSHIP ("HUBBARDS RIDGE")

During the year ended March 31, 2000 it was determined that construction costs
payable in the amount of $605,358 would not be paid and such amounts were
subsequently written off and recorded as forgiveness of indebtedness income on
the consolidated statements of operations of the Partnership.

42

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002

SUMMER CREEK VILLAS LOCAL PARTNERSHIP
During 2001, 2000 and 1999, various partners made voluntary loans to the
Partnership. The Local General Partner also elected to treat portions of such
loans in the amount of $593,589 and $1,051,485 as nonrepayable in 2001 and 2000.
During 2001, it was determined management fees in the amount of $239,413 payable
to the former management agent would not be paid and such amounts were
subsequently written off. These amounts were recorded as forgiveness of
indebtedness income on the consolidated statements of operations of the
Partnership.

NOTE 11 - Commitments and Contingencies

Subsidiary Partnership - Going Concern

SUMMER CREEK VILLAS LOCAL PARTNERSHIP
The Summer Creek Villas has experienced lower than expected economic occupancy
levels over the course of the last several years, which has resulted in
recurring losses from operations and has adversely affected the liquidity of
Summer Creek Villas. Despite an increase in rent levels during 2001, Summer
Creek Villas' operations are impeded by the inability to raise rents
sufficiently to pay for the operating and debt costs. Summer Creek Villas has
been unable to obtain maximum rents as potential residents are restricted based
on county median income levels, which limit the maximum income that a
prospective resident can earn. The Summer Creek Villas has been obligated, since
1996, to repay significant amounts of principal on its mortgage.

During 2001 and 2000, in an effort to improve occupancy, the Summer Creek Villas
invested funds to improve the physical condition of the property. Such
improvements primarily consisted of painting, landscaping, new playground,
asphalt repairs, and individual units fixture and finish replacements.

The Local General Partner of Summer Creek Villas was formerly obligated to fund
operating deficits under two separate operating deficit guaranty agreements,
which ended December 31, 1997. Total advances made by the Local General Partner
under the operating deficit guaranties totaled $2,742,460. In addition, the
Local General Partner has made voluntary loans in excess of its obligations
under the guaranties to fund operations of $1,645,074. Additional voluntary
loans during 2001 and 2000 of $1,525,000 and $2,436,936, respectively, have been
received from Patriot Tax Credit Properties, L.P. and Palm Beach Investor
(Washington Mutual).

Effective January 1, 1999, Summer Creek Villas entered into a funding agreement
with its Class C local limited partner which provides for a series of loans to
be made to Summer Creek Villas in each of the years 1999, 2000 and 2001, in
amounts not to exceed $2,000,000 in the aggregate. Although no formal agreements
have been reached with the other partners, additional loans from the Partnership
(which is the Class A limited partner) are expected to be obtained in accordance
with the loans to be provided under the funding agreement. Loans made in 2001
and 2000 to fund operating deficit's total $1,525,000 and $2,436,936,
respectively. As of December 31, 2001, no additional funding is required.
Management of Summer Creek Villas plans to request additional funding from its
partners (including the Partnership) in the coming year.

These loans, if obtained, are expected to enable the Summer Creek Villas to
continue operations and make payments on its mortgage while management endeavors
to improve occupancy rates and rental rates to sufficient levels to sustain
operations independent of such funding.

43

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002

During 2001, the management agent, an affiliate of Summer Creek Villas, advanced
Summer Creek Villas operating funds in the form of deferred management fees and
unreimbursed payroll in the amount of $797,017. The management agent is not
obligated to provide such advances.

As of March 31, 2002 and 2001, the consolidated financial statements include
total assets of $32,067,406 and $33,168,512, respectively, total liabilities of
$36,100,522 and $33,486,565, respectively, and a minority interest of $796,380
and $409,237, respectively, attributable to this subsidiary.

Summer Creek Villas' ability to continue its operations is dependent upon
management achieving the plans described in the foregoing paragraphs. The
accompanying consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty. Any adjustments would be
limited solely to Summer Creek Villas' financial statements included herein.

44

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.

There are no directors or executive officers of the Registrant. The Registrant
is managed by the General Partner.

The Registrant, the Registrant's General Partner and its members and executive
officers, and any persons holding more than ten percent of the Registrant's BUC$
are required to report their initial ownership of such BUC$ and any subsequent
changes in that ownership to the Securities and Exchange Commission on Forms 3,
4 and 5. Such executive officers, directors, and persons who own greater than
ten percent of the Registrant's BUC$ are required by Securities and Exchange
Commission regulations to furnish the Registrant with copies of all Forms 3, 4
and 5 they file. All of these filing requirements were satisfied on a timely
basis. In making these disclosures, the Registrant relied solely on written
representations of the General Partner, and its members and certain officers, if
any, or copies of the reports they have filed with the Securities and Exchange
Commission during and with respect to its most recent fiscal year.

The members and executive officers of the General Partner and their positions
with regard to managing the Registrant are as follows:

NAME POSITION

Alan P. Hirmes Member, President and Chief
Executive and Financial Officer

Stuart J. Boesky Member, Executive Vice President
and Chief Operating Officer

Denise L. Kiley Vice President

Mark J. Schlacter Vice President

Marc D. Schnitzer Vice President

Glenn F. Hopps Treasurer

Teresa Wicelinski Secretary

ALAN P. HIRMES, 47, is the sole stockholder of one of the general partners of
RCC, the real estate finance affiliate of The Related Companies, L.P. Mr. Hirmes
has been a Certified Public Accountant in New York since 1978. Prior to joining
Related in October 1983, Mr. Hirmes was employed by Wiener & Co., certified
public accountants. 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 American
Mortgage Acceptance Company.

STUART J. BOESKY, 46, is the sole stockholder of one of the general partners of
RCC, the real estate finance affiliate of The Related Companies, L.P. Mr. Boesky
practiced real estate and tax

45

law in New York City with the law firm of Shipley & Rothstein from 1984 until
February 1986 when he joined Related. From 1983 to 1984 Mr. Boesky practiced law
with the Boston law firm of Kaye, Fialkow, Richmond & Rothstein (which
subsequently merged with Strook & Strook & Lavan) and from 1978 to 1980 was a
consultant specializing in real estate at the accounting firm of Laventhol &
Horwath. Mr. Boesky graduated from Michigan State University with a Bachelor of
Arts degree and from Wayne State School of Law with a Juris Doctor degree. He
then received a Master of Laws degree in Taxation from Boston University School
of Law. Mr. Boesky also serves on the Board of Directors of Aegis Realty, Inc.,
Charter Municipal Mortgage Acceptance Company and American Mortgage Acceptance
Company.

DENISE L. KILEY, 42, is an Executive Vice President and Chief Underwriter for
RCC, responsible for overseeing the investment underwriting and approval of all
multifamily residential properties invested in RCC-sponsored corporate, public
and private equity and debt funds. Ms. Kiley is also responsible for the
strategic planning and implementation of the firm's mortgage financing programs.
Prior to joining Related in 1990, Ms. Kiley had experience acquiring, financing,
and managing the assets of multifamily residential properties. From 1981 through
1985 she was an auditor with a national accounting firm. Ms. Kiley holds a
Bachelor of Science degree in Accounting from Boston College and is a Member of
the Affordable Housing Roundtable.

MARK J. SCHLACTER, 51, is a Vice President of Mortgage Acquisitions of RCC, and
has been with Related since June 1989. Mr. Schlacter is responsible for the
origination of Related's taxable participating debt programs and low-income
housing tax credit debt programs. Prior to joining Related, Mr. Schlacter
garnered 16 years of direct real estate experience covering commercial and
residential construction, single and multifamily mortgage origination and
servicing, commercial mortgage origination and servicing, multifamily property
acquisition and financing, and multifamily mortgage lending program underwriting
and development. He was a Vice President with Bankers Trust Company from 1986 to
June 1989, and held prior positions with Citibank, Anchor Savings Bank and the
Pyramid Companies covering the 1972-1986 period. Mr. Schlacter holds a Bachelor
of Arts degree in Political Science from Pennsylvania State University and
periodically teaches multifamily underwriting at the New York University School
of Continuing Education, Real Estate Institute.

MARK D. SCHNITZER, 41, is an Executive Vice President of RCC and Director of the
firm's Tax Credit Acquisitions Group. Mr. Schnitzer received a Master of
Business Administration degree from The Wharton School of the University of
Pennsylvania in December 1987, and joined Related in January 1988. From 1983 to
1986, Mr. Schnitzer was a Financial Analyst in the Fixed Income Research
department of The First Boston Corporation in New York. Mr. Schnitzer received a
Bachelor of Science degree, summa cum laude, in Business Administration from the
School of Management at Boston University.

GLENN F. HOPPS, 39, joined RCC 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 RCC 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 Registrant does not pay or accrue any fees, salaries or any other form of
compensation to directors and officers of the General Partner for its services.
Certain executive officers and

46

directors of the General Partner receive compensation from affiliates of the
General Partner, not from the Registrant, for services performed for various
affiliated entities, which may include services performed for the Registrant;
however, the General Partner believes that any compensation attributable to
services performed for the Registrant is immaterial. See Item 13, Certain
Relationships and Related Transactions, for information regarding compensation
to the General Partner.

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

As of June 1, 2002, Messrs. Boesky and Hirmes own directly or beneficially 100%
of the interest in the voting securities of the General Partner.

As of June 1, 2002, no director or executive officer of the General Partner owns
directly or beneficially any of the BUC$ issued by the Registrant.

As of June 1, 2002, no limited partner beneficially owns more than five percent
(5%) of the BUC$ issued by the Registrant.

Item 13. Certain Relationships and Related Transactions.

The Registrant has and will continue to have certain relationships with the
General Partner and its affiliates. However, there have been no direct financial
transactions between the Registrant and the directors or executive officers of
the General Partner.

Reference is made to Notes 1, 3, 6 and 7, to the consolidated financial
statements in the Registrant's financial statements, which identify the related
parties and discuss the services provided by these parties and the amounts paid
or payable for their services.

47

PART IV

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

48

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

49

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.

PATRIOT TAX CREDIT PROPERTIES L.P.
----------------------------------
(Registrant)

By: RCC PARTNERS 96, L.L.C.,
General Partner

Date: June 21, 2002 By: /s/ Alan P. Hirmes
---------------------------------------
Alan P. Hirmes
Member, President and Chief
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
Patriot Tax Credit Properties L.P. and Subsidiaries

In connection with our audit of the consolidated financial statements of Patriot
Tax Credit Properties L.P. and Subsidiaries included in this Form 10-K, we have
also audited supporting Schedule III for the year ended March 31, 2001. In our
opinion, based on our audit and the reports of the other auditors, the
consolidated schedule presents fairly, when read in conjunction with the related
consolidated financial statements, the financial data required to be set forth
therein.

REZNICK FEDDER & SILVERMAN

Bethesda, Maryland
June 4, 2002

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
MARCH 31, 2002

(1) First mortgage
(2) Includes first and second mortgages
(3) Includes first, second and third mortgages
(4) At March 31, 2002, the Registrant holds a 66.5% interest in the Local
Partnerships of Summer Creek Villas, a 98% interest in Hubbard's Ridge,
Hill Top Homes and Compton Townhouses and a 98.99% interest in Cutler Canal
II, Diamond Street, Papillion Heights and Brookland Park Plaza.
(5) The cost basis of Land and Buildings and Improvements for federal income
tax purposes as of December 31, 2001 is $80,614,671.
(6) The Registrant believes the properties are adequately insured.
(7) Costs Capitalized Subsequent to Acquisition included a write-down of
$2,700,000 for Diamond Street Venture recorded as of March 31, 1995.

PATRIOT TAX CREDIT PROPERTIES L.P.
(a limited partnership)
AND SUBSIDIARIES
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
MARCH 31, 2002

(1) Refer to Notes 2 and 4 to the consolidated financial statements for
additional information.